EWAN LAMB reports
A massive 42 per cent rise since 2012 in the number of Borderers working for at least two employers means the region is now clearly on top of the Scottish mainland's multiple jobs league as an increasing proportion of local people apparently struggle to earn a living wage.
The statistics which show that one in 13 people in the Scottish Borders 16-64 population bracket have a second job were published today by the SNP Government in a document titled Local Area Labour Markets in Scotland.
While the proportion of workers with two jobs in most of the rest of Scotland has been declining, the percentage in the Borders has shot up from 5.6% of the population in 2012 to 7.5% in 2014. That represents a numerical jump from 2,800 to 4,000. Ten years ago the figures were 6.1% and 3,200.
The nearest local government area in terms of second job percentages is Argyll & Bute with 5.9% (2,200 people) although that council's total is much lower than its 2004 levels of 7.7% and 3,100 workers with two jobs.
The rapid escalation in Borders numbers is also in sharp contrast with neighbouring Dumfries & Galloway - 50 per cent larger than Borders in population terms - where the 2014 percentage was 5.5% (3,600). To the north Midlothian recorded 4.3% (1,700) while another rural local authority, Perth & Kinross had second job figures of 5.6% (3,800).
The average proportion for Scotland stands at 4.1%. The statistics for the three island authorities show a much higher percentage of people doing more than one job in areas where multi-tasking has long been the norm.
There is no explanation given in the Scottish Government publication as to why the Scottish Borders is bucking the mainland trend. The region has traditionally suffered from a low-wage economy, and despite various initiatives stretching back decades earnings levels compared to the rest of the country have stayed stubbornly near the bottom of the incomes table.
An increase in the number of two-job workers of more than 40% in the space of two years would suggest new employment opportunities being created since the recession are not necessarily well paid.
Of course it could be that many hundreds of Borderers enjoy working at two part-time jobs. On the other hand it could mean a growing number of individuals are finding it increasingly difficult to make ends meet.
A recent report from the House of Commons Scottish Affairs Committee, published in March, listed some of the economic ills facing the south of Scotland. But the report - Our Borderlands Our Future - did not refer to the issue of second jobs.
It does seem meaningful financial packages are required if the area is to attract skilled jobs with attractive financial rewards. Official figures for 2013/14 show that only £810,000 of EU structural funding found its way into the Borders by way of capital income.
A major effort is surely required by politicians and development agencies to boost investment and reverse the upward trend in those numbers who find it necessary to hold down at least two jobs.
Thursday, 28 May 2015
Friday, 22 May 2015
Boot sizes and pacemakers not commercially sensitive
by DOUG COLLIE
A set of fascinating new revelations concerning a possible shortage of safety boots to fit the 18-strong Borders council delegation on a site visit to Bristol last October have escaped the information censor's black felt tip and are now in the public domain.
But unfortunately crucial information concerning the trip to the New Earth Solutions waste treatment facility at Avonmouth, including the presentation given to 12 elected councillors and six senior officials by NES executives has been classified "confidential and commercially sensitive".
So the latest attempt to find out whether the £3,939.35 spent on the visit achieved "due diligence" has been thwarted. The party from Scottish Borders Council were given a guided tour of the Avonmouth facilities on which the £27 million Easter Langlee treatment project was to be modelled.
SBC was invited to respond to a Freedom of Information request for details of the delegation's members, and why they were included in the group.The council was also asked about costs associated with the visit, a description of what took place on site, and information contained in documents generated as a result of the away day.
A key element of last October's meeting was a question and answer session with NES "so that councillors could get a detailed understanding of the delivery strategy, technology development, permit and funding".
But the FOI reveals - perhaps disturbingly - that "no information is held on record in respect of the questions or answers provided. Only the presentations are held, which are commercially confidential". Presumably the councillors retained all of the complex information given to them by NES experts in their heads without the need for note taking.
The FOI response adds: "By way of a briefing for members going on the visit a presentation was given to them by officers. As this contains commercially confidential information it cannot be released. redacted (censored) version of the presentation is attached.
"Subsequently project reports, minutes and emails make reference to the visit but were not generated specifically as a consequence of the visit. Again the contents of these documents contain commercially confidential information and cannot be released. Copies of the redacted correspondence is attached."
The four documents sent with the response have had up to 90% of the information completely blacked out, prompting one observer to say: "It looks as though SBC has slapped a D Notice on this affair. They're certainly not going to voluntarily release stuff which might point the finger at those responsible for the loss of £2.3 million of taxpayers' money.
"You had councillors of every political hue bar Labour on the trip so it might prove difficult to persuade anyone to act politically in the public interest. In the circumstances can the council be forced to make their secret documents available for scrutiny?"
One of the attachments contains copies of email exchanges between Matthew Webb, commercial manager at NES and Ewan Doyle, SBC's project manager. One of the messages is titled 'High Level Statement', but unfortunately the key messages have fallen victim to the ruthless redacter.
But a couple of email between the pair survive intact. Mr Webb asks: "Are you able to confirm numbers for the visit, and importantly boot sizes? We're concerned we're going to have to order some more boots if lots of the visitors have small feet."
A few days later Mr Webb writes: "We're intending to split the tour into three groups. We thought there would be two groups who do the full tour which will involve going up and down steps and walking along gantries above the ground.
"One group may not want to do the full tour, but can see virtually all of the plant at ground level. In this third group there should be anybody with a pacemaker as they need to stay away from the magnetic fields in the MBT (Mechanical Biological Treatment) sorting hall."
