Where now for Borders kiln-drying facility?

Yet another potential development project for the Borders, assessed and proposed by a trio of consultancy firms for the council at considerable cost, now stands little or no chance of delivery in the short term following the collapse of the planned waste treatment facility at Easter Langlee.

Only 10 months ago the findings of a 160-page study report confirmed the viability of kiln-drying timber from the Borders forests at a £1.2 million plant alongside New Earth Solutions' combined Mechanical Biological Treatment and Advanced Thermal Treatment (ATT) centre. The kiln was to use power generated by the ATT which would also supply heat and electricity for hundreds of homes and public sector buildings and business premises at Langlee and beyond..

But the council's shock decision to terminate SBC's 24-year £65 million contract with New Earth after just four years appears to have scuppered a project heralded as 'doable' by timber producers, processors and potential customers for the end product.

According to consultants Enviro Centre, Buccleuch Woodlands and Nevin Associates, who between them conducted the 12-month long assessment, the proposed 12-bin wood kiln was capable of producing 24,000 tonnes of dry wood chip per annum or 4,000 tonnes of dried logs.

The carbon saving potential was considered to be significant. The facility would produce 2,804 tonnes of carbon dioxide (CO2) annually compared to natural gas and LPG which would generate 13,336 and 15,440 tonnes of CO2 respectively.

The detailed report claimed: "The financial forecasts indicate the project will generate positive cash flows and be able to meet all obligations placed upon it in terms of taxation, debt service obligations and dividends paid to shareholders."

Scottish Enterprise indicated they could provide support for further assessments, and possible project funding sources were identified by the consultants including Regional Selective Assistance.

"Ownership of the project could be transferred to an entrepreneur who would design, build, finance and operate the facility", according to the report. "Legal protection might have to be built in to any agreement to ensure the facility continues to operate or the council has step-in rights in the event that the owner becomes insolvent".

The Borders proposals were also compared to similar studies in Revelstoke, British Columbia and Burchkirchen, Austria.

SBC's enthusiasm for the idea was illustrated when they organised a seminar for interested parties in June 2014, only a month after the report was made public. There were upbeat presentations from a number of specialist speakers, and it seemed only a matter of time before the plans were progressed to the next stage.

Now, it would appear SBC's mishandling of the flawed New Earth contract and the subsequent decision to abandon it completely means the Borders kiln-dried timber centre may have gone up in smoke.

Waste plant decisions "extremely questionable" says council's expert

The procurement expert who negotiated the original £65 million contract on behalf of Scottish Borders Council for the development of a waste treatment facility at Easter Langlee says the local authority made some "extremely questionable" decisions relating to the project, and he would welcome an investigation following the cancellation of the scheme.

Barry Phelps, who was asked to head up the council's procurement team in 2008, and sealed the deal in 2011 has told Not Just Sheep and Rugby he cannot understand why councillors amended the contract with developers New Earth Solutions (NES) in 2012 to include an Advanced Thermal Treatment Plant (ATT) from the outset at a time when the technology for that element of the facility was unproven.

Mr Phelps was recruited by senior SBC officers while they were on a visit to inspect a waste management centre in Essex where he (Mr Phelps) had procured a similar arrangement for the county council.

He agreed to start work in the Borders almost immediately on a daily rate of £550 plus expenses together with a percentage of any savings he achieved for the council. His normal fee was £1,000 per day, but the radically reduced rate took account of the 20% Gain Share he would receive if he was successful in saving the council significant sums of money.

As is well documented, after the original contract with NES was tied up Mr Phelps was told by SBC officers that the council owed him nothing so he raised a Court of Session action in 2013 in a bid to recover millions of pounds of unpaid Gain Share he believed were due to him.

But after SBC terminated their 24-year contract with New Earth in February of this year and decided to write off over £2 million of public money they'd spent on the project Mr Phelps abandoned his claim.

"Setting aside the issues relating to my case, SBC has made some extremely questionable decisions relating to the waste treatment facility at Galashiels", said Mr Phelps. He explained that the initial contract was to provide a Mechanical Biological Treatment (MBT) facility with NES requiring to use their best endeavours to bring on board ATT technology within eight years of the MBT being built.

In 2012 SBC took the decision to amend the contract with NES, he said. This made the development of the ATT mandatory at the start of services commencement (i.e. when the treatment facility was built).

