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Exclusive: Thousands of future homes at £800m Countesswells ‘new town’ in jeopardy as firm goes bust

CDL has gone into administration.

The future of the “new town” of Countesswells has been thrown into doubt after the firm responsible for managing it collapsed.

Countesswells Development Limited (CDL), which manages the £800 million development in the west of Aberdeen, has been forced to call in administrators.

Directors at the company – wholly owned by the Stewart Milne Group – have blamed disruption caused by the oil and gas downturn, as well as the Covid-19 pandemic.

The UK Government ploughed £86m into the “pioneering new community” with a guarantee as it was taking shape in 2015.

Under the scheme, the Treasury showed its support by guaranteeing that lenders to CDL would be be repaid in full.

Countesswells ‘behind schedule’

When the massive project was launched, Countesswells was hailed as “new town” which would ultimately house 10,000 people.

As CDL now sells off parts of the land to separate housebuilders, rather than constructing the development itself, there is not believed to be any risk to existing projects.

Bosses remain confident work which has already begun at the site will be completed, and that there will be no impact on jobs.

Around 900 homes have been built at Countesswells.

But the fate of the project, with thousands of homes still to be built, is now hanging in the balance.

Currently only around 900 of 3,000 planned homes are built or under construction.

It is understood that CDL, which was set up to design and deliver the new development, has privately accepted Countesswells is far behind schedule.

“We are extremely disappointed that CDL, set up to deliver Countesswells, one of the most visionary and environmentally pioneering new communities in the UK, has been placed into administration,” a spokeswoman for the firm’s directors said.

“Countesswells undoubtedly suffered from the seismic downturn in the oil and gas industry which began in 2015, with local property prices dropping by 30%.

“Furthermore, the disruption caused by the pandemic has undoubtedly taken its toll, despite sustained efforts on the part of many stakeholders.”

Directors believe project has future

“We firmly believe in the future of the project and will, of course, cooperate fully with the administrators to help ensure that the vision, which many people share for Countesswells, is realised.

“In the meantime, all existing construction work on the affordable homes at Countesswells will continue and these homes will be completed and ready to move into as planned.”

Four years ago then-Conservative leader Ruth Davidson hailed the UK Government’s role in the Countesswells development, saying it “simply would not happen” without the Treasury’s intervention.

She claimed the new town would “help address gaps in the market” and could act as an example for the building of more new homes across Scotland.

Just this month work began on a long-delayed school in Countesswells – the first in the new town, with children already living there being bussed to the former Hazlewood School several miles away.

Building work on the new Countesswells Primary School will begin next week.
Building work on the new Countesswells Primary School has finally begun.

That followed a wrangle over developer contributions, which at one stage left the 400-student facility in jeopardy.

Tom MacLennan, joint administrator with business advisory firm FRP, said the “immediate priority” would be ensuring parts of the development already under construction are completed.

Administration ‘extremely concerning’

“This is extremely concerning news and my constituents who have already made Countesswells their home, and indeed those working on the site itself, will be worried about what this means for the wider development of the area,” said Aberdeen South MP Stephen Flynn.

“There will rightly be significant focus on whether this will impact development of the planned new school and I will be seeking immediate assurances from both the council and the administrator in this regard.”

Aberdeen City Council said it would be “inappropriate” to comment on the news CDL had gone into administration.

However, the local authority “remains committed” to delivering the new school.

A spokeswoman for the Treasury said: “We regret that the Countesswells project has entered administration. The UK Government will stand behind the guarantee that supported the development.

“We will work with partners, including Aberdeen City Council, to minimise any impact on the local area.”

Stewart Milne eyed up site at Countesswells for more than three decades before his dream became a reality