Wow! How did those contentious nuggets get past the censorship committee?
A set of fascinating new revelations concerning a possible shortage of safety boots to fit the 18-strong Borders council delegation on a site visit to Bristol last October have escaped the information censor's black felt tip and are now in the public domain.
But unfortunately crucial information concerning the trip to the New Earth Solutions waste treatment facility at Avonmouth, including the presentation given to 12 elected councillors and six senior officials by NES executives has been classified "confidential and commercially sensitive".
So the latest attempt to find out whether the £3,939.35 spent on the visit achieved "due diligence" has been thwarted. The party from Scottish Borders Council were given a guided tour of the Avonmouth facilities on which the £27 million Easter Langlee treatment project was to be modelled.
SBC was invited to respond to a Freedom of Information request for details of the delegation's members, and why they were included in the group.The council was also asked about costs associated with the visit, a description of what took place on site, and information contained in documents generated as a result of the away day.
A key element of last October's meeting was a question and answer session with NES "so that councillors could get a detailed understanding of the delivery strategy, technology development, permit and funding".
But the FOI reveals - perhaps disturbingly - that "no information is held on record in respect of the questions or answers provided. Only the presentations are held, which are commercially confidential". Presumably the councillors retained all of the complex information given to them by NES experts in their heads without the need for note taking.
The FOI response adds: "By way of a briefing for members going on the visit a presentation was given to them by officers. As this contains commercially confidential information it cannot be released. redacted (censored) version of the presentation is attached.
"Subsequently project reports, minutes and emails make reference to the visit but were not generated specifically as a consequence of the visit. Again the contents of these documents contain commercially confidential information and cannot be released. Copies of the redacted correspondence is attached."
The four documents sent with the response have had up to 90% of the information completely blacked out, prompting one observer to say: "It looks as though SBC has slapped a D Notice on this affair. They're certainly not going to voluntarily release stuff which might point the finger at those responsible for the loss of £2.3 million of taxpayers' money.
"You had councillors of every political hue bar Labour on the trip so it might prove difficult to persuade anyone to act politically in the public interest. In the circumstances can the council be forced to make their secret documents available for scrutiny?"
One of the attachments contains copies of email exchanges between Matthew Webb, commercial manager at NES and Ewan Doyle, SBC's project manager. One of the messages is titled 'High Level Statement', but unfortunately the key messages have fallen victim to the ruthless redacter.
But a couple of email between the pair survive intact. Mr Webb asks: "Are you able to confirm numbers for the visit, and importantly boot sizes? We're concerned we're going to have to order some more boots if lots of the visitors have small feet."
A few days later Mr Webb writes: "We're intending to split the tour into three groups. We thought there would be two groups who do the full tour which will involve going up and down steps and walking along gantries above the ground.
"One group may not want to do the full tour, but can see virtually all of the plant at ground level. In this third group there should be anybody with a pacemaker as they need to stay away from the magnetic fields in the MBT (Mechanical Biological Treatment) sorting hall."
Wow! How did those contentious nuggets get past the censorship committee?
Sunday, 17 May 2015
Staff exodus cleans out "Golden Goodbye" fund
EWAN LAMB reports
The fund which Scottish Borders Council uses to meet the cost of severance packages and early retirement deals will be completely used up less than two months into the new financial year if councillors agree to let another 53 staff members go when they meet on Thursday.
Now the council faces the prospect of taking hundreds of thousands of pounds from other budgets to meet the £1.3 million bill for the departure of 15 administrative staff and 38 members of the teaching establishment. And other sources of funding will be have to identified if other so-called Golden Goodbyes are approved before the end of March 2016.
A "Managing Our Workforce" report to be considered at the full council meeting reveals that no fewer than 102 teachers expressed an interest in taking redundancy or early retirement during the three months from January to March this year. In addition there were 34 volunteers from other departments.
Senior officers have approved 15 of those applications which will involve one-off costs of £516,051. But it is claimed the departing staff members will allow the local authority to make annual savings of £320,763 on salaries.
Most of the successful candidates for lump sums of up to £38,000 are no longer required because of service restructuring. They range in age from 51 to 61. The departures will place a strain on the council's pension fund of £350,730.
The 38 members of the education service whose requests to leave have been recommended for approval will involve expenditure of £749,539 for 27 severance payments together with £48,201 for 11 pension payments. Annual savings of £503,112 are predicted.
The cost of dispensing with the services of the 38 will be met in part by the £201,949 left in the 2015/16 voluntary severance/early retirement budget. But the exercise will also require a £200,000 departmental contribution with the remaining £395,791 coming from identified corporate funding.
"Action recommended in this report will utilise the full 2015/16 budget for early retirement", adds the document. "Any further approaches before 31/3/2016 will require further budgets to be identified."
Teachers retiring from the Borders education service will have to be replaced under the terms of the local government funding mechanism introduced by the Scottish Government.
The report explains: "This demands the absolute number of teachers and the pupil-teacher ratio to be maintained at 2014/15 levels. A failure to replace teaching staff will result in a significant financial penalty to the council.
"To avoid this risk, before staff are released new replacement teachers will require to have been interviewed and appointed with contracts of employment in place for the start of the new academic year."
The number of staff leaving Borders secondary schools are: Galashiels Academy 7, Berwickshire High School 2, Selkirk High School 5, Peebles High School 5, Eyemouth High School 2, Hawick High School 3, Kelso High School 2 and Earlston High School 2. The remaining volunteers for early retirement work in primary education.
