Edinburgh, Fife & East Scotland

City of Edinburgh Council criticised for 'sitting on' millions of pounds

Construction workers Image copyright Getty Images
Image caption Contributions from developers have gone towards the construction of Edinburgh's tram line

Money paid to City of Edinburgh Council by developers has "languished unused" for years rather than being spent, a new report has revealed.

The backers of big construction projects are required to hand over cash to the local authority to help fund infrastructure improvements.

The money is to be spent on projects such as roads and schools.

But an audit report has raised concerns over how the contracts are being managed by council departments.

The local authority currently has £2.65m worth of the contributions, known as section 75 agreement payments, in its account. Of that total, £790,000 is more than 10 years old.

The picture has improved since 2014, when more than £5m of the £7.4m of payments from developers had been sitting with the council for more than five years.

Image copyright Getty Images
Image caption Millions of pounds are in reserves to extend the tram network

The internal audit report raises concerns that the city council's planning and finance departments are not effectively managing the contributions from developers.

Some of the largest payments in recent years have gone towards the construction of Edinburgh's tram line.

There is currently £4m being held in a separate account to help fund the extension of the tram network to Newhaven.

Other big projects, such as the St James Centre revamp, have also seen developers contribute money to relevant council infrastructure projects.

Image caption Developers, such as the backers of the project to demolish and rebuild the St James Centre in Edinburgh, help fund improvements to the council services around them such as schools

Chas Booth, Green councillor for Leith, said the report shows "the council has very poor control over how contributions are calculated and agreed, how money is collected and how it is used for the purposes intended".

He added: "At worst, money which has been collected from some developers years ago has languished unused.

"This matters because developer contributions are essential to building future public services: from school capacity, to community centres, parks and affordable housing.

"There is already a massive shortfall in the funds needed to deliver that in the future, so every penny needs to be used well."

No room for failure

Conservative councillor Jim Campbell, raised concerns that the lack of management of a database, could have led to "fraudulent or inappropriate use of those funds".

He added: "We can't be absolutely certain that somebody with devious intent might not have been able to change figures and perhaps benefit themselves. I'm not suggesting that has happened, it's just a possibility."

Councillor Neil Gardiner, Edinburgh's planning convener, said: "Improvements have been made to the coordination of developer contributions for infrastructure projects that are required through the local development plan action programme.

"It's important that local communities have confidence in how we are using developer contributions and we'll be publishing this information on an annual basis now."