Seven thousand Borders workers under-employed

EXCLUSIVE REPORT by EWAN LAMB

Record numbers of Borders workers are currently underemployed, with no fewer than one in eight employees telling researchers they would like extra hours. A high proportion of part-time, lower paid jobs in the region, and the use of zero hour contracts may be among the factors behind the statistics.

At the same time, disproportionately high numbers of Borderers are holding down two jobs while the region has one of the highest percentages of workers aged over 65.

The data offers a fascinating snapshot of the make-up of the Borders economy, yet so far the numbers have not been covered by local media.

A report titled Regional Employment Patterns in Scotland was issued by the Scottish Government earlier this week with a series of tables displaying workforce categories for each of the country's 32 local authority areas.

Our analysis of the figures shows the Scottish Borders has the second highest percentage of workers in mainland Scotland claiming to be under-employed at 13.1 (7,100 employees in total). That proportion is only exceeded in North Ayrshire with 13.6%.

It seems surprising that the Borders has experienced a significant increase in this category within the space of 12 months. The 2014 data recorded 5,900 people 'under-employed' representing 10.5% of the workforce.

The latest level is even more dramatic and perhaps disturbing when compared to the figures of a decade ago. In 2005 the region had 3,400 (6.5%) workers in the under employed bracket.

It may or may not be a lifestyle choice, but the number of Borderers with two separate jobs is also the second highest on the Scottish mainland. The total in 2015 stood at 3,500 or 6.8%, a level exceeded only in Highland at 7.1%.

Does the upwards spiral from 2005 (2,600 workers or 4.7%) highlight low wages, more part-time working or identify a small army of workaholics?

There's a second place for the Borders too in the section covering the numbers of people above the age of 65 who are still at work.

According to the national employment patterns 12.4% of over 65s (3,300 individuals) remain in the workplace beyond pension age. Highland and Aberdeenshire (12.6%) are the only local government areas which exceed the Borders rate.

In 2006 - the first year for which statistics are available - a mere 1,600 pensioners (7.4%) were employed. So why the substantial increase? Poor level of state pension? Failure to save for retirement? Job satisfaction and enjoyment of work?

The variety of tables no doubt paint a picture of every local employment pattern in Scotland, and there will be lessons and information for those engaged in economic development and expansion. The trouble is, do any of our decision makers or those with influence bother to read and digest the available information?

Taxpayers lost twice as much as council's contractor

EXCLUSIVE by DOUG COLLIE

The disastrous waste management contract between Scottish Borders Council and New Earth Solutions Group Ltd [NES] cost hard-pressed local taxpayers twice as much as the losses sustained by the company's shareholders, Not Just Sheep & Rugby can reveal.

By the time the 24-year deal was terminated in February 2015, Borders councillors were responsible for the loss of at least £2.4 million in a catastrophic venture which was to produce no material benefit for households in the area.

Now, newly published accounts for New Earth Solutions (Scottish Borders) Ltd, the firm with just £2 of share capital which was specially formed to develop a £21 million "state-of-the-art" waste treatment centre at Easter Langlee, Galashiels has, for the first time, disclosed how much the contractors lost in the fiasco.

According to a director's report and financial statements for the year up to January 31 2015, expenditure racked up by NES amounted to £1,287,247.

The report explains: "In March 2015 the contract with Scottish Borders Council was terminated. The assets of the company at the time represented the value of securing that contract and as a consequence were impaired".

The accounts do not include a breakdown of how the substantial sum was spent. But like their former local authority partners, the NES Group seem content to write off their losses and move on. The combined deficit resulting from the incompetence and failures of the contract partners now exceeds £3.5 million.

New Earth Solutions (Scottish Borders) Ltd - it retains its active status well over a year after the council and their contractors parted company - is now wholly owned by the Isle of Man-based New Earth Recycling & Renewables Infrastructure Fund [NERR] which in turn is controlled by managing shareholders registered in the tax haven of British Virgin Islands.

The 15-page report detailing the accounts shows that at the year end loan notes totaling £1,300,959 were issued by NES (Scottish Borders) Ltd. to NERR "which has significant influence and provides finance to the company". A shareholders' deficit of £1,291,352 is also recorded.

A contribution from the Group's auditors BDO repeats warnings given in the Group's accounts which have also been published this week. BDO say: "The Group's external financing facilities are currently being reviewed and extended on a monthly basis, and the facilities need to be refinanced."

If a European developer who is currently negotiating to take over the Group's debts which total in the region of £60 million cannot cut a deal then the directors of NES may have no option but to call in administrators.