The fund which Scottish Borders Council uses to meet the cost of severance packages and early retirement deals will be completely used up less than two months into the new financial year if councillors agree to let another 53 staff members go when they meet on Thursday.
Now the council faces the prospect of taking hundreds of thousands of pounds from other budgets to meet the £1.3 million bill for the departure of 15 administrative staff and 38 members of the teaching establishment. And other sources of funding will be have to identified if other so-called Golden Goodbyes are approved before the end of March 2016.
A "Managing Our Workforce" report to be considered at the full council meeting reveals that no fewer than 102 teachers expressed an interest in taking redundancy or early retirement during the three months from January to March this year. In addition there were 34 volunteers from other departments.
Senior officers have approved 15 of those applications which will involve one-off costs of £516,051. But it is claimed the departing staff members will allow the local authority to make annual savings of £320,763 on salaries.
Most of the successful candidates for lump sums of up to £38,000 are no longer required because of service restructuring. They range in age from 51 to 61. The departures will place a strain on the council's pension fund of £350,730.
The 38 members of the education service whose requests to leave have been recommended for approval will involve expenditure of £749,539 for 27 severance payments together with £48,201 for 11 pension payments. Annual savings of £503,112 are predicted.
The cost of dispensing with the services of the 38 will be met in part by the £201,949 left in the 2015/16 voluntary severance/early retirement budget. But the exercise will also require a £200,000 departmental contribution with the remaining £395,791 coming from identified corporate funding.
"Action recommended in this report will utilise the full 2015/16 budget for early retirement", adds the document. "Any further approaches before 31/3/2016 will require further budgets to be identified."
Teachers retiring from the Borders education service will have to be replaced under the terms of the local government funding mechanism introduced by the Scottish Government.
The report explains: "This demands the absolute number of teachers and the pupil-teacher ratio to be maintained at 2014/15 levels. A failure to replace teaching staff will result in a significant financial penalty to the council.
"To avoid this risk, before staff are released new replacement teachers will require to have been interviewed and appointed with contracts of employment in place for the start of the new academic year."
The number of staff leaving Borders secondary schools are: Galashiels Academy 7, Berwickshire High School 2, Selkirk High School 5, Peebles High School 5, Eyemouth High School 2, Hawick High School 3, Kelso High School 2 and Earlston High School 2. The remaining volunteers for early retirement work in primary education.
Friday, 15 May 2015
Another door closes as cover up gains momentum
Crucial information relating to risks associated with the failed Galashiels waste treatment project cannot be disclosed because the reports and notes of meetings are held by a private firm of accountants appointed to carry out audits at Scottish Borders Council and other public authorities.
The latest setback in the continuing campaign to find out why SBC squandered £2.3 million of council taxpayers' money on legal advice and expensive consultants before abandoning their 24-year contract with New Earth Solutions follows a Freedom of Information request to Audit Scotland, the supposed public spending monitor.
The watchdog, which reports to the Accounts Commission, costs more than £7 million a year to run and pays out over £5 million per annum to consultants who are hand picked to check the books of local authorities and other bodies funded by taxpayers.
Audit Scotland was handed a lengthy report last month which set out the circumstances surrounding the collapse of SBC's £65 million deal with NES and the failure to deliver a plant capable of diverting up to 80% of Borders refuse from landfill. The document was accompanied by a request for an investigation after the council blithely wrote off their losses without explanation.
But in response the watchdog merely indicated the correspondence it had received had been shared with the accountancy firm KPMG who are SBC's external auditors appointed and paid for by the Commission. KPMG received fees totalling more than £1.2 million for audits carried out over a recent 18 month period at a range of councils together with other amounts, details of which have been redacted (blanked out) on the agency's website. The grand total handed over to KPMG is also unavailable.
Audit Scotland explained that both it and KPMG were aware of "local interest and concerns" around SBC's waste management strategy which was holed below the waterline by the collapse of the NES contract. The project had been monitored and reported through SBC's risk register, and the auditor (KPMG) was present during a recent discussion of the risks associated with the scheme at the council's Audit & Risk Committee.
So it seemed reasonable to ask for copies of information contained in notes taken by the auditor in the course of those discussions via a Freedom of Information request to Audit Scotland. After all, SBC had already refused to divulge risk assessments made and precautions taken before they signed, then amended their disastrous contract with NES.
However, the response from the watchdog is disappointing to say the least. It reads: "KPMG is a private firm of accountants appointed by the Accounts Commission to undertake the council's audit. This means that nearly all the information about this audit is held by KPMG and not Audit Scotland.
"The Freedom of Information (Scotland) Act (FOISA) does not extend to private firms and therefore any information relating to your request would be held by KPMG and not Audit Scotland. FOISA does not require a Scottish public body to seek information from others to reply to a request."
How very convenient for all concerned. Audit Scotland does not even hold the information it pays private firms of accountants to collect. And FOISA is couched in terms which allows public bodies to cover each others' backs. So what is the point of keeping a very expensive watchdog?
The response continues: "I can only advise you to seek the information you have requested, regarding the discussion of the risks associated with the project at the council's Audit & Risk Committee, from Scottish Borders Council. If you feel you have not received a full reply from the council you could take your concern to the Scottish Information Commissioner."
Anyone fancy another trip on Scotland's finely crafted magic roundabout of obfuscation and cover-up? Probably not. The masters who operate the merry-go-round will only ensure you have a nightmare journey. But it certainly seems they all have something to hide.
