Forest City: West Suffolk

Debate between Nick Timothy and Peter Fortune

Tuesday 23rd June 2026 Commons Chamber

[Nick Timothy]

I think we have just had it—the people of West Suffolk will know that local Labour representatives are in favour of Forest City, which I think is shameful.

As I was saying, the resale model removes residential land value and caps resale at inflation-indexed build cost, excluding land. Where homes cost £350,000, as promised by the developers, this creates a permanent capital gap of £275,000 per unit. At the scale proposed—approximately 400,000 homes—that implies up to £110 billion of housing capital subsidy paid by the Government.

Secondly, the plan relies on a development corporation with powers of compulsory purchase, while denying itself increases in land value uplift. For a city of 1 million people, non-housing infrastructure will cost anywhere up to £60 billion in capital expenditure. The developers suggest selling a limited number of commercial plots to cross-subsidise investment, but this falls far too short. Without capturing the wider increase in land value, this is another massive black hole.

Thirdly, the plan implies water self-sufficiency at scale. The east of England is a water-stressed region, and a city of 1 million people would require around 170 megalitres per day of additional supply. That is equivalent to one south Lincolnshire reservoir or two fens reservoirs in deployable output terms, at a capital cost of up to £4 billion, excluding network reinforcements and financing. There is no plan and no funding for that work, and when I wrote to Anglian Water, it said that the developers had not even been in touch.

Fourthly, even assuming compulsory purchase at existing use value with hope value removed—which I believe is not what the developers have said to local landowners—land acquisition would require around £1 billion of up-front public expenditure. Removing hope value reduces up-front costs, but capping resale prices through a so-called permanent affordability model means that there is no mechanism to pay back the capital. In other words, this is yet another black hole.

Taken together, these funding gaps suggest up to £175 billion of Government funding, with no way for the state to recover the costs. When I put these problems and detailed questions to the developers in a letter sent in March, the reply I received one day later did not even seek to provide answers. When their report, “We Can Build A City”, was published and sent to Ministers in April, it failed to address a single one of these very serious challenges. That is no wonder, because building a city is far more complicated than these cowboys pretend.

Let us take the Government’s new towns programme as an example. Those are only towns, not cities, and only seven of the original 12 schemes are going ahead. Where whole cities have been built from scratch elsewhere in the world, many have failed. Those that have worked—to an extent—are often artificial new capital cities where the functions of government create jobs, such as Brasilia and Islamabad. Often they are in countries where there is still a great migration of people from rural areas to cities, such as in China. Even in China, though, people have simply chosen not to move to many of the new cities, and they stand partially empty. There are similar stories in Songdo in South Korea, Ciudad de la Paz in Equatorial Guinea, and Masdar City in the United Arab Emirates.

The reasons for that failure are all too familiar to those of us who have studied the Forest City proposal. These cities are built speculatively, without real demand; there are massive infrastructure costs without feasible revenue generation; and they are elite-driven projects, disconnected from the needs of real people.

[Peter Fortune (Bromley and Biggin Hill) (Con)]

Although there are no proposals the size of a city in my constituency, there is a proposal to build thousands of new homes on the green belt in Hayes. Does my hon. Friend agree that this indiscriminate building on the green belt threatens communities and is swamping public services as well?

[Nick Timothy]

It is undoubtedly the case that we need to build more houses in this country, but schemes such as the one described by my hon. Friend must be proportionate for the areas in which they are proposed, and must come with infrastructure, services and amenities.