PAN Meadows residents could be left without heating and hot water unless the Isle of Wight Council pays £400,000 to keep the development afloat.

According to a report due to go before the cabinet tonight (Thursday), there is no contingency plan to provide heating and hot water should the Pan Management Company — a community interest company, which manages the site — go bust.

A deal with Pan Meadows developer Barratt Homes — which would see the council take 24 houses instead of a £4 million cash payment once the project is completed — will also be considered by cabinet members.

Ward councillor, Geoff Brodie, said that because of the nature of the development, Pan Manco has ended up with quite a lot of debt owed by the residents who live there.

When plans for the development were first approved, the agreement guaranteed the council would be paid the maximum land value of £4.7 million. This would be payable in stages as the development was completed.

All 257 affordable houses have been built, and 224 of the 614 private units have been built. To date, the council has not received any money — other than section 106 money — apart from the initial £1 million, paid at the start of the development.

The council will now consider whether to accept 24 houses, in lieu of the remaining agreed cash. These units will be managed as affordable homes for allocation to Island residents, and will help the council begin addressing the ‘urgent housing needs’ on the Island.

The number of houses has been agreed as being equivalent to the value of the land. 

The council is able to own a limited number of houses without the need for a separate housing company however, in a different paper — also due to be seen by the cabinet tonight — plans will be considered to set up a company to deliver affordable housing across the Island.

In February, the development was classed as high risk by the council’s auditors.

The decision to accept 24 houses from Barratt was welcomed by Cllr Brodie.

Cllr Brodie said: “Barratt are building houses that people cannot afford. So this is a success in terms of providing more affordable homes for the Island.

“As for the energy management company, it’s quite interesting that the council are looking to put in £400,000. Where that money is coming from, I don’t know.”

Cllr Brodie said the details were ‘vague’ and he could not say if the houses would come from the private stock, or they were currently being built by Barratt.

Council leader Councillor Dave Stewart said: “The idea of taking those 24 houses at Pan would very much start this process and means we have homes available quickly, if it is agreed by Cabinet. We could then develop this approach or others to ensure we really do see more affordable homes built in the years to come.”

The plans will go before the cabinet tonight at 5pm.