The latest setback in the continuing campaign to find out why SBC squandered £2.3 million of council taxpayers' money on legal advice and expensive consultants before abandoning their 24-year contract with New Earth Solutions follows a Freedom of Information request to Audit Scotland, the supposed public spending monitor.
The watchdog, which reports to the Accounts Commission, costs more than £7 million a year to run and pays out over £5 million per annum to consultants who are hand picked to check the books of local authorities and other bodies funded by taxpayers.
Audit Scotland was handed a lengthy report last month which set out the circumstances surrounding the collapse of SBC's £65 million deal with NES and the failure to deliver a plant capable of diverting up to 80% of Borders refuse from landfill. The document was accompanied by a request for an investigation after the council blithely wrote off their losses without explanation.
But in response the watchdog merely indicated the correspondence it had received had been shared with the accountancy firm KPMG who are SBC's external auditors appointed and paid for by the Commission. KPMG received fees totalling more than £1.2 million for audits carried out over a recent 18 month period at a range of councils together with other amounts, details of which have been redacted (blanked out) on the agency's website. The grand total handed over to KPMG is also unavailable.
Audit Scotland explained that both it and KPMG were aware of "local interest and concerns" around SBC's waste management strategy which was holed below the waterline by the collapse of the NES contract. The project had been monitored and reported through SBC's risk register, and the auditor (KPMG) was present during a recent discussion of the risks associated with the scheme at the council's Audit & Risk Committee.
So it seemed reasonable to ask for copies of information contained in notes taken by the auditor in the course of those discussions via a Freedom of Information request to Audit Scotland. After all, SBC had already refused to divulge risk assessments made and precautions taken before they signed, then amended their disastrous contract with NES.
However, the response from the watchdog is disappointing to say the least. It reads: "KPMG is a private firm of accountants appointed by the Accounts Commission to undertake the council's audit. This means that nearly all the information about this audit is held by KPMG and not Audit Scotland.
"The Freedom of Information (Scotland) Act (FOISA) does not extend to private firms and therefore any information relating to your request would be held by KPMG and not Audit Scotland. FOISA does not require a Scottish public body to seek information from others to reply to a request."
How very convenient for all concerned. Audit Scotland does not even hold the information it pays private firms of accountants to collect. And FOISA is couched in terms which allows public bodies to cover each others' backs. So what is the point of keeping a very expensive watchdog?
The response continues: "I can only advise you to seek the information you have requested, regarding the discussion of the risks associated with the project at the council's Audit & Risk Committee, from Scottish Borders Council. If you feel you have not received a full reply from the council you could take your concern to the Scottish Information Commissioner."
Anyone fancy another trip on Scotland's finely crafted magic roundabout of obfuscation and cover-up? Probably not. The masters who operate the merry-go-round will only ensure you have a nightmare journey. But it certainly seems they all have something to hide.
Wednesday, 13 May 2015
£2.3 million loss "tip of the iceberg"
EXCLUSIVE - by Doug Collie
Several new pieces of information which have found their way into the Not Just Sheep & Rugby office suggest the failure to develop a Mechanical Biological Treatment facility to deal with Scottish Borders municipal refuse has cost the local council at least £20 million in terms of lost savings on landfill costs and associated expenditure to manage waste.
And we have also been told that one of six original bidders for the £65 million contract advertised by Scottish Borders Council was forced to withdraw from the procurement process after the local authority decided the technology they planned to use was considered "too risky".
Later SBC amended their agreement with New Earth Solutions (NES), the successful bidders, to include a form of incineration which was completely untried and untested, a decision which ultimately led to the abandonment of the Easter Langlee scheme.
Last month it was revealed via a Freedom of Information request that the council had spent £1.9 million (£2.3 million if you include Value Added Tax) on a string of expensive lawyers and consultants who appear to have only assisted in the project's abject failure.
Yet despite the alleged incompetence by councillors and paid officials involved in the debacle there appears to be a total reluctance on the part of politicians and public spending watchdogs to initiate an investigation into what went so horribly wrong.
SBC has made it clear it will not divulge meaningful information concerning its disastrous relationship with NES because of the strict confidentiality clauses embedded in the multi-million pound contract until 2021.
But Not Just Sheep & Rugby has managed to uncover more intelligence following the decision to simply write-off the loss of this sizeable amount of council taxpayers' cash.
It should be remembered that NES was ready to build the MBT plant in April 2011 when the original contract was signed. Had it been delivered on time (2013) 80% of Borders household waste would no longer have had to be buried under the ground where it rots and produces dangerous methane emissions.
The radical changes in Scottish Government policies on waste treatment in 2009 forced SBC's hand, and they realised their "do nothing" strategy - continuing to send tens of thousands of rubbish to landfill - would soon become untenable. At the time the council feared it could be liable for more than £14 million in Landfill Allowance Scheme (LAS) penalties unless a solution could be found.
Senior personnel at Newtown St Boswells were so intimidated by the impending Zero Waste targets being formulated by SNP ministers they sent a Borders delegation to Edinburgh to warn government officials it would be extremely difficult to meet the proposed changes both technically and from the financial viewpoint.
So where does the failure to even start work on the MBT leave the Borders in its efforts to meet landfill diversion targets and to comply with the national Zero Waste strategy six years down the line? The revised integrated treatment plan has yet to be published and for now the "do nothing" scenario persists. Extra costs are being incurred on a daily basis.
