A disgrace - Council leader hits back at Lib Dems Crown Works climbdown accusation
The city's Lib Dem councillors have slammed the announcement of the construction of the first phase of the Crown Works Film Studios development as a “climbdown” whilst Labour’s City Council leader has hit back, calling them a “disgrace”.
On March 9 the North East mayor Kim McGuinness announced £38.5m of new funding for what was described as Phase One of the development, in addition to £25m of funding as part of the Devolution Deal which established the North East mayor.
Construction of the first phase of the development is set to commence in July 2026 with the opening of the initial film studios set to take place at the end of 2027.
Yesterday (March 10) City Council leader Michael Mordey was joined by North East mayor Kim McGuinness and County Durham born entrepreneur and Dragons’ Den star Sara Davies to celebrate the new funding.
Whilst the initial new facility will be one of the biggest film studios in the North of the UK it is significantly scaled down on the planned £450m 80-acre development which would have created an estimated 8,000 new jobs and established the city as one of the premier film destinations in Europe.
The city’s Lib Dem councillors have described the new announcement as a “climbdown”.
With an initial £25m coming from the Government and a further £38m from the North East Combined Authority, the city’s Lib Dems are concerned the initial project is now being funded by public, rather than private money.
A phased approach is now being taken after the studios’ main backers, financiers Cain International, pulled out of the development in June (2025).
In October (2025) Sunderland City Council announced that global real estate service advisor CBRE were appointed to spearhead the search for new private investors, but as yet, this has not been secured.
Speaking following the announcement of the new phased approach and the funding for work to commence on phase one, Lib Dem councillor for Pallion and Ford Steve Donkin said: “The “Palliwood” project promised by Sunderland’s Labour group has become the centre of growing controversy as council bosses and the mayor throw yet more public money at the project and desperately try to spin another investor pulling out and a downgrading of the plans as something to be celebrated.
“It just won’t wash with local people.
“The public deserves answers about the decisions, financial mismanagement and failed promises that have led to widespread disappointment. It seems that ambitious plans for investment and community transformation that were first announced are failing to materialise.
"The project now faces a £300 million funding gap, leaving only a fraction of the original scheme—just four sound stages with confirmed approval—on the table. Many local residents fear the promised benefits will never materialise and we will have to put up with this latest climbdown instead.”
City Council leader Michael Mordey has defended the new phased approach and is confident completion of phase one will attract private investors to help take the development forward.
He said: “This initial modest investment is a significant gamble which I’m extremely confident will lead in time to a bigger development.
“Film production in the region is up by 130% in the last three years. There’s clearly a demand, and once phase one is complete and proves to be a success I’m confident it will act as a catalyst bringing in private investment for further development.
“Once these studios are fully booked it will prove our business case to move on with phases two and three.
“It’s the same situation as the Riverside development. We built the initial Beam building and when developers saw what was happening they came in with additional investment.
“We have looked at other film studios in places like Belfast and talked to people in the industry and their advice is that if we went and built 18 studios in one go you would end up with a lot of them standing empty, and so we have listened and learned from what they have said.”
Cllr Mordey also hit back at the accusation of the phased approach representing a ‘climbdown’ from the original plans.
He said: “This is just typical of the Lib Dems. They have taken this as an opportunity to knock the city for their own political purposes.
“I don’t think they really want the film studios to happen because they want it to remain as a political issue.
“The Labour group and Labour Council is delivering on our promise to deliver Crown Works and I just wish they would get behind the city and back it.
“The Lib Dems are a disgrace.”