ABERDEEN City Council has been told to return £1.2million of regeneration grants to local government organisation Cosla, it emerged last night.
Officials and councillors have been forced to forfeit the money because they were unable to find suitable projects to spend it on.
They failed to meet a March31 deadline set by Scottish Enterprise, which allocated the money – part of a £2million grant to build a contemporary-arts centre in the city’s Union Terrace Gardens.
Aberdeen Central Labour MSP Lewis Macdonald said last night he was shocked by the revelations and accused the council’s Liberal Democrat-SNP administration of “neglecting” their duty to spend money wisely.
Some £400,000 of the £2million funding package had already been spent on preparatory work before the Peacock Visual Arts project was abandoned on May 19 last year after councillors voted to accept the principle of Sir Ian Wood’s rival vision.
Scottish Enterprise official Derek McCrindle wrote to the council’s enterprise, planning and infrastructure director, Gordon McIntosh, in October last year to say that the agency was happy for the remainder of the money to be used on other “eligible” projects.
The letter, dated October 19, said: “Some £1.6million of the £2million remains uncommitted and, unless alternative eligible projects which produce similar outputs to the centre for contemporary arts can be drawn down from the balance by March 2011, the £1.6million funding will return to Cosla.”
A spokeswoman for Scottish Enterprise said the council had drawn up a list of proposals and secured permission to use £375,000 of the grant funding for Sir Ian Wood’s city square scheme.
She added that the local authority had so far been unsuccessful in its bid to use some of the money for improvements to Aberdeen Art Gallery but discussions were continuing.
The spokeswoman said the funding had “effectively been reallocated by the Scottish Government to local authorities”.
Mr McIntosh told city councillors in January that the Scottish Enterprise contribution to the Peacock scheme had been withdrawn in April last year – weeks before councillors met to decide whether to keep supporting the project.
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 not been informed either.
Mr Macdonald said: “It is extraordinary that a council so strapped for cash should have failed to capitalise on the offer of regeneration money for the city centre.”
The Press and Journal contacted council leader John Stewart, councillor Kevin Stewart and enterprise, planning and infrastructure convener Kate Dean for comment but they declined to respond. A council spokesman said: “We put forward several projects and the usual processes were followed.”