Three year 'deficit' on council credit cards

EWAN LAMB reports on a non-publication mystery at SBC

Scottish Borders Council's failure to publish details of credit card spending by its top officials over the last three years has been attributed to "changes to staff roles and responsibilities" despite the local authority's repeated pledge to be 'open and transparent' with the information it holds.

The use of credit cards by the Newtown St Boswells-based council has stirred controversy in the past with local Tory MP (then a member of the Scottish Parliament) John Lamont obtaining the payment details via Freedom of Information [FOI].

But after a flurry of data for 2014 and 2015 coupled with an unequivocal declaration that "we are committed to regularly publishing details on our credit card spending" there has been no disclosure whatsoever for 2016, 2017 or 2018.

Now it has emerged in a response to another FOI request for the backdated information that SBC plans to publish three years worth of facts and figures in February 2019. Because the council has stipulated a specific publication date within twelve weeks of the FOI request being lodged the local authority claims it does not need to supply the asked for data until February.

The saga of credit card expenditure at SBC stretches back over almost a decade. Mr Lamont's January 2014 disclosure revealed there had been nearly 1,000 transactions over the previous three years with two departments – the chief executive and environment & infrastructure – emerging as the most prodigious users of plastic cards.

Lists of all items and services bought by this method were released by Mr Lamont ( MSP for Ettrick, Roxburgh and Berwickshire) who claimed Borderers would be “staggered” at the level of spending.

At that time the Border Telegraph reported a council statement which said:“Elected members play no part in sanctioning the use of the credit card…” 

According to the Telegraph the list provided to Mr Lamont showed that, between April, 2012 and November 2013, the chief executive’s department made credit card purchases worth £28,398, compared to £18,057 between November, 2010 and March, 2012.

A statement from Mr Lamont’s office noted: “The chief executive’s credit card included several purchases from Amazon totalling hundreds of pounds. “There were also several purchases from iTunes as well as money spent at bars and restaurants.

“Meanwhile, the environment & infrastructure departmental spend was mainly on accommodation and travel, although it did include items such as a woman’s jacket and a man’s fleece.” 

Mr Lamont told the paper: “I am sure that many Borders residents will be staggered to see the level of spending that has been put on these council credit cards. In the current economic climate it is unbelievable that it was considered appropriate to spend so much taxpayers’ money on items such as these.

“While some of them are undoubtedly necessary, many of them seem not to be and could easily have been avoided. For example, the spending on fees paid to attend conferences and awards ceremonies does seem excessive."

The subsequent transactions for 2014 and 2015 remain posted on the council's website. Examples included on the chief executive's list of purchases include three payments totalling over £135 to the Conciliation & Arbitration Service for mediation training; accommodation for the 2015 General Election count in June 2015 (£127.15) and a foreign exchange fee for a European Commission event (£1.05).

In the same year the Corporate Transformation Service at SBC used its card to pay shipping and insurance costs associated with the acquisition of Mungo Park's trunk (£991.48) and accommodation for seven at the Tomorrow's People Awards (£452.50).

But unfortunately the information trail ends in December 2015 with no further details published since then.

The recent FOI request to the council asked:"Unfortunately details of corporate credit card spending for 2016, 2017 and 2018 have never been published. A – why?; and B – Please provide full details of credit card spending by the council officers listed on the web page for those “missing” years of 2016, 2017 and 2018.

"Secondly – Please explain why the Council’s Freedom of Information archive has not been updated at all since March 2018 when previously it was updated on a monthly basis. It means potential FOI requesters cannot see what information has been released under the council’s ‘open and transparent’ regime before submitting requests which may have already been answered. Would a properly maintained archive not save staff in all council departments time and effort?"

Here is the council's response in full:

"Changes to staff roles and responsibilities have delayed the publication of the 2016 & 2017 credit card spend. On this occasion, 2018 will be published at the same time as 2016 & 2017.

"We can advise that credit card spending by council officers for years 2016, 2017 and 2018 will be updated and published publicly within 12 weeks of your request being made. The information you have requested is due to be made publicly available by 26th February 2019. Therefore we are relying on S27 of FOI(S)A 2002, information intended for future publication.

