Sunday, 16 October 2016

Contractor demanded money from Borders council


Scottish Borders Council has been instructed to release more 'confidential' material linked to its disastrous waste management contract with penniless New Earth Solutions Group following a six-month investigation by Scotland's Information Commissioner.

And the Decision Notice from Commissioner Rosemary Agnew reveals for the first time that New Earth's management requested an unspecified sum of money from SBC at some point during the four year partnership which cost taxpayers millions of pounds.

However, no doubt the council will be greatly relieved that details of how much cash was demanded,  the reasons for the request, and whether the money was handed over, are to remain secret for now after they maintained in their submission to Ms Agnew that the sum should not be disclosed even though their former contractors have since crashed out of business with huge unpaid debts.

SBC had also refused to provide details of the lessons learned from the waste management fiasco in response to a Freedom of Information request. Now some of the documentation assembled from the "post-mortem" must be provided by November 28th after Ms Agnew ruled the council had wrongly withheld information.

But so far as the NES cash demand is concerned, the Commissioner's decision notice states: "The Commissioner is satisfied that the information is not required in order to understand any of the lessons learned by the council, and she finds that its disclosure is not required in the public interest".

The FOI request asked for: "Information contained in Council documents, reports, emails and other written correspondence detailing the ‘lessons learned’ from the Council’s unfortunate experience with a contractor who could not deliver either the technology or the funding for the region’s vital modern waste facility at Easter Langlee”.

After refusing the request the council had to supply all of the relevant information to the SIC. But SBC claimed there was no written report detailing the lessons learned. These would be taken forward by staff to be incorporated in future projects.

Ms Agnew's report includes the following reasons given by SBC for keeping the lessons learned information under wraps.

"The Council maintained that, having considered the matter repeatedly, the public interest in withholding the information was so significant that it outweighed the disclosure of the information in this case. The purpose of a “lessons learned” workshop is to ensure that a project can be properly and thoroughly scrutinised with honesty and objectivity. It argued that the most full and frank disclosure and discussion will always take place in circumstances where those participating in that conversation are free to speak honestly, safe in the knowledge that the information will be used for its proper purpose and will not find itself placed in a public environment. 

"The Council submitted that there is a significant public interest in ensuring that where projects have been completed (whether successfully or otherwise), this conversation is able to take place and the fullest rewards of such a conversation are able to be achieved. This way, a public authority can ensure that it is best placed to critically review its own actions, and the public can be assured that such conversations take place. The Council submitted that the public interest in a local body being able to critically review its own actions is substantial, and this interest will be significantly weakened if the content of these conversations find their way directly into the public domain."

Ms Agnew acknowledged it was important that authorities were not deterred from reviewing their actions and decisions (especially in situations which have not had a positive outcome), in order that the knowledge and experience gained from past projects can be utilised in future projects.  The Commissioner considered it was in the public interest for authorities to be able to continually improve their performance in order to increase their efficiency.

However, the FOI requester had indicated he did not require the names of Council officers, where they appeared in the withheld information. The Commissioner considered that if staff names were not disclosed, then it was far less likely that staff would be inhibited from fully engaging in a similar process in the future.

In her ruling Ms Agnew goes on to state: "the Commissioner notes that there is information in section 1.3 of Annex 1 which does not embody formal “lessons” gained from the workshops, but describes the personal reflections and experiences of the staff involved. These comments cannot be seen as organisational learning, but more accurately reflect frank discussions between officers about their own experiences at various times during the project.

"Its disclosure would not be in the public interest: it would not add to public understanding of the Council’s assessment of its overall performance, as the discussions focus on individual experiences. In addition, the Commissioner considers that disclosure of this kind of information may well lead to the harm anticipated by the Council, as officers may not wish to contribute their thoughts so freely in future if they consider that personal reflections and discussions which do not relate to an organisational learning point may be disclosed, even with their names redacted."

But she also writes: " With regard to the remaining content of Annex 1 and Annex 2, the Commissioner notes that both contain organisational “lessons” from the Council’s handling of the NES project.

