The leader of East Cambridgeshire’s Liberal Democrat group has written a letter to Sainsbury’s appealing for the retailer to hand back some of the £500,000 it collected from East Cambridgeshire District Council.
Cllr Gareth Wilson said the supermarket giant was “in danger of a double whammy of bad publicity” over the reclaiming of the funds and called on bosses to hand some of the cash back to fund community projects in Ely.
Cllr Wilson’s letter came after it was revealed that the district council was left with no choice but to hand back more than £500,000 to Sainsbury’s because it had nowhere to spend the money.
In 2012, when Sainsbury’s Ely store opened, the council received more than £1.4million in developer contributions to fund projects to improve the city centre.
Some £600,000 of that money was earmarked specifically to ease the impact on the road network of the new store.
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.
Cllr Wilson said: “Section 106 money is paid by developers to compensate the local community for problems caused by their development, out of the profits made by gaining planning permission.
“This is a legal agreement and should be drawn up carefully with all loose ends sorted out before the building work starts. However, Sainsbury’s were quite willing to pay out £600,000 towards an agreement drawn up so loosely that the community had to hand back £543,625.96 of it.
“The Tory administration therefore handed back this gigantic amount of money without even discussing this on any committee or even informing councillors of what was about to be done.”
When news that the money would have to be handed back, John Hill, the council’s chief executive, 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.
“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.”
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