The debts include over £30 million owed to the Nord and Co-op banks. These debts are secured over all the assets held by NES - five waste treatment plants in England - as well as waste management contracts which the Group has with local authorities in Kent, Bournemouth, Gloucestershire, Leicestershire and the West of England.

Pioneering waste plant was sold for just £2

SPECIAL REPORT - by OUR BUSINESS STAFF

The investments in a flagship thermal technology waste treatment facility near Bristol, which was meant to allow Scottish Borders Council to become Scotland's leading local authority in the field of refuse disposal, were sold by its debt-ridden owners for just £2 (two pounds), it has been revealed.

And now the threat of administration hangs over the New Earth Solutions Group [NES], the specialist company recruited by Borders councillors to handle their waste treatment requirements for 24 years in a deal with a gross payment value of £180 million.

The future of the NES business empire hinges on crucial negotiations with a developer who must agree to take on millions of pounds of debts owed to two banks and to refinance New Earth by next Tuesday.

The Group has posted a set of long awaited and twice delayed accounts on the Channel Islands Stock Exchange only days after investors in the Isle of Man-based fund which has a controlling interest in NES [New Earth Recycling & Renewables or NERR] were warned of an uncertain future for the businesses.

New Earth recorded a consolidated loss for the year of £29.67 million in the year ended January 2015 compared to a deficit of £11.99 million the previous year. The various companies in the Group owe NERR shareholders loans totaling more than £59 million.

The report on the financial plight of NES states: "The directors recognized that continuing support from these parties - NERR, Co-op Bank and Nord Bank - was unlikely to continue indefinitely. With the future cash flows of the Group showing that additional support was likely to be required, the directors have been exploring different financial options for the Group".

An unnamed developer of large combined heat and power plants in Europe is said to be interested in assisting NES with its future progress, 'recognizing the value in waste contracts controlled by the Group'.

According to the accounts the developer is negotiating with Co-op and Nord for the exit from their outstanding loan facilities. The aim is to have a deal in place for the acquisition of the entire debt by May 31. But settlement is conditional on the developer's lender successfully syndicating facilities required in connection with the deal.

"The directors [of NES] understand that the acquisition of the senior debt by the developer means the developer will assume full control and ownership of NES Group", adds the report

But the document goes on to warn that if the deal over the debt does not go through the company may not be able to realise its assets and discharge its liabilities in the normal course of business.

"The conditions at the date of signing these financial statements (May 19) indicate the existence of a material uncertainty which may cast significant doubt about NES Group's ability to continue as a going concern.

"SHOULD THE TRANSACTION NOT COMPLETE THE DIRECTORS MAY HAVE NO OPTION OTHER THAN TO APPOINT ADMINISTRATORS TO THE GROUP".

In July 2015 NES terminated its contract to operate the energy from waste facility at Avonmouth, Bristol, which had Borders councillors and senior officers drooling following a site visit in October 2014. This followed the malfunctioning plant's acquisition by a newly formed company called Avonmouth Bio Power Ltd.

The accounts show that NES sold its investments in New Earth Energy (West) Ltd and New Earth Energy (West) Operations Ltd - the owners and operators of the facility - for the princely sum of £2.

Yet only six months before the peppercorn deal was signed Scottish Borders Council remained convinced a scaled down version of the Avonmouth plant or another experimental and untried NES facility at Canford, Dorset was the answer to their environmental prayers.

By the time they finally decided to cut their losses more than £2.4 million had disappeared down the plughole, public money they wrote off without as much as an explanation..

New Earth fund "high risk" and unregulated

by EWAN LAMB

Advisers who recommended clients to invest their pension pots and life savings in the offshore Premier New Earth Recycling & Renewables [NERR] fund have been ordered to make good hundreds of thousands of pounds following complaints to the Financial Services Ombudsman.

It is yet another controversy linked to NERR, the Isle of Man based environmental fund which was supposed to finance a £21 million 'revolutionary' waste treatment facility for the Scottish Borders.

But in fact dealings in NERR Infrastructure PLC have been suspended since November 2013, preventing hundreds of investors from taking their money out while the fund failed dismally to deliver the cash needed for the waste management incinerator planned for Easter Langlee, near Galashiels.

Files published on the Ombudsman's website reveal a string of complaints from individuals who claim to have received bad advice from finance 'experts' who told them to sink large sums of cash in NERR. In each of the cases reported the financial services watchdog has upheld the complaints, ruling that the New Earth funds were not suitable for cautious investors.

In one particularly distressing case, an 82-year old woman - she has since died - was persuaded to place £99,000 in NERR out of a total investment of £125,000 after selling her house in 2013. The executors of her estate were unable to access the capital within the bond because of the suspension of NERR.

