Monday, 21 December 2015

Thirteen little words tell a very worrying story!


Waste disposal contractors selected by Scottish Borders Council to deliver a £80 million contract over 24 years could not afford the capital for a modest insurance policy associated with the project, it has been revealed.

The shock disclosure - outlined in just thirteen words - has been made after the Council was told to release information previously classified as top secret following an unsuccessful attempt to block a Freedom of Information (FOI) request.

This newly published information seems certain to represent an acute embarrassment for councillors and leading officers associated with the ill-fated Easter Langlee waste management plans which were abandoned in February 2015 at a cost of more than £2 million to the public purse. At the end of the day the contractor was unable to fund the project and technical issues associated with it could not be overcome.

The information which SBC was keen to suppress dates back to March 2012, shortly after the multi-million pound deal with waste management "specialists" New Earth Solutions (NES), of Verwood, Dorset, was signed.

Before an operating certificate could be secured from the Scottish Environment Protection Agency for the "state of the art" waste management centre to serve the Borders, NES was supposed to provide an insurance guarantee of up to £315,000 to cover the cost of potential environmental incidents at the plant or to pay for the removal of waste in the event of NES crashing out of business.

So it was both unusual and puzzling when it came to light that in fact SBC - not their contractors - had to step in and provide SEPA with the necessary 'Letter of Undertaking'.

When a FOI request was submitted to the council earlier this year the requester was told a report covering the topic was confidential and would not be released due to 'commercial sensitivity'.

Rosemary Agnew, the Scottish Information Commissioner, was asked to intervene, and during the course of her inquiries SBC did release parts of the secret document, written originally by their Director of Environment & Infrastructure.

But they insisted part of a sentence would continue to remain "off limits", claiming its publication would be likely to cause substantial harm to the legitimate economic interests of NES. The Commissioner threw out SBC's arguments for withholding the material and gave the local authority until January 15 to comply with her decision.

Three weeks after Ms Agnew's decision notice was issued SBC released copies of the thirteen missing words from the secret document.

The relevant paragraph with the previously redacted words in capital letters reads as follows: "NES cannot obtain £315k of insurance without incurring costs that would have to be passed back directly to the council, NOR CAN THEY AFFORD TO HOLD THE CAPITAL ASIDE TO COVER THIS REQUIREMENT.

"As the council are ultimately responsible for the facility, the authority is being sought to issue a letter of comfort/guarantee to SEPA to cover this requirement, without the need for a fixed bond".

The undertaking was required to ensure the permit was obtained, and SEPA would not issue a certificate without it. The confidential report states: “The bond requirement is a recent requirement by SEPA for private sector companies”.

If NES could not afford the insurance premium for a £315,000 guarantee in March 2012, how did SBC expect the company to finance even a fraction of the massive waste management project which was so vital to the environment of the Scottish Borders?

But despite this potentially explosive insight into NES's 'financial health' not a single councillor appears to have asked questions or demanded assurances that the firm could deliver the facility.

A former council insider commented: "The case for full disclosure is now more pressing than ever. It seems clear those responsible for this fiasco failed to ensure NES was even capable of paying an insurance premium. Alarm bells should have been ringing not long after the original contract was awarded. Yet SBC stuck with NES for three long and costly years before the balloon went up".

Friday, 18 December 2015

Incredible ups and downs in SBC staffing levels



The headcount of people on Scottish Borders Council's payroll fell by a staggering 700 in the space of three months during 2009 then rose by an equally dramatic 300 full-time equivalents in a single quarter in 2010.

Those are just two of the seismic shifts in the staffing levels which have come to light after radical adjustments and amendments to Borders local government employment data during lengthy consultations between SBC and the Scottish Government.

The revised information - the council had neglected to include casual workers and relief staff in their quarterly returns ever since national record keeping began more than a decade ago - was published on the SNP Government's website earlier this week.

The accuracy of the council's information was called into question earlier this year after three different totals for headcount (total number of full and part time workers) and so-called full time equivalents (FTE) were issued in the space of a few weeks. Headcount totals given out to Freedom of Information requesters and contained in reports to council varied from 5,700 to 6,421.

SBC was contacted for an explanation after the matter was drawn to the attention of the Government's statistics division in Edinburgh. It was then discovered that casual and relief staff had been left out of the calculations.

The council has now submitted "corrected" figures for both categories of statistics right back to the first quarter of 2009. And the local authority is now believed to be assessing what information could be made available for the period prior to that.

However, there would seem to be a number of bizarre statistics, even after the completion of the rejigged staffing levels. For example, the inclusion of casual staff from the first quarter of 2009 meant the headcount went up from 5,700 in the last quarter of 2008 to 6,100 to take account of the "missing" employees. That seems entirely logical.

