The price of failure - 15 million pounds?

EXCLUSIVE by DOUG COLLIE

Scottish Borders Council's failure to develop and deliver a waste treatment plant to deal with the region's annual "output" of 42,000 tonnes of residual rubbish is set to result in an additional bill of up to 15 million pounds over ten years for council taxpayers.

A contract notice published by the authority this week estimates it will cost 50 million pounds to export around 420,000 tonnes of municipal waste - excluding recyclables - during the decade from mid 2019.

The annual cost will be five million pounds, and research and calculations carried out by Not Just Sheep & Rugby show the cost of transporting and treating the residual waste will work out at 119 pounds per tonne. The preferred option is also certain to add to SBC's carbon footprint with a fleet of lorries required to haul the garbage to its final destination.

But figures linked to the proposal to build a Mechanical Biological Treatment (MBT) plant at Easter Langlee, Galashiels, to divert the residual waste from landfill show the cost per tonne would have been just 83 pounds per tonne. The 119 pounds figure now in prospect is some 29.8% higher than the MBT facility costing.

The savings over a year when the two disposal methods are compared is 1.512 million pounds in favour of the MBT which adds up to 15.140 million pounds in ten years.

A confidential report presented to Borders councillors in 2011, which management attempted to keep under wraps, estimated the Galashiels treatment plant would deliver savings of 26 million pounds against the so-called 'do nothing' scenario of continuing to landfill the residual waste.

But as we have reported several times previously, councillors voted in private in 2012 to abandon the MBT-only option in favour of a combined Advanced Thermal Treatment (ATT) plant in a bid to produce power by incinerating the rubbish.

The Deed of Variation which allowed contractors New Earth Solutions to avoid having to stick to the original 2011 deal was to prove disastrous and expensive. The company's ATT system failed to function, their offshore funders could not come up with the extra money, and the complete venture was abandoned in February 2015 with the council and its residents 2.4 million pounds out of pocket for no return.

This week's notice, inviting bids for the 50 million pounds contract, says: The Authority currently manages around 42,000 tonnes of residual waste per annum. The majority of this waste is deposited at Easter Langlee landfill site which is owned and operated by the Authority. A decision was taken not to expand the Easter Langlee landfill site once its current capacity is exhausted (by mid-2019) but instead develop a new Waste Transfer Station in its place.

"This will enable the Authority to comply with the ban on sending biodegradable municipal waste to landfill which comes into effect from 1st January 2021 by exporting waste out of the Borders for treatment and disposal. The Authority reserves the right to take responsibility for haulage for part of the Contract Waste to the Contractors Delivery Site in order to gain benefits through utilising its own Authority Haulage Vehicles. The Authority is looking for a haulage, treatment and disposal solution that provides a reliable and robust means of managing contract waste from mid-2019."

The contract is divided into four lots, namely: Lot 1 - Municipal Residual Waste - Duration in months: 60 There is an option for the parties to agree to extending the Contract on a yearly basis up to a maximum of a further five years subject to the terms within the Conditions of Contract after expiry of the initial term. Lot 2 - Bulky Residual Waste;   Lot 3 - Commercial and Demolition Waste;

Lot 4 - Street Cleansing Waste.

It is understood the option of exporting residual waste out of the Borders by road was dismissed on grounds of cost during a project analysis of various options undertaken in 2009/10. But in the absence of a MBT plant and with an end to landfilling looming large it now appears to be the only game in town.

The financial implications for Borders local government appear likely to run into many millions of pounds thanks to the council's decision to get into a bed with debt-ridden New Earth Solutions and then to pass up the chance to construct a tried and tested form of waste disposal facility to serve the region. The 2.4 million pounds of admitted losses so far may well rocket to more than 17 million pounds ten years from now.

Business World far from ideal

EXCLUSIVE by DOUGLAS SHEPHERD

Self-generating errors and malfunctions following the installation of a new financial system at Scottish Borders Council have resulted in staff being deployed to sort defects while there was a heightened risk of a control failure over the past year, it has been revealed.

Not Just Sheep & Rugby recently reported on the issues and challenges associated with Business World, an integrated Enterprise Resource Planning (ERP) system. It appears the transition from legacy payroll, general ledger and procurement systems to Business World has been far from smooth.

More details about the problems facing SBC staff as a result of the ERP not working properly are included in the council's so-called Annual Governance Statement which forms part of the annual accounts for 2017/18.

A governance review concluded that in 2017/18 the Council continued to demonstrate that the governance arrangements and framework within which it operates are sound and effective, and are consistent with the principles and recommendations of the ‘Framework’.

But Chief Financial Officer David Robertson highlighted one exception in his assurance statement, namely "the ongoing rectification plan to address deficiencies in the Business World ERP system"

He drew attention to "the delayed delivery of outstanding functionality, specified in Solution Design Documents, and intended to deliver significant business benefits which remain outstanding, have impacted upon the full effectiveness of the control environment and heightened risk of a control failure during the year.

