Swindon estate 'costing £1.7m a year in interest'
A housing estate in Swindon is costing council tax payers £1.7m a year in interest, a councillor has said.
Jim Grant, Labour leader on Swindon Borough Council, said the Tory-led authority had borrowed £45m to pay for the Wichelstowe development.
He said the debt was due to be repaid by sale of the land, but a depressed housing market had hindered the sale.
However, Tory councillor Peter Greenhalgh, responsible for strategic planning, insisted it would sell.
Swindon Council says it has a £12m contingency fund to cover £1.7m interest repayments on the loan.
The fund is part of a settlement deal the council received from Taylor Wimpey in 2009.
Councillor Grant said: "The initial idea was that Swindon Borough Council would recoup the £45m by eventually selling the land to developers for house building.
"However since they've taken out this loan, or decided on this loan, the housing market has gone flat.
"And we're worried in the labour group that Swindon Borough Council have not got a strategy in place for a plan B, as it were, as to how to pay the money back.
"And that £45m, council tax payers are having to pay back at an interest rate of £1.7m a year."
Councillor Greenhalgh said the debt was serviced for the next seven years. He denied that the interest amount would be met by council tax payers.
"We are putting the infrastructure in place to add significant value to the land," he said. "Land that has a road, gas electricity all these services connected to it is worth considerably more than land that doesn't have services connected ie a field.
"We're managing the project so that within the next six years we will be disposing of land which will easily service the debt that we have borrowed."
The Wichelstowe development covers an 800 acre site and lies between Swindon's Old Town and the M4 motorway.
Formerly known as Swindon's Front Garden, the area is divided into three parcels of land with around 300 acres being developed for residential or commercial use.