But during the same period FTEs actually fell from 4,700 to 4,600. It means that while the headcount went up by more than 7% the FTE total fell by 2.1%. A real puzzler that for mathematicians to ponder over.

It is difficult to comprehend how the payroll total was slashed by 700 (6,200 to 5,500) between the second and third quarters of 2009, representing a drop of more than 11% in the headcount. In the same three months the number of FTEs went down by 500 (4,700 to 4,200) or 10.6%.

But then SBC appear to have recruited 300 extra FTEs between the fourth quarter of 2009 and the first three months of 2010. In the same period the headcount only increased by 100.

One observer of local government affairs asked: "How did the finance department manage to budget and allow for such incredulous fluctuations in the SBC wage bill?"

In an explanatory note accompanying the Government's latest official quarterly publication covering public sector employment, readers are told: "Prior to quarter one of 2009 SBC head counted and FTE figures do not include casual/relief employees who were paid in the reference period. This means that these figures under-estimate the headcount and FTE for Scottish Borders Council."

There was another major reduction in staffing levels during 2015. The headcount fell from 5,600 to 4,800 in the second quarter of the year after hundreds of care staff were transferred to SB Cares, an arms length company.

It would certainly seem from the masses of tables on the Scottish Government's website that the yo-yoing Borders figures may require further scrutiny.

Monday, 14 December 2015

New Earth fund's new potential victims


who discovers the suspended fund which was to have financed a multi-million pound waste treatment facility for the Scottish Borders is having a negative impact worldwide.

Almost a year after the disastrous contract between waste handling 'specialists' New Earth Solutions (NES) Group and Scottish Borders Council (SBC) collapsed, owing local council taxpayers more than £2 million, the sub-plots involving companies and funds linked to the ill-fated project are hitting investors and shareholders on a global scale.

It was the Isle of Man-controlled New Earth Recycling and Renewable (NERR) Fund which was to have provided the capital for the development of a "ground breaking" treatment centre at Easter Langlee on the outskirts of Galashiels.. So presumably SBC lead councillors and senior officials carried out rigorous checks before awarding the vital environmental deal to NES and their paymasters, Premier Group.

A few months after the original contract was agreed in 2011 for the tried and tested conventional facility which would have diverted 80% of Borders rubbish from landfill, Premier Group director Jamie Sutton told the renowned Wealth Advisor website the various funds under his company's control were managing £500 million of investments with NERR gaining £2.5 million per month and achieving double figure returns annually.

According to Mr Sutton: "With a decent track record, we are confident that new investments will continue to grow at least at this rate and higher if the economic recovery can gather pace. Investors in the fund are high net worth individuals investing directly or through international life companies and/or pension funds".

He added that investment risk was managed from the outset when the full cost-benefit case was prepared for consideration by the investment committee. Mr Sutton explained: "Corporate risk is monitored at board level, where the fund has director representation of the New Earth Solutions Group as well as in any SPV (Special Purpose Vehicle) set up to hold recycling facility assets".

In the Borders case the SPV was New Earth Solutions (Scottish Borders) Ltd, a company established in 2011 with just two £1 shares held by another New Earth business called NES Management Services LLP.

But barely two years after Mr Sutton's upbeat interview the NERR fund was suspended with all subscriptions into it ceasing from January 8th 2014 and all redemptions to investors and shareholders banned from November 7th 2013.

That remains the position to this day, and it seems clear NERR could not have funded the Easter Langlee plant. In a recent missive to those affected by the fund's suspension, Premier director Michael Richardson warned: "The Fund is currently considering a number of restructuring options with potentially different outcomes for the calculation of the net asset value. As a consequence, at this time, the directors are unable to provide any indicative value for investors."

As hundreds of investors in the UK, Europe and beyond find their money locked up in the suspended NERR fund, Not Just Sheep & Rugby has learned that a New Zealand company involved in the transfer of pensions from Great Britain has been forced to place its own temporary suspension of all member redemptions.

GBP International, based in Auckland, had invested most of its 3.18 million New Zealand dollars in NERR and its sister EcoEarth Resources fund which has also been suspended by Premier Group. Apparently Premier had been inundated with requests for withdrawals from that fund which specialises in the development of bamboo plantations in Central America.

Investment News NZ reported that the GBP scheme accounts revealed: "The trustee is uncertain when the scheme will be able to lift this suspension as it is reliant on the lifting of redemption suspensions on at least one of the underlying investments..."