The report upholding this complaint by ombudsman Doug Mansell states: "This fund has been referred to as an unregulated collective investment scheme [UCIS]. But I think it is more accurately defined as a 'qualifying investor' fund incorporated on the Isle of Man. It was intended for use only by specialist investors, and on balance I don't think Miss C was made truly aware of the risks involved in the fund".

He ordered MFS Partnership (SW) LLP, who advised Miss C, to make good the losses. And he warned: "I agree with the adjudicator's proposal that the [NERR] fund should be given a nil valuation when calculating compensation".

Not Just Sheep & Rugby was told months ago by an agent trying to recover money for clients from NERR that the fund's long-term suspension and its connections with the tax haven of British Virgin Islands meant the chances of him succeeding were "virtually nil".

But it looks as though a number of investors will be compensated by financial advisors who claimed NERR was a low risk sure bet offering a return of up to 12% per annum.

Another individual who suffered at the hands of NERR and the same form of advisers was cajoled into investing more than £210,000 in the fund via his self-invested personal pension [SIPP]. The suspension of the fund meant Mr. S has been unable to take his pension benefits, and his complaint was also upheld.

The ombudsman in this case Adrian Hudson explained that an adjudicator had decided the fact that 80% of the investment went to unsecured loan stock made the fund high risk and increased the potential for liquidity issues. The fund was also subject to restrictive redemption procedures and penalties, and was not suited to an investor nearing retirement age.

In a negative critique of NERR, Mr. Hudson stated: "Unregulated investments carry higher risks in themselves. They don't benefit from regulatory protections and the funds are generally regarded to be highly specialized. In many cases UCIS funds have a limited market for re-sale and have significant investment and illiquidity risks."

Several other complaints involving NERR have been taken to the ombudsman service, and each one has been upheld. At the same time the Premier Group, controllers and managers of the fund, have failed to submit financial statements since the year ended March 31 2014, and are thereby in breach of Isle of Man company law. It means no-one knows the true value - if there is one - of the fund.

And yet councillors at Scottish Borders Council remained convinced for almost four years - from April 2011 to February 2015 - that NERR could build them a shiny new waste disposal mechanical and thermal facility for council contractors New Earth Solutions [NES], whose technology also proved to be worthless.

The sad truth is that elected members of every political shade appear to have failed to insist on rigorous 'due diligence' of NES and NERR, a failure which resulted in the loss of at least £2.4 million for local taxpayers. It is a saga which seems set to run and run. 

New Earth companies in the liquidiser!

EXCLUSIVE - by DOUG COLLIE

Two thirds of the companies which form New Earth Solutions Group - the Dorset-based waste treatment specialists selected as contractors by Borders councillors - are either entering liquidation, have been dissolved or are being struck off the companies register.

Earlier this month it was revealed by the offshore finance group which controls and is supposed to fund NES that efforts were continuing to restructure the ailing businesses after lenders rejected a business plan.

Now, research of company records shows 15 of the 23 separate firms which make up NES Group Ltd. are set to disappear.

They include the organisations which previously owned and operated the malfunctioning Avonmouth energy recovery facility [ERF] near Bristol, a "pioneering" form of waste management facility which was to have provided a scaled down template for a similar £21 million project for Scottish Borders Council.

None of the NES companies have submitted annual accounts in each of the last two years, and the last financial records posted at Companies House covered the 12 months up to January 2014. The deadline for publication has been pushed back on two separate occasions, an unusual occurrence in the business world.

As previously reported here, a large delegation of chief officers and senior councillors from SBC visited the Avonmouth plant in October 2014 and appear to have been impressed by the misfiring technology.

Councillor David Paterson, the council's executive member for environmental services, told online magazine Letsrecycle.com after the visit that the Galashiels plant would implement the technology on a ‘smaller-scale’ than in Avonmouth,.

Mr. Paterson said that the live demonstration of the technology had been ‘very informative’ and an ‘insight into what we could have in the Borders'.

Less than four months later the council abandoned the project, tore up their 24-year contract with NES and blandly wrote off the £2.4 million spent on the fruitless escapade.

New Earth Energy Facilities Management Ltd [NEEFM], the company which owned Avonmouth ERF and New Earth Energy (Avonmouth) Ltd, the plant operators, both indicated to Companies House on April 27 2016 that they were heading into members voluntary liquidation.

Last year, with the processing centre failing to meet production targets and requiring a multi-million pounds injection of cash to tackle a range of negative issues and technological glitches, NES offloaded the pyrolysis and gasification burner to principal lender Macquarie Bank at "virtually no cost".

