Work on developing old council offices in Hadleigh into 57 homes will begin this summer, Babergh has pledged – despite costs for the scheme increasing.

But opposition councillors have called for the site to be sold and a greater profit to be made from the sale of the land.

The authority's cabinet confirmed costs for the development of its old base in Corks Lane had increased by nearly £700,000 as a result of several factors.

The coalition cabinet agreed to increase the debt threshold for its company, Babergh Growth Ltd, from £3.7million to £7m in order to facilitate the cash flow needed.

The council said that without it, it would not be able to begin work on site before September, which was one of the conditions of the planning approval issued in March 2019.

Opposition councillors have raised concerns over the numbers, and said selling the site would deliver a better return, particularly as the scheme had already been delayed.

John Ward, Independent Conservative leader of the coalition administration, said: "It was important we took the time to find the best possible solution for the local community and the neighbouring cricket club but we now find ourself in a particularly challenging period of rapidly increasing costs, supply chain issues and uncertainty within the construction industry due to a combination of factors, including Brexit, the pandemic and the war in Ukraine.

"Having considered the options for this site carefully, including a sale, alternative schemes and phasing, I strongly believe the best way to ensure this development is brought forward is to increase the debt threshold for Babergh Growth Ltd.

"This is not about increasing the bill for the taxpayer, but purely to do with cash flow during the phasing of the project and the governance around the amount Babergh Growth Ltd can borrow to deliver it.

"Ultimately the development is still expected to break even or even show a modest profit for the council."

Babergh leader Independent Conservative John Ward

Hadleigh North ward councillor Dr Sian Dawson said: "I am simply staggered that they refuse to accept that labour and materials have increased from a minimum 18% to 35%, which on this basis alone makes this project commercially unviable according to the original figures.

"The site ought to be sold as Babergh are not developers and working with a third party to hasten progression has failed and the project has been dogged by delays."

Conservative councillor Michael Holt, a director of Babergh Growth Ltd, said risks of a recession and a fall in house prices, as well as the inability to guarantee phase two of the scheme, meant he had outstanding concerns.

The group has also questioned the report's  assessment of the land's value at £500,000, and said it should be tested on the open market to see if it can attract bids that would deliver a better return.

Both Cllrs Dawson and Holt were part of the Conservative administration that voted for Babergh to leave the district's HQ in Hadleigh, sell it for development and move the council to Ipswich.

The rainbow cabinet of Independent Conservatives, Independents, Liberal Democrat and Green unanimously voted to approve the debt threshold increase.

It means the building contract can be signed this week, and work can start later this summer.