"This technology was not fully developed, hence the original eight year agreement", said Mr Phelps. "I do not understand why they had to make such an amendment. Not only did SBC/NES amend the contract to include the ATT at the start, they also adjusted the terms of the contract that shifted risk away from NES to SBC without any financial adjustment, The council is now in a position whereby if they retender and the cost is higher they will not be able to recover those additional costs."

Almost all of the council debates about the waste treatment facility have been held in private, and details of decisions made amount to no more than a line or two at the end of council minutes. None of the detailed technical reports on which it is assumed decisions were based have been made public.

It would appear the original contract was changed in October 2012, five months after a new political grouping took control of SBC in the wake of the local government elections in May of that year.The relevant minute of a full council meeting on October 25th simply reads: SUMMARY OF PRIVATE BUSINESS. Item 3 Waste Treatment Project.. Members approved a report by the Director of Environment & Infrastructure.

According to Mr Phelps: "In the previous unamended contract, if NES did not meet deadlines for construction (amongst other obligations), the council was protected against any additional cost, including if they terminated the contract and had to retender or bring in an alternative contractor to take over the services.

"I do not understand why anyone would set aside this protection. If you compare the gate fees [the actual cost of waste disposal] within the NES contract and the guaranteed minimum of 80% diversion of waste from landfill, this is substantially less than any other contract in Scotland. Therefore if SBC retender it is likely they will have to pay substantially more for the same services. The Scottish Government released expected prices a few years ago and these indicated gate fees of around £126 per tonne, some 50% more than the NES contract."

He went on to predict that if SBC decide to transport waste out of the region, this will cost more in terms of gate fees and transportation costs. Mr Phelps said this was estimated to be well in excess of £1 million per year when the project team undertook this analysis in 2009/10.

THE REMAINDER OF OUR COMMUNICATION WITH MR PHELPS WILL BE PUBLISHED IN A FORTHCOMING NOT JUST SHEEP AND RUGBY REPORT.

Hundreds of staff unaccounted for in latest headcount

The number of employees on Scottish Borders Council's payroll in the final quarter of 2014 stood at 5,300, according to official statistics just released by the SNP Government.

But the council has told a Freedom of Information requester it employs 6,421 people. a massive 1,121 more than the official return published on the Holyrood website.

The huge discrepancy is doubly puzzling as there was a similar glaring difference of well over a thousand in the Government and council's headcounts in 2010. It would appear the quarterly totals for 2014, which show a reduction in Borders local government staffing numbers of 200 over the year may require clarification to clear up any confusion.

Public sector employment across Scotland is updated every three months with the latest set of statistics for the period October-December 2014 released only last week. Two separate tables show the headcount of full-time and part-time staff and the so-called Full Time Equivalents (FTE). The figures are rounded up or down to the nearest one hundred.

In SBC's case the number of FTEs is given as 4,300 in the final quarter of last year, 100 less than at the beginning of 2014.

However, in January of this year, around the time when the latest staffing statistics were being assembled, the council received a Freedom of Information request (FOI number 7408) asking how many people were currently employed, and how many of them were receiving above or equal to the living wage of £7.85 per hour.

According to the reply from SBC's Information team: "We currently employ 6,421 people". The response goes on to say that 6,135 of them receive £7.85 or more. It is only fair to assume the information distributed under FOI rules will be accurate.

However, further research revealed an almost identical discrepancy five years ago when the SBC headcount for the final quarter of 2010 was logged on the Scottish Government chart as 5,700. At the same time the FTE figure was 4,600.

Then in another Freedom of Information request (FOI number 3320) lodged with SBC in November 2010 the requester asked: "How many people are employed by the council, by department if possible".

The departmental breakdown contained within the response was as follows: Chief Executive 95; Education 2,936; Planning 101; Resources 918; Social Work 2,223; Technical Services 862. Total employed 7,135 or a whopping 1,435 above the official Government figure.

Perhaps the numbers supplied by the council demonstrate that those official national tables cannot be relied upon and are therefore virtually worthless. Or is it the case that the SBC statistics released in 2010, and again in January of this year are flawed. They certainly cannot both be correct.

As recently as July 2013 council leader David Parker took issue with the FTE figures for his authority - 4,500 - when that number was published by the Scottish Government. He said the actual FTE headcount at the time was 4,395.

Maybe someone can solve the mystery of the extra 1,100 employees who appear to be working for the region's largest employer. Job creation is laudable, but this is ridiculous!

Smoking gun for new health alliance?