NEEFM's last accounts showed an operational loss for the year to 31/1/2014 of £2.347 million with shareholder loans standing at £49 million. At the same time New Earth Energy (Avonmouth) Ltd posted an annual deficit of £548,673 with an amount owed to group undertakings given as £3.88 million.

All of the companies now facing 'the chop' have either been loss making or are dormant businesses which have not been trading. Those entities which did conduct business reported sizeable outstanding debts to various lenders including the Isle of Man-based New Earth Recycling & Renewables [Infrastructure] PLC, the fund which was supposed to finance the Borders project at Easter Langlee.

Yet ironically one of the few active companies left in the NES Group is New Earth Solutions (Scottish Borders) Ltd., the so-called special vehicle set up in 2011 to deliver the state-of-the-art waste treatment plant for SBC. Unfortunately the technology and the funder both turned out to be not fit for purpose.

The last annual accounts for New Earth Solutions (Scottish Borders) includes an entry 'construction work in progress £1.136 million' alongside an identical sum described as 'shareholder loans'. Given that not a brick was laid at Easter Langlee, does this figure represent the financial loss incurred by NES as a result of the contract's failure?

Here is the list of NES companies with no future and, where available, their operating performance in the year ended January 31 2014:

NES Management Services LLP: members voluntary liquidation: net debt £1.170 million.
New Earth Solutions Ltd. - application to strike the company off the register 22/4/2016.
NES (Kent) Ltd. - application to strike the company off the register 22/4/2016. Loss £1.053 million.
NES (Canford) Ltd. - application to strike the company off the register 29/3/2016.Loss £1.223 million.
NES (Bristol) Ltd.- application to strike the company off the register 22/4/2016. Dormant company.
NES (Leicestershire) Ltd. - application to strike the company off the register 22/4/2016. Dormant.
NES (Gloucestershire) Ltd. - application to strike the company off the register 22/4/2016. Loss £114,450.
New Earth Energy Ltd. - Members voluntary liquidation 27/4/2016. Holding company.
New Earth Energy Management Services LLP - members voluntary liquidation 27/4/2016.
New Earth Solutions (Willow) Ltd. - members voluntary liquidation 27/4/2016. loss £844,643.
New Earth Solutions (Bristol) Ltd. - members voluntary liquidation 27/4/2016. Not trading.
New Earth Energy Facilities Management Ltd. - members voluntary liquidation 27/4/2016. Loss £2.347 million.
New Earth Energy (Canford) Ltd. - dissolved 15/3/2016. Did not trade.
New Earth Energy (Avonmouth) Ltd - members voluntary liquidation 27/4/2016. Loss £548,673.
Scottish Borders District Heating Company - dissolved May 2016. Dormant.

Panama Papers reveal tangled offshore web

EXCLUSIVE by Our Investigations Unit

New Earth Solutions (Scottish Borders) Ltd., the so-named special vehicle set up to develop and deliver a £21 million waste treatment facility for Scottish Borders Council can now be linked to at least six offshore entities in the British Virgin Islands, with Panamanian law firm Mossack Fonseca identified as agents in each case.

A searchable internet database featuring details from over 11 million confidential documents leaked to the International Consortium of Investigative Journalists [ICIJ] is now available for public scrutiny for the first time. It contains the names of shareholders, investors, intermediaries and owners of tens of thousands of companies registered in tax havens around the world.

The so-called Panama Papers from the files of Mossack Fonseca are revealing the special arrangements made by wealthy and powerful individuals and corporations to keep their financial arrangements top secret. But, as the ICIJ points out, ownership of or involvement in an offshore firm does not necessarily involve wrongdoing, and the practice is perfectly legal.

Research by Not Just Sheep & Rugby has concentrated on the Premier Group (Isle of Man) Ltd. whose directors include David Whitaker and Michael Richardson. The Group controls or manages an extensive range of businesses and investment funds with a stake in New Earth Solutions Group, the contractors chosen by Borders councillors in March/April 2011 to provide waste treatment services.

Mr Whitaker was appointed as a director of New Earth Solutions (Scottish Borders) on April 15 2011, ten days after the firm was incorporated (set up). He served in that capacity for four and a half years until his resignation in November 2015 following the total collapse of the Scottish Borders contract.

Premier Group also runs the New Earth Recycling & Renewables [Infrastructure] fund (NERR), the outfit selected to finance a waste processing plant at Easter Langlee, but which was unable to come up with the cash.

The leaked Panama Papers show Premier Group acts as direct intermediaries for four separate offshore entities, all of them established long before the deal was signed between NES Group and SBC.