"To mitigate this risk, as far as is possible, staff resources have consequently been deployed to sorting defects, performing manual reconciliation processes to address areas where system functionality has not been operating effectively for much of the year e.g. bank reconciliation, and resolving system generated errors. This has required significant manual effort, a series of workarounds, and the procurement of additional consulting time."

Other 'highlights' from the draft accounts nclude:

*Remuneration - SBC chief executive Tracey Logan received total remuneration of 134,726 pounds (previous year 131,099). The payment in 2017/18 included fees as returning officer at elections. Two other members of staff were paid between 105,000 and 109,000 pounds.

A total of 125 members of staff earned 50,000 pounds or more comprising 20 chief officers, 74 teachers and 31 other staff. The overall total was the same as in the previous financial year.

*Exit packages - Five employees took advantage of SBC's early retirement packages at a total cost of 153,699. The largest individual package amounted to 73,233. In the previous year 24 exit packages cost 477,562.

*Payments for loans + Public Private Partnership (PPP) Schools - The council made loan fund repayments of 10.578 million (10.202 million in 2016/17); So far as PPP schools are concerned the amount payable in 2018/19 is given as 8.044 million (liability and service charge) plus 2.766 million (interest) making a total of 10.810 million.

Overall SBC faces total repayments for PPP contracts of 236.25 million plus interest of 47.663 million for a grand total of 283.913 million.

*Management Statement - Conclusion - The operating environment for the Council continues to be very challenging with financial and economic influences such as increasing demands on services, reducing Scottish Government funding, low interest rates and cost pressures from pay and price inflation all affecting the Council’s finances.

The Council, despite these challenges, remains financially sound and well placed to serve the people of the Scottish Borders in the future. As already noted 2017/18 has been a year of significant change within the Council with huge challenges posed by implementation of ERP. The work of staff across the Council in implementing the new system is gratefully acknowledged. 

A great deal....of bureaucracy

DOUG COLLIE reports on the overwhelming committee structure needed to run the Edinburgh & South East Scotland  City Region deal.

Newly published documents outlining how the much trumpeted Edinburgh & South East Scotland City Region deal will accelerate economic growth across six local authority areas also reveal that the administrative system required to deliver the 600 million pounds project will have no fewer than twelve separate committees, boards and advisory groups.

The Scottish and UK Governments have each pledged 300 million pounds for the deal over the next fifteen years, and it is claimed the venture will result in 1.3 billion pounds in investment for Edinburgh, East Lothian, Fife, Midlothian, Scottish Borders and West Lothian Councils.

A 51-page document outlining the deal which will be considered by members of Scottish Borders Council later this week states: "City of Edinburgh Council will act as the accountable body for the city region deal finances. All grant funding from Government will be channeled through the City of Edinburgh Council with the exception of the Sheriffhall Roundabout project. Edinburgh Council will be the authority to hold others to account should projects present a risk to the overall programme”.

The Borders share of the cake is expected to be a 25 million pounds innovative industrial park for high quality business space at Tweedbank, close to the Borders railway terminus as well as additional housing development, also in the Tweedbank area.

But the large collection of bodies which are apparently essential to oversee and monitor the city deal may well attract criticism. The cost of administration could be considerable, and could tie up senior councillors and many council officers in a never ending string of regular meetings.

These are the separate entities mentioned in the report:

Joint Committee – comprising leaders of the six local authorities, a uni/college representative, a business sector representative and a third sector representative. Will meet at least quarterly

 

Regional Enterprise Council – approximately 12 members – To meet quarterly.

 

Executive Board – the six chief executives from the local authorities, a university/college representative, six local government representatives responsible for the economy: Government colleagues to attend meetings as observers. To meet monthly

 

Regional Directors’ Group – 13 members – monthly meetings on alternative fortnights to executive board.

 

Finance Directors’ Group – To meet quarterly.

 

Innovation Advisory Group – Representatives from local authorities, Higher Education (HE) and Further Education (FE) institutions, Government agencies – meetings schedule to be confirmed.

 

HE/FE Group – university/college representatives – meet quarterly.

 

Data Driven Innovation (DDI) Delivery Board – meet monthly

 

Integrated Regional Employability & Skills Board – 18 members – “regular meetings”.

 

Regional Transport Appraisal Board (TAB) – meetings schedule to be confirmed.

 

IMPACT Scotland Board – to monitor progress – meet every ten weeks

 

City Region Housing Board – ten members + two observers – meet bi-monthly

The city deal report claims: "Prosperity and success is not universal across the city region: 22.4% of children are living in poverty ; there is a lack of mid-market and affordable housing; and too many people are unable to move on from low wage/low skill jobs. The City Region Deal will address these issues; it will accelerate growth, create new economic opportunities, and meaningful new jobs that will help to reduce inequalities."