EXCLUSIVE - Doug Collie reports

One of the members of a new Borders partnership which will be responsible for promoting public health, including quit smoking sessions, has had a sizable sum invested in global cigarette manufacturers British American Tobacco for many years.

The Scottish Borders Health & Social Care Integration Joint Board is being formed by Scottish Borders Council and NHS Borders, and is due to ‘go live’ on April 1 although services currently delivered by the two public bodies will not be delegated until a so-called strategic plan is agreed by April 2016 at the latest.

This latest layer of bureaucracy is a result of the Scottish Government’s Public Bodies (Joint Working) (Scotland) Act 2014 which requires health boards and local authorities to integrate planning for, and delivery of, certain adult health and social care services. Each integration scheme must be submitted to Scottish Ministers for approval.

The two Borders organisations already have a joint Director of Public Health while the local integration board has appointed a chief officer, the post having been advertised with an annual salary of between £74,296 and £100,255. The board will also have a chief financial officer, and is currently advertising for a communities and engagement officer for health and social care integration who can expect to earn between £26,000 and £28,000 annually.

Scottish Borders Council’s Public Health web page sets out the various initiatives across the region “to improve health and reduce health inequalities”. Included in a list of services is the statement: “We offer stop smoking clinics to help people quit smoking”.

The message was reinforced in the NHS Borders Quit for Good statement, issued in September last year.

It begins: “NHS Borders and Scottish Borders Council Joint Health Improvement Team are looking to encourage smokers to stop smoking for good by using NHS Borders Quit4Good service.” The statement promises that the support being offered will be consistent and ongoing.

But the council’s involvement in the stop smoking initiative appears to be at odds with the investment strategy of its own staff pension fund, which was worth £486 million in March 2014, according to the latest published accounts.

The fund’s value increased by £40 million from the previous financial year and included £5.2 million in investment income. It currently has 9,500 members including 2,898 pensioners who are either employed by or worked for SBC and eleven other organisations, among them housing associations, sport and leisure trusts and colleges.

The accounts for 2013/14 list the top 20 direct equity holdings of the Fund. They include £4.3 million lodged with Prudential Assurance, £3.6 million invested in Google and £2.7 million with Royal Caribbean Cruises. The seventh highest equity holding is shown as £2.3 million invested in British American Tobacco (BAT).

 

Ten years ago the fund’s accounts for 2005 show investment in tobacco companies at that time was split between global rivals BAT (£1.344 million) and Philip Morris (£1.2 million).

But by 2008 the stake in BAT had increased to £2.326 million with no mention of Philip Morris on the list of equities.

A council statement of investment principles relating to socially responsible investments declares: “The Pension Fund Sub-Committee is of the view that its prime responsibility is to maximise the returns on its investment for the benefit of the beneficiaries of the Pension Fund. It is aware that should it fulfil this responsibility then the financial contributions required of employers will be minimised.

“The Sub-Committee will hence place no restrictions on its investment managers when choosing individual investments in companies in either the UK or overseas markets. It will furthermore not place any particular responsibility upon its managers to engage in discussions with companies on non-financial matters”.

Statistics compiled by the Scottish Public Health Observatory for their Smoking Ready Reckoner – 2011 Edition showed 239 Borders deaths during 2009 were attributable to smoking, and an estimated 19% of the population were smokers at that time. Tobacco was also said to have been responsible for 1,229 hospital admissions, and costs to the local health services associated with smoking were between £6.1 million and £9.5 million, based on two separate methods of calculation.

Flagship waste plant 'underperforming', shareholders warned

EXCLUSIVE: by Doug Collie

The "state of the art" Advanced Thermal Treatment plant which left a delegation of Borders councillors impressed and illuminated when they visited the site a few months ago is under-performing, thanks to operational issues which may not be resolved before the end of this year.

New Energy Solutions Group's Energy Recovery Facility (ERF) at Avonmouth, Bristol, was to have provided the blueprint for the controversial Scottish Borders Council integrated waste plant at Easter Langlee on the outskirts of Galashiels.

But only a matter of weeks after returning from Avonmouth and claiming they were on the right track with the £27 million ATT facility, Borders councillors last month abandoned their 24-year contract with New Earth Solutions (NES) and agreed to write off the £2 million they had squandered on the ill-conceived venture.

In a letter published in this week's Border Telegraph, Councillor John Mitchell, the council's depute leader, claims they were right to withdraw from the contract after "the fullest consideration of the likely success of this project and full understanding of the costs and risks involved".