The vast ICIJ dossier names the BVI "businesses" as Projected Solutions Inc. (incorporated 2009), International Product Distribution Inc. (2002), Premier Group Distribution Inc. (2009) and Premier International Distribution Inc. (2005). In each case Mr.Richardson and Mr Whitaker are named as beneficiaries or shareholders. There are between a dozen and 60 shareholders in these firms.

Mr Richardson also has shares in Premier Balanced Distribution Inc. (2004) and Premier Property Distribution Inc. (2002), also based in BVI.

Premier Group (IOM) was contacted on May 11 and was asked to outline the nature of these offshore companies, what purpose they serve, and what impact or influence they have on the New Earth Recycling & Renewables (Infrastructure) Fund and on New Earth Solutions Group. To date there has been no response.

As we reported last week, Mr Richardson has just circulated investors in NERR with an update on the troubled fund's latest position, and with details of the continuing efforts to reshape New Earth Solutions.

The new missive issued from the Isle of Man says negotiations have been continuing on the restructuring of the waste business of the NES Group. These include talks with a potential 'developer' of large combined heat and power plants in Europe who might take the solid substances produced at NES conventional treatment centres.

But the activities of those offshore entities remain shrouded in mystery as does much of Scottish Borders Council's disastrous and costly involvement with NES and NERR.

A political death - or is it?

CROSSBENCHER on the apparent demise of the Borders Lib Dems

At least one notable feature of the 2016 Scottish parliamentary election results appears to have passed the world's press by - the fact that the Scottish Borders is without an elected Lib Dem MP or MSP for the first time in more than half a century.

Less than a decade ago the Party ruled the Borders political roost with a clutch of election successes at both Westminster and Holyrood levels.

But after Michael Moore was firmly rejected by the electorate as the Hon. Member for Berwickshire, Roxburgh & Selkirk at the 2015 General Election, the sole Lib Dem representative was Jim Hume, a list MSP for the South of Scotland.

However, on May 5th he too was swept away on a combined SNP and Tory flood tide when the Lib Dems only polled a pathetic 11,775 list votes in the entire South of Scotland region. Their 3.7% share of the poll was even lower than The Greens on 4.7% (14,773) while the SNP garnered 120,217 votes (38.3%) with the Conservatives on 100,753 (32.1%).

The Scottish Borders constituencies were once a Lib Dem power base from the 1965 breakthrough when David Steel scored a famous by-election victory, then held the seat for a quarter of a century before handing the baton to Archy Kirkwood who passed it later to Michael Moore.

From 1999 when the first elections to the Scottish Parliament were held, through to 2007 the Party sent two MSPs up from the Borders, each time with healthy majorities. But the rot set in at the 2007 poll when Euan Robson lost Roxburgh & Berwickshire to the Tories while Jeremy Purvis came within a whisker of losing Tweeddale, Ettrick & Lauderdale to the Nationalists. Boundary changes would cook Purvis's goose four years later.

The Lib Dems appeared to be on the way out.

However at the 2010 General Election the highly popular Michael Moore notched up a remarkable win in Berwickshire, Roxburgh & Selkirk, taking 45% of the votes cast. But the apparent resurgence in his Party's fortunes was stopped dead in its tracks when only weeks after that triumph Nick Clegg took his troops into an electorally disastrous liaison with Cameron's Conservatives.

Borders voters did not forgive Moore in 2015, plumping instead for the SNP's new kid on the block, Calum Kerr.

The spectacularly disastrous slump in Lib Dem fortunes was reinforced at constituency level this time round when previous supporters deserted in droves leaving candidate Jim Hume with just 2,551 votes (7.7%, down 9.6% on 2011)). They did little better in neighbouring Midlothian South, Tweeddale & Lauderdale with 3,686 votes (10.4% - down 17.7% on 2011)

So farewell then Borders Liberal Democrats; your political obituary is complete. Well, actually not quite....

For up in the House of Lords the Scottish Borders continues to be represented by three of the politicians who used to canvass for votes, namely David Steel (now Lord Steel of Aikwood), Archy Kirkwood (Lord Kirkwood of Kirkhope) and Jeremy Purvis (Lord Purvis of Tweed).

It's hard to quantify what benefits the region reaps from their lordships' diligent attendance in the house of peers. But the services of the experienced trio come at a price.

Westminster's records of attendance allowances - members of the upper house can claim £300 a day for simply being there - and associated expenses including travel, parking, taxis, air fares, etcetera show that in the seven months of 2015 when the Lords was in full session the Borders threesome claimed more than £84,000 in allowances between them.

The individual tallies were Lord Purvis over £31,000, Lord Kirkwood £27,000 and Lord Steel more than £24,000. In addition, the combined expenses claims totaled more than £68,000 including £35,000 for travel costs and £21,000 for air fares. When attendance allowances and expenses are totted together the figure exceeds £150,000.

