THE dream of an eco-community on the site of York’s former British Sugar factory has suffered a cash blow in the wake of Government cutbacks, a Labour councillor has revealed.

The York North West site, off Boroughbridge Road, site is intended to be a trailblazing environmentally friendly development.

But Coun David Scott, who chairs City of York Council’s economic development and city strategy scrutiny committee, has revealed Government funding to help pave the way for this and three other projects across the Leeds city region has been halved from £1.2 million to £600,000.

He said while council officers had said York would still receive a significant proportion of the funding, this would be of a smaller pot of money. He doubted officers were correct in believing the project would not be jeopardised, and he called for York’s scheme to be made a top priority in the region.

However, the council’s Liberal Democrat leader Andrew Waller insisted the cut would not jeopardise the York scheme, saying the Leeds City Region’s Homes and Communities Agency (HCA) Board, which he chaired, had met on Monday and confirmed work would continue.

He said there was an opportunity to bid for a range of funding that would support the important work for low-carbon sustainable development, and described Coun Scott’s comments as “very dangerous and unhelpful” as York sought to ensure it worked well with neighbouring councils.

Meanwhile, funding worth £110 million has been agreed by the city region with the HCA to improve existing housing and neighbourhoods, create energy efficient homes and deliver affordable housing across Selby, York and the wider region.

Coun Waller said the funding agreement would provide significant investment at a time when the economic recovery was still fragile.

“It will help maintain momentum in delivering the affordable homes we need across the city region, supporting much needed jobs and training opportunities.”