"The Commissioner considers that disclosure of these “lessons” are in the public interest, as they indicate that the Council has evaluated its handling of the NES project and they demonstrate how this evaluation will be used to improve the management of future waste treatment contracts.  The Commissioner notes that the cancellation of the NES contract led to the Council “writing off” several million pounds of tax payers’ money, and, in the circumstances, she considers that disclosure of the lessons learned during this process is in the public interest.

"The Commissioner finds that the public interest in disclosure outweighs the public interest in maintaining the exception and withholding the information.  Accordingly, she finds that the Council was not entitled to withhold the information under consideration.  She now requires the Council to disclose parts of Annex 1 and 2. The Commissioner will provide the Council with marked up copies of Annex 1 and 2 to indicate what information is to be disclosed."

Sunday, 9 October 2016

Future of Scott's Abbotsford now seems secure


Only a decade ago one of the best known stately homes in the Scottish Borders faced an uncertain future following the death of novelist Sir Walter Scott's last direct descendant.

But now the fortunes of Abbotsford House where Scott penned many of his best known works appear to have been completely transformed following a £12 million regeneration project funded by national agencies, and the reopening of the Borders Railway which is already bringing hundreds of extra paying customers to the imposing house on the banks of the Tweed.

The latest set of accounts for The Abbotsford Trust, tasked with looking after Abbotsford since the death of Dame Jean Maxwell Scott shows that for the second year running 40,000 individuals paid to go round the house and garden in 2015, almost double the numbers in some of the years before the ambitious renewal scheme began.

And according to the Trustees an estimated additional 30,000 visited the free exhibition and wider estate. The annual report says: "This was helped considerably by the opening of the Borders Railway on September 9th 2015 and associated national publicity by VisitScotland, Scotrail and Scottish Borders Council".

In 2014 the Trust reported a large overall surplus of £791,000. The impressive financial performance was repeated in 2015 with a recorded surplus of £784,000.

The Trust's subsidiary The Abbotsford Trading Company, which operates the Abbotsford gift shop, lettings, weddings and corporate events also achieved a profit of £16,873, "thereby continuing the trend of improvement, and beginning to show some positive return on the Trustees' investments".

In a section of the report headed Future Plans, the Trust writes: "The Trustees seek to improve and adjust the visitor experience, notably in the garden and grounds (which could not be achieved in the main capital project) as well as seeking to maximise the opportunities from the reopening of the Borders Railway.The Trustees believe there is now a firm foundation of visitor numbers to build on".

Many of the visitors from around the world who flock to Abbotsford come to view the outstanding collection of heritage assets housed there. These include statues, paintings and valuable historical artefacts collected by Scott during his lifetime.

The 2015 report reveals there was an important addition to the collection last year. This was a harp which originally belonged to Scott's daughter Anne, and was purchased following a donation received for the purpose.

Anne Scott (1803-1833) took charge of the Abbotsford household after her elder sister married. Anne, reportedly afflicted by a weak constitution, cared for her mother who died in 1826, and is said to have been profoundly affected by her father's passing in 1832.

The accounts put the market value of Abbotsford and its environs at £3.845 million. But the report acknowledges: "Due to the historical connection it is likely the property could realise significantly more than this if it were to be sold on the open market".

Monday, 26 September 2016

Council just one of 3,253 losers after offshore fund's collapse


A total of 3,252 investors who placed their money and their trust in a now bankrupt investment fund have joined Scottish Borders Council as victims of the Premier New Earth Recycling & Renewables [Infrastructure] PLC or NERR's liquidation.

The sheer scale of the financial losses now facing the fund's creditors - SBC is not a creditor but managed to lose £2.4 million of public money as a result of NERR's failure to finance a £21 million waste treatment facility at Galashiels - have been laid bare following a major investigation by Sunday Times journalist Ali Hussain.

In an article which was published on the front page of the paper's Money section at the weekend, the story of how a couple lost more than £350,000 of their life savings after they were advised to invest in NERR makes disturbing and sickening reading.

David and Sheila Solomon, from Cornwall, have been left with just £3,000 from their respective pension pots although the Financial Ombudsman Service has instructed the company which advised them to make good the sum of £497,000. So far, according to the Sunday Times, they have not received a penny of the compensation due to them.