It is to be hoped it won't become bogged down in red tape generated by its dozen individual committees and boards. The six participating councils obviously believe the twelve groupings complete with members and administrative back-up are vital to the success of the project.

"Significant weaknesses" in council's new financial system

EXCLUSIVE by EWAN LAMB

A management report by Audit Scotland has pinpointed 'significant weaknesses' following the introduction of a new financial system at Scottish Borders Council.

And in a foreword to the local authority's annual accounts for 2017/18, council leader Shona Haslam says: "Transition from legacy payroll, general ledger and procurement systems to Business World, an integrated Enterprise Resource Planning (ERP) system has been challenging whilst maintaining a ‘business as usual’ approach."

Audit Scotland, the public spending watchdog, replaced KPMG as SBC's external auditors. They will carry out more financial checks before signing off the latest set of accounts later this year.

But in their Management Report to be considered by the council's Scrutiny Committee the auditors outline a number of issues linked to the introduction of the ERP system.

The report explains that results of testing from audit work, and the work carried out by internal audit, has identified that there are significant weaknesses in the control environment following the implementation of the new financial system. 

In addition, there is "planned functionality within the system that is not yet in place." There is a risk that errors or fraud may not be identified timeously due to weaknesses in controls. 

A management response claims the control weaknesses identified are being addressed through an agreed action plan. Work is ongoing with CGI - the company handed a multi-million pounds contract by SBC - to ensure these are rectified. According to the report: "The plan agreed with CGI at Go Live should ensure that outstanding functionality relating to fixed assets and self-service reporting are encompassed in the CGI Contract."

Audit Scotland also report - "We reviewed the list of users with access to the Council Tax and Non Domestic Rates revenues system for appropriateness. We identified eight users with inappropriate access to the system due to changes in their role or no longer working for the council. There is a risk that individuals could have inappropriate access to revenues systems"

A section of the document headed Payroll Audit Reports says "In previous years, payroll staff used a daily ‘audit report’ of changes made to the system the previous day to check that all changes were supported by appropriate documentation.

"The new system does not allow an equivalent report to be produced. There is therefore no system generated report of changes available to allow payroll staff to check changes made to the payroll. There is a risk that unauthorised changes to payroll data may not be identified timeously."

An internal audit report included 18 recommendations to address identified weaknesses in the ERP system which covers four main areas:- procurement and payments (five recommendations); accounts receivable (two recommendations); payroll (one recommendation); financial ledger (eight recommendations); and two recommendations covering all modules. 

Audit Scotland add "In addition to the agreed recommendations, it was also noted in the internal audit report that it has not been possible to fully test system user access due to limitations in system reports and insufficient documentation regarding user roles and access. A role review is underway to ensure that appropriate access is in place for users.

"There are also elements of Business World that are not yet operational, such as fixed asset registers and self-service budgetary information. In these areas previous systems and processes from before the introduction of Business World are being used.

"Any weaknesses identified represent those that have come to our attention during the course of normal audit work and therefore are not necessarily all the weaknesses that may exist. It is the responsibility of management to decide on the extent of the internal control system appropriate to Scottish Borders Council."

James Waugh:Jedburgh's Royal Ascot winner

THE TRAINER WHO FOUNDED A RACING DYNASTY

With Royal Ascot in full swing this week it is perhaps fitting to recall the achievements of a Jedburgh-born trainer of racehorses who was to become one of the leading exponents of his profession.

But like Matthew Hardie, violin maker extraordinaire, who featured in these columns recently, James Waugh (1831-1905) doesn't seem to feature in Jedburgh's pantheon of all-time greats.

James was the patriarch of a veritable racing dynasty of Waughs which survives to this day. No fewer than six of his sons became trainers including Richard Waugh who, at one point in his career, took charge of Kaiser Wilhelm II's string of horses based at Germany's Imperial Stud.

Three Waugh family members involved in Germany's racing regime found themselves held captive in that country's Ruhleben prisoner of war camp for the duration of World War I. They returned to the sport in Germany and Denmark following their release.

Details of James Waugh's rise to fame can be found in Alan Walker's book The Scots and The Turf: Racing & Breeding - The Scottish Influence, a new edition of which was published last year.

James was the seventh son of Richard Waugh, a Jedburgh farmer who also spent time as coachman to local GP Dr Hume. Young James started work on the farm, but aged only 20 he was offered the chance to become personal racehorse trainer to the wealthy owner of Cessford Manor near the Borders village of Morebattle.

An accomplished horseman, Waugh built a reputation as a courageous steeplechase jockey as well as an efficient trainer. He was soon lured to the seaside at Gullane in East Lothian where he trained thoroughbreds for two knights of the realm, Sir James Boswell and Sir David Baird.

