Proposals to build social housing in an underperforming car park have been met with dismay by business leaders – who have questioned how the ‘absurd’ idea ever surfaced.

Sidmouth Chamber of Commerce said the loss of the bays at Mill Street would be a ‘catastrophic blow’ to the town centre and cost the resort £1million.

Members blame East Devon District Council (EDDC) for trebling the annual cost of a permit at Mill Street to £1,800, pricing residents out – and said it would likely face opposition from the authority’s own development chiefs.

A chamber spokesperson said: “The loss of Mill Street would be a catastrophic blow to our town centre, where the lack of adequate parking has been acknowledged by all parties, including the district council, for at least 40 years.

“It is beyond belief that EDDC has suddenly, without any evidence or consultation, decided that this is no longer the case.

“We are surprised that such an ill-conceived idea has even surfaced in the first place.

“The chamber is broadly in favour of the provision of social housing in Sidmouth and, indeed, over the years, has suggested several suitable sites to EDDC.

“But it is clearly absurd to allocate a major town centre car park for this purpose.”

Only 25 of the 46 parking spaces at Mill Street have been leased since the price hike, so EDDC is assessing the feasibility of its redevelopment.

The proposals would see Sidmouth gain a number of affordable homes, paid for using a share of some £1.5million in section 106 funding – a levy paid by developers for the loss of an amenity, in this case the Fortfield Hotel.

The chamber said there were plenty of places in Sidmouth for such housing, including EDDC’s Manstone Depot and Knowle sites. “The proposal to sell off the Mill Street car park would be in complete contradiction to the current and draft Local Plans,” said the spokesperson.

“For this reason, we doubt that it would be supported by the planning team at EDDC, or the development management committee, and would be likely to be ‘called in’ by the Secretary of State.”

The chamber also warned that the sell-off of Mill Street car park would ‘effectively quash’ any hopes of a ‘quality of redevelopment’ of Port Royal, which the spokesman said EDDC was determined to strip of assets.