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A Kent council says it has rejected £38 million of Government cash for road improvements because it would mean building 8,000 extra houses.
Cllr Mike Baldock, deputy leader and cabinet member for planning at Swale council, said today the council's new administration would not be "bounced" into accepting "thousands of extra houses by the promise of government housing funding linked to road improvements."
He said: "We cannot support the imposition of more dormitory estates across the borough that rely on commuting many miles to work and which are out of the price range of most local people."
In November the Chancellor of the Exchequer Sajid Javid announced the Government was giving £38.1 million from its Housing Infrastructure Fund (HIF) to improve congestion hotspots at Grovehurst Roundabout on the A249 at Kemsley and Key Street roundabout, which links the A2 with the A249 near Sittingbourne.
The Swale Transport Infrastructure bid, put forward by Kent County Council with backing from the then Conservative-controlled Swale council, would "make way for 7,899 homes."
But Cllr Baldock, leader of the Swale Independents Alliance, said: "This money is intrinsically linked with the delivery of ever more housing. We strongly feel, however, that this is not a basis on which we can agree to support this funding."
The decision immediately brought howls of outrage from Conservative councillors.
Cllr Cameron Beart (Con, Queenborough and Halfway) said: "This is unbelievable news that Swale Borough Council's coalition cabinet is to reject £38.1 million from central government to upgrade Key Street and Grovehurst Road junctions on the A249.
"The money was secured by Kent County Council and was announced by the chancellor in November.
"This is following the equally baffling decision recently to withdraw £800,000 of funding for the M2 Junction 5 at Stockbury Roundabout.
"Clearly the new administration is determined to gridlock the A249 and bring total misery to all residents for years to come."
Cllr James Hunt (Con, The Meads) said: "This is absolute madness that the coalition at Swale Council has turned down over £30 million of funding for junctions on the A249 including the much needed upgrades Grovehurst roundabout.
"While they may think it's a clever idea to stifle housing growth, these improvements are needed now. Not having them will have a massive impact on the local economy."
Cllr Baldock said the new administration was determined to deliver a new "green" Local Plan which would provide sustainable housing developments with high quality and environmentally-sensitive housing, local jobs and a "focus on living local, working local, and enjoying life locally."
He added: "It will be less reliant on car use with a focus on public transport and green infrastructure and a housing target that is realistic and proportionate."
He went on: "Road improvements are necessary but must be part of a package that tackles all the infrastructure failings.
"There is nothing in this funding that tackles the chronic shortage of GPs in our area and the woefully inadequate health provision.
"We appreciate the Government is aware that this road-focused approach to infrastructure is inadequate and we welcome their plans to come forward with a more integrated approach to Housing Infrastructure Funding that will seek to address the other major concerns many local authorities have.
"But this Housing Infrastructure Fund money would require us to run counter to our ambitions.
"By leaving the Grovehurst Roundabout and the Bobbing Interchange as the only two major road junctions in our borough with spare capacity going beyond 2031, we would face insurmountable pressures to provide the full 10,000 new houses the Government is demanding.
"The failed approach of simply filling up green fields with more dormitory estates reliant on the strategic road network to get into London for the daily commute would continue.
"We need investment just to meet existing demand not to be the catalyst for causing even more demand.
"Consequently, although in the final instance this remains a Kent County Council decision, we cannot support this bid."
He admitted that Swale's lack of support might not be enough to stop the scheme and added: "I suspect we will be having more meetings with the county council very shortly."