James's next job was in Berkshire where he took up a private training engagement for Australian owner Wybrow Robinson in 1867. Then it was on to Wiltshire to train exclusively for Scottish businessman James Merry.

This time the relationship between owner and trainer was to end in a degree of acrimony after Merry's horse Macgregor - an odds on favourite after winning the 2000 Guineas in 1870 - finished down the field in the Epsom Derby. That Guineas triumph was to be Waugh's only Classic success.

James Waugh was soon on his travels again, this time settling in Poland for a time to train for a Count Henschel. Next stop Hungary where his employers were Count Esterhazy and Prince Festitics.

As Alan Walker recalls in his book, James was to spend ten seasons in mainland Europe where in one highly successful year he sent out 45 winners including the German Derby at Hamburg.

But by this time his wife Isabella (nee Scott, from Southdean) was in poor health, and the pair return to England in 1880. Tragically Mrs Waugh died at the age of just 47 after giving birth to eleven children in less than two decades.

The contacts made during his European sojourns meant there were plenty of patrons willing to send him horses to train when he next set up an establishment in Newmarket. His list of owners included leading members of the European aristocracy as well as prosperous businessmen closer to home.

No doubt the stable star would have been St Gatien, the horse which famously dead-heated for the 1884 Derby, and which Waugh 'inherited' after its Classic victory. St Gatien provided the trainer with his third success in the prestigious Jockey Club Cup before Eurasian, another leading light in Waugh's string lifted the Gold Vase and the Alexandra Stakes at Royal Ascot in 1887.

Numerous other top grade wins were chalked up before retirement beckoned. According to The Scots and The Turf James was described as "smart, charming, genial, hospitable and with courtly manners". He died in 1905.

While six of his sons would take out trainers' licences, the dynasty was strengthened still further when two of his daughters married trainers too.

His offspring enjoyed great success on race courses up and down the United Kingdom, keeping the Waugh name to the fore in the so-called Sport of Kings right up to the 1980s.

His great-great grandson Alec Waugh established a highly successful stud in Normandy in 1997. He named his French breeding facility The Jedburgh Stud after the home of his illustrious ancestor.

Borders recycling rate well below 2011 level

by DOUG COLLIE

The performance of Scottish Borders Council in recycling the region's household rubbish is so unimpressive that the rate in 2017 was a full six percentage points below the figure recorded as long ago as 2011 while almost 60% of all garbage collected went to landfill.

Last year's recycling figure of 39.8 per cent which was published this week, was way below the council's 46.3 per cent recorded in 2011 and lagging behind the national average of 45.2 per cent in 2016.

At the end of May the Scottish Environment Protection Agency announced that recycling levels for all forms of waste in Scotland had exceeded 60 per cent for the first time in 2017. Last year's data for all 32 Scottish local authorities is expected to be published by SEPA in September.

But a report to SBC's Executive reveals only a marginal increase in local recycling rates between 2016 (39.0%) and 2017 (39.8%). Before that Borders recycling had been travelling in a downward direction while most of the rest of the country were improving their ability to divert waste from landfill.

As reported previously, the suspension of garden waste collections several years ago had a seriously detrimental impact on the council's recycling rates. But despite vociferous protests from service users and some councillors there has been no reprieve for the axed green bins.

Meanwhile the future location for the treatment of residual waste - approximately 30,000 tonnes of it per year - remains undecided.

The Easter Langlee landfill site which produces large volumes of methane gas each year, is scheduled for closure in mid 2019. A waste transfer station is currently being developed at the Galashiels site from where the rubbish will be taken by road to its final destination.

A long awaited waste management strategy has yet to be finalised by a group of councillors and officers who first met in 2015 following the collapse of the council's disastrous contract with New Earth Solutions Group.

One of the priorities for the local authority will be to invite bids for the contract to haul and treat the waste previously bound for landfill. But critics claim such an arrangement is not environmentally friendly given the additional polluting lorry movements as the loads of refuse are taken out of the Borders.

Once the alternative system is up and running the remainder of the Easter Langlee site will be capped and the site is to be grassed over.

It looks as though the Borders will continue to be affected financially and environmentally for many years to come by the failure of SBC to develop and deliver its very own waste treatment facility. That unproductive venture has already cost local taxpayers the thick end of 2.5 million pounds.

"Scotland's Stradivari" a stranger in his own birthplace

MATTHEW HARDIE – THE GENIUS AIRBRUSHED FROM JEDBURGH’S HISTORY

He may have produced some of the world's finest violins despite battling alcoholism for much of his life. But Matthew Hardie, dubbed "Scotland's Stradivari" doesn't rate a mention in official or unofficial versions of the history of Jedburgh, the town of his birth.

