A charity has handed over more than £360,000 from a land sale to Oxford City Council.

The cash constitutes a quarter of the £1.2m raised from the sale of allotments at Temple Cowley and was paid over in return for planning permission to develop the site.

But the payment by the Elder Stubbs charity has left residents feeling "cheated".

The charity was set up in 1852 to provide for the "deserving, labouring poor of the parish of Cowley" by managing 11 acres of allotments. Its eight trustees include the Lord Mayor of Oxford, Carole Roberts, and former council leader Stan Taylor.

Last year the charity sold 1.8 acres of the land to developer Bewley Homes.

But the city council took their slice of the proceeds in return for giving planning permission. Of the £1,235,000 received for the land, trustees handed over £360,051 to council coffers. Now the charity is asking for some of the money back.

John Purves, clerk to the trustees, said: "Local residents feel they have been cheated.

"But the trustees are legally bound to get the best deal for the land and the advice they got was that this was the best deal they would get. None of us liked it, but it is an imposition."

The Elder Stubbs charity raised money for the poor by charging rent on allotments and distributing the profit at Christmas. Charitable donations ceased in the 1980s after the demand for allotments fell.

Since then, the charity has worked with other charities and voluntary groups to transform much of the derelict land into woodland, market gardens, orchards and sculpture areas.

The decision to sell some of the plot was taken to generate enough cash to maintain the site properly and benefit the poor of Cowley once again. After drawn-out talks with the council, the charity won planning permission for housing, on condition it paid 30 per cent of the sale price to the council as "planning gain".

Planning gain is used by councils to return some of the profits from developing land to the taxpayer and pay for other improvements. In this case it will fund social housing in Cowley.

The Elder Stubbs trustees accepted the deal after taking advice from solicitors and planning advisers. The former Elder Stubbs land now makes up Bhandari Close and Cricket Road.

Cllr Stan Taylor, chairman of the trustees, said: "A lot of people think of it as blackmail and, in a way, you are made an offer you cannot refuse.

"But the value of land shoots up once it has planning permission for housing and it is only right that some of the sale price returns to the taxpayer. We also earned an assurance that this planning gain would be spent on social housing in Cowley, which in many ways fulfils the purpose of the charity."

He added: "I have been very careful to act in the best interests of the trust and not the council on this."

The charity has invested the money "ethically" under charity law and, although it cannot spend the capital, has used the interest to fund a series of improvements to the land. It is now putting pressure on the council to return some of the planning gain cash.

Mike Ford, head of planning policy at the city council, said: "We are still in the middle of negotiations with Elder Stubbs so I cannot discuss the intricacies of the matter. We are proposing to report to councillors once we have heard back from the trustees and we have not heard back from them yet.

"There is no distinction made between charities and anybody else in these things. They are a landowner as far as we are concerned. We cannot go letting people off planning gain - it leads to corruption."

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