A contact in the waste treatment industry told us: "The variation in the contract with NES should never have been made, and it was completely unnecessary. There was scope within the agreement for the incinerator to be delivered within eight years of completion of the MBT, a time lag which would have allowed the NES thermal treatment technology to prove itself.
"Whoever recommended that change and those who sanctioned the decision not to proceed with the MBT on its own has already cost the council at least £20 million in savings if you compare the proposed facility with 'do nothing' It simply does not make sense, and someone needs to explain in detail why the contract variation of 2012 was agreed. It will cost many millions more to go out to tender again and go through the procurement and construction phases, and those costs will not be recovered".
He said the only other possibility might be to transport all of the Borders waste to a treatment facility outside the region, an option which would be expensive and environmentally damaging. It is a waste management method given serious consideration a decade ago when councils in the Lothians and Borders were working on a combined initiative to treat refuse. But that also fell through.
Several new pieces of information which have found their way into the Not Just Sheep & Rugby office suggest the failure to develop a Mechanical Biological Treatment facility to deal with Scottish Borders municipal refuse has cost the local council at least £20 million in terms of lost savings on landfill costs and associated expenditure to manage waste.
And we have also been told that one of six original bidders for the £65 million contract advertised by Scottish Borders Council was forced to withdraw from the procurement process after the local authority decided the technology they planned to use was considered "too risky".
Later SBC amended their agreement with New Earth Solutions (NES), the successful bidders, to include a form of incineration which was completely untried and untested, a decision which ultimately led to the abandonment of the Easter Langlee scheme.
Last month it was revealed via a Freedom of Information request that the council had spent £1.9 million (£2.3 million if you include Value Added Tax) on a string of expensive lawyers and consultants who appear to have only assisted in the project's abject failure.
Yet despite the alleged incompetence by councillors and paid officials involved in the debacle there appears to be a total reluctance on the part of politicians and public spending watchdogs to initiate an investigation into what went so horribly wrong.
SBC has made it clear it will not divulge meaningful information concerning its disastrous relationship with NES because of the strict confidentiality clauses embedded in the multi-million pound contract until 2021.
But Not Just Sheep & Rugby has managed to uncover more intelligence following the decision to simply write-off the loss of this sizeable amount of council taxpayers' cash.
It should be remembered that NES was ready to build the MBT plant in April 2011 when the original contract was signed. Had it been delivered on time (2013) 80% of Borders household waste would no longer have had to be buried under the ground where it rots and produces dangerous methane emissions.
The radical changes in Scottish Government policies on waste treatment in 2009 forced SBC's hand, and they realised their "do nothing" strategy - continuing to send tens of thousands of rubbish to landfill - would soon become untenable. At the time the council feared it could be liable for more than £14 million in Landfill Allowance Scheme (LAS) penalties unless a solution could be found.
Senior personnel at Newtown St Boswells were so intimidated by the impending Zero Waste targets being formulated by SNP ministers they sent a Borders delegation to Edinburgh to warn government officials it would be extremely difficult to meet the proposed changes both technically and from the financial viewpoint.
So where does the failure to even start work on the MBT leave the Borders in its efforts to meet landfill diversion targets and to comply with the national Zero Waste strategy six years down the line? The revised integrated treatment plan has yet to be published and for now the "do nothing" scenario persists. Extra costs are being incurred on a daily basis.
A contact in the waste treatment industry told us: "The variation in the contract with NES should never have been made, and it was completely unnecessary. There was scope within the agreement for the incinerator to be delivered within eight years of completion of the MBT, a time lag which would have allowed the NES thermal treatment technology to prove itself.
"Whoever recommended that change and those who sanctioned the decision not to proceed with the MBT on its own has already cost the council at least £20 million in savings if you compare the proposed facility with 'do nothing' It simply does not make sense, and someone needs to explain in detail why the contract variation of 2012 was agreed. It will cost many millions more to go out to tender again and go through the procurement and construction phases, and those costs will not be recovered".
He said the only other possibility might be to transport all of the Borders waste to a treatment facility outside the region, an option which would be expensive and environmentally damaging. It is a waste management method given serious consideration a decade ago when councils in the Lothians and Borders were working on a combined initiative to treat refuse. But that also fell through.
Sunday, 10 May 2015
Oh What A Tangled Web!
The specialist investment fund which would have provided the financial resources needed to develop a new waste treatment facility for the Scottish Borders is controlled by two offshore companies based in the British Virgin Islands (BVI), one of the world's premier tax havens.
And it has also emerged that the two directors of New Earth Solutions (Scottish Borders) Ltd., the contractors selected by Scottish Borders Council (SBC) to construct the plant at Easter Langlee, Galashiels, each have a stake in those offshore businesses, Premier Group Distribution Inc. (PGDI) and B4 Sales Ltd., both with addresses in Road Town, Tortola, BVI.
Meanwhile, a major restructuring of the New Earth Solutions (NES) Group in December 2014 - two months before the 24-year deal with SBC collapsed - means that same investment fund NERR [New Earth Recycling & Renewables (Infrastructure) PLC] together with B4 Sales and members of NES management directly or indirectly own the entire share capital of the Group of companies, including the subsidiary which bears the Borders name.
The complicated network of inter-linked businesses and a series of multi-million pound transactions between the various entities can be found in NERR's latest prospectus for potential investors, published recently by Premier Group (Isle of Man) Ltd., yet another offshore business which is in turn managed by its BVI namesake.
