The case relates to plans to transform four Category A-listed Georgian townhouses at 14-17 Atholl Crescent, within Edinburgh’s UNESCO World Heritage Site, into high-density pod-style visitor accommodation.

A Statutory Appeal at the Court of Session seeks to have the decision quashed, arguing that serious errors were made in the way the application was considered.

Philip Flockhart, conservation architect and spokesperson for the residents, said: “The decision to pursue a Court of Session challenge has not been taken lightly and the legal arguments will now be considered through that process.

“The wider issue, which goes beyond one development, is that this was an exceptionally large and complex proposal and Edinburgh’s elected Development Management Sub Committee never had the opportunity to consider it.”

The application was taken to the Scottish Government after the council’s deadline for reaching a decision had passed, before it had reached Edinburgh’s Development Management Sub-Committee. As a result, locally elected councillors never had the opportunity to vote on the proposals.

Concerns about the way the application moved through the planning process have been raised by elected representatives from across the political spectrum.

In a written response to Cllr Adam Nols-McVey, who raised deep concerns about the situation surrounding the Atholl Crescent development, Cllr Hal Osler, convener of Edinburgh’s Development Management Sub-Committee, said she was “deeply disappointed” that the committee had not been given the chance to determine the application.

She said: “This was an extremely complicated application that required both planning permission and listed building consent. The statutory decision-making timescale for both applications is set at two months.

“Prior to the agent exercising their right to appeal non-determination, the officer sought to agree an extension of time with the agent to allow submission of additional information to support the assessment.”

The case comes amid wider pressure on Edinburgh’s planning system. Council figures show that 2,434 applications, 54% of those determined between August 2024 and July 2026, were decided after the point at which applicants became entitled to appeal on grounds of non-determination.

Residents have stressed that their concern is not with Edinburgh’s planning officers, who are dealing with significant workloads and pressure on resources. Instead, they believe the case raises a wider question about whether the current system gives councils enough time and support to properly consider particularly large and complex applications before an applicant becomes entitled to take the matter to appeal.

Mr Flockhart added: “We have sympathy with planning officers working under enormous pressure. The question is whether the current system gives councils and communities sufficient protection when major applications reach a statutory deadline before local democratic scrutiny has taken place.

“Edinburgh needs investment and it needs places for visitors to stay. This is not about opposing appropriate development or tourism. It is about making sure people can have confidence in how major planning decisions are made.”

More than 280 objections were lodged against the proposals, which were also opposed by all four local ward councillors and the area’s MP, Dr Scott Arthur. The Cockburn Association previously warned that the development would cause “substantial and irreversible harm”, while the Architectural Heritage Society of Scotland raised concerns about the “scale and intensity” of the proposed use.

Dr Scott Arthur MP said: “I remain deeply disappointed by the decision to approve this development. The scale and 24-hour nature of the proposal raises legitimate concerns around residential amenity, noise, safety and the impact on the surrounding area.

“I respect the planning process and the role of the Reporter, but I continue to stand with residents who have raised serious and reasonable concerns about this development.”

Cllr Claire Miller, Green councillor for the city centre ward, said: “While the planning decision was extremely disappointing, I’m really pleased that the community is pulling together and I’ll be supporting their decision to lodge a Statutory Appeal.

“Our planning system is skewed in favour of developers and so I believe it’s important to support local residents to have their say when it comes to large applications like this hostel and that local decision making is respected.”

Cllr Finlay McFarlane, SNP councillor for the city centre ward, said: “I am certainly impressed at the resolution of the residents that they are continuing to take this forward. For them not to have had their say through the planning process is an absolute betrayal and I wish them well.”

Cllr Jo Mowat, Scottish Conservatives councillor for the city centre ward, said: “It is disappointing that residents are having to take the further action in this matter but encouraging that they are now able to make their case legally. Such decisions are best made locally, not by distant bureaucrats, and this whole episode epitomises the much wider issue of local democracy and planning reform which the Scottish Government urgently needs to address.”

Liberal Democrat spokeperson and former City Centre councillor Charlie Dundas, said: “My main concern is the bypassing of local democracy by going straight to the national reporter.  Local voices need to be heard and the Council should be able to do its job. This feels like a loophole which needs to be closed.”

Among the further issues raised in the Statutory Appeal is the scale of the development itself. Although the proposals have consistently been presented as providing approximately 544 beds, the appeal argues that the planning permission contains no restriction on the number of beds or pod units which could ultimately be provided.

The Reporter concluded that the number of beds within a Class 7 hotel could not be controlled through the planning process. The appeal argues that conditions restricting the number of beds, pods and rooms containing pods could have been imposed and that without them there is no restriction on the development’s overall bed capacity.

Jocelyn Cunliffe, of the Architectural Heritage Society of Scotland, said: “This case raises a wider question about whether Scotland’s planning system is equipped to protect historic buildings and local communities when dealing with increasingly intensive uses.

“If the number of beds cannot be controlled through the planning process, it is reasonable to ask how the intensity of use of a historic building can be properly assessed and managed. That is an issue which goes far beyond Atholl Crescent.”

The appeal also raises questions about the assessment of the impact on nearby residents and refers to previous decisions involving much smaller short-term visitor accommodation proposals in the surrounding area.

It additionally argues that the Reporter considered the expired 2017-2022 World Heritage Site Management Plan rather than the current 2025-2035 plan, as well as raising questions over the assessment of infrastructure contributions towards Edinburgh’s tram network.

The Statutory Appeal asks the Court of Session to consider a series of questions of law, including whether the Reporter erred in law, failed to have regard to material considerations, failed to interpret development plan policy properly and whether the decision should be quashed.