It is believed Audit Scotland will be urged to initiate a full investigation into the reasons why SBC chose to spend £2 million of public money before suddenly deciding to sever their partnership with NES which they signed in 2011after realising the plan had no chance of delivery.

But apparently Mr Mitchell sees no need for an inquiry into possible financial mismanagement. Instead, he says the decision will be subject to full audit scrutiny by the council's appointed external auditors. It is doubtful whether that will satisfy many of the council's local taxpayers, some of whom have been highly critical of the way the entire Easter Langlee fiasco has been handled.

Councillors who were convinced New Earth had the technology, and presumably the funding, to develop the combined heat and power plant for the Borders may be interested in two recent messages to shareholders of Premier Investment, the offshore fund which is supposed to pay for NES projects.

The first message, issued in October 2014 - the same month the 16-strong delegation from SBC travelled to Avonmouth - revealed that dealings in the Fund's shares had been officially suspended in January 2014. They remain suspended to this day.

 Premier directors recognised at the time that the funding requirements for New Earth's "ambitious" expansion plans for new waste and energy plants - including the Borders project - were of such a size that they had realistically exceeded the capacity of the Fund to continue to finance NES on its own. The decision was taken to seek alternative sources of funding to finance these capital requirements.

It appears therefore that the proposed multi-million pound Galashiels facility had encountered potentially insurmountable funding issues as far back as late 2013, and there is no indication that those difficulties had been overcome by the time the council's partnership with NES was severed. Perhaps Mr Mitchell and his colleagues could shed light on this worrying aspect of the unfortunate saga.

A second downbeat message to Premier shareholders sent to them earlier this month, and after the Borders project was scrapped, reveals ongoing problems at Avonmouth.

"The key focus remains on creating and maintaining a strong track record of performance from Avonmouth ERF", the bulletin declares. "Unfortunately, operational issues continue to impact on the level of energy generation. These issues are being addressed with a planned programme of improvements to increase energy generation to an acceptable level of performance by the end of the year".

The plant produced its first electricity in June 2013 so the current difficulties surely cannot be attributed to "teething problems". It must therefore be a concern that the Galashiels facility, designed to provide power and heat for homes and other buildings in the area, could have encountered similar generating problems had it been built.

But the implications for NES do not end there. The shareholder message adds: "The current underperformance of the ERF is having a knock-on effect on the financial performance of the adjacent Avonmouth waste plant.

"With the combined turnover of both the ERF and Avonmouth waste plant representing some 70% of New Earth's £50 million total annual revenue it is essential that the performance of both plants is maintained and improves throughout 2015".

In a reference to the failed Borders venture the message claims that since the Easter Langlee contract was signed there had been significant changes with regard to Scottish waste policy and regulation. However, it does not explain how these policies an regulations contributed to the downfall of the scheme.

These sleeping watchdogs are expensive pets

Do we really need up to five separate regulatory and investigative bodies to keep an eye on Scotland's less than perfect local and central government set-up when the operating costs exceed £13 million a year and most councillors simply carry on regardless?

The current assortment of watchdogs might just be able to justify their expensive existence if they could demonstrate efficiency and effectiveness. But the sanctions they are able to impose on wayward local authorities, government departments and parliamentarians are practically non-existent and barely add up to a slap on the wrist.

Surely the time has come to scrap them all and invest in a single organisation to take control of financial issues, investigation of complaints, disciplinary procedures for dealing with wayward elected members, and the administration of the country's extremely flawed Freedom of Information system.

It's worth taking a look at the cumbersome and over-staffed collection of separate entities we're lumbered with at present. To be frank they cost a fortune and do not represent value for money.

Top of the pile sits the Accounts Commission supported by Audit Scotland. It has 262 members of staff including an Auditor General who is paid up to £140,000 per annum. Two other senior staffers are on more than £100,000 each. It reported operating costs of £7.326 million in 2013/14, and carried out a number of financial investigations resulting in a number of nicely produced reports.

There were also lucrative fees and expenses totalling £5.193 million handed over by the Commission to appointed audit firms.

Joe Public may be invited to lodge complaints with Audit Scotland, but there's little evidence that individual grievances ever get to the investigation stage.

Next in line comes the Scottish Public Services Ombudsman (SPSO) with a payroll of 46 including the Ombudsman himself on a salary of £80k to £85k. Annual running costs for the SPSO amount to £3.437 million.

