Increased construction costs mean Bracknell Forest Council could stump up more cash to finish the major new Market Street housing development than the private company it is working with.

Councillors on the leading Executive Committee will debate whether to increase the council’s funding for the project at a meeting on Tuesday, July 18.

Bracknell Forest Council and private developer Countryside Properties are building a 169-home town centre housing project where the old bus station used to be on Market Street.

Under the agreement, the council and Countryside Properties pay 50 per cent of the costs each. But now councillors are being asked to support increasing the council’s share of the funding to 60 per cent.

A council officers’ report submitted to the meeting says the proposed increase reflects “increased construction costs.”

The document says that the alternative to increasing council funding would be to abandon support for the scheme.

But it says in this scenario the council would still be liable for 50 per cent of the costs of the project to date, and the prospect of new homes would be lost. It also says the site would “remain derelict for the foreseeable future”.

Most of the relevant financial information is held out of public view in a separate confidential document on the grounds that it contains sensitive commercial information.

But the public document claims the increase won’t change the council’s financial position due to a “loan note mechanism” contained in the legal agreement with Countryside Properties.

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Kevin Gibbs, executive director for delivery at Bracknell Forest Council, explained this meant that the council will receive back the funding that it put in, plus interest, once the development is complete.

He said: “This finance is held in the Joint Venture accounts as a loan note for the duration of the build. The loan note attracts interest during this period.

“Once the development is completed, the council receives back the funding it has contributed to the development, plus an interest payment. This means the money contributed towards the development costs has no adverse impact on the council’s finances.”

Earlier this year, former council leader Paul Bettison agreed to reduce the amount of affordable housing that would be in the new development, also due to increased construction costs.

He said this was necessary to ensure housing developers’ income. And the council’s executive director for resources Stuart McKellar added that Mr Bettison’s decision came after “feedback” from some of the housing associations interested in purchasing the homes to let at affordable rents.