Tesco appeals to Scottish Ministers over £400,000 contributions

Tesco has appealed to Scottish Ministers to back its bid to get out of paying £400,000 towards school costs in a planning deal signed more than a decade ago.

The supermarket chain was originally granted planning permission for its current Olivebank Road store in Musselburgh as part of a mixed use development, including housing, a health centre and care home in 2008.

However, a condition attached to the permission included a £400,000 contribution to education linked to the additional housing.

Tesco says it built the new supermarket and petrol station now on the site under a separate planning permission and no longer has any involvement in the rest of the site.

But its request to have its name taken off the agreement and replaced with “third proprietor” was rejected by East Lothian Council’s planning officers.

Now the chain has appealed to Scottish Ministers to overturn the council’s decision.

In its appeal, it says: “Tesco was previously involved in a land transaction which enabled residential development to be constructed on the site of the former Tesco store site.

“This transaction took place over a decade ago and the land of the residential development site is not owned by Tesco.”

The Section 75 agreement which was signed by East Lothian Council, Dundas Estates and Development Ltd and Tesco as first, second and third proprietors, in that order, covers contributions to be made to funding of infrastructure impacted by the new development.

Education contributions are based on the number of houses and impact on local schools.

A report by East Lothian Council’s planning officers in July said that following the original agreement, Tesco sold the site of its former store at Olivebank to Dundas Estates for residential development and Dundas sold Tesco the neighbouring land, which had originally been set aside for housing, for the new store, so they switched places, making Tesco the second proprietor and Dundas the third proprietor.

But when the council notified Dundas Estates of Tesco’s request to change the agreement, it was “vigorously” opposed.

The report said: “Their reasoning is that it was always Tesco Stores Limited who agreed to be responsible for the education contribution and that correspondence from Tesco’s solicitors to the council solicitor in 2008 clearly set out that Tesco Stores Limited agreed to be responsible for the contribution.”

Refusing Tesco’s request to have its name taken off the agreement, the planning officer said: “The council has clear documentation from the time of the drafting of the agreement setting out that Tesco Stores Limited agreed to be a specific, non-transferable, named party responsible for the education contribution.

“Tesco Stores Limited are a legitimate party to whom the education contribution is enforceable, despite them not being the current owners of the third subjects.

“Tesco Stores Limited benefited as the landowner of the third subjects from the grant of the mixed use planning consent, including the residential element of the mixed use development, and the need for the education contribution arises from that element of the mixed use planning consent.”

The appeal is waiting to be allocated to a Scottish Government Reporter.