This is the body tasked with investigating complaints from members of the public who allege poor service from their council, health board, medical practice, dental practice or even Scottish Water and the Scottish Prison Service.

But even when it finds one of these organisations guilty as libelled the harshest "sentence" SPSO can dish out is to recommend the service provider issues an apology to the disgruntled client. How absolutely inadequate is that?

The Scottish Information Commissioner (SIC) looks into complaints from Freedom of Information requesters, but has no powers to impose penalties on wrongdoers. The SIC has a staff of 22, the Commissioner's yearly pay is between £75k and £80k, and annual expenditure stands at £1.580 million.

The total lack of sanctions within the FOI system means many councils and other public bodies have become serial offenders by failing to respond to requests within the 20 days allowed. They simply ignore the weak written warnings from the SIC.

Towards the bottom of the expenditure league comes the Commissioner for Ethical Standards in Public Life in Scotland which investigates complaints against councillors, members of devolved bodies, and Members of the Scottish Parliament. The Public Standards Commissioner is also paid between £80k and £85k, employs 9.5 full time equivalent (FTE) staff and incurs running costs of £768,000.

Meanwhile the Standards Commission for Scotland costs £207,000 a year, and organises hearings into alleged misdemeanours by councillors and members of 105 public bodies. The secretary to the Commission has a £55k to £60k salary, there is a staff of 3.5 FTEs. A part-time convener and four part-time members who conduct the hearings are also paid between £5,700 and £10,260.

Well, what's the verdict? A significant sum could certainly be saved if these toothless autonomous entities were abolished and their handsomely paid chiefs were replaced by say a Commissioner for the Public Sector with real powers to crack down on miscreants. Unfortunately our councillors, MSPs, civil servants, quango members and local government officials would never allow it to happen.

Will councillors choose to ignore this sound advice?

A detailed report from the Accounts Commission, Scotland's public expenditure watchdog, has advised our councillors to get to grips with financial  issues and to request training and support to help them make decisions and scrutinise performance.

They could certainly do with it, I hear you cry. There is a growing perception both here in the Borders and further afield that the local government show is run almost exclusively by paid officials with the elected members fulfilling a minor role by rubber-stamping recommendations, and hardly bothering to make sure they are well briefed before entering the council chamber.

The Commission's report, which appears to have had quite limited exposure, comes at a very appropriate time, and every one of our councillors should be made to read it and digest the contents. As well as some frightening statistics on spending cuts, debts, and interest payments the document contains a list of recommendations as our local authorities face up to an even more austere financial future.

Between them Scotland's 32 councils have overseen a staggering increase in annual interest and debt repayments on borrowing from £946 million in 2010 to £1.5 billion in 2014. Meanwhile repayments for the highly controversial Public Private Partnership (PPP) projects totalled £488 million last year and are expected to peak at around £600 million in ten years time.

Our councillors certainly need all the financial knowledge they can muster with those self-afflicted albatrosses around their (and our) necks. But if the Icelandic banks fiasco of 2008 is anything to go when authorities including SBC risked losing millions of pounds of other people's cash then it must be doubtful whether the men and women elected to represent us are financially savvy.

The Accounts Commission advice doesn't stop there. Information about the council's performance should be clearly reported to the public and...wait for it...local authorities should work with service users and local communities to understand their needs and explore ways of meeting them. Now there's a novelty!

Council budgets should then be targeted towards agreed priorities, including those designed to prevent or reduce service demand in future. No mention here of the Great Tapestry of Scotland or the Easter Langlee Advanced Thermal Treatment facility, two expensive, unaffordable projects on which the public had no say whatsoever.

There's also a warning from the Commission for councils which have paid out £352 million on exit packages since 2011 in a bid to cut costs by decimating their workforces. According to the report: "There is an increasing risk that reductions in staff numbers, and the associated loss of skills and experience, will affect essential support services."

Yet if recent press reports are true SBC is about to embark on another round of people shedding. The council's senior management team was also slashed from 19 to 12 in a recent reconfiguration exercise.

On that issue the report has this to say: "There is a risk that some councils' management teams may now be too small, or lack the skills and experience, to oversee and control their wide-ranging responsibilities. This can make effective leadership and management more challenging."

There's a word of warning too for councils which choose to set up arms length companies, known as ALEOs as an alternative way of delivering council services. Here in the Borders the formation of these separate entities has become an almost full-time preoccupation with the promise of more ALEOs on the way.