Tony Chamberlain, GBP International's co-director, confirmed that the scheme prospectus had been withdrawn. He was not at liberty to give any further information.

Sunday, 6 December 2015

"Secrecy" agreements no guarantee of confidentiality


A six-year confidentiality agreement like the one signed by Scottish Borders Council and New Earth Solutions in March 2015 after their 24-year waste management contract collapsed in disarray does not mean parties can always rely on such agreements to withhold information from the public.

That is the significant conclusion reached by Scottish Information Commissioner (SIC) Rosemary Agnew who, as we reported last week, has ruled that SBC must release a single line of "secret" text to a Freedom of Information requester.

The Commissioner's Decision Notice in this case reveals that the local authority and their contractor, who could not deliver a state-of-the-art waste management facility at Easter Langlee after running into insurmountable technical and financial issues, re-signed their confidentiality agreement a month after severing their business relationship. Under the terms of that agreement disclosure of commercially sensitive information was to have been forbidden until March 2021.

During her investigation into SBC's refusal to provide the requester with the information he asked for, SBC claimed their confidentiality clause applied to the requested information. Apparently the definition of confidential information in the agreement with NES is "any and all information of a confidential nature relating to the other party, either in writing, orally or in any other form."

At the same time the agreement sought to recognise the existence of the Freedom of Information and Environmental Information regulations (EIRs). However, as the Decision Notice goes on to explain, the council took the view that where an exemption applied, they should seek to preserve the integrity of the confidentiality agreement and act in accordance with that exemption.

But according to the SIC, she does not accept that the existence of a confidentiality agreement will, in itself, mean that all information captured by such a clause should be, or will be, automatically considered confidential.

As Ms Agnew rightly asserts: "To accept such a proposition would essentially give public authorities the ability to contract out of their obligations under the EIRs, regardless of whether the information is actually confidential".

Her report reveals that a separate clause in the SBC/NES contract recognises that, regardless of their agreement, there will be times when information must be disclosed by the council in order to allow it to comply with its statutory duties.

Yet SBC has sought to invoke the provisions of its 'secrecy' agreement on no fewer than four occasions when requests for information about the waste contract fiasco were submitted to the local authority. Three other linked investigations by the SIC are continuing with decisions expected at some point in the future.

In this first case concerning SBC's decision to stand as guarantor for a £315,000 bond on behalf of NES (Scottish Borders) Ltd, the contractors selected to build the Easter Langlee plant, Ms Agnew has firmly rejected the council's confidentiality arguments.

"The Commissioner has considered all of these arguments carefully but she is not persuaded that disclosure of the withheld information would cause, or be likely to cause, substantial harm to a legitimate economic interest", she concludes.

Saturday, 5 December 2015

Lazy, inconsiderate patients cost Borders health service millions


Almost 30,000 Borders patients have missed first out-patient appointments at consultant-led clinics over the last 16 years.Their apparent thoughtlessness or sheer laziness could have cost the NHS more than £4.7 million and denied many others with medical complaints or genuine illnesses an appointment slot.

These shocking statistics for NHS Borders - the level of missed appointments is even higher in most other parts of Scotland - were disclosed in a Scottish parliamentary written answer this week. It has been estimated that every time someone fails turn up to see a consultant the NHS loses £160.

MSP Nanette Milne (Conservative, North-east Scotland) asked the Scottish Government how many patients had missed (a) GP and (b) hospital appointments in each year since 1999 broken down by  individual health boards.

She was told by SNP Health Minister Shona Robison the Scottish Government did not hold information on missed GP appointments. But the minister was able to provide the figures for the number of first out-patient appointments at consultant-led clinics where the patient did not attend (DNA) in each calendar year from 1999 to 2014.

A researcher from Not Just Sheep & Rugby collated the data for NHS Borders over the sixteen years covered by Ms Robison's answer. Here are the statistics:

Year        Total appointments               DNA                 Percentage DNA

1999              24,562                             1,457                        5.9
2000              24,391                             1,448                        5.9
2001              31,525                             2,275                        7.2
2002              33,483                             2,326                        6.9
2003              26,655                             1,819                        6.8
2004              27,614                             1,780                        6.4
2005              27,770                             1,528                        5.5
2006              29,184                             1,847                        6.3
2007              29,763                             1,757                        5.9
2008              30,892                             1,759                        5.7
2009              32,462                             1,999                        6.2
2010              32,186                             2,118                        6.6
2011              31,217                             1,728                        5.5
2012              33,548                             2,034                        6.1
2013              34,296                             1,917                        5.6
2014              33,740                             1,990                        5.9

The table above means that over the 16 years a total of 29,782 individuals with hospital appointments did not turn up after being referred to a consultant. If each missed appointment does cost the NHS an average of £160 then the amount wasted in financial terms would be equivalent to £4,765,120.