Other Scottish Borders peers who claim for attending the Lords are Lord Sanderson of Bowden, Lord Palmer and Lord Sutherland of Houndwood. And from November last year Lord Beith (former long-serving Lib Dem MP for Berwick-on-Tweed Sir Alan Beith) also joined the ranks of peers. The Party also lost their grip on Lord Beith's constituency in 2015 when it was taken by the Conservatives.

So there you have it. The Borders Lib Dems may have been kicked out of elected office at every political level, yet still they retain a strong local presence.

Problems pile up for rubbish company

DOUGLAS SHEPHERD on a new set of woes facing New Earth Solutions

A long list of financial issues, overdue accounts, a plant fire and breaches of company law have been revealed in a rare statement to shareholders and investors from the offshore finance house which controls New Earth Solutions [NES] and the fund which was to have delivered a £21 million waste management facility for the Scottish Borders.

The latest update from Michael Richardson, a director of Premier Group (Isle of Man) which has a large stake in the NES group and runs the New Earth Recycling & Renewables (Infrastructure) Fund or NERR seems to suggest an uncertain future for the firm selected by Scottish Borders Council as its contractor for waste treatment services.

And there is an equal air of uncertainty hanging over the NERR fund whose last financial statements were for the year ended March 2014. It means the fund is in breach of the Isle of Man Companies Act. The failure to hold an annual general meeting in 2015 also constitutes a contravention of Manx law although there is no indication that the IOM regulator plans to take any action against Premier Group. The fund has been suspended since late 2013.

Borders councillors certainly made a huge and very costly mistake when they awarded a 24-year deal with a reported gross payment value of £180 million to NES in 2011. The contract was abandoned in February last year with at least £2.4 million squandered for no return.

It would also appear neither elected members nor senior officials bothered to check out NERR to see if it had the resources to fund the proposed treatment plant at Easter Langlee. They left the financial details entirely to NES, a Group with a large level of debt and a brand of technology which turned out to be useless.

Mr.Richardson disclosed last October that the energy recovery facility [ERF] which NES developed at Avonmouth, near Bristol, was proving to be such a financial drain on the businesses that it had been offloaded to an Australian bank for no financial consideration. The same system was to have been installed at Galashiels.

The new missive issued from the Isle of Man says negotiations have been continuing on the restructuring of the waste business of the NES Group. These include talks with a potential 'developer' of large combined heat and power plants in Europe who might take the solid substances produced at NES conventional treatment centres.

"The New Earth management in consultation with their advisers prepared a five year business plan for the senior lenders in the autumn of 2015", writes Mr Richardson. "However, this was rejected by the senior lenders. A revised business plan was developed with capital expenditure kept to a minimum.

"A consequence of this is that some capital improvements to plant have been deferred and this has impacted on the business operations. In addition, the senior lenders have been exploring options for restructuring and exit routes."

The letter goes on to reveal that in December there was a fire at the NES Avonmouth waste treatment plant which was contained. However, processing has been affected since that time. The supply of refuse derived fuel to the Avonmouth BioPower plant was interrupted and discussions are taking place over alleged consequences of the disruption to their business.

"The filing of the accounts of the New Earth companies (they include New Earth Solutions [Scottish Borders] Ltd) has been deferred on two occasions whilst restructuring and exit routes were being progressed by the senior lenders", investors are told.

According to Mr. Richardson, the directors of Premier Group [and presumably those of its associated businesses] appreciate that the lack of clarity is of concern to shareholders. But they firmly believe this course of action offers the most favourable outcome for shareholders.

Investors are promised written details of the ramifications and final outcomes as soon as negotiations on "the assumption of control of the fund and the New Earth companies by the developer and the exit of senior lenders have completed satisfactorily".

There will be a further delay before financial statements are published, and Mr. Richardson warns: "Unfortunately at this time the directors cannot be definitive on the timeline or on further detail as full terms remain confidential".

NES and NERR certainly do not have their troubles to seek!

Public outrage after Commissioner's verdict

by EWAN LAMB

Scottish Borders Council has been hit by a new wave of criticism after Scotland's information commissioner Rosemary Agnew's latest decision notice in the New Earth Solutions affair.

The angry reaction from members of the public in Scotland and the rest of the United Kingdom has been flooding in to the Not Just Sheep & Rugby office after we published details of Ms Agnew's 'judgement' in a disputed Freedom of Information case.

The strongest comments are aimed at the council for failing to maintain comprehensive written records so that members and officers can be held accountable for the loss of £2.4 million of public money following the shambolic collapse of the local authority's 24-year contract with so-called waste management specialists NES.

