Enfield Council’s £6 billion Meridian Water regeneration scheme has been hit by further delays amid surging construction and borrowing costs.

Forecast spending on the 10,000-home development in Edmonton is set to drop by £67 million during the current financial year as housing and infrastructure works are pushed back in a bid to control costs.

It is one of multiple housing projects in the borough – totalling more than 1,000  proposed homes – to face delays or be withdrawn as the rate of inflation has soared to 10%. The details are set out in a report that was presented to the council’s cabinet on Wednesday.

The report reveals the final design work for Meridian Four, which is expected to deliver more than 800 homes within the wider Meridian Water development zone, will be pushed back to the next financial year.

A contract to deliver street works for the Meridian Water scheme that was due to begin this summer is now expected to start early next year due to “significant budget pressure”.

The latest project cost plan indicates a £42 million budget pressure, which is “mainly due to exceptional inflation cost increases” totalling £30m and “fees related to prolongation and design changes” which add up to £12 million.

Railway upgrade works that would help boost train services at Meridian Water Station have also been pushed back because of design hold-ups and delays in the procurement of a contractor.

After years of delays and setbacks, construction work on the first homes at Meridian Water finally began in August last year. In 2020, opposition councillors warned that the council’s “unashamedly ambitious” capital programme, funded partly through increased borrowing, could leave the council vulnerable to a rise in interest rates.

The cabinet report states that £332 million – only 68% of the 2022/23 capital programme budget of £486 million – is expected to be spent during the current financial year. It blames “the aftermath of the Covid-19 pandemic, disruption of global supply chains and more recently soaring inflation and the economic impact of the war in Ukraine”.

Interest rates have risen in response to inflation, pushing up public sector borrowing rates. The report says these increases “have an acute impact on the revenue financing costs of borrowing undertaken to deliver the capital programme”.

Elsewhere in the borough, work on several smaller housing projects in Angel Edmonton (Raynham and Upton roads), Enfield Highway (Exeter Road Estate) and Edmonton Green (Gatward Green) have all been delayed. Together, the schemes are due to provide 272 homes. A project to build 23 homes in Bullsmoor (Dendridge Close) has even been withdrawn as funds are instead redirected to Meridian Water. Several school expansion projects also face delays.

Cllr Tim Leaver, cabinet member for finance and procurement, told Wednesday’s meeting that firms the council works with were also experiencing mounting costs. He said the important point was to ensure the council gets value for money and delivers “on projects that matter to residents in Enfield”.

In response to a question from deputy leader Cllr Ergin Erbil about how the council was working to mitigate rising inflation and borrowing costs, Cllr Leaver added that councillors needed to have a “realistic expectation that there will be cost pressures everywhere and in everything we do, and we need to ensure we are working well with our suppliers to ensure we are supporting them during this time”.

Council leader Cllr Nesil Caliskan said the council was reprofiling projects to focus on those that provide the best social value as well as monetary value, adding that local authorities across London are doing the same thing in response to growing economic pressures.