"We have considered the second part of your request and concluded that this is not a request for recorded information. However, I can advise that although we strive to publish FOIs on a regular basis, it is a very manual and onerous task and is not a statutory duty placed on us by the legislation and therefore it is not always given priority.

"Over the past 18 months, the team has been leading on implementing changes required by new data protection legislation throughout the Council and this has placed a strain on team resources.  Nevertheless, please be reassured that work is ongoing to bring the archive up to date and we expect to publish a large number of FOIs within the next week or so.

"We are developing a new FOI log with the view to improve the process of publishing making it much more efficient in the future".

"Tweedbank retail park will drain millions from town centres" - Co-op

EXCLUSIVE by EWAN LAMB

The Co-op Group which is a major retailer and investor in most Scottish Borders towns has fired a warning that the planned gateway retail park at Tweedbank has the potential to draw more than £13 million worth of trade out of Melrose, Galashiels and Selkirk.

Glasgow-based consultants North Planning & Development have lodged a strong and wide-ranging objection to the Borders Gateway project with Scottish Borders Council on behalf of the Co-op. The written submission predicts the proposed scheme could seriously damage the vitality and viability of several nearby towns as well as the village of Newtown St Boswells where the group also has a store.

"The proposed convenience good sales floor space [at Tweedbank] exceeds the combined convenience sales floor space within Melrose, Newtown St Boswells and St Boswells", according to North. "The development of up to 2,310 square metres of retail floor space at Tweedbank would cause significant harm to the vitality and viability of Melrose, Selkirk, Galashiels and Newtown St Boswells".

North estimate the Borders Gateway project being promoted by Manor Place Developments, from Edinburgh, would have a total turnover of between £14.1 million and £16.3 million - "significantly higher than the applicant's estimate of £10 million".

The Co-op submission continues: "The applicant's study predicts a three per cent trade draw from Melrose town centre, something we consider to be an under-estimate. It is reasonable to assume at least 10 per cent of the proposed development's trade would be drawn from Melrose.

"This would result in a trade draw of £1.28 million if the proposed food store were operated by a discounter and £1.52 million if it were operated by a mainstream convenience retailer. Retail imports on this scale would have very serious consequences for Melrose town centre, most likely bringing about store closures".

North calculate that 72% of the trade drawn to Tweedbank would be from Galashiels (£10.94 million) and 12% from Selkirk (£1.82 million).

According to the submission: "The anticipated impacts on Galashiels town centre are less significant. But the proposals will certainly not support the health of the centre which is experiencing challenges, as evidenced by recent Scottish Borders Council retail surveys.

"The council's survey data illustrates the fragile nature of the town centres, particularly Melrose where vacancy rates [of shop premises] have been steadily increasing and pedestrian footfall declining."

North warn the proposed development which also incorporates a 70-bedroom hotel, will only serve to draw trade away from the town centres, something which will undoubtedly lead to further reductions in footfall and resulting increases in vacant floor space.

In a separate objection to the retail park Galashiels Community Council claims the current Scottish Borders Council Local Development Plan says that this Tweedbank location is safeguarded for business and industrial use and therefore as the application is predominately retail based, the application should be refused.

In a letter to planners the community council's Richard Kenney says: " There will be detrimental effects on Galashiels if this out of town development should go ahead. The increased number and capacity of petrol stations for the area will result in lack of business overall and the possible closure of existing businesses.

"Existing Galashiels retailers are already facing severe economic challenges and the addition of another store and major catering provider in this location would increase the possible closure of more Galashiels shops and therefore create the loss of more jobs."

The community council points out that while it is looking at the planning application through the auspices of Galashiels its members feel they should also mention that Melrose would also suffer adversely should this planning application be approved. In fact, as reported recently, Melrose Community Council has lodged its own objection.

Other points made in Mr Kenney's written objection include:

·         There are more appropriate sites for hotel provision in Galashiels such as the previously identified Burgh Yard location and also the field on the south side of the A6091 just past the Galafoot Bridge. Other locations also require more investigation.

