Council owed £100,000 by Oakbank Residential School

The governors of a former residential school in Aberdeen still owe the city council £100,000 – more than two years after it was shut down.

Oakbank School, for youngsters with behaviour problems, closed in August 2008 after a drop in referrals and rising debts.

It emerged yesterday that Liberal Democrat councillor Gordon Leslie, a former member of the school’s board, has questioned the council’s chief executive, Sue Bruce, about two loans Oakbank was given by the local authority in 1997.

In a written answer in advance of Wednesday’s council meeting, Mrs Bruce has revealed that the loans were worth £380,000 and were supposed to be “short-term, not exceeding one year”.

The Press and Journal understands that, 13 years later, a total of £103,764 remains outstanding, with the last payment of £10,000 made three years ago.

About £1million is also thought to be due from Oakbank to the local authority’s pension fund.

The governors are expected to be hit with another bill after the council recently sent in its joiners to board up the Mid Stocket Road building amid complaints about antisocial behaviour.

Mr Leslie said: “In the current financial situation and the cutbacks we are having in social work, education and everything else, I wanted to find out where we are with the loan from Oakbank because I believe that the citizens of Aberdeen need to know what is going on and how much money is still outstanding to the council.

“I think the money should be paid quickly. We want to find out why nothing was done at the end of the year loan.”

Oakbank board chairman Willie Young said Mr Leslie and other members of the council’s Liberal Democrat-SNP administration “ran away” from the board in 2008, and questioned why he was raising the concerns now. “We didn’t leave,” he said. “We took our responsibilities seriously.

“There was outstanding money due, but Aberdeen City Council hasn’t been able to substantiate that loan. They can’t provide us with a copy of the loan agreement.

“We, as governors, are taking it in good faith that we owe them that money and we will give them that money when we get it from the developer. I can assure the council, and most importantly the council taxpayers, that they will be paid.”

An £8million deal to sell the school building to developer Carlton Rock was agreed in 2008, although it is understood a final instalment is still to be paid.

Plans for a £30million residential development at the site are expected to be lodged by the firm soon.