Northumberland HQ plan: Developer pulls out of housing scheme

About 1,000 people work in the current building, which was built in 1981

Plans to sell off a council headquarters for housing have collapsed after the developer pulled out.

Northumberland County Council approved proposals for 200 houses, shops and a school at its County Hall site.

The Home Group said it would no longer be pursuing the scheme owing to a "number of reasons" including "current market conditions".

A council spokesman said it "remained committed to progressing alternative options".

Karen Heaney, Home Group director of regeneration, said: "We've gained outline planning approval and we leave at a stage where another developer can now take over, progress the scheme and deliver homes for the people of Morpeth."

The council said it was "concerned at the loss of a significant capital receipt which would have benefited all council tax payers in Northumberland".

The new council headquarters would be built in Ashington

Maple Grove Developments said they "remain committed" to the development of shops at the site and has "not considered withdrawing its plans".

There had been criticism of the cost of council plans to relocate its headquarters.

The authority said selling off the land and erecting a new £40m building in Ashington would be more cost-effective than refurbishing the current building.

David Holden of the South Morpeth Coalition residents' campaign group, said: "This is a victory for the will and determination of Morpeth residents.

"The Morpeth Neighbourhood Plan is clear that housing is not an appropriate use for the site... the whole process was a shambles.

"The loss of a capital receipt is entirely the fault of the council and is a result of pursuing a scheme that had no merit in planning terms."