More homes, council houses, and a revamped town centre will be at the heart of the Colchester Borough Council agenda for the coming year.

Senior members of the Liberal Democrat, Labour and Highwoods and Stanway Independent groups have finalised a coalition deal which will see them stay in power until at least May.

The Conservatives, which made a number of gains in last week’s elections, had been pushing for a deal with the independents to give them a majority and control of the council for the first time in seven years.

However the independents rejected two offers, and have instead struck a deal with their current coalition partners.

Paul Smith, former cabinet member for finance, will be nominated by his Lib Dem colleagues as the new council leader after previous leader Martin Hunt stepped down at the elections, and he is expected to be supported by the coalition partners.

His appointment, and the announcement of cabinet positions, will not be confirmed until the authority’s annual meeting on May 27.

Yesterday the three parties outlined their aims for the coming year.

Mr Smith said: “We want to make sure everyone in Colchester shares in the prosperity of the town, and not just a few.

“We recognise we need to engage with people and explain some of the difficult decisions as a council we are facing.

“One example is there are 800 more births than death a year in Colchester, which means we need to continue to provide housing for the foreseeable future. We have a choice – we can do nothing and leave the developers to choose where to put it and what community facilities they would like to provide, or we can take the hard decision and decide where we want them.

“We recognise residents will be adversely affected and disappointed when development happens in their area rather than somewhere else.”

Labour’s Tina Bourne, former councillor for housing, is keen to continue a programme of council house building while party group leader Tim Young, whose previous portfolio included culture, said he wanted to continue work on developing Colchester as a tourist destination.

Gerard Oxford, leader of the independent group, added: “We need to try, now we are coming out of recession, to get developers to move on Vineyard Gate.

“It has been on the back burner for some time, purely because of the recession, but now we need to drive it forward to deliver small and medium units to offer a different retail experience for residents and visitors.”

Vineyard Gate is a proposed £70million project to deliver a new shopping development on the site of the Vineyard Street car park.

Other measures outlined by the administration include the return of a small allowance for each councillor to spend on community projects within their ward, as well as seeing the completion of the Curzon cinema and The Wonderhouse plans, plus a feasibility study for Jumbo.

The group leaders also all pledged to work closely with the town’s three Conservative MPs.

Next year the council will hold its first all-out elections for a number of years as it moves to a reduced-size 17 three-ward seat authority.

This will be followed by county council elections in 2017, before the councillor with the least votes in each ward faces re-election as the borough council returns to electing one-third of its members.