While James Hutton (geologist), Mary Somerville (scientist) and David Brewster (physicist) have been rightfully inducted into the town's virtual Hall of Fame alongside Roy Laidlaw and Gary Armstrong, Hardie's link to the royal burgh appears to have been virtually overlooked.

Perhaps it is time to raise the profile of this master craftsman despite his chaotic lifestyle which had him banged up in a debtor's prison before his death in an Edinburgh poorhouse and burial in a pauper's grave in Greyfriars kirkyard.

These days Matthew Hardie's musical instruments command premium prices around the globe. At present, on E-bay you'll find one of his 1815 violins advertised by an American vendor with a price tag of $75,000 or 55.900 pounds. A Hardie-made cello sold for 28,800 pounds in 2006.

His son Thomas who inherited his father's skills along with his liking for strong drink was no slouch when it came to instrument making, although the critics did not always afford him rave reviews.

Just listen to this put down by William Meredith Morris, author of the 1920 publication 'British Violin Makers - a Biographical Dictionary': "As a matter of fact the tone of Thomas Hardie's instruments is almost always poor and often positively bad".

Mr Morris's forthright criticisms seem to have been well wide of the mark for The Upton Bass String Instrument Company, of Connecticut, USA, currently offers for sale a Thomas Hardie 1825 double bass, "a long time denizen of the Boston Symphony Orchestra"with an asking price of $95,000 (73,000 pounds). Not bad for a 'poor toned' member of the strings section!

Matthew Hardie (1754-1826) was the son of Jedburgh clock maker Stephen Hardie. The Register of Baptisms for Jedburgh Parish shows Matthew was christened on November 27th 1754.

Young Hardie trained as a joiner. But in 1778 together with his brother Henry he entered military service, enlisting in the South Fencible Regiment [SFR] commanded by the Duke of Buccleuch. The Buccleuch family was to come to his rescue as his patrons more than 20 years later.

He was discharged from the SFR in 1782. From 1788 on Matthew is mentioned in several Edinburgh directories, described as a musical instrument maker working from a number of different addresses.

Most of Hardie's work appears to have been for the Edinburgh Musical Society. But when the society closed in 1798 it heralded the beginning of his downward spiral into financial chaos and grinding poverty. He could no longer always afford the premium quality cuts of wood required to manufacture top class violins even though benefactors tried to help him maintain his high standards.

Matthew certainly had confidence in his own ability, claiming that his violins were 'inferior to none of the London made ones'.But by now he faced competition from a growing volume of imported instruments of inferior quality which were helping to meet the burgeoning demand for violins in Scotland.

In May 1800, with Hardie's fortunes close to rock bottom, the text of a poster reproduced on the informative Patrick's People website tells us:

'Subscription Concert and Ball For the Benefit of Matthew Hardie and his family who have been honoured with the patronage of Her Grace the Duchess of Buccleuch, Hon. Lady Charlotte Campbell Hon.Mrs Dundas of Arniston besides several other Ladies and Gentlemen of distinction To be held in Bernard's Room Thistle Street on Tuesday the 9th May curt at eight o'clock in the evening Leader of the Band Mr Bird, Piano Forte Mr Clark......Tickets (Three Shillings each) to be had at Mr Hardie back of Fountain Well, at all the Music Shops, and at the Door of the Rooms.'

Matthew's fall from grace was complete, but at least he had the support of the Buccleuchs.

There was to be a repeat performance the following year.

This time the advertisements (again reproduced at www.patrickspeople.scot) declared: 'Ball-under the Patronage of the Right Hon. the Earl & Countess of Dalkeith and the Officers of the 4th Regiment N B M will be held on Tuesday the 24th Feb. 1801 in Bernard's Rooms, Thistle Street for the benefit of Matthew Hardie Violin Maker. Since the conclusion of the American War, when the South Fencibles were discharged in which corps M. H. had the honour of serving, he has applied himself to making Violins etc. but on account of his numerous family, has never been able to acquire a sufficient stock to carry on trade to advantage, Therefore the Right Hon. the Earl and Countess of Dalkeith, with the Officers of the Regiment commanded by his Lordship have generously agreed to patronise him.'

Despite these interventions by the nobility Hardie seemed unable to regain and hold on to financial stability. For example, he was a member of the Edinburgh Musical Fund, but apparently could not keep up his subscriptions, and when he was unable to pay off arrears dating back to 1817 his name was, after several warnings, removed from the membership list in April 1825.

The end of Hardie's tortured life came a year later. The following entry is from the Greyfriars Burial Register: 'Matthew Hardie Violin Maker died 30th August 1826 C W H (Charity Workhouse) buried in Greyfriars on 31st.' He was 71 years of age.

So how good was Hardie and did he merit the Scottish Stradivari title?