The Accounts Commission report states: "As more councils use ALEOs to save money or run more efficient services, they must satisfy themselves that arrangements are in place to ensure the new structures deliver good services within budget. In particular they must manage the financial risks to the council and service users if the ALEO fails."

So plenty of food for thought for members of both the administration and the opposition at Newtown St Boswells. Many of the topics covered in the report can be applied directly to Borders local government. But will many or indeed any of our elected members even bother to read the report entitled An Overview of Local Government in Scotland 2015? For those who might be interested it can be found on the Audit Scotland website.

The Borders 'business' with 51 separate bank loans

EWAN LAMB reports

It is an organisation with an annual budget of  more than £250 million, is the largest employer of labour in the Scottish Borders, yet it is currently burdened by a portfolio of 51 separate loans ranging in size from just £60,000 to £24 million requiring between them annual interest payments of close to £11.5 million.

It must be questionable whether any private sector company would survive under such a heavy level of debt. No doubt the bank would have called in receivers or administrators years ago and the firm would be a certain candidate for liquidation.

But the 'business' we are talking about here just happens to be Scottish Borders Council whose debts have featured in these columns on more than one occasion. The local authority - its debt level is by no means unique or any worse than its colleagues in the Scottish local government sector - is currently in hock to the Public Works Loan Board (PWLB) to the tune of £127.6 million, not to mention a separate assortment of bonds and mortgages adding up to more than £44 million which were sourced from the money markets. The indebtedness to the PWLB was £120 million five years ago.

Details of the 51 outstanding loans SBC have with the PWLB can be found on the Board's website alongside the huge deficits of every other local authority in the UK.

This is the type of information every public body should have to publish on an annual basis rather than requiring individuals to ferret around and pore over pages and pages of figures and tables to get at the facts.

The file on SBC shows that while some loans will be paid off by 2020 the final payment on others are not due until 2052, 2057 or in one case 2061. So future generations of local taxpayers will still be servicing their council's debts up to 45 years from now.

The largest outstanding sums are for £24 million (twice) and £10 million. According to the PWLB the combined 'fair value' of the 51 loans is estimated to be £187 million, up from £154 million in 2010.

Between them the 32 Scottish local authorities have 2,505 outstanding loans with the PWLB worth £8.764 billion (in 2010 the figure was £7.259 billion). In this instance the fair value is set at £11.056 billion compared to £8.764 billion five years ago.

No doubt Treasury and finance officials working in local government will tell you the huge raft of loans and debts is manageable and that individual local authorities have the situation under control. But to the layman the entire municipal edifice appears to be built on sand, and at some point the crumbling and inadequate foundations will be washed away.

We showed the collection of truly staggering figures to a financial expert who told us:" I would not like to put my name to a credit rating for a local authority now that I have seen the debt burden.

"It would be like awarding a credit rating to a black hole; the money just keeps getting sucked in and there seems to be no prospect of the councils paying off these loans without assistance from central government. That would only increase overall public debt. The situation already appears to be indefensible and completely unsustainable."

It is worth pointing out again that the £11.4 million in interest payments made by SBC in 2013/14 exceeds the council's entire net expenditure on cultural services ( £10.552 million and is way ahead of the annual budgets of both Central Services (£8.283 million) and Planning & Development (£4.972 million).

Perhaps this set of eye watering  numbers demonstrates again why Borders councillors were so blase and unconcerned about writing off the £2 million lost/squandered on the New Earth Solutions Advanced Thermal Technology project at Easter Langlee on the outskirts of Galashiels.

After all, a phone call or an online application to the PWLB is probably all it would require to fill the gap in SBC's finances left by the fruitless venture into the world of incineration.

FOOTNOTE: New Earth Solutions Group, the business selected by SBC in 2011 to mastermind the council's integrated waste strategy, currently has 24 mortgages and charges outstanding, according to information available from Companies House.

Don’t get your fingers burned again, council advised

EXCLUSIVE - by Doug Collie

Scottish Borders Council would be wise to steer clear of all forms of incineration when members and officials ‘return to the drawing board’ to rethink their integrated waste strategy in the wake of the recent Easter Langlee debacle, according to a network of environmental campaigners.

The attempt to develop a so-called gasification and pyrolysis plant at Galashiels to deal with 25,000 tonnes of Borders rubbish each year ended in a dismal and embarrassing failure last month when it became clear neither the technology nor the funding was in place to deliver the project.

