Council hands back more than £500,000 to supermarket giant because it ‘could not lawfully’ spend the cash

Sainsbury's Ely store is in Lisle Lane.

Sainsbury's Ely store is in Lisle Lane. - Credit: Archant

East Cambridgeshire District Council says it was left with no choice but to hand back more than £500,000 to Sainsbury’s because it had nowhere it could spend the money.

In 2012, when the Sainsbury’s store opened, the district council received more than £1.4million in developer contributions in order to fund projects to improve the city centre, including roads and signage.

Some £600,000 of that money was earmarked specifically for mitigating the impact on the road network of the new Lisle Lane supermarket and the council says it spent £88,694.72 of the money, including more than £7,000 on air quality surveys and more than £30,000 on traffic surveys.

But, when all the work was completed, the council says that the studies showed that there had been no significant impact on the road network around the city and so, legally, it was not able to spend the remaining funds, totalling £534,625.96

The money has now been handed back to the supermarket giant.

John Hill, chief executive of the district council, said: “When Sainsbury’s received planning permission, a Section 106 agreement was signed securing contributions of £1.4 million to mitigate the impact of the new store on the local infrastructure. “£600,000 of this money was requested by the county council to assess the traffic impact the supermarket would have and to pay for any works should they be required.

“Working with the county council, we commissioned a study to assess the traffic flows both before and after the store opened.

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“This has concluded that no highway improvement works were needed as the existing network could cope with the increased level of traffic.

“Despite the council exploring a number of options, the sum of £543,625.96 has been returned to Sainsbury’s, as the money could not be lawfully spent for any other purpose.

“This is clearly very disappointing, given the large sums of money involved, however the council has been able to spend the other Section 106 on projects to benefit the community from subsidising the excellent bus service to improvements to the country park and the installation of cycle hoops at three different locations in the city centre.”