There is a ‘persistent ambiguity’ in government’s approach to the Manx Development Corporation, an MLC told Tynwald.

Gary Cluit asked: ‘Are we treating it as a commercial housebuilder expected to make a profit or as a regeneration vehicle designed to deliver outcomes that the market will not?

‘You can’t have it both ways.’

Mr Cluit, who is a member for Treasury, which is the arm’s length development company’s sole shareholder, said MDC’s refurbishment of the former Nurses’ Home had not proven financially successful.

He said: ‘The reality is that their only route to breaking even may be to hold the units as rentals for a period of years, tying up capital that MDC needs if it is going to deliver further sites.’

The MLC said this went to the heart of whether it could be a ‘scale-able delivery mechanism at all’.

‘A regeneration body that must hold assets for years to recover its costs becomes capital-constrained, slow and inherently limited in output,’ he said.

‘Do we expect MDC to break even on typical brownfield regeneration schemes?

Mr Cluit said the MDC currently does not qualify for support from the Department for Enterprise’s Island Infrastructure Scheme.

He argued it should be eligible for this or similar government support in order for it to regenerate the most difficult sites.

The MLC insisted most brownfield developments do not fail because the developer lacks goodwill but because the numbers do not stack up.

His comments came during a debate on an update report on the government’s brownfield regeneration programme.

Cabinet Office Minister David Ashford said ‘significant progress’ had been made in the last five years.

But Speaker Juan Watterson said the government’s approach had been ‘all carrot and no stick’.

He said it seemed ‘determined to throw money’ at luxury developments which would ‘do nothing to help people get on the housing ladder’.