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Councils left with £200m shortfall in funds to clean up opencast mines

Local authorities are missing a massive £200 million from the funds they need to clean up the mess made by 32 opencast coal mines across central Scotland, a Sunday Herald investigation has revealed.

According to informed industry sources, the cash set aside by two major coal companies before they collapsed this year amounts to only a quarter of the sum now needed to restore scarred landscapes as local communities were promised.

As a result, most of the mines that are disfiguring large areas of East Ayrshire, Lanarkshire, Dumfries and Galloway, Fife and Midlothian are likely to remain derelict, or to be cleaned up on the cheap.

The revelations have prompted furious reactions this weekend from leading politicians, environmental groups and local communities. It is a "national scandal" and a "betrayal", they say.

The falling price of coal forced Scottish Coal into liquidation in April. Another opencast company, ATH Resources, was wound up in May. Their collapse threw the future of 32 opencast sites in six local authority areas into doubt.

The sites were meant to have insurance bonds in place to ensure that the cost of restoring the sites could be met, whatever happened to the operating companies. But it has since emerged that the bonds were inadequate and, in some cases, had expired or didn't exist.

Now the Sunday Herald has discovered, from speaking to industry experts and examining published data, that the gap between the money that councils have and the money they actually need for clean-ups, is huge - and much higher than previously estimated. The most conservative estimate is that only £66m is available for restoration works that are likely to cost more than £255m, a shortfall of £189m. But rising costs are almost bound to increase this to £210m, experts say.

By far the biggest problem is in East Ayrshire, where 22 sites face a £132m shortfall on a total restoration cost estimated at £161m. But there are also major deficits in South Lanarkshire (£34m), Dumfries and Galloway (£15m) and elsewhere (see the table).

A independent review commissioned by East Ayrshire from the Scottish Government's former chief planner, Jim Mackinnon, was due to publish its report this week, but it has now been delayed until January so that "further work" can be done.

The council - along with South Lanarkshire, the Scottish Environment Protection Agency and the Scottish Government - has gone to court to try to prevent Scottish Coal's liquidators from disclaiming responsibility for restoration.

The Scottish Liberal Democrat leader, Willie Rennie MSP, is hosting a "coal summit" at Holyrood tomorrow. He said: "I have seen for myself the devastation that the collapse of this industry has had on the local communities and the environment.

"This new estimate reveals the true scale of the betrayal by those responsible and the mountain that needs to be climbed to make the mines safe and restore the land to what was promised."

To the Green MSP, Patrick Harvie, it was a "national scandal" for which the coal companies must be held to account. "Taxpayers and local communities have been dumped on," he said.

According to bird charity the RSPB, there had been "an almost total failure" of the planning system. Aedán Smith, from RSPB Scotland, said: "That failure effectively amounts to a massive additional subsidy for the opencast coal industry, giving them free rein to trash our environment."

Community umbrella group the Scottish Opencast Communities Alliance predicted that only a tiny fraction of the money needed would be made available, leaving communities with "the scars, the blight and the polluted water for many years to come".

East Ayrshire's chief executive, Fiona Lees, described the council's £132m funding gap as "notional". She said: "It has never been suggested that this amount or anything like it be spent by the council and so alternative restoration proposals are being developed."

In April, the Scottish Government set up the Scottish Mines Restoration Trust to try to find ways of solving the funding shortfalls. In an email at the time, released under freedom of information law, the trust was labelled as "very tricky politically" by its newly appointed chairman, Professor Russel Griggs.

The Scottish Government said it shared community concerns about restoration. A spokesman said: "No-one doubts the scale of the challenge, but bleak projections of huge costs will not help solve or tackle those challenges. The reality is that local authorities have developed many good schemes in the past and they will do so in the future."

Energy minister Fergus Ewing has asked the UK Government for a levy taken from the coal mining industry to be used to restore mine sites. Last week, ministers launched a consultation on how to ensure future mines are restored.

European commission takes up opencast restoration complaint

The European Commission is investigating a complaint about the failure to restore two opencast coal mines in East Ayrshire, and damage caused to the environment.

Mines at Powharnel and Grievehill were abandoned by coal firms when they went bust this year, leaving slag heaps, gaping holes and a partially wrecked wildlife protection area.

The money in insurance bonds for restoration and mitigation from Scottish Coal and ATH Resources is totally inadequate. East Ayrshire Council says £3.5 million is available for tasks costing £26m.

Greta Roberts from the Mining and Environment Group Ayrshire (Mega) lodged the complaint with Brussels. She says hen harrier habitat has been damaged and fears a council "quick fix". The Royal Society for the Protection of Birds is concerned about the loss of wildlife habitat.

East Ayrshire Council said it would co-operate with any inquiry.

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