More than £1m of European cash has been paid back by Redcar and Cleveland Council after it failed to fill office units in an ambitious new development.
The authority received funding for the £31m Redcar Leisure and Community Heart project which opened in April 2014.
The all-weather attraction boasts sports and leisure centre, swimming pools, civic facilities, business centre, and multi-functional meeting and community spaces.
The authority says the development “in the heart of the town centre, provides a focal point and much needed facility for local communities and visitors”.
But the council has now had to refund £1.3m after it failed to meet all the EU Development Fund criteria.
Redcar cabinet member for housing Councillor Tristan Learoyd warned taxpayers might have to foot the shortfall.
“As part of the (EU) deal it was specified that a number of office spaces had to be filled,” he said.
“The reality is no office space was being taken up and there is empty floor space for everybody to see.
“The cash has been claimed back already and some time in the near future it’s going to hit taxpayers.
“It works out as £10 per head across the borough, it will be paid out of the central grant so that means services will have to be cut back as a result or there will be future tax rises.
“This year the books have been balanced but moving forward, because of the catastrophic decisions made in the past, wasting money at a time when they were having to cut back, there is a likelihood of future tax increases because of these mistakes.”
Cllr Learoyd, who has been in the authority’s Cabinet for just three weeks, said an economic regeneration masterplan was now being “rewritten”.
“We are going in a completely different direction, more science than craft based,” he said, adding that the full details would be announced later.
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