CALLS to reignite a five-year-old criminal investigation into a huge corruption scandal at Edinburgh's property conservation department have been rejected by police.

The confirmation came after further scrutiny of project files in relation to their 2011 investigation spawned by claims that police were not in possession of important documents in relation to the 2011 probe.

But the move has disappointed campaigners who hoped those involved would finally be held to account.

The concerns surround allegations more than 500 property owners in Edinburgh were being ripped off after council staff served "statutory repair notices" for work that was often not needed then hired contractors not on the council's approved list before billing owners for inflated sums.

The Herald:

The local authority uses statutory notices to ensure essential repairs are carried out on historic tenements.

A five-year-old police progress report seen by the Sunday Herald reveals how they found "clear evidence" that a significant number of staff" within the PCD (property conservation department) received hospitality for contracts but no criminality was identified.

It was once estimated Edinburgh City Council was up to £40m out of pocket due to the problems in the department.

Under the system, which had been in place for decades in Edinburgh, the council could intervene to organise repair work on private properties when the owners cannot reach agreement.

The PCD section was investigated following claims that contractors carried out over-engineered or unnecessary statutory repairs, before billing homeowners.

However, the value of statutory notices issued by council surveyors increased dramatically, from £9.2m in 2005 to more than £30m in 2010. Some homeowners complained about overcharging, unnecessary and poor quality work.

The Herald:

The system was suspended in 2011, amid claims that bribes had been offered by contractors, and of cosy relationships between contractors and council officials.

No criminal charges were brought four years ago when Lothian and Borders Police investigated allegations of fraud and corruption in the property conservation department.

It has now been confirmed there was a recent meeting held between Police Scotland and and the council to discuss a review of "project files" in respect of officers' 2011 investigation into the PCD. This related to claims put forward by an Edinburgh city councillor that important missing files that were not part of the probe.

But the police has now concluded that they had had all the information they needed at the time to submit a report to the Procurator Fiscal and that there was no new evidence to support a new one.

Gordon Murdie, a former chairman of the Royal Institute of Chartered Surveyors East Area who had represented more than 200 clients affected by the controversy, said he it was "beyond understanding" that "no strand of criminality" has yet been found.

He said people had "got away with it".

A 2012 progress report compiled by Lothian and Borders Police in relation to allegations of corruption within the City of Edinburgh Council Property Conservation Service has revealed that it was "debatable" that practices uncovered were "for the benefit of the householders, buildings or a means of additional revenue for the PCD and contractors".

The Herald:

The local authority used the statutory notice system to ensure essential repairs are carried out on historic tenements in a city which has the highest ratio of listed buildings of any major city in the UK.

It is set up to ensure that the character of the old town and new town districts of Edinburgh which are listed as UNESCO World Heritage Sites is retained and that they are safe.

The 2011 police progress report found that a "significant number of projects" were allocated to companies outwith an approved a Term Framework Agreement (TFA), which pre-qualified a number of contractors through a tendering process to be eligible to bid for individual jobs or projects.

The report said the department "regularly breached" the Public Contracts (Scotland) Regulations 2006, by allocating hundreds of projects to non-approved companies between 2006 to 2009.

While breaches are not criminal, they are subject to action by civil legislations pursued by EU regulators, said the report.

The Herald:

It highlighted allegations that roofing and building contractors not on the TFA were awarded works contrary to the council directives in return for hospitality at football matches, golf outings "and other gifts beyond what would reasonably be deemed as acceptable".

A "significant number of PCD members" accepted hospitality from contractors, including attending football matches, horse racing meetings, rounds of golf, meals and drinks and "certainly on one occasion attending a strip club", it said.

PCD staff borrowed contractors vehicles and equipment to complete their own projects without paying hire costs. They also used contractors to buy materials on their behalfto benefit from trade discount. Some accepted gifts of alcohol and tools.

It meant that existing contractors on the TFA lost out.

""The successful contractors saw acceptance onto the TFA as a promise of work over the next four years, however this was not strictly the case," said the police report.

"Contractors incurred expensive set up costs to bring their operations into line with the TFA's strict requirements particularly in relation to welfare and health and safety regulations. The [council's] position is and to quote from a senior member of the department, 'These businesses should not have put their eggs in the one basket'."

The report said there were claims of overpricing and overestimating in many of the contracts provided to contractors. And inspectors and contractors had falsified certain documents in relation to works completed.

Four staff in the PCD were dismissed during 2012 and 2013 in connection with the scandal. Director of city development, Dave Anderson resigned before a disciplinary inquiry into his management of the department was completed.