As Not Just Sheep & Rugby has reported on numerous occasions, the Solomons' were just two of many investors who were persuaded to put their money in NERR, a fund managed by Premier Group (Isle of Man) but ultimately controlled by a Premier Group offshoot in British Virgin Islands.

The worthless fund was earmarked to provide the millions needed by its business partner New Earth Solutions Group (NESG) to deliver a state-of-the-art waste processing centre on the Easter Langlee landfill site. But the council was fed different excuses during a four year liaison with NESG and NERR before finally binning the £80 million contract in February 2015.

The protracted dealings with SBC proved fruitful for the bosses at Premier Isle of Man. A liquidators' report shows they took many millions in management and promotion fees while NERR was failing its investors and clients, including the Borders local authority.

Deloitte, the NERR liquidators told the Sunday Times: "There appears to be little prospect of any meaningful recovery from the fund's investments", revealing that there are 3,252 registered investors in NERR.

Their money was loaned by NERR to the debt-ridden NESG which staged its own dramatic financial collapse a few days before NERR went belly up. Scores of creditors owed millions by New Earth Solutions will also have to whistle for their cash. The two-pronged debacle has left many small businesses struggling while a significant number of individuals have complained about the advice they were given to the financial Ombudsman.

The promotion of funds like NERR which was an Unregulated Collective Investment Scheme (UCIS) was outlawed in 2013 near to the time when NERR was suspended by its managers, a move which meant money could not be recovered from the fund's coffers.

In a second distressing case covered in the Sunday Times story, the financial adviser who brought heartache and misery to Mr. and Mrs. Solomons - MFS Partnership - also told an 82-year-old woman to invest £99,000 of her £125,000 savings in NERR. The lady has subsequently died, but the Ombudsman found in her family's favour.

According to the article. lawyers for MFS have warned that if the Solomons demanded their full payment immediately it would make the Partnership insolvent. But MFS insisted it had every attention of paying the couple the Ombudsman's award contained in a ruling which was issued six months ago. He described NERR as "high risk".

Correspondence seen by the newspaper shows concern was being expressed as far back as 2011 over the advice provided to the couple based on documentation related to the fund. That was also the year in which SBC signed the contract with NESG and its funder.

Saturday, 24 September 2016

Borders council's shocking environmental record continues


Greenhouse gas emissions from Scottish Borders Council's landfill site reached their highest levels for seven years in 2015 while the authority's recycling performance remained close to the bottom of Scotland's waste treatment league table at a pathetic 37.3%, nine percentage points below the national average.

Statistics newly released by the Scottish Environment Protection Agency (SEPA) reveal an 11 per cent increase in methane gas being emitted from the Easter Langlee site where 30,355 tonnes or 60.9% of the region's household waste was landfilled last year.

The figure for methane was recorded at 403,000 kg, a staggering 40 times above the reporting threshold of 10,000 kg. It is the highest total for methane since 2009 and compares with the 2014 level of 361,000 kg.

Much of the rest of Scotland may be meeting their greenhouse gases reduction targets. But there is no sign that is happening in the Borders where environmental issues appear to be given a low priority.

The picture is equally concerning when it comes to deadly chlorofluorocarbons [CFCs] and hydrochlorofluorocarbons [HCFCs] produced at the Easter Langlee site. In both cases the totals emitted in 2015 were the highest for several years.

The reporting threshold for CFCs and HCFCs is 1 kg per annum. The CFCs logged at the Borders treatment centre added up to 34 kg in 2015, well up on the 31.1 kg recorded in 2014. The figures for the previous two years were 27.5 kg (2013) and 32.8 kg (2012).

HCFC emissions increased by an alarming 44% in the space of 12 months, up from 23.9 kg in 2014 to 34.6 kg last year. The 2015 return was also considerably higher than in 2013 (26.5 kg) and 2012 (28.3 kg).

Waste data returns, also published on SEPA's website do not show Scottish Borders in a good light. Just 18,600 of the 49,848 tonnes of household rubbish generated were recycled. And a paltry 892 tonnes (1.8%) were diverted from landfill.

The 37.3% recycled represents a marginal improvement from 36.7% in 2014 when 49,952 tonnes of waste were collected and 30,666 were landfilled. Only 940 tonnes (1.9%) were diverted from landfill.

