MOST of the cash from the sale of the Sick Kids Hospital looks set to go straight to the Scottish Government rather than cash-strapped NHS Lothian.
The hospital site in Sciennes Road – a prime location close to the Meadows – is expected to fetch up to £25 million.
But under government rules, most of the money from such sales by health boards must go to the Scottish Government’s health department to fund projects across the country, unless it has already been allocated to a government-approved project in the health board area.
It is understood the Sick Kids proceeds have not been earmarked to any specific project.
Edinburgh Southern Labour MSP Daniel Johnson said the cash was needed here. He said: “The money raised must stay in the Lothians. This is a growing city with a health service under strain, we cannot allow a cash grab by the Scottish Government.”
Developers are eager to secure the land for housing when the hospital moves to a new home next to Edinburgh Royal Infirmary at Little France. But campaigners have put forward proposals for a community buy-out.
The Marchmont and Sciennes Development Trust, which is behind the community bid, wants to use the site for affordable co-operative housing, healthcare and nursery facilities, space for social enterprises and a community hall.
It formally lodged the application late last month and ministers must decide within 30 days whether the community bid should get first refusal.
Mr Johnson voiced concern about the potential for a conflict of interest between the government’s financial interest and its role in having to rule on allowing the community buy-out bid to proceed to the next stage, which would delay a quick sale.
He has written to Land Reform Secretary Roseanna Cunningham, asking her to set out what measures would be put in place to avoid such a conflict.
He said: “The sale of this site will result in significant capital receipts, therefore Scottish ministers have an interest in this sale either directly or indirectly.
“Given that ministers will also have to decide whether there is a valid community interest under the statutory process in the coming weeks, which would in turn result in a delay to the sale, there is a clear possibility of a conflict of interest.”
The rules on the sale of health board land and property say the “capital” element of the proceeds will go to the government for reinvestment in the overall capital programme unless it has already been approved for spend on a separate project.
The board does retain the “profit” element of the proceeds – the difference between the valuation and the sale price.
A spokesman for the community trust said: “The ideas put forward by the people living around the Sick Kids site have the potential to revitalise the local area and address some of the big pressures on our city.
“I think we all would appreciate clarity on where exactly the money raised by the sale will go, given most people will have assumed it will all be going to the health board.”
NHS Lothian and the Scottish Government both said it would be inappropriate to comment.