Well, according to William Honeyman, author of Scottish Violin Makers Past and Present, written in 1910: "It is evident that the graceful lines of his violins and the perfect contour of his scrolls have come intuitively from the man's brain more than from his patterns. ... in every one of his violins there is apparent in every line that subtle something which no one can define.

"It is the same with the tone. The trained ear at once notes that it is not a commonplace tone, though it sometimes takes a firm hand to show its real grandeur."

Hardie's customers, among them members of Edinburgh's elite, were paying as much as six guineas for one of his sought after instruments in the early 1800's. That's the equivalent of six hundred pounds in today's monetary values.

And his reputation and popularity as a craftsman were such that he had his portrait painted by the noted Scottish artist Sir William Allan in about 1822.

The picture has been in the ownership of the National Galleries of Scotland since 1960. But perhaps fittingly, given Matthew's unconventional lifestyle, the oil on panel is currently 'in storage' rather than gracing some gallery wall. The NGS website wrongly claims Hardie to have been born in Edinburgh in 1755.

And what became of Thomas Hardie (1803-1856)?

He was, like his father, a hard-living individual whose alcoholism inhibited his inherited talents. Experts - apart from William Meredith Morris - say his instruments possess excellent sound quality and are well-made though the craftsmanship is less precise than that displayed by Hardie senior.

Like his father he had problems in maintaining a steady existence, and eventually died after falling down some stairs near his final residence at Advocate’s Close, Edinburgh, aged just 52. 

A modest plaque tells its readers: "BURIED IN THIS KIRKYARD MATTHEW HARDIE (1755-1826) THE SCOTTISH STRADIVARI AND HIS SON THOMAS (1804-1858) MASTER VIOLIN MAKERS OF EDINBURGH". The dates may be wrong, but at least the Hardies' last resting place is marked in some way.

Letter from the Scottish Borders

THE CUT OUR COUNCIL IS'NT MAKING

Well, it hasn't taken the new administration at Newtown St Boswells long to get our backs up. They've already shown an ability to be even more annoying than their predecessors - some achievement, I hear fellow locals cry!

Many of us thought the removal of our kerbside garden waste collections several years ago ranked as the silliest cut to save money. It resulted in pensioners taking sacks of lawn clippings to their nearest recycling centre by taxi. It may also have sparked an epidemic of fly tipping in our beautiful countryside.

Thousands of green bins lie unused in gardens from Eyemouth to Peebles while we wait on the edge of our seats for a review of the council's waste management strategy. Meanwhile regular trips to the 'cowp' remain the order of the day.

The future of refuse collection and disposal has been "undecided" since 2015 when the previous administration had to abandon a waste management contract after losing close to two and a half million pounds on a failed venture with an insolvent contractor.

But I digress. The new target for our wrath is the ground breaking policy rubber stamped several months ago and revelling in the title: CHANGES TO GRASS CUTTING AND BEDDING PLANT PROVISION.

It slipped through virtually unnoticed, but is already proving to be a game changer. The immediate result has been the creation of scores of unsightly, unkempt green spaces in our towns and villages with grass allowed to grow a foot high before it is mowed.

The review of ground maintenance follows similar cost cutting exercises affecting all of our basic local government services down the years. It is a wonder another arms length company hasn't been set up to take on the 635 hectares of green space and 3,250 individual plots maintained by the council. Such a business could sit alongside those already functioning in other spheres including home care and libraries.

Information posted on the SBC website predicted: "As part of the Neighbourhood Services review, some parks and open spaces, grass verges and some amenity grass areas, including steeply sloping ground will look different as we change our grass cutting service across the Borders. The changes are required to ensure financial sustainability for the service as well as improving environmental sustainability".

The new policy did warn us: "GRASS CUTTING:There will also be a change of approach to general amenity grass areas (including cemeteries) so grass that was previously cut once every ten working days is cut approximately every 20 working days. This method is widely used throughout the UK and Scotland as an appropriate, sustainable and efficient method of maintaining green space"

Just try telling that to the many who are already writing angry letters of protest to local papers or have urged their local councillor to reverse the damaging measure before untold damage is done to our economy and our unique landscape. A host of community council chairmen and women are also on the case.

We could call it the unkindest uncut of all. But with tens of thousands of visitors from the rest of the UK and from overseas about to descend on us there is little appetite for humour. We mustn't allow the grass to grow under our feet!

A friend who spent time searching for his vertically challenged pooch [dachshund] in the Scottish Borders Council sponsored undergrowth wondered which firm of consultants had come up with the concept of the 20-day cutting cycle. Or did our elected members simply spawn the plain daft idea on their own?

For those who haven't read the small print, there's a second chapter of the policy due to kick in early in 2019. This could allow the council to abdicate responsibility for providing attractive floral displays even in the main tourist locations.