Not Just Sheep & Rugby looked at the statistics for SBC's immediate local government neighbours to see how they performed in 2015.

Dumfries & Galloway generated 74,092 tonnes of waste, landfilled 21,767 tonnes (29.4%), recycled 20,091 tonnes (27.1%) but diverted the remaining 32,235 tonnes (43.5%) from landfill.

East Lothian generated 50,906 tonnes of waste, landfilled 22,526 tonnes (44.2%), recycled 26,163 tonnes (51.4%) and diverted 2,217 tonnes (4.4%) from landfill.

Midlothian generated 42,076 tonnes of waste, landfilled 14,227 tonnes (33.8%), recycled 20,136 tonnes (47.9%) and diverted 7,714 tonnes (18.3%) from landfill.

And yet the Borders' appalling record could have been very different had the council managed to provide its population with a modern treatment facility at Easter Langlee instead of becoming involved in their disastrous partnership with New Earth Solutions Group between 2011 and 2015,

The original intention was to develop a conventional processing centre which would have diverted at least 80 per cent of waste from landfill. Had the plant been completed on time in 2013 then those disgraceful emission levels would probably have been decreasing in line with the rest of the country.

Instead elected members sanctioned a contract variation which they thought would bring them glory as the leading waste disposal authority in Scotland. But the (not so) advanced thermal technology let them down badly while the (now liquidated) funding company could not come up with the £21 million needed to build the Galashiels facility.

The contract was abandoned in disarray, and just to compound matters the same set of councillors also voted to scrap garden waste collections - the only authority in Scotland to do so.

Those awful statistics on recycling, landfilling and greenhouse gas emissions are a direct result of that flawed decision making. But there seems to be little or no pressure from Government agencies on SBC to turn around its dreadful record of recent years.

Sunday, 18 September 2016

30-year "war" over the king of fish


A war of words between the "landed gentry" who own the world renowned salmon fishing beats on the River Tweed and a dwindling band of fishermen in North-east England accused of intercepting tens of thousands of fish heading for Scottish rivers looks set to continue for at least another six years.

The Atlantic salmon in question may be 'wild' but the riparian owners of those lucrative angling waters continue to pile pressure on the UK Government to speed up the complete removal of drift net licences and beach netting on the Northumberland, Durham and Yorkshire coasts.

For their part the working fishermen of the north-east claim the angling proprietors are motivated by pure greed, and that there is no scientific argument for the demise of their 'traditional' methods of catching salmon and sea trout which have been a way of life for countless decades.

Publication of the number of salmon caught by the English drift nets and the T & J or fixed engine beach nets has prompted renewed calls for an end to both methods of fishing ahead of the planned 'death' of drift netting in 2022 and the phasing out of the beach nets.

A blog written by one Tweed proprietor describes as "staggering" the 15,989 salmon taken by the north east coast fisheries in 2015. And yet the total is only a fraction of the 50,849 caught in 1988 or the average figure of 56,000 between 1970 and 1976. At that time there were close to 200 drift net licences compared to the dozen or so which survive into 2016.

According to a 1982 Fisheries Research report compiled by researchers 94% of the salmon intercepted off north-east England may have been returning to Scottish waters. The angling proprietors have been involved in a relentless campaign ever since to rid the seas of drift nets and, according to the netsmen, to have total access to every wild salmon in the North Sea.

The Tweed Beats blogger writes: "These 15,989 salmon (almost all killed) are caught by just 12 drift nets and 49 T & J nets at a time when the east coast Scottish rivers, which produce most of these fish, had another very poor year in 2015, if not quite as bad as 2014. By contrast, Tweed rods caught 8,091 salmon in 2015 and killed just 1,651 of those caught.

"One imagines there is not a salmon angler in the land who does not want to see the end of the last remaining major interceptory net fishery around the coast of Great Britain and Ireland. The drift nets are being phased out already, but it needs to be quicker, and the T & J nets, also to predate on mixed stocks need to go to."

The netters may have taken 15,989 salmon last year, but their hauls in some previous seasons were much less impressive with totals lower than the numbers caught on Tweed. In 2012 the catch was 7,318 with only 5,395 taken in 2009, 5,241 in 2008 and 7,091 in 2007.

