A Sutton Council regeneration project has already increased in cost by £14million before any physical work has started.

The authority approved a budget increase from £30m to £44.2m for a development of 93 new homes in Sutton town centre.

Sutton Council agreed it would regenerate Beech Tree Place in 2021 and a planning application for the development was approved in March 2022.

Built in the 1950s, it currently provides 25 homes for older people over the age of 55.

The new plans include a four-storey building and two six-storey buildings to provide 93 affordable flats.

Existing residents would be rehoused in one of the new blocks.

At an urgent council meeting on Thursday night, Spencer Palmer, Sutton’s director of housing, said: “At the time, the approval was based on an estimated capital budget of £30m, having completed the detailed design and tender process the total cost of the scheme has increased significantly to £44.2m.”

He said the main reason is due to estimated construction costs coming in much higher than expected.

The council is hoping to award a contract for the work by the end of this month so work can start before the end of September.

The committee also agreed to approach the Greater London Authority for another £2.24 million to convert the scheme into 100 per cent rented properties rather than 35 to be sold as shared ownership.

It successfully bid for a £6.4m grant from the GLA in March 2021.

The report said this would “eliminate the council’s exposure to

sales risk on the shared ownership units” and create a profit on the scheme rather than a deficit. 

The decision included considering cost saving measures on the project, including using different materials which could save more than £1m.

Conservative councillor Tim Crowley voted against the increase in funding for the scheme.

He said: “In terms of value for money for this project I don’t think that has just been demonstrated at £44.2m.

“I think there is too much uncertainty in the market I think it hampers the regeneration schemes for the rest of the borough in the respect that contractors might see us as an easy touch with the amount we’ve allowed them to increase their costs.

"And as such I am afraid I am voting against the recommendations.”