Companies in the Virgin Islands and any money paid by them to non-residents are exempt from all local taxes and stamp duty. The sale or transfer of shares to third parties is not liable for capital gains tax under BVI law while local businesses are not required to file tax returns or any other type of declaration to the BVI Government regarding overseas income.
The current directors of NES (Scottish Borders) Ltd are David Whitaker and Jonathan Fogg, both of whom also sit on the Group board and act as directors for a number of other NES subsidiaries. Their directorships at NES earn them £60,000 a year each. Mr Whitaker is also a director of Premier Group (Isle of Man), the management company of the NERR fund.
In April 2011, after SBC signed their original contract with New Earth, the company told the local authority the Borders project was to be funded by a combination of money from NERR and from refinancing of the NES waste treatment complex at Avonmouth, Bristol. Subscriptions into NERR would be allocated to the development of the Galashiels Mechanical Biological Treatment (MBT) facility with construction to commence in autumn 2011.
The MBT would have diverted at least 80% of Borders refuse from landfill. But work on the plant was never even started, and councillors later amended the contract, leading to its termination earlier this year. The reasons for changing the terms of the deal have not been made public.
The NERR prospectus explains that the management shares in Premier Group (IOM) are held offshore by PGDI and B4 Sales, both limited liability companies.
The document says: "PGDI is a special purpose vehicle formed to act as a financial intermediary for NERR and is owned jointly by Michael Richardson and by a trust of which David Whitaker is the main beneficiary. PGDI has also established a management share participation scheme in which Jonathan Fogg participates via a non-voting interest in the company."
In a separate entry outlining the role of B4 Sales Ltd, the prospectus states: "B4 Sales is a special purpose vehicle formed to hold investments in various entities and is wholly owned directly or indirectly by Michael Richardson and David Whitaker and parties associated with them." That company also has a direct interest in New Earth Solutions.
The offshore fund NERR now has more than £150 million staked in the NES companies. And as explained earlier it now also owns all of the share capital in the Group. In recent years a number of NES investors including Ludgate Environmental Fund, Colebrooke Offshore Ltd, Carbon Trust Investments Ltd, and the Irish-based Impax Group all wished to dispose of their sizable holdings in the New Earth businesses. And in each case the shares were acquired by NERR at a total cost of around £26 million.
NES Group reported an annual loss of £11.996 million in its most recent annual accounts compared to a loss of £1.436 million in 2013.
And it has also emerged that the two directors of New Earth Solutions (Scottish Borders) Ltd., the contractors selected by Scottish Borders Council (SBC) to construct the plant at Easter Langlee, Galashiels, each have a stake in those offshore businesses, Premier Group Distribution Inc. (PGDI) and B4 Sales Ltd., both with addresses in Road Town, Tortola, BVI.
Meanwhile, a major restructuring of the New Earth Solutions (NES) Group in December 2014 - two months before the 24-year deal with SBC collapsed - means that same investment fund NERR [New Earth Recycling & Renewables (Infrastructure) PLC] together with B4 Sales and members of NES management directly or indirectly own the entire share capital of the Group of companies, including the subsidiary which bears the Borders name.
The complicated network of inter-linked businesses and a series of multi-million pound transactions between the various entities can be found in NERR's latest prospectus for potential investors, published recently by Premier Group (Isle of Man) Ltd., yet another offshore business which is in turn managed by its BVI namesake.
Companies in the Virgin Islands and any money paid by them to non-residents are exempt from all local taxes and stamp duty. The sale or transfer of shares to third parties is not liable for capital gains tax under BVI law while local businesses are not required to file tax returns or any other type of declaration to the BVI Government regarding overseas income.
The current directors of NES (Scottish Borders) Ltd are David Whitaker and Jonathan Fogg, both of whom also sit on the Group board and act as directors for a number of other NES subsidiaries. Their directorships at NES earn them £60,000 a year each. Mr Whitaker is also a director of Premier Group (Isle of Man), the management company of the NERR fund.
In April 2011, after SBC signed their original contract with New Earth, the company told the local authority the Borders project was to be funded by a combination of money from NERR and from refinancing of the NES waste treatment complex at Avonmouth, Bristol. Subscriptions into NERR would be allocated to the development of the Galashiels Mechanical Biological Treatment (MBT) facility with construction to commence in autumn 2011.
The MBT would have diverted at least 80% of Borders refuse from landfill. But work on the plant was never even started, and councillors later amended the contract, leading to its termination earlier this year. The reasons for changing the terms of the deal have not been made public.
The NERR prospectus explains that the management shares in Premier Group (IOM) are held offshore by PGDI and B4 Sales, both limited liability companies.
The document says: "PGDI is a special purpose vehicle formed to act as a financial intermediary for NERR and is owned jointly by Michael Richardson and by a trust of which David Whitaker is the main beneficiary. PGDI has also established a management share participation scheme in which Jonathan Fogg participates via a non-voting interest in the company."
In a separate entry outlining the role of B4 Sales Ltd, the prospectus states: "B4 Sales is a special purpose vehicle formed to hold investments in various entities and is wholly owned directly or indirectly by Michael Richardson and David Whitaker and parties associated with them." That company also has a direct interest in New Earth Solutions.
The offshore fund NERR now has more than £150 million staked in the NES companies. And as explained earlier it now also owns all of the share capital in the Group. In recent years a number of NES investors including Ludgate Environmental Fund, Colebrooke Offshore Ltd, Carbon Trust Investments Ltd, and the Irish-based Impax Group all wished to dispose of their sizable holdings in the New Earth businesses. And in each case the shares were acquired by NERR at a total cost of around £26 million.