Ms. Agnew wrote: "The council's decision to rely on informal briefings generating no recorded information during the lifetime of the project appears questionable at least, in terms of accountability and transparency".

During the investigation SBC also flooded the Commissioner's office with 500 separate reports which, they claimed, were relevant to the FOI request. But Ms Agnew concluded none of the documents were linked to the question which concerned the decision making processes surrounding the scrapping of the NES contract in February 2015.

A waste industry expert commented: "Obviously they [SBC] tried to avoid the requirement to disclose information by overwhelming Ms Agnew with irrelevant documentation. Moreover, it is very poor practice if proper records and minutes were not kept to make such a big decision.

"Perhaps the council does not have money pressures and therefore can afford the luxury of wasting £2.4 million of taxpayers' money. Had they delivered the project then the Borders would have been diverting 80% of the region's waste from landfill by now. It would be interesting to see what the variation report contained as I assume such a variation would have required the agreement of elected members."

Meanwhile a retired solicitor got in touch to say: "What is interesting is the extent to which the information commissioner is prepared to criticise the governance. Surely this should be enough to make the Audit Commission look again at the situation. Equally, given the amount of money involved the external auditors should have this drawn to their attention".

Unfortunately Audit Scotland has already made it clear on several occasions that it has no interest in investigating the loss of public cash in this instance despite allegations of bungling incompetence by SBC. After all they selected a form of technology which did not work and a funder who could not come up with the £21 million needed to build the waste plant at Easter Langlee.

A leading campaigner against the incineration of waste who has studied Ms Agnew's decision notice said: "There seems to be a pattern here with respect to the council's reluctance to seek clarification that could have narrowed the scope of the various FOI requests linked to this contract.

"Does SBC plan to revise its FOI procedures in light of the criticism of their repeated failure to work with requesters to simplify matters? And do they intend changing their systems following criticism of their reliance on unrecorded informal briefings on matters of importance?"

A brief comment from one Borders taxpayer simply said: "There will and should be extreme discomfort at SBC HQ. Heads should roll".

This disastrous saga, and the reluctance of SBC to give the public the full facts relating to what went wrong and why appears to be set to continue into the period leading up to the 2017 Scottish local government elections next May. That is when those elected members involved in the debacle, and who decide to stand for re-election may have to answer some very awkward questions.

Not Just Sheep & Rugby will continue to publish articles about the catastrophic £65 million deal between SBC and NES which went so horribly wrong. Please feel free to post a comment. And anyone who can shed light on the mystery should make sure their information gets into the public domain.

Council savaged over 'questionable' record keeping

DOUG COLLIE on a devastating decision notice from Scotland's information commissioner

The tendency of Scottish Borders Council to conduct its business through verbal briefings rather than written records has landed the authority in hot water with the Scottish Information Commissioner [SIC] who says the practice "appears questionable at least, in terms of accountability and transparency".

Commissioner Rosemary Agnew has also fired a broadside at SBC for making her office commit considerable resources in printing, collating and reading 500 documents which bore no relevance to the case her staff were investigating on behalf of a Freedom of Information requester.

This fourth decision notice linked to the council's disastrous waste management contract with New Earth Solutions, which cost taxpayers at least £2.4 million, cannot be considered anything other than a damning indictment of the local authority. It has been ordered to release yet more information which it has tried desperately to conceal to avoid embarrassment and further allegations of incompetence.

On this occasion SBC was asked for copies of information concerning the decision by elected members in February 2015 to scrap the £65 million waste treatment deal with NES after the company and council were unable to overcome funding and technological issues.

But the council failed to respond to the request within the time allowed by FOI law, and following a review the requested information was withheld on grounds of commercial confidentiality. It is not the first time SBC has trotted out this reason for keeping potentially damaging information about their dalliance with NES firmly under wraps.

Ms Agnew's investigation report appears to show how the council provided her with over 500 documents in a failed bid to cloud the issue. SBC claimed all of this paperwork would fall within the scope of the information request, but after reviewing each of these documents the SIC found none of them were relevant.

When the Commissioner pointed out that none of the reports provided appeared to have been presented to council committees for consideration, SBC confirmed that was indeed the case. All of the correspondence was between members of the council's project team, their external advisors and NES itself.

The decision report slams the council by declaring: "If [the requester] had been given the opportunity to clarify or discuss his request, the Council might have avoided spending significant time and effort in collating the large volume of information it considered relevant to the request.

"Additionally, it would have prevented the Commissioner from having to commit considerable resources in printing, collating and reading information which was not relevant to the request."