Beneath the heading BEDDING PLANT PROVISION we are informed: "The new provision will take effect in spring 2019, allowing us time to redesign areas and liaise with community groups. The provision will be either: introduce permanent rather than seasonal displays; grass over areas; support communities who wish to undertake bedding plant maintenance as part of their 'In Bloom' activities".

So, faced with a tidal wave of protest from their constituents, and the threat of inflicting untold damage on cash-strapped Borders businesses will those who are supposed to represent us have the courage to admit their folly and impose more cuts in this case? It would certainly be remarkable if an entire council administration admitted it was wrong.

Court orders requested against Borders council's "funders"

EXCLUSIVE by DOUGLAS SHEPHERD

Directors of the bankrupt offshore investment fund which was lined up by Scottish Borders Council to bankroll a £23 million waste treatment plant are the subject of applications to the Isle of Man courts after refusing to be interviewed by liquidators probing their company's spectacular failure.

Now it is hoped the four men who presided over the collapse of Premier New Earth Recycling & Renewables [Infrastructure] Ltd. (NERR) will be quizzed under oath as a lengthy investigation seeks to establish what happened to tens of millions of pounds of cash owed to creditors and investors.

Councillors in the Borders handed a £80 million contract to Dorset-based New Earth Solutions Group (NESG) in 2011 in a bid to resolve problems linked to the disposal and treatment of the region's household rubbish.

But the deal was rendered worthless in 2015 after NESG could not deliver the technology to power the new waste plant while funding partners NERR could not come up with the money to pay for the project.

There seems little doubt that the council's four year involvement with NESG and NERR gave both of those businesses credibility neither of them warranted, and SBC was left with a £2.4 million loss which the local authority spent on expensive consultants and lawyers for no return.

Some 3,250 investors worldwide are understood to have placed a total of $292 million in NERR which was controlled and managed by Premier Group Isle of Man, now also totally insolvent like NESG and NERR. But over a number of years well over £20 million was taken out of the fund in management fees and charges for promoting and marketing NERR.

The latest twist in the complicated mystery has emerged in a progress report to creditors by NERR liquidators Alexander Adam and David Craine, of Deloitte's Isle of Man branch. They are currently wading through an estimated 200,000 documents linked to the disaster.

Their report says:"As you are aware, the Company’s assets were principally investments by way of equity and unsecured loans in three companies, which were located in the United Kingdom: 1. New Earth Solutions Group Limited (“NESGL”) 2. New Earth Solutions Facilities Management Limited (“NESFM”) 3. New Earth Energy Facilities Management Limited (“NEEFM”) (together the “UK Trading Companies”)

"As set out previously, the value of those investments at the date of winding up was close to nil. The role of the Joint Liquidators is therefore principally to: investigate the reasons for the failure of NERR; determine whether liability for the failure can be attributed to one or more parties; working alongside our legal advisers, establish whether there is any legal recourse against one or more of those parties which could result in a recovery to the Company’s estate; and  to the extent that that those third parties are expected to have the resources to meet any successful claim, seek to recover value from them."

 Following a review of the Company’s records together with information provided by various third parties, the liquidators attempted to conduct formal fact-finding interviews with the Company’s directors.

"The reason for this is that the directors were the individuals with day to day responsibility for the management of the Company and therefore the appropriate people to clarify the Joint Liquidators understanding of the Company’s affairs and dealings and provide additional information as appropriate.

"Two of the four directors attended for an initial interview. However, all four have, through their legal advisers, informed the Joint Liquidators that they are now unwilling to be orally interviewed in relation to this matter and have indicated that they will only provide written answers to any questions put to them. In the opinion of the Joint Liquidators, attempting to clarify the affairs and dealings of the Company over a period of several years through written correspondence is both impractical and inefficient."

The report reveals that an application has therefore been made to Court, pursuant to the provisions of the Isle of Man Companies Act 1931, for those directors who have yet to be interviewed, to be examined in Court on oath. Assuming that the application is successful, Mr Adam and Mr Craine anticipate conducting the examinations during the course of the next few months, depending on the availability of Court time.

It is explained in the report that investigations are focusing on the matters that resulted in a direct loss to the Company. That is, the value of investments made in the ultimately insolvent UK trading companies and the fees paid by the Company to the various service providers.

"Our initial investigations into the fees charged by one third party service provider highlighted concerns around the basis for such payments.

 

"A letter of claim for restitution or damages to be paid by that entity has been issued by the Joint Liquidators. That entity has acknowledged receipt of the letter of claim and a substantive response is awaited. Further updates on this matter will be provided in due course as appropriate."

 

And the report concludes: "Our review of the documentation and records of the Company remain ongoing as we, in conjunction with our legal advisors, continue to refine our initial analysis of the data to support any potential third party claims. However, as previously noted in our updates, we are limited in what information we can share with you on potential causes of action so that we do not prejudice any potential claims. 