As a result SBC and their chosen developers New Earth Solutions Group agreed to abandon a 24-year contract after only four years and at a cost of at least £2 million to Borders taxpayers. Now the local authority will have to carry out a complete rethink of its waste disposal policies if it is to comply with national and European targets.

In a hard hitting interview with our ‘Not Just Sheep and Rugby’ staff, office bearers from the United Kingdom Without Incineration Network (UKWIN) told us: “This supposedly advanced and state of the art project ended up proving itself to have been obsolete before it was ever even built because it failed to treat waste as a series of separate waste streams that could individually be reduced, re-used, recycled or composted.”

UKWIN national coordinator Shlomo Dowen said: “We are glad that the council took the time to re-evaluate this project in light of changing circumstances, and hope that other local authorities across the UK will do likewise for their own outdated incineration arrangements.”

We asked if SBC should have been aware of the technological problems associated with gasification before signing the New Earth contract in April 2011, and whether the council had been sold a ‘pig in a poke’ given the technology was unproven.

Mr Dowen replied: “The council was probably aware that this sort of technology was risky, but might not have appreciated the true extent of that risk. Councils are often expected to make decisions about complex proposals without much in-house expertise and are therefore very reliant on outside consultants who might have little incentive to place the long-term interests of sustainable waste management at the heart of their advice.

“It is not uncommon for local authorities to regret entering into long-term incineration contracts, for example because the contracts prove inflexible, overestimate the need for waste disposal capacity, and/or underestimate the need for capacity higher up in the waste hierarchy.”

UKWIN explained that while it was not privy to the technical report considered by councillors, as it was withheld on the basis of commercial confidentiality, it appeared that one of the issues which led to the contract being ended was that New Earth was unable to convince the Scottish Environment Protection Agency that the technology would actually work.

Mr Dowen claimed: “Various forms of so-called advanced thermal treatment technology (ATT) have been attempted for waste management, and they have all faced difficulties, so it is not surprising there are concerns that the technology would not have performed as advertised.

“UKWIN published a briefing paper advising caution regarding gasification and pyrolysis back in 2010, so issues with ATT are not new”.

Asked what UKWIN’s advice would be as SBC returns to square one to formulate an amended strategy, Mr Dowen said: “They should avoid paying for new incineration capacity and ensure they are not overly committed to residual waste infrastructure. They should minimise waste arisings, for example through education and re-use schemes. And they should maximise recycling and composting.”

Tim Hill, UKWIN’s technical advisor, commented: “The council needs to look to maximise recycling revenues by working with the recycling industry. In particular they should maximise the collection of aluminium cans; maximise the collection of plastics with minimal contamination and ensure that high quality plastics are segregated by type. This may involve some investment.”

Did SBC really spend that £2 million wisely?

by Doug Collie

The technological procedures which would have been used at the proposed £23 million waste management plant at Easter Langlee on the outskirts of Galashiels pollute the atmosphere with dioxins, undermine recycling and are not cost-effective, according to global and UK campaign groups opposed to incineration.

Last month Scottish Borders Council announced it had scrapped its 24-year contract with New Earth Solutions Group (NES) which would have included the development of a controversial Advanced Thermal Treatment (ATT) waste management facility capable of handling 25,000 tonnes of refuse each year.

The company and the local authority agreed in 2013 to modify the Easter Langlee proposals to incorporate largely untried and untested technology to enable the plant to generate electricity and power a district heating system capable of supplying up to 500 Galashiels properties.

According to NES the so-called gasification and pyrolysis technologies would enhance the environmental performance of the facility. And district heating scheme customers would pay less for heat than if they were using gas or oil.

However, environmental assessments submitted to the Scottish Environmental Protection Agency as part of an application for an operating permit, revealed the ATT plant would generate 3,500 to 4,000 tonnes of ash per annum. There would also be unquantified deposits of sludge and tar from the processes.

If a market could not be found for the ash then as a fall back it could be transferred directly to the Easter Langlee landfill site. So far as the sludge and tar was concerned, the report went on to admit: "It may be possible to use these residues in some industrial processes although a market has yet to be found in the UK." It recommended removal of aqueous effluent by tanker to be disposed of at local sewage works.

United Kingdom Without Incineration Network (UKWIN) opposes the burning of waste, including via gasification and pyrolysis. UKWIN says: "Incineration depresses recycling, destroys valuable resources, releases greenhouse gases and is a waste of money. Incineration has no place in the zero waste economy we should be working towards."

