County Durham is set to lose out on a £13m investment package due to the “catastrophic indecision” of the Tory-led Coalition running the council.

Labour leaders claim “dithering and political posturing” from Tory, LibDem and Independent councillors, who make up the administration, will mean County Durham misses out on £6m grant from the North East Local Enterprise Partnership, which underpinned wider scheme costs of over £13m.

Last week, Durham County Council Cabinet waved through Coalition plans to utilise “Plot C” at Aykley Heads for a THIRD Council HQ, rejecting Labour calls to move the authority into the purpose-built HQ at The Sands, which the Tory-led council wants to sell to Durham University.

However, the NELEP Investment Board met on Monday to discuss the £6m grant awarded to Durham County Council, to provide investment in the Plot C site, which had been earmarked for an office development to support private sector investment in the city.

The terms of the £6m NELEP grant clearly state that funding was to facilitate a £13m investment programme, a move undermined by the Coalition decision to keep the Council on the Aykley Heads site.

Should NELEP withdraw the grant offer, it will also clawback more than £3.5m already paid to Durham County Council and reallocate the money elsewhere in the region.

It is understood that DCC has been informed of NELEP’s intention and NELEP will publish its formal decision today (Wednesday) morning.

County Durham Labour Leader, Cllr Carl Marshall, said:

“Catastrophic indecision, constant dithering and political posturing of this chaotic Coalition is dragging Durham back to the dark ages.

“Nobody in this so-called Coalition has a clue what they are doing – they don’t care that their nonsensical politically-motivated decisions have such damaging repercussions for everyone in Durham. It’s one thing to oppose the new HQ at The Sands when in opposition, but it’s quite another to destroy an economic development plan set to deliver a once in a lifetime development opportunity for County Durham.

“NELEP recognised the opportunity and ambition of Labour’s original plan for a new HQ in Durham, freeing up Aykley Heads for development and potentially creating 6,000 new jobs. It backed our plans to the tune of £13m because it saw that the new HQ would put 800 people in the city on a daily basis, create prime development land for businesses queuing up for office space in Durham and raise employment prospects and prosperity in our county.

“However, the Coalition’s decision to tear up this plan and embark on a flight of fantasy for a third HQ won’t deliver anywhere near the economic boost or private sector development opportunity, so who can blame it for pulling this investment!

“For a year, Labour has asked this weak Coalition of self-interest, what the plan is, how it will deliver for Durham. The silence is deafening. The time has come for the councillors propping up this shaky alliance to recognise that their support is harming our city and holding back the progress of our county – Durham will remember the councillors who cost us this development, these jobs and snuffed out a once in a generation opportunity.”

Labour only learned of NELEP’s intention of clawing back the investment after seeing a leaked report to Durham County Council administration.

Cllr Marshall added:

“This report must be scrutinised and this Coalition must come clean to the people of County Durham. Let everyone have a look at this report and see how much money this is costing taxpayers and how much Durham is set to miss out on.

“Losing this NELEP funding confirms Labour’s fears that private sector investment and jobs will be catastrophically affected by this Coalition’s decision to scrap plans to move to The Sands and free up development space at Aykley Heads.”

Labour has called for the Coalition to provide an urgent update on the situation and allow scrutiny of the report received from NELEP, which is made up of representatives from both the public and private sectors.