The National Federation of Fishermen's Associations [NFFA] continue to fight drift netting's corner. In a letter to Fishing News, Ned Clark, chairman of the Association's North-east Committee wrote: "There is something uniquely mean-spirited and vindictive about the campaign by one of the richest power blocks in the country to extinguish the small-scale net fishery for salmon and trout in the north east of England.

"This issue, although cloaked in spurious conservation arguments, has always been about the resentment of recreational anglers and riparian owners towards the small share pf the catch taken by the traditional nets. No expense has been spared to hire ex-DEFRA and Marine Scotland civil servants to advise and front the lobbying campaign.

In December 2012 Fisheries Minister Richard Benyon announced the closure of the drift net fishery in 2022 with the T & J nets to be gradually phased out. The NFFa claimed the move was to placate the "landed/riparian lobby" following 30 years of continuous pressure.

The drift net fishery has been in the process of being phased out since 1992 when John Selwyn Gummer, another Government minister, decided drift net licences should be surrendered when the holder retired rather than passing them on to the next generation. Many licencees accepted offers to buy them out after the angling proprietors and the Government set up a £1.5 million fund for the purpose.

Saturday, 10 September 2016

"Cutting edge" technology issues just wouldn't go away

DOUG COLLIE concludes our three-part expose of a not so NEAT technology

The Scottish Environment Protection Agency [SEPA] was still not prepared to issue a vital certificate to allow the planned £21 million refuse disposal facility for Scottish Borders Council to operate more than two years after elected members decided to incorporate the energy from waste technology in the project.

Failure to deliver the brand of gasification and pyrolysis which was supposed to transform tens of thousands of tonnes of household waste into heat and power resulted in the council and their contractors New Earth Solutions Group (NES) abandoning their 24-year deal, a move which cost the partners many millions of pounds. Millions more will now have to be spent on an alternative strategy to deal with Borders waste.

As we have reported previously, council external auditors KPMG have maintained the New Earth Advanced Thermal [NEAT] technology was "not core" to the £80 million deal originally signed off by SBC in 2011. Council taxpayers who were stung to the tune of £2.4 million by the failure of the venture may find the auditors' conclusions both bizarre and puzzling.

SEPA was certainly in no doubt in October 2014 that the Renewable Energy Facility proposed for Easter Langlee was not ready to receive its crucial Pollution Prevention and Control [PPC] permit. The agency listed a number of outstanding issues in an email to New Earth Solutions which has been made available under Freedom of Information.

A year before the message was written the company was suggesting pressure should be brought to bear on SEPA by Government agencies and by SBC in a bid to have the technological problems ignored so that the PPC variation could be issued.

The October 2014 email from SEPA is mainly of a technical nature. But it contains a suggestion that NES might consider withdrawing the REF part of their application and then submit a new request once the outstanding issues linked to the pyrogas/engines were dealt with.

New Earth are told: "We are of the opinion that the information provided to date does not provide adequate demonstration that either the gases have been purified so they are no longer a waste prior to their incineration, or that they can cause emissions no higher than those resulting from burning natural gas.

"This means that at the present time we are unable to progress the determination of the REF part of the application for substantial variation based on the current design."

Not Just Sheep & Rugby believes some of the technical matters outlined in the note are worthy of publication, and no doubt there will be readers with a sufficient grasp of the sciences to interpret SEPA's narrative.

For example: "Pyrogas H2S, organohalogens (especially vinyl chloride) and chromium levels exceed the thresholds for natural gas referenced in the Environment Agency Syngas Briefing Note. The level of HCN and other species e.g. benzene and acetaldehyde in the Environment Report."

And another passage states: "Little/no data has been provided for total Sulphur, xylenes, ammonia, HCI, HF which are covered in the quality protocol for biomethane injection, or physical parameters, all of which were requested in Q9e of the Schedule 7 Notice.

"There is little detail of breakdown mechanisms/predicted removal rate of different pollutants during syngas purification in your response to Q8 and details of reactions involving NaOCI have not been provided."

