Several large-scale projects in Aberdeen are at risk following the outcome of a long-running legal battle according to a council report.
A new report detailing Aberdeen City Council’s quarterly accounts reveals the Supreme Court decision on developer obligations will have “significant implications” for the local authority.
Last year the court upheld a decision that the Elsick Development Company (EDC) – the firm behind the Chapelton of Elsick development – should not have to pay £7.5 million to Aberdeen City and Aberdeenshire councils for transport improvements.
The court ruled the firm was not legally obliged to contribute to the Strategic Transport Fund (STF) for public transport improvements not related to the proposed development.
The new report, which will be considered by councillors next week, said section 75 agreements (developer obligations) are frequently sought by the council in relation to the awarding of planning permission.
It added: “The Supreme Court’s recent judgment in relation to the Strategic Transport Fund, which was funded through developer obligations, has significant implications for the council, as there are several large-scale projects in development which had expected to rely on STF funding. Delivery of these projects is now at risk unless an alternative funding solution can be identified.”
Both administration and opposition councillors said they did not yet know which of the local authority’s projects were under threat.
Local authority leaders previously said it was a “disappointing” decision that raised serious questions about other previous agreements and over where cash-strapped councils would find funding for vital infrastructure.
Just last week Scotia Homes Ltd, the lead developer at the Dubford housing development in Bridge of Don, had its request to remove a requirement to pay money into the STF granted. In making their decision, council planners said it was “no longer legally competent” for the planning authority to require STF contributions from developers.
But the Duke of Fife, who heads the firm behind the Chapelton of Elsick estate, previously said the saga, which dates back to 2015, had been a “waste of time and money”.
Developer obligations are intended to ensure that developers address any impact on infrastructure which is created by the development.
The Duke of Fife, speaking on behalf of Elsick Development Company, yesterday said: “The Supreme Court’s judgment simply confirmed the long-held view that developers can only be asked to make contributions towards mitigating the effects of their own development and cannot be made to pay for the infrastructure required for other developers’ schemes or to mitigate an existing problem.
“We remain committed to investing in the infrastructure that is required because of the traffic generated by our development at Chapelton.
“We have already invested more than £1 million in a new roundabout at Newtonhill as well as a significant amount in a new park and ride at Newtonhill.
“As Chapelton grows, we will spend hundreds of thousands of pounds improving the A90 and a further £12m on a new grade-separated junction on the A90. Aside from roads, we are also funding the new schools, community facilities, healthcare and other services which will be used by Chapelton residents.”
Meanwhile, the report, which details the accounts from April 1 to June 30, said the local authority’s financial performance for the first quarter is a “positive one”, with expenditure and income “largely in line with budget” for this stage of the year.
A small underspend of £75,000 is forecast for the year, according to the accounts.
The accounts added that the council has spent 23% of its full-year budget on delivering services.
But it said the council is also managing a “number of cost pressures”, including agency social worker costs and providing fostering services.
An Aberdeen City Council spokeswoman said they could not comment ahead of the report going to the city growth and resources committee on Wednesday.