The controversial revamp of a Richmond neighbourhood on the River Thames will cost £12.5 million more than expected.

Plans for the part-derelict Twickenham Riverside were approved in 2022 after 40 years of uncertainty and will see 45 new homes, shops, cafés, open space and a pub built next to the River Thames.

Richmond Council’s finance committee approved £45 million for the scheme on Thursday, January 19 – funded by cash made from the project and grants.

But a council report says the estimated net cost to the authority will be £20 million, based on its current design and including inflation.

A council report in November 2021 estimated the scheme would generate more than £20 million locally over 30 years – including council tax and business rates income – and bring shoppers to the high street.

Local Celia Holman, from Twickenham Riverside Trust, asked the committee on January 19 whether the scheme represented the “best value-for-money”.

She said: “All this increasingly scarce internal council revenue will be diverted to this scheme and there will still be at least a £20 million shortfall.

"Ask yourselves, could these 21 units be achieved without building out the full scheme?”

The scheme was approved in November 2022 after splitting thousands of locals in petitions.

Residents have objected to moving Diamond Jubilee Gardens to build the flats.

Councillors raised concerns that a detailed risk assessment had not been submitted with the figures at the meeting on January 19.

Conservative councillor Geoffrey Samuel said a “significant amount of the compensating revenue is actually speculative and without a risk assessment that said what the council will do if that amount of money is not realised I think that this claim… should not be accepted at this stage”. 

Lib Dem councillor Robin Brown said the authority is “in a robust financial position, borrowings have not increased at all under this administration so far compared to the situation we’ve inherited” and that the “reserve situation has gone up significantly so the overall council financial position is robust and could certainly cope with any adverse situation on this project”. 

He said: “There’s always going to be some uncertainty on big projects like this in terms of the revenue generation.”

But he added that the plans had been looked at “quite thoroughly with independent professional advice that has also taken into account the current circumstances of the market”. 

The report says: “Significant amounts of money have already been spent on this, and previous schemes, and should this scheme fail it is unlikely that the council will embark on further attempts given the investment to date.”

It adds: “The previous scheme viability indicated an estimated investment required by the council in the regeneration to be £7.5 million after the use of grant.

"This was based on estimates which have now been revised… bringing the revised investment required by the council to £20 million.”

The trust has a 125-year lease on the gardens and plans to oppose the council’s compulsory purchase order of them at a public inquiry in summer.

If the order is granted, the council will find a contractor to build the scheme and confirm final costs.