News

Northumberland council hit with legal claim after firm racks up £13m delayed project bill

Northumberland County Council’s decision to scrap new housing proposals may have cost a developer more than £13m in planning permission costs.

Newcastle-based property developer the Lugano Group was due to build the Dissington Garden Village that would create 2,000 homes north of Ponteland, commissioned by Labour before the Conservatives gained control of the area in last May’s local elections.

Since the Tories took to power, the Dissington project has been put under review, landing the developer with considerable costs – allegedly totalling over £13,305,000 according to media reports – due to delays to the expected obtaining of planning permission.

The property developer has now issued formal legal proceedings against county council leader Peter Jackson, Cllr John Riddle, chief executive Daljit Lally, and Northumberland CC itself.

Lugano claims it had to use high-cost financial methods of securing funding until it received full planning permission, but since the plans have been changed and the process has become more drawn-out, the company’s overheads have continued to rise – with no solution to the issue in sight.

All parties have denied any wrongdoing.

A Northumberland County Council spokesperson told PSE: “We have received further correspondence from the Lugano Group and are taking legal advice in this regard. As previously advised, we believe that the council has acted lawfully and reasonably throughout this process.

“We continue to work with Lugano on their live planning application for Dissington Garden Village.”

Lugano had previously raised its concerns with the Crown Prosecution Service and these matters have now been formally referred to the police for further assessment.

Richard Robson, Lugano Group chairman, commented: “While Northumberland County Council have referred to an investigation into some aspects of our case, we consider that investigation to have been neither independent nor comprehensive, and despite the council relying on it, thus far they have refused to release details to support their position.

“Our offers to meet and discuss our concerns on a ‘without prejudice’ basis have also been declined. Accordingly and with regret, we have no option but to commence formal legal proceedings against the authority and individuals concerned. We have engaged a leading international law firm.”

Alan Rankin, Lugano director, added: “We have openly stated that our wish is simply to continue working in partnership with Northumberland County Council as we were previously, however the conduct of certain persons has made this impossible currently.

“We sincerely hope that we are able to return to that position for the benefit of all parties in due course; however in the interim we will pursue all actions necessary to ensure our interests are protected and that we and the people of Northumberland can again have confidence in the proper due planning processes in the county.”

Enjoying PSE? Subscribe here to receive our weekly news updates or click here to receive a copy of the magazine!

Image Credit: North East of England Chamber of Commerce