Tuesday 17th October, 2023
Colchester City Council is reevaluating its involvement in the Amphora Group. The details will be discussed at the Governance and Audit Committee meeting taking place at the Town Hall this evening.
The Council is considering scaling back its role in housing development at the Northern Gateway. This decision has been prompted by increasing financial risks that the local authority is reluctant to undertake.
The Amphora Group comprises a holding company, Colchester Commercial Holdings Ltd, and three subsidiaries, including Colchester Amphora Trading Ltd (CATL), Colchester Amphora Homes (CAHL), and Colchester Amphora Energy Ltd (CAEL).
These companies were established as Local Authority Trading Companies in 2017, wholly owned by the City Council, with the aim of generating income for the authority.
Council Claims Financial Constraints
A challenging economic environment, marked by higher costs and subdued property values, has led to financial constraints for the City Council.
The original plans for new housing under CAHL, particularly as part of the Northern Gateway development, have been affected by these financial limitations. The ability to fund such investments has caused concern at the Town Hall.
The new proposal is for the Council to take on the role of master developer for the Northern Gateway, providing funding for key aspects of the project. However, the changing circumstances raise questions about the Council’s ability to continue in this role.
Reevaluating Delivery Options
The Council claims it is not abandoning its aspirations for the Northern Gateway but is considering alternative strategic delivery options. Joint ventures or even partial or full disposal of the site are being explored as potential alternatives to the Council’s current role as a master developer.
Hibernating Amphora Homes
In line with these changes, there’s a recommendation to ‘hibernate’ or place Amphora Homes in a dormant status. The prospects of the company recovering its costs in the near future appear limited.
Delays Affecting CAEL
Delays in the development of the Northern Gateway have delayed CAEL’s ability to complete the low carbon heat network, impacting its income-generation potential.
Without buildings and facilities in place, CAEL currently lacks customers for the heat it was established to produce.
As a result, CIPFA (Chartered Institute of Public Finance and Accountancy) recommends that CAEL be ‘hibernated,’ with the assets created transferred to the City Council.
Staff Implications
The new strategy carries significant staffing implications, and staff consultations are planned.
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