A BANK of Colchester could still be set up if Tories win power at the May elections...even though the Bank of Essex failed.

Kevin Bentley, leader of the Conservatives at Colchester Council, said the Colchester version would offer mortgage and housing support rather than business loans.

The Bank of Essex was scrapped on Tuesday after giving out just £535,000. It cost £386,000 to set up.

Mr Bentley said: “The idea of Banking on Colchester is about helping people who couldn’t get a mortgage and to help provide affordable housing.”

Mr Bentley defended the Essex County Council scheme, and criticised Lib Dems for having no ideas on how to help.

He said: “Lib Dems have no alternatives and just complain and moan. Anyone can do that.

“Banking on Essex was a great idea of its time.

“Two years ago, banks had stopped lending and Essex County Council stepped into the breach.

“The Government and other county councils looked at it and hailed the initiative.

“Now banks and building societies are starting to lend after the Government made them do that, so times have changed.”

Anne Turrell, a Lib Dem county councillor and leader of Colchester Council, said: “The Tories’ Bank of Essex has been a complete failure.

“It is surprising it took them so long to realise the project has been an absolute disaster.

“I am glad the county council will no longer be giving taxpayers’ money to banks for this scheme, but it should never have been set up in the first place.”