A NOW-defunct development project may need to be bailed out with £7.5million of public cash.
That is the warning, with more than £350,000 set aside for the next year alone.
Kirkintilloch’s Initiative (KI), which was responsible for Kirkintilloch Link Road, Kirkintilloch Leisure Centre and the town’s new Integrated Care Centre, was effectively taken into council hands earlier this year.
The falling property market has seen once-valuable pieces of land earmarked to fund KI’s work left unsold – leaving a funding black-hole estimated at around £7.5million.
In East Dunbartonshire Council’s annual accounts £360,000 has been allocated to finance the debt for 2011/12 – with a warning that future years could see the council shelling out even more cash.
That money is coming from the council’s revenue budget – which provides funding for front-line services.
The accounts state: “A shortfall in KI receipts to fund capital expenditure is estimated at £7.5million.
“There will be implications for the debt charges on the phasing of receipts and in the long term the £7.5million will now require to be funded by the council.
“The implications for 2011/12 are estimated to require additional funding of £360,000, with future years seeing further increases as full impact is met.”
Thomas Glen, the council’s head of development and enterprise, said: “When being established, the anticipated ‘lifespan’ of KI to deliver the planned programme of works was thought to be in the order of 10 years.
“That anticipated 10-year period has in fact proved to be quite accurate and, with completion of the Kirkintilloch Link Road, the Initiative has delivered nearly all of the major projects originally envisaged – including major new integrated health and leisure facilities for the local community.
“These successful projects have assisted in the regeneration of Kirkintilloch in recent years.
“However, as a result of the economic downturn, the scope for promotion of further projects has reduced and accordingly, a number of measures have been put in place to wind up KI.
“The council will consider the next steps for projects originally proposed under KI as part of its wider economic regeneration proposals and will ensure the principles of involving the community, which KI strongly advocated and the council supports, are included within any such proposals.”