NES Group reported an annual loss of £11.996 million in its most recent annual accounts compared to a loss of £1.436 million in 2013.
Tuesday, 5 May 2015
Fury and outrage at "Brodies' beanfeast"
Members of the public have condemned Scottish Borders Council's financial recklessness following the publication of the sums spent on lawyers and consultants during the failed attempt to develop and build a waste treatment facility at Easter Langlee.
And it has now come to light that the figures released by the local authority under Freedom of Information did not include VAT at 20 per cent because SBC can claim back the tax.
If VAT is added the total expenditure on the disastrous venture rises from £1,968,160 to £2,361,792 while the legal advice from Edinburgh law firm Brodies, which cost the council a whopping £679,316 goes up to £815,178 with Value Added Tax.
The outcry from people who contacted Not Just Sheep & Rugby appears to be in sharp contrast to the deafening silence from councillors, local politicians and public spending watchdogs who seem singularly unconcerned by the total loss of a sizeable amount of public money.
One respondent who got in touch after reading our article entitled Law firm scoops up £670,000 of council cash said: "These statistics are quite outrageous and incredible. There must be a requirement for even more pressure to force the appropriate investigative body to conduct an inquiry."
Another message asked what SBC had received in return for the hundreds of thousands of pounds paid in what was described as "Brodies beanfeast"
A calculation sent to us by email estimated that if Brodies charged the council say £400 per hour for their expert services to procure the £80 million deal with New Earth Solutions Ltd then their legal team must have racked up just short of 2,000 hours on SBC business. On a costing base of 35 hours per week Brodies bill worked out at over a year's work excluding holidays!
In their FOI response SBC also maintained there would be no additional landfill costs over the next five years as a result of the cancellation of the NES contract. But a sceptical caller told us: "I do not accept that there will be no implications for landfill tax. The project papers indicate that one of the drivers for the facility was to minimise exposure to this [landfill tax]".
Someone else wondered how much input councillors had over the life of the ill-fated project. But that would be difficult to establish in view of the secrecy surrounding all of the proceedings at committee meetings and the refusal to make documents available for public scrutiny.
The crucial chapter in the long-running saga was undoubtedly the controversial decision approved or rubber-stamped by the elected members in October 2012 to radically alter the contract with New Earth Solutions to include an incinerator based on completely untested technology.
"What took place at that private meeting holds the key to the entire collapse of the plans and the subsequent failure to deliver a Mechanical Biological Treatment (MBT) plant which had planning permission and environmental permits", said yet another individual who felt moved to write to us.
He added: "I don't suppose any of the council members are waste treatment specialists, so they would require a full and detailed briefing from their paid officials before giving the go-ahead for the combined MBT and Advanced Thermal Treatment plant. Was it a unanimous decision or did anyone move a counter-motion?
"Those briefing documents must be placed in the public domain. The present lack of transparency and the use of the commercial confidentiality shield by SBC is simply stoking the suspicions of their own residents. Surely council tax payers have a legitimate interest in the loss of at least £2 million and how that will impinge on a diminution of other council services."
And it has now come to light that the figures released by the local authority under Freedom of Information did not include VAT at 20 per cent because SBC can claim back the tax.
If VAT is added the total expenditure on the disastrous venture rises from £1,968,160 to £2,361,792 while the legal advice from Edinburgh law firm Brodies, which cost the council a whopping £679,316 goes up to £815,178 with Value Added Tax.
The outcry from people who contacted Not Just Sheep & Rugby appears to be in sharp contrast to the deafening silence from councillors, local politicians and public spending watchdogs who seem singularly unconcerned by the total loss of a sizeable amount of public money.
One respondent who got in touch after reading our article entitled Law firm scoops up £670,000 of council cash said: "These statistics are quite outrageous and incredible. There must be a requirement for even more pressure to force the appropriate investigative body to conduct an inquiry."
Another message asked what SBC had received in return for the hundreds of thousands of pounds paid in what was described as "Brodies beanfeast"
A calculation sent to us by email estimated that if Brodies charged the council say £400 per hour for their expert services to procure the £80 million deal with New Earth Solutions Ltd then their legal team must have racked up just short of 2,000 hours on SBC business. On a costing base of 35 hours per week Brodies bill worked out at over a year's work excluding holidays!
In their FOI response SBC also maintained there would be no additional landfill costs over the next five years as a result of the cancellation of the NES contract. But a sceptical caller told us: "I do not accept that there will be no implications for landfill tax. The project papers indicate that one of the drivers for the facility was to minimise exposure to this [landfill tax]".
Someone else wondered how much input councillors had over the life of the ill-fated project. But that would be difficult to establish in view of the secrecy surrounding all of the proceedings at committee meetings and the refusal to make documents available for public scrutiny.
The crucial chapter in the long-running saga was undoubtedly the controversial decision approved or rubber-stamped by the elected members in October 2012 to radically alter the contract with New Earth Solutions to include an incinerator based on completely untested technology.
"What took place at that private meeting holds the key to the entire collapse of the plans and the subsequent failure to deliver a Mechanical Biological Treatment (MBT) plant which had planning permission and environmental permits", said yet another individual who felt moved to write to us.