The respected Nottinghamshire based pressure group, which has been invited to submit evidence on the subject to Westminster MPs, claims gasification and pyrolysis creates toxic emissions and hazardous ash, and poses significant health risks.

UKWIN maintains that local authorities are still not maximising recycling and composting. It adds: "Waste management contractors pressure councils to accept long term (typically 20 years) contracts with conditions that conflict with recycling and may contain 'get-out' clauses applicable in cases of non-delivery."

Meanwhile the Global Alliance for Incinerator Alternatives (GAIA) is highly critical of gasification and pyrolysis techniques, branding them as "incinerators in disguise".

The US-based alliance warns all of these technologies emit dioxins and other harmful pollutants, despite industry claims that they are green technologies. GAIA state: "The short track record of pyrolysis and gasification has shown even higher costs, less dependability, and inconsistent energy generation.."

A report prepared for lobbyists opposing such a facility in America's Blue Ridge area concluded: "The false promise offered by gasification is that a single solution can solve all waste disposal problems. But municipal solid waste, household hazardous waste, commercial and industrial wastes, and so-called special wastes cannot be dumped in a hopper and gassed out of existence".

Perhaps the attention of Borders councillors and senior officers should also have been drawn to a document compiled up by the Jupiter Consultancy, extracts of which appear on the Friends of the Earth website. According to Jupiter: "Technology risks for many pyrolysis and gasification (P&G) processes targeting municipal solid waste can be significant.

"One reason for this is that P&G processes do not yet have an established track record in the UK. This is compounded by the fact that variants that are being widely marketed here have limited relevant track record anywhere else in the world. [This] means that the robustness of guarantees given on factors that may include process availability, maintenance costs and energy output, all of which are necessary to underpin financial models and contract terms, are often called into question in technical due diligence. Juniper still see the integration of gasification with gas engines as very risky".

Additional reporting by Ewan Lamb

Totting up the losses in the waste plant fiasco

Although Borders council leaders already admit they will have to write off £2 million as a result of the failure of the local authority's waste treatment contract with New Earth Solutions, there are already suggestions the financial implications could be far more extensive when other factors are taken into account.

There remain many unanswered questions after the plug was pulled last month on NES's planned £23 million investment at Easter Langlee after the scheme encountered insuperable technological and funding difficulties. It is the latest chapter in a long running story stretching back to 2002 when outline planning consent was first granted for an integrated materials recovery and composting facility at the site.

How much has the termination of the contract cost the company chosen by Scottish Borders Council to deliver the amended plans for an advanced thermal treatment ATT plant? NES must have ploughed considerable resources and many man hours into the process since landing the potentially plum job almost four years ago.

For example, planning applications in 2010 and again in 2013 were accompanied by fees of £14,000 and £10,800, although its not clear whether the company or the council as joint applicants covered those costs. In both cases the preparatory work by consultants, NES executives and local government staff must have accounted for a tidy sum. The firm seem unlikely to publish details of their losses, and would no doubt cite commercial confidentiality if they were asked.

The project's failure also means the Borders economy will miss out on jobs and the spending power of workers involved in the construction and operation of the ATT.

According to reports supporting the 2013 planning application 80 jobs would have been created for up to 18 months while the plant was being built. A back of the fag packet calculation suggests wages totalling some £2.5 million could have been paid out to the workforce over the period of the building contract.

The ATT was scheduled to employ up to 40 operational staff working in shifts 24-hours a day, seven days a week. Their salaries and wages could have totalled getting on for £1 million per annum.

The power plant was due to produce enough electricity to serve the equivalent of 2,500 homes, and up to 500 local houses "may be heated by the plant". This valuable resource, together with the associated benefits for the environment, has been forfeited, at least in the short term.

NES and the council claimed a significant proportion of the 25,000 tonnes of incoming waste from the Borders area would be diverted from landfill as a result of the revolutionary processes at Easter Langlee. It depends what is meant by significant.

But if say 50% of the total (12,500 tonnes) must now continue to be sent to landfill each year while the council 'goes back to the drawing board' to consider its options, then the charges accompanying this form of disposal will be considerable.

All in all the decision to abandon and tear up the contract between SBC and NES is certain to have noticeable knock-on effects in a number of quarters. Yet another reason why this controversial issue requires an independent investigation.