The DNA percentages for Scotland as a whole were 10.1% in 2013 and 10% in 2014. It meant 164,794 appointments were unfulfilled in 2013 and 163,990 last year. The monetary losses may have exceeded £26 million on each occasion.

There have been several initiatives in recent years to reduce the unacceptable numbers in the DNA column. But it seems little progress has been made, and a minority of patients still show no sign of making sure they turn up at hospital on their allotted day.

When the 'unavailable' figures for missed GP appointments are added into the equation, the loss of scarce NHS funding will be even more devastating, but largely unnecessary. 

Health services in Scotland are predominantly efficient and effective, but when things go wrong the Scottish Government and dedicated NHS professionals are panned - particularly by the  right-wing sections of the press and media. It's as though the situation is much better in England where, we are told, many health trusts are in fact in financial meltdown, and a vast number of A&E departments fail to meet their targets despite working flat out.

But on this occasion it is Scottish patients who are included in the DNA columns of these damning statistics who should be issued with a tongue lashing and told in no uncertain terms about the financial impact they have on the cash-strapped NHS. 

Wednesday, 2 December 2015

SBC loses first round in waste management fiasco "cover-up"

DOUG COLLIE on a significant defeat for council secrecy

Scottish Borders Council has been ordered to provide a freedom of information requester with 'confidential' information linked to its disastrous waste management contract with New Earth Solutions, a liaison which cost local council taxpayers millions of pounds.

In a newly published decision notice, the Scottish Information Commissioner Rosemary Agnew has rejected the local authority's claims that the release of allegedly commercially sensitive information to a Freedom of Information (FOI) requester would seriously compromise NES's business interests. The company was unable to develop a multi-million pound waste treatment plant at Galashiels on both technical and financial grounds, a failure requiring the deal to be torn up.

Ms Agnew's written report reveals that SBC was so determined to keep information under wraps that they did not even provide the withheld documentation to the Commissioner when her office requested it as part of the investigation into the requester's complaint.

Instead the council referred Ms Agnew to concerns it had previously raised with regard to the information in question being subject to a confidentiality clause in its flawed and now abandoned contract with NES. Eventually they did accede to the Commissioner's legitimate request.

An experienced expert in FOI process and regulation told Not Just Sheep & Rugby: "How ludicrous is that? Has this local authority never been through a FOI investigation before?"

The request for disclosure - one of four concerning various issues surrounding the doomed contract - asked why SBC had found it necessary to stand as guarantor for its contractor New Earth Solutions (Scottish Borders) Ltd for up to £315,000 when the firm applied to the Scottish Environment Protection Agency (SEPA) for an operating certificate. The request was refused twice before an application was lodged with SIC for a decision.

In its submissions to Ms Agnew, The council argued that the disclosure of the withheld information would be likely to cause substantial harm to the legitimate economic interests of NES. The council noted that competitors of NES could utilise this intelligence to NES’s disadvantage.

SBC also suggested that disclosure of the withheld information could have an influence on any future
business partners of NES. In either case, the Council argued that the footing of NES in a
commercial setting was likely to be weakened by disclosure of the withheld information into the
public domain.

During the course of the SIC investigation, SBC agreed to release parts of a confidential report prepared for councillors in 2012 when they agreed to approve the SEPA bond on behalf of NES.

But in dismissing the council's claims, the commissioner said she had considered all of the arguments carefully, but was not persuaded that disclosure of the withheld information would cause, or be likely to cause, substantial harm to NES.

Ms Agnew's report explains how the council had refused to disclose part of a sentence (amounting to one line of text) from the committee report , arguing that disclosure would prejudice substantially NES’s legitimate economic interests.

The council commented that the sentence contained information giving a clear indication of the financial health of NES.

But the decision report states:"The Commissioner notes that the information dates from March 2012, some three years before the request for information. It is therefore difficult to see how
disclosure of the information, three years on, could cause substantial prejudice to NES’s
legitimate interests.

"Since March 2012, NES has submitted two sets of annual accounts to Companies House which clearly contain information on its “financial health”. These annual accounts are publicly available. Given this, the Commissioner finds it difficult to accept that the withheld information would in any way dissuade future business partners from working with NES. Neither is she persuaded that disclosure of this information would enable competitors to take advantage of NES, given its age and the lack of detail."

SBC has until January 15 to provide the requester with the redacted single sentence. Separate investigations into the three allied FOI requests - all of them refused or partially refused by the council - are ongoing with decisions expected some time in the future.