Waltham Forest Council defended giving the developer behind the borough’s largest ever housing scheme a discount, arguing it was spending money to make money.

On January 14, the council’s cabinet decided in private to give Taylor Wimpey a discount of an undisclosed size on the cost of land for a £190 million regeneration project in Leyton.

The “Coronation Square” project, approved in April last year, will see 750 new homes and community services built on the Score Centre site.

The council agreed to reduce the price of the land and buy all commercial space being built after Taylor Wimpey warned “unforeseen costs” could delay work “until conditions improve”

Councillors on the budget and performance scrutiny committee last night questioned whether the decision would encourage other developers to follow suit.

Read more: Council agrees to give developer discount of unknown size

Cllr Selina Seesunkur (Con, Larkswood) asked: “What happens if other developers find out and use that excuse to hold the council to ransom?

“Given that we have got our own budgetary pressures, I just wanted a bit more detail about (the decision) because that obviously affects our budget and our income as a council.”

The council has refused to reveal the size of the discount or the amount it is paying for 1,762sq m of commercial space on the grounds it is “commercially sensitive” information.

The council’s finance director John Turnbull agreed there was a “danger” other developers might try to follow suit but said the council had a “robust process” for dealing with such requests.

He said officers “do not just give” but “negotiate”, adding: “If there’s a key decision-type change, it would have to go to the cabinet… so you would have that transparency there.

“What (this decision) is actually doing is potentially reducing the availability of capital resources to fund further capital.”

He said, for example, the council had paid to relocate leisure facilities previously at the site “with the understanding we would get a receipt or surplus” and had “more than refunded” this cost.

Read more: Score Centre redevelopment deemed 'not policy compliant' approved

Taylor Wimpey first requested a renegotiation In August, arguing Covid-19, Brexit and “unforeseen costs” had decreased how much money it expected to make from the scheme.

The company, which currently estimates an operating profit of £293 million for 2020, said this could “significantly” delay the work “until conditions improve”.

Explaining the decision on the council website, an officer said “delaying the project is not an attractive or viable option” because of the housing and infrastructure it will deliver.

The project will include five flat blocks, the tallest 18 storeys; a new GP, leisure centre, nursery and civic square; commercial spaces and a heating network for the surrounding area.

Half of the 750 homes will be affordable, although Cllr Marie Pye (Lab, Leytonstone), who sits on the planning committee, noted in March last year that the majority of these will be more expensive “shared ownership” homes, rather than low-cost rent.

A report prepared for the cabinet by officers notes that buying the commercial space “meets the council’s investment objectives, whilst helping to de-risk the scheme for Taylor Wimpey.”.

It adds: “The council will receive a market rental income for the units, on which the value has been priced.

“It should be noted that the commercial space will be available at the end of 2023, allowing ample opportunity for pre-lets to be arranged, thereby ensuring income from future rentals.”

Construction on the site is expected to start in spring this year and to finish by 2027.

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