In a side swipe at SBC's dubious record keeping, Ms Agnew points out her remit is limited to considering the information actually held by an authority. But the decision notice adds: "However, she is surprised that the Council failed to record any details of these meetings and briefings on the NES project, given the significant expenditure which the Council was committing to this project, and the onus and expectation on Scottish public authorities to be transparent and accountable".

The strong criticism does not end there. The report states: "The Commissioner notes that the termination of this contract led the Council to 'write off' some two million pounds worth of public funds; in the circumstances the Council's decision to rely on informal briefings generating no recorded information during the lifetime of the project appears questionable at least, in terms of accountability and transparency".

The investigation has also made it clear that SBC was - yet again - determined not to release any information voluntarily. Its representatives warned the SIC that disclosure of the withheld information would substantially harm the legitimate financial interests of NES.

SBC argued the information contained details about the technology which NES was developing as well as its financial arrangements and this information was commercially sensitive.

But as these columns have already revealed, the technology chosen by Borders councillors was untried and useless and the method chosen by elected members to fund a proposed £21 million waste treatment centre at Easter Langlee was incapable of delivering the project.

Fortunately Ms Agnew concludes: "Some of the withheld information does not contain sensitive details of NES's finances or technology. Instead, it concerns the decision-making processes of the Council in relation to this matter, and shows how the Council reached the decision to terminate its contract with NES.

"The Commissioner does not consider that disclosure of this type of information would cause the harm that the Council has claimed, as it is not information which would enable a competitor of NES to gain any real commercial advantage".

And yet SBC maintained there was a greater public interest in withholding all of the information than disclosing it even though it had nothing to do with New Earth Solutions. Readers can only speculate as to why the bungling local authority wished to keep the documentation plastered with thick black ink to prevent it from being read..

Commissioner Ms Agnew requires the Council to disclose information that was wrongly withheld by June 17th.

INDEPENDENT? Run that by me again!

CROSSBENCHER on the confusing world of Borders "politics"

So how do all of those SNP, Labour and Lib Dem supporters who voted for Councillor Michael Cook at the last Scottish Borders Council elections feel after reading his letter in last Thursday's local press?

Mr Cook, you see, camouflaged himself with an Independent ticket in the East Berwickshire ward at the 2012 polls, leading the electorate to believe he was a non-political animal, keen to keep Party dogma out of municipal business.

But now we discover the former deputy leader of the council, and a high heid-yin in the Convention of Scottish Local Authorities [COSLA] to boot, will give his two votes to the Tories at the parliamentary elections this Thursday, casting his Independent credentials [conveniently and no doubt temporarily] aside.

As an elector, Mr. Cook is free to vote for whoever he likes. But having chosen to stand under an Independent banner at council level he would have been well advised to keep his true colours under the bed, in the closet, or wherever he chooses to conceal them.

Before proceeding further it might be helpful to explain the political set-up at SBC where the member for East Berwickshire is an influential member of the unholy Rainbow Alliance which is tasked with the responsibility of delivering essential local services.

Mr Cook's Independent Party - a screaming oxymoron if ever there was one - did not have a majority of seats post-election so Group members invited the Scottish National Party and Liberal Democrat councillors to join them and take power. That left the Conservatives, the largest group returned by the voters, out in the cold and condemned to the minority opposition benches for five long years.

When the partnership was formed and after the top jobs were divvied up, the unlikely bedfellows heaped praise on each other, exuding an air of sweetness and light.

Speaking on behalf of the Scottish National Party Group, their leader John Mitchell said: "We are pleased to be part of the new Administration that will run Scottish Borders Council for the next five years. The SNP Group is committed to working hard with our Administration partners for the good of the Scottish Borders."

So how has Councillor Cook managed to work with Mr Mitchell and his colleagues for four years when he describes the SNP in his letter to the papers as "A party with a profoundly ugly disposition"?

His decision to publicly endorse the Conservative candidate in the constituency where he lives surely renders his position within that SBC Rainbow Alliance untenable. After all he's backing the Tories who have been and are his political 'enemies' in the council chamber.

Can Mr Mitchell and the other SNP "tapestry gallery sympathisers" continue to work hand in glove with an individual who clearly detests what their party stands for? Will the Nationalists withdraw from the administration? And should Mr Cook leave or be suspended from the Independent Party - whatever that is - before crossing the floor to sit on the council's Tory benches?

It must be time to end the use of 'Independent' as a political ticket and replace it with something more appropriate and meaningful. We suggest 'Non-Political' so that voters know exactly where candidates who wish to hide their political leanings stand. Anyone subsequently declaring allegiance to the SNP, Tories, Lib Dems, Labour, UKIP or Greens would then forfeit the right to use the 'Non-Political' designation with immediate effect.