"We remain confident that our investigations will result in further claims being identified which, if successfully pursued, would result in recoveries being made for the benefit of creditors and shareholders in due course."

Council contractors wanted to "double their price"

EXCLUSIVE by EWAN LAMB

Officials at Scottish Borders Council extended a valuable £300,000-a-year waste recycling contract under delegated powers without inviting competitive tenders even though the existing suppliers demanded a near doubling of their prices at one point during discussions.

Not Just Sheep & Rugby has already reported on the "highly unusual" decision by SBC that their long-standing contract for dealing with 10,500 tonnes of so-called dry mixed recyclates (blue bin rubbish) would continue to be in the hands of J & B Recycling Ltd, of Hartlepool without rival firms having the opportunity to bid because of "special circumstances".

Since 2005 that company which later became sub-contractors to New Earth Solutions - the now dissolved firm chosen by councillors to solve the Borders' waste treatment problems - has handled collections of domestic recyclable rubbish which are hauled 110 miles by road to the J & B Tees-side facility.

One of two so-called transparency notices published by SBC set out to explain why other firms had been denied the chance to bid for the work when J & B's contract expired in March 2017. The notice claimed: "Scottish Borders Council is in the process of reviewing future requirements for all Waste Management Services. During this period the highest priority for the Council is existing service delivery.

"Therefore until the new Waste Management Plan is fully implemented and to avoid a disproportionate impact on current waste operations it is necessary that existing arrangements relating to service provision continue. A detailed options appraisal has been conducted which confirms that this approach is the most appropriate solution delivering best value while meeting the necessary requirements of the Public Contracts (Scotland) Regulations 2015."

Then a second notice gave this reason for the deviation from normal procurement procedures: "Extreme urgency brought about by events unforeseeable for the contracting authority".

Additional details of what led up to the contract extension have now emerged in a heavily redacted (censored) version of an internal council briefing note. The 21-page document was released following a Freedom of Information request, but unfortunately virtually every figure in the report has been hidden from view.

The note records that a firm of consultants had been called in to carry out an appraisal of options available once the contract came to an end.

"The Options Appraisal concluded that extension of the current contract with J&B Recycling Ltd was most likely to achieve the Council’s short-term procurement objectives and achieve the lowest price given the current market conditions. The negotiation with J&B regarding the contract extension progressed well until January 2017 when J&B changed position and requested a significant price increase i.e [redacted figure]."

The Council requested J&B reconsider their position and revisited the other viable options available: J&B subsequently proposed two alternative options with increased risk share but at significantly reduced rates.

 A review of the pros and cons of each of the options by officials concluded that J&B’s option one (costs redacted) represented the best way forward for the following key reasons:

1. The price is competitive 2. The Council is exposed to additional risk compared to the current contract; however break clauses built into the contract provide an element of protection. 3. J&B have a proven track record of managing the Council’s refuse since 2005. 4. The public will see no changes to the service which is not the case if the Council was to enter into a contract with [redaction]. 5. It is likely to present the quickest way of putting a contract in place and minimises the costs the Council would be exposed to during an interim arrangement.

On the other hand the Briefing Note warns: "The main risks of entering into the contract are: 1. The Council is exposed to additional risks and price fluctuations compared to the current contract. 2. The Council may receive a challenge during the 10 day standstill process. If this occurs it will need to go out through a full procurement exercise. This is likely to result in additional cost whilst the procurement project is undertaken."

More detailed background to the discussions between SBC and J & B shows how the contractors came to request a sizeable price increase.

 On 19th January 2017 J&B’s Commercial Manager confirmed that they had taken the proposal to their Board and they had indicated that terms and price did not deliver the required return on investment.

"The main justifications were as follows: J&B’s paper contract was due to expire and it was unlikely they would be able to negotiate a fixed price at the level of their current arrangement. The paper contract was likely to require card to be extracted and this would need significant additional investment into their plant. Their haulier had recently lost a back haul contract and J&B were expecting a price increase.

"An emergency meeting was arranged with J&B’s Managing Director and Commercial Manager on 23rd January 2017. At this meeting J&B outlined that they required [redacted figure] if they were to continue to provide the contract on similar terms as had been discussed. 

"It was now clear that the extension of the current contract with J&B may no longer represent the best option. The Council outlined to J&B that they were unable to enter into a contract at [redacted figure] nearly double the current price, and asked them to rethink their proposal."

However, as reported, the range of possible alternative solutions were assessed, then discarded.

The Briefing Note concludes: "The Council has been put in a difficult position as a result of J&B changing their position and the fact that the current contract expires at the end of March 2017. Following a review of the viable options available to the Council, at the 1st March 2017, the following options are considered to represent best value in terms of price: 1. New contract with J&B 2. Partner with [redacted] Council."