He added: "I don't suppose any of the council members are waste treatment specialists, so they would require a full and detailed briefing from their paid officials before giving the go-ahead for the combined MBT and Advanced Thermal Treatment plant. Was it a unanimous decision or did anyone move a counter-motion?
"Those briefing documents must be placed in the public domain. The present lack of transparency and the use of the commercial confidentiality shield by SBC is simply stoking the suspicions of their own residents. Surely council tax payers have a legitimate interest in the loss of at least £2 million and how that will impinge on a diminution of other council services."
Monday, 4 May 2015
Could SBC have combined food and green waste collections?
A detailed study of refuse collection services across mainland Scotland shows Scottish Borders Council is the only local authority in the country to terminate garden waste collections to save cash while no fewer than eight councils currently collect food and green waste in the same bin.
The Scottish Government's insistence that all 32 local councils introduce food waste caddies for the households they serve was one of the reasons given for the withdrawal of the Borders green bin service last year.
Local taxpayers (and gardeners) were assured axing the service was necessary to safeguard the delivery of key mandatory services "that will assist us in meeting national and EU targets". The downside was a lessening of Borders recycling percentages, although that home truth hardly merited a mention.
Service users were reminded the extremely popular kerbside uplift of garden waste was not a mandatory service. Its removal would save approximately £450,000 per annum which meant the collections could have remained in place for another four years had councillors not wasted around £2 million on that disastrous integrated waste management scheme at Easter Langlee.
But what was to stop SBC using the green bins - many have now been rounded up and no doubt sent to some dustbin compound in the sky - to allow a combined uplift of food and green waste? Such a measure could have trimmed the estimated £600,000 a year it is going to cost to roll out the collection of food scraps.
Our research has confirmed that eight local authorities - Fife, Moray, North Ayrshire, Aberdeen, Perth & Kinross, East Renfrewshire, West Dunbartonshire and South Lanarkshire - have combined food and green waste collections, most of them on a weekly basis and the remainder on a fortnightly cycle.
At the same time sixteen other Scottish councils which have brought in food waste uplifts have retained kerbside garden waste collections. But thousands of Borders households no longer benefit from having green bins even though they were so environmentally friendly.
In sharp contrast, neighbouring East Lothian Council started a brand new weekly food waste collection in April, and their fortnightly garden waste uplifts are being extended to cover every property in their area. One is tempted to ask how they've managed it.
Aberdeen Council's website declares: "Your brown wheelie bin is for recycling waste from the garden, such as grass cuttings, weeds and leaves, and food waste from the home."
And on the other side of Scotland, in North Ayrshire, the council there tells its service users: "Fill the liners with food waste until they are almost full, then tie them up and put them in your garden brown bin. Brown bins are collected once a week throughout the year.
It's a similar story in Perth & Kinross: "Simply put your food waste together with your garden waste in your brown-lidded bin instead of your general waste bin."
There you have four splendid examples of local councils providing a first class service for local taxpayers. So why could SBC not have gone down the same route instead of adopting a negative and minimalistic approach?
The withdrawal of the garden waste service at a time when Scotland is striving to achieve a zero waste target surely remains one of the most bizarre decisions to be taken by Borders councillors.
The Scottish Government's insistence that all 32 local councils introduce food waste caddies for the households they serve was one of the reasons given for the withdrawal of the Borders green bin service last year.
Local taxpayers (and gardeners) were assured axing the service was necessary to safeguard the delivery of key mandatory services "that will assist us in meeting national and EU targets". The downside was a lessening of Borders recycling percentages, although that home truth hardly merited a mention.
Service users were reminded the extremely popular kerbside uplift of garden waste was not a mandatory service. Its removal would save approximately £450,000 per annum which meant the collections could have remained in place for another four years had councillors not wasted around £2 million on that disastrous integrated waste management scheme at Easter Langlee.
But what was to stop SBC using the green bins - many have now been rounded up and no doubt sent to some dustbin compound in the sky - to allow a combined uplift of food and green waste? Such a measure could have trimmed the estimated £600,000 a year it is going to cost to roll out the collection of food scraps.
Our research has confirmed that eight local authorities - Fife, Moray, North Ayrshire, Aberdeen, Perth & Kinross, East Renfrewshire, West Dunbartonshire and South Lanarkshire - have combined food and green waste collections, most of them on a weekly basis and the remainder on a fortnightly cycle.
At the same time sixteen other Scottish councils which have brought in food waste uplifts have retained kerbside garden waste collections. But thousands of Borders households no longer benefit from having green bins even though they were so environmentally friendly.
In sharp contrast, neighbouring East Lothian Council started a brand new weekly food waste collection in April, and their fortnightly garden waste uplifts are being extended to cover every property in their area. One is tempted to ask how they've managed it.
Aberdeen Council's website declares: "Your brown wheelie bin is for recycling waste from the garden, such as grass cuttings, weeds and leaves, and food waste from the home."
And on the other side of Scotland, in North Ayrshire, the council there tells its service users: "Fill the liners with food waste until they are almost full, then tie them up and put them in your garden brown bin. Brown bins are collected once a week throughout the year.
It's a similar story in Perth & Kinross: "Simply put your food waste together with your garden waste in your brown-lidded bin instead of your general waste bin."
There you have four splendid examples of local councils providing a first class service for local taxpayers. So why could SBC not have gone down the same route instead of adopting a negative and minimalistic approach?
The withdrawal of the garden waste service at a time when Scotland is striving to achieve a zero waste target surely remains one of the most bizarre decisions to be taken by Borders councillors.