GRAHAM’S The Family Dairy has accused the Scottish Government of sending out conflicting messages after it threw out the company’s appeal against a decision to not grant it planning permission for a £40 million housing and dairy project in Stirling.

Robert Graham, managing director of the Bridge of Allan-based firm, said its plans to build 600 homes and create 500 jobs by investing £20m in a state of the art dairy at Airthrey Kerse were “dead” after being dismissed by the minister for local government and housing.

He claimed the decision runs counter to the Scottish Government’s stated aim of tackling the country’s housing shortage and commitment to supporting economic growth, as signalled by its recent Growth Commission.

And he said it blocks the investment he believes is needed to ramp up production in the Scottish dairy industry, with the Brexit vote having raised the prospect of tariffs being placed on dairy imports to the UK. The UK is the world’s second biggest net importer of dairy products after China.

Asked whether the company would seek to appeal the decision at the Court of Session, Mr Graham said: “To be honest, I’m not sure. I’m so surprised by the decision, and disappointed.

“Clearly, there has been so much talk of commitment to the Scottish economy, Scottish companies, food and drink, rural economy, [and] dealing with the housing shortfall [that] this is clearly a contradictory message. What we do know is that our proposal for Hill O Drip (farm) is dead. Anything else we just need to think about.

“As a business, we have managed to grow over the last 20 years and will continue to work to do that. We’ve got great products, we’re innovative, but we won’t be able to do the big step-change investment.”

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Graham’s has been embroiled in a two-year planning battle over its plans for Airthrey Kerse, where its proposals include the development of 150 affordable homes, a primary school and 90-acre public park. It claims the plans, which it developed in conjunction with housebuilder Mactaggart & Mickel, would have helped solve Scotland’s housing shortage.

The plans were constructed so that the sale of the homes would release the capital required by the firm to invest in its new dairy.

The application was initially refused by Stirling Council. Now, further to Graham's appeal, the scheme has been thrown out by the minister for local government and housing, Kevin Stewart, on the grounds it does fit the local development plan for the area.

The company claimed that the minister’s ruling has blocked the “single largest investment in the Scottish dairy industry in a generation”, declaring that the project would have given the Scottish economy a £65.3m boost and created 1,425 jobs across the country.

Mr Graham was unwilling to comment specifically when asked if he had been told which aspects of the local plan the scheme had breached.

“SEPA approved it,” he said. “I think that, when you set it against a backdrop where the head of planning of Stirling Council recommended it for approval, I’m not sure how much of this decision was about planning.”

And he said the experience would force the firm to think twice about developing such plans again. “I don’t think it will just be us – I think it will make other people think twice about that kind of aspiration,” Mr Graham added.

A planning bill is currently in the process of making its way through the Scottish Parliament and completed stage one at the end of last month. Mr Graham insisted the current system “absolutely needs reform”.

He said: “You can’t have councils continuing to not provide housing, despite government telling them to do it. You can’t have governments continually being ignored by councils yet continuing to do nothing about it.”

The Scottish Government said in a statement: "Ministers carefully considered this application and its economic and housing benefits. However they accepted the independent planning reporter’s view that these benefits do not outweigh the loss of a significant area of sensitive greenbelt land and upheld Stirling Council’s original decision to reject the planning application.

"In addition, we support local development plans as the best way of identifying land for sustainable development and in this instance Airthrey Kerse is not recommended for housing."