Community leaders say showing them the legal agreements for spending development cash could be the only way to ensure money is not squandered or lost.

People in Saxmundham are bitter after losing out to the tune of £100,000 because legal paperwork connected with a housing project stipulated that money for community facilities could only be spent on a Saxmundham Health and Social Care One Stop Shop.

The aim had been to have GPs, out of hours services, social care with fostering/adoption and family support, pharmacy, dentist, optician, NHS nursery, ambulance station, midwife-led birthing unit, health visitors, and a training and education centre under one roof.

When the NHS withdrew its backing, the project was abandoned.

However, because the £200,000 in the planning agreement was said to be for the one-stop-shop only, it could not be used for any other community project – and was set to be returned to the developer Hopkins Homes this summer.

A recent compromise in which Hopkins agreed to pay £100,000 towards a new extension at the Lambsale Meadow surgery has enabled some to be used, while the other half will be returned.

Town councillors in Saxmundham felt the legal agreement should not have been so specific – and should have said the money would be used for health facilities for the town rather than naming a particular project.

The town is in line for more windfalls from further phases of housebuilding in the town and is keen not to lose out again.

Council chairman John Fisher said: “I think we have to see the agreement in future – that’s the only way to ensure that it brings the proper benefits to the town.

“This is not the first time where something has been put in a Section 106 (planning legal) agreement for Saxmundham and which has then turned out to be different or has been altered later.”

Councillor Don Tricker said the town council had not even been consulted on the use of the money gained through the planning consent.

Blything county councillor Michael Gower said local councils should insist on seeing the agreements and described the drawing up of the medical facilities agreement as “cack-handed”. He said all the money should have been spent in the town and it was “completely crass” and “appalling” that half would be handed back to the developer.

He said: “We need to make sure these agreements bring proper benefits for the public and ensure ourselves that they make sense.

“We are not lawyers but we need to be given sufficient understanding of an agreement to see that it meets the requirements of Saxmundham Town Council and there needs to be a mechanism to monitor how an agreement is drawn up to make sure it does that.”

Hopkins Homes said when the £200,000 was agreed five years ago, it was towards a multi-million pound project while the offer of £100,000 for the surgery was pro rata and considered proportional towards a much smaller scheme.