Redbridge Council has built less than 100 of the 600 affordable homes it pledged to deliver “by 2022”.

The council first committed to building 600 “permanent, affordable council homes for rent” in 2019 but has so far only completed 96.

Since February 2020, the overall estimated cost of the project has jumped by £66 million to a total of £201 million.

According to a report approved by council leader Jas Athwal’s cabinet on July 19, construction work has started on 282 homes but six of the nine sites have been “heavily delayed” due to increases in costs.

Three of the sites have now re-started work after a “long and protracted value engineering process” and three are currently being “re-procure[d]”.

Summarising the challenges, the report says: “The programme is encountering the most difficult market conditions ever experienced.

“The construction market as a whole for both private and public sector has overheated, with price increases and labour shortages affecting all projects.”

Speaking to the council’s overview and scrutiny committee on July 18, director of the affordable home programme Paul Shafer blamed the delays on a “perfect storm” of Brexit, Covid-19, the war in Ukraine and increasing costs.

He added the council is trying to “bring costs down” but the estimated price of building per square metre is “fluctuating” between £3,000 and £5,500.

To save money, the council has also taken demolition and external landscaping out of the construction contracts.

The cabinet has now agreed to continue the next phase of its housebuilding programme and delegate further decision making to corporate director of communities Nicky Fielder.

The committee also heard that “historic grant issues” with the Greater London Authority (GLA), who gave the council at least £20million in funding for new homes, caused a “freezing of relationships” in March last year.

The tension originated from Redbridge’s use of the GLA’s Homes For Londoners funds to buy the Iceland supermarket site in Ilford for £6.25m in 2019, a site the council now wants to develop into private homes as part of the regeneration of the town centre.

Mr Shafer, who joined Labour-run Redbridge Council in March 2021, said the “slate is sort of cleared” with the GLA, adding “I don’t tell them lies or hide anything from them”.

To resolve the dispute, the GLA has agreed that the funds can be used to buy 55 affordable homes in council-lead developments at the Clements Road and Loxford Lane.

Those schemes were previously managed by the council’s failed housebuilding arm Redbridge Living but were rejected by the GLA due to a lack of affordable housing.

The report on the affordable homes programme adds: “The affordable units at Clements Road and Loxford Lane… will therefore be discounted from the market value (approximately 40%) providing much needed financial breathing space for the overall programme, potentially allowing it to get much closer to balancing the overall budget.”