SEPA goes on to say the variable nature of the Refuse Derived Fuel (RDF) feed-stock means the pyrogas is also likely to change in composition over time. SEPA needs confidence that any End of Waste (EOW)/Chapter IV exemption with an associated spec for purified pyrogas would be achievable on an ongoing basis - it is considered that further information and data is required to prove this.

There are additional paragraphs dealing with other yet-to-be-resolved issues, but the information set out above provides ample evidence that the technology was proving to be a major stumbling block in delivering the Easter Langlee facility.

Only NES, who firmly believed the PPC variation should have been issued months earlier, and later on KPMG in their "investigation" into how SBC dealt with the contract were convinced respectively that technical issues and the NEAT technological system were of little or no importance to the overall success of the project.

Tuesday, 6 September 2016

Mystery deepens around 'irrelevant' technology

DOUGLAS SHEPHERD presents part two of our latest waste contract trilogy

The 'advanced' thermal technology, dismissed as irrelevant by external auditors who scrutinised Scottish Borders Council's disastrous waste management contract in 2015 following losses of £2.4 million enjoyed a much more elevated status when councillors sanctioned the system in 2012, according to a report which was never meant for publication.

As we reported last week, accountants KPMG who audited the local authority's books concluded their investigations into the collapse of the £80 million contract with New Earth Solutions by stating: "The technology which has subsequently not been able to be implemented was not core to the initial agreement with NES. The basis of award was not reliant upon delivery of the technology".

Such a conclusion might cause some to wonder how the planned £21 million facility at Easter Langlee for treating 40,000 tonnes of municipal rubbish annually could have worked if the so-called New Earth Advanced Technology (NEAT) "was not core" to the project.

But the NEAT system, which turned out to be useless and had still not been certified by the Scottish Environment Protection Agency [SEPA] by early 2015, certainly featured in the private report to councillors which persuaded them to include it in a contract variation in October 2012.

The report states specifically: "The proposed facility will use two technologies to achieve the outcome of the project. The second element of technology to be delivered was a form of Energy from Waste technology specifically known as Advanced Thermal Conversion.

"The technology would ensure that the facility is self-sufficient in terms of energy consumption but would also export up to 3MW of electricity to the National Grid".

Council members were told: "Agree to sign the Deed of Variation (to include thermal technology). If this recommended option is chosen then the project will continue and deliver the previously agreed objectives (legislatively and financially) by delivering an integrated waste treatment facility for the service commencement date of March 2015".

In those circumstances it is difficult to understand how KPMG and their paymasters Audit Scotland were able to dismiss the technology as irrelevant when the entire project together with the 24-year contract went pear-shaped.

The subsequent financial collapse of the New Earth Group and the bankruptcy of the firm chosen to fund Easter Langlee, New Earth Recycling & Renewables [Infrastructure] PLC or NERR, simply compounds the mystery.

A newly published report from liquidators appointed to NERR earlier this year may also be of interest to Scotland's public finance watchdog, and to Scottish Borders Council. There are some alarming statistics within the 12-page document which confirms none of the investors who were naïve enough to place money in the offshore Fund will see a return.

As Not Just Sheep & Rugby reported some time ago, NERR was run from offices on the Isle of Man where directors of Premier Group were able to collect millions of pounds in fees over four years while SBC waited for the Easter Langlee funding to materialise. But it never did.

And as we also revealed, the NERR entity was ultimately controlled by Premier Group Distribution Inc., operating from Panamanian law firm Mossack Fonseca's office in the tax haven of British Virgin Islands.

According to the liquidators' report on NERR potential options for recovery of shareholders/ investors cash could include actions for misfeasance, fraudulent trading, or fraudulent disposal or concealment of assets.

The bottom line is that the NERR Fund on which delivery of the Borders' £21 million waste treatment facility relied is expected to yield just £465,000 for unsecured creditors before the costs of the liquidation process.

Many of the debts, including multi-million pound loans made to the soon to be dissolved New Earth Solutions Group, are irrecoverable.

Of course Scottish Borders Council's dealings with these bust organisations - the report shows NERR held a £1 million equity stake in New Earth Solutions (Scottish Borders) - and the subsequent write off of £2.4 million of public money do not warrant any kind of official investigation.

COMING NEXT: SEPA's issues with that useless technology