Mactaggart & Mickel Homes Ltd says it has contributed around £9m over the past 15 years to support educational enhancements linked to its housing developments. But the company alleges that a substantial portion of this, approximately £6m, has not been spent.

The dispute centres on financial contributions made under Section 75 agreements tied to a large residential development at Greenan, off Dunure Road, first approved in 2010. At the time, the developer agreed to pay towards local school improvements to accommodate the expected rise in pupil numbers from the new homes.

A second Section 75 agreement, signed in 2021 when a continuation of the development was approved, contained similar provisions regarding education infrastructure to “mitigate” the impact of the expanded housing.

According to Mactaggart & Mickel, some of the money has been used to upgrade Doonfoot Primary School and St John’s Primary School. But it argues the bulk of the funds remain unallocated, with no clear evidence of additional improvements required.

In a statement submitted by its legal representatives, Shepherd and Wedderburn LLP, the developer said: “The council has used some of those contributions to expand and improve the local Doonfoot Primary School. The exact amount is unclear.”

It added: “It is unclear to what extent the council has used other contributions to improve any other school attended by children from the development.

“In August 2024, the council still held £5.9m, which, at that stage, had not been allocated to any identified future capital expenditure. In September 2024, Mactaggart & Mickel made a final payment to the council of £259,778.”

The developer argues that the need for further improvements no longer exists: “The available evidence strongly suggests there is no ongoing requirement to carry out any further school improvements as a result of the Greenan development.

“It illustrates that each of the schools which could be improved using contributions from the development, has available teaching capacity and that children from the development are not causing capacity constraints that would require the schools to be expanded further.”

Under the terms of the Section 75 agreement, any unspent or uncommitted contributions are to be repaid within five years of the development’s completion.

The statement continues: “However, in view of the available evidence there does not appear to be any lawful basis on which the council could justify further expenditure on education infrastructure arising from the development.

In these circumstances, the council is requested to agree to modify the Section 75 Agreements to provide for the repayment to Mactaggart & Mickel of unspent education contributions together with accrued interest (by 30th July 2025).”

The developers also question whether expansion of Kyle Academy, a secondary school outside the development’s catchment area, should have been considered at all: “There is no ongoing justification for the council’s retention of funds to deliver an expansion of St John’s Primary School since its most recently published occupancy level is less than 65% of its capacity.

“And we have seen no evidence that any alternative facilities are required to meet the denominational primary educational needs of children from the Greenan development.”

It further stated: “There was never any justification for using any of the Greenan developer contributions towards the expansion of Kyle Academy, since the Greenan development is not within its catchment area.

“The request from the council’s service lead for planning and building standards that funds held by the council could be ‘utilised to reconfigure the layout of the school’ is unreasonable, given the lack of any linkage between the development and the school. It is not clear whether the council has ever used funds from Greenan to make improvements to Kyle Academy.”

According to the Ayrshire Live, Mactaggart & Mickel has now instructed planning KC James Findlay to pursue repayment of “any or all” of the £9m paid.

In correspondence with the council, Mr Findlay said: “It would appear that the council retains £5.9m of the total paid. I suggest that, as a first step, the council be asked to identify all sums ostensibly spent pursuant to the agreement and the basis of so doing in each instance.

“A more informed view can be taken as to the merits of seeking to recover all or any part of the relevant monies.

“At present, I suggest that the arbitration route provided by the agreement would appear to offer the most suitable avenue for determination of any disputed issues as to the propriety of any expenditure.”

In response, South Ayrshire Council confirmed the request is under consideration: “South Ayrshire Council has received an application to vary an existing Legal agreement relating to the Greenan development in Ayr.

“The developer Mactaggart & Mickel have requested the return of the unused Developer Contributions originally provided to reduce the impact of the development on Educational facilities in the area.

“The developer purports that the Greenan development has not created the impact on educational facilities, predicted at the time of the original planning application and therefore the council no longer requires the developer’s finance to upgrade school facilities.

“The money provided through the developer contributions process is ringfenced and therefore has no impact on the council’s budgets.

“The application to amend the legal agreement will be considered by the Planning Authority in due course.”