ABERDEEN City Council and Scottish Enterprise were on a collision course last night amid claims that the local authority was misled about a major project in Union Terrace Gardens.
The two bodies offered conflicting explanations about what happened to a £2million grant that was earmarked to help build a new Peacock Visual Arts centre in the city-centre park.
The project collapsed on May 19 last year after councillors controversially voted to accept the principle of Sir Ian Wood’s rival vision of creating a street-level square and garden in the Denburn Valley.
But a senior local authority official and councillor said yesterday that elected members had been under a “misapprehension” at the meeting.
Gordon MacIntosh, director of enterprise, planning and infrastructure, said he discovered last week that Scottish Enterprise had withdrawn its contribution towards the £13.5million scheme in April, weeks before the full council met.
He said officers and councillors had not been aware the decision had been taken, and he believed the local branch of the government agency had also not been informed.
Peacock director Lindsay Gordon said he was “flabbergasted” by the claims last night.
Scottish Enterprise offered a different version of events, however. A spokeswoman said the money was given to the council in 2008, and that the local authority told the agency it was no longer needed two months ago, only in November.
The dispute about the grant, which it is understood had reduced to £1.6million because permission was given for a proportion of it to be used, emerged at yesterday’s enterprise, planning and infrastructure committee meeting in Aberdeen.
It is believed a Scottish Enterprise official spoke to Mr MacIntosh at a meeting last week about the extension of Aberdeen Art Gallery.
“The information that I was provided with last week was that the £1.6million was handed back last April,” the council director told committee members.
“The council was working under the assumption that the money was there when it wasn’t there.”
Mr MacIntosh said the money had been “handed back” to council umbrella body Cosla by Scottish Enterprise.
Deputy council leader Kevin Stewart, convener of the finance committee, said: “I think one of the things that is quite clear is that we as councillors were under a misapprehension about the amount of money available from Scottish Enterprise.
“It comes as a surprise to me that this money was withdrawn long before we made decisions about Union Terrace Gardens.
“If we had taken the decision to go ahead with Peacock, that would have left them with an even bigger funding shortfall than there was.”
Asked about the claims by the Press and Journal after the meeting, a Scottish Enterprise spokeswoman said the council had only recently said the money was no longer needed.
“In 2008, we approved funding of £2million to Aberdeen City Council towards the construction of a new contemporary arts centre located in Union Terrace Gardens, Aberdeen,” she said.
“We were informed by the council in November last year that this project will not proceed within the timescales outlined in the legal agreement and as such Aberdeen City Council will no longer require funding for this project.”
Scottish Enterprise also commissioned a feasibility study that said Sir Ian’s scheme for the gardens could be delivered.
The oil services businessman is a former chairman of the agency.
Mr Gordon said: “I heard from Gordon (MacIntosh) on Friday evening that Scottish Enterprise had withdrawn the money back in April last year and I was flabbergasted.
“There was no consultation with us.
“The deadline for the grant was March 31, 2011.”
Peacock is holding talks with the council as it continues to search for a new home.