Four-storey apartment blocks in phase three Weyside Urban Village development. GBC planning documents

By Emily Dalton

local democracy reporter

Funding a 1,650-home development project is still “the biggest financial risk” to Guildford Borough Council as it tries to manage its growing budget deficit.

The council hopes its flagship Weyside Urban Village (WUV) scheme will see hundreds of new homes, 40 per cent of them affordable, as well as  community buildings, employment space and significantly improved infrastructure being built.

The £453 million project was given outline planning permission in October 2021. But it has seen a mounting potential deficit. In May 2024, it was pitched at £50 million and will have increased with inflation since.

The deficit was initially reported in January 2023, which the council attributed to “macro-economic factors” of inflation and high borrowing rates affecting the construction industry.

Officers have now outlined various options to plug the funding black hole for the council to consider, with a full decision to be made by the end of July 2025.

Richard Bates

In the last two years, Guildford Council has sold some of its assets which were no longer used or were not generating enough money. This has generated around £9 million, according to the council’s Chief Financial Officer, Richard Bates. He said there are a few other bits in the pipeline but he expects £20 million in total could “easily” be available.

The intended new leisure contract for the Spectrum, Lido and development at Ash Manor is also hoped to generate funds for WUV which includes a new Guildford depot, already under construction.

Bates told local reporters the updated contract arrangement means the new operator will manage its own utility bills and pay a higher management fee – both benefiting the council.

He also said that a new G-Live contract will generate income for the council and North Downs Housing is also now trading at a profit so the money the council had previously set aside for outstanding interest payments can be put toward the project as a voluntary revenue provision.

The project is “clearly the biggest risk” to council finances, he admitted, and is still going to be a large financial risk for the council and its successors for perhaps the next decade. “We’re still going to have to borrow another £180 million to get us from A to B,” he said and explained the project still has to deal with ongoing inflation, soaring construction costs, land and house prices.

But he added: “We’ve got to the stage where we have enough things to take to the council that will help us mitigate the risk of the project as it currently stands.”

Cllr Richard Lucas

Cllr Richard Lucas (Lib Dem, Ash Vale), the lead councillor for Finance, commented: “We still have our arms around the situation.” He seemed confident that although it is recognised as a big risk it is being managed. He added: “As the project goes on, because there is a lot of infrastructure provision in the early stages, the risk will reduce.”

The aim is to squash the deficit to zero before local government reorganisation takes into effect and Guildford council is merged into a mega authority in 2026-27. If Guildford does not cover the gap, there will be an annual impact on the new council’s budget and it could have to cut services.

Cllr Tom Hunt

Deputy Council Leader Tom Hunt (Lib Dem, St Nicolas) emphasised again that cutting the number of affordable homes would be the absolute “last lever to pull” in the development. “It remains an option for the future but it’s not one that anyone wants to take,” he said.

Any reduction to the types of homes would require a planning application, taking a year to complete, and Homes England, who are contributing millions to the project, would also need to be notified that the original business case has changed.