·         With the Transport Interchange facility, the railway station and the forthcoming Great Tapestry of Scotland building all being located in Galashiels, Scottish Borders Council should be concentrating all its efforts to ensuring the success and future sustainability of these and the town of Galashiels. The Tweedbank planning application is detrimental to all this and therefore should be refused

Alarming increase in Borders greenhouse gas emissions

A DISTURBING INVESTIGATION by DOUG COLLIE

The volume of methane and other harmful gases produced at Scottish Borders Council's landfill site on the outskirts of Galashiels increased by more than 25 per cent in 2017 at a time when Scotland-wide emissions continues to fall.

Environmental data released by the Scottish Environment Protection Agency (SEPA) at the weekend revealed 451,000 kilos of methane were sent into the atmosphere from the rotting garbage at Easter Langlee, 27% more than in 2016 and more than twice the level of 2011 when the figure was 197,000 kilos. The reporting threshold for methane is 10,000 kilos per annum.

Meanwhile the statistics for CFCs (Chlorofluorocarbons) and HCFCs (Hydrochlorofluorocarbons) are equally alarming with increases at Langlee of 39.7% and 25% respectively.

In the case of these two polluting substances the reporting threshold is 1 kilo. But the Borders landfill site generated 38.3 kilos of CFCs (27.4 in 2016) and 26.5 kilos of HCFCs compared to 21.4 kilos in 2016. The 2016 figure for methane emissions at the site was 356,000 kilos.

Waste management emissions in Scotland as a whole have been travelling in the opposite direction to those in the Borders. From 2015 to 2016 (the latest data available) emissions decreased by 4.9%.

The Scottish Government claims the decrease is largely due to the progressive introduction of methane capture and oxidisation systems within landfill management. From 1990 to 2016 emissions have dropped by 72.8%.

Our investigation shows that between 2002 and 2017 - figures are not available for 2003 on the SEPA database - Easter Langlee produced 13,867,000 kilos of methane.

Research has apparently established a dairy cow will generate 110.7 kilos of methane in a year while the total for a beef cow is given as 50.5 kilos.

It means the Easter Langlee methane emissions of 451,000 kilos in 2017 were equivalent to the "output" from a herd of 4,074 dairy cows or 8,930 beef cattle. And the mammoth total for 2002-2017 would have required over 125,000 dairy cows or almost 275,000 beef cattle to match it.

So far as CFCs and HCFCs are concerned the Borders landfill total emissions show little sign of abating with CFCs considerably higher than the 2013 level of 27.5 kilos and HCFCs in 2017 identical to those recorded in 2013.

In April 2015 Persimmon Homes had to call a temporary halt to house building at their Melrose Gait site near the landfill at Easter Langlee following the discovery of elevated levels of methane gas and carbon dioxide in the area..

 SEPA's own briefing note on methane tells us one of the main sources of the gas being emitted into the environment is from the natural decomposition of plant and animal matter in airless conditions.  The UK's biggest man-made source of methane is from rotting rubbish in landfills. Methane is also released during the mining and distribution of fossil fuels (coal, oil and gas).

According to SEPA: "On a local scale, build-up of methane poses an explosion hazard which can result in evacuation of areas over old landfills or mines.The main impact of methane is on a global scale, as a greenhouse gas. Although levels of methane in the environment are relatively low, its high 'global warming potential' (21 times that of carbon dioxide) ranks it amongst the worst of the greenhouse gases."

So far as CFCs are concerned, SEPA says: "At a global level releases of CFCs have serious environmental consequences. Their long lifetimes in the atmosphere mean that some end up in the higher atmosphere (stratosphere) where they can destroy the ozone layer, thus reducing the protection it offers the earth from the sun's harmful UV rays.

"CFCs also contribute to Global Warming (through 'the Greenhouse Effect'). Although the amounts emitted are relatively small, they have a powerful warming effect (a very high 'Global Warming Potential')".

On HCFCs the environmental watchdog has this to say: "Hydrochlorofluorocarbons are a large group of compounds, whose structure is very close to that of Chlorofluorocarbons  but including one or more hydrogen atoms. 

"In particular, HCFCs are now used as refrigerants (in refrigerators, freezers and air conditioning systems) and also in insulative foams. The use of HCFCs as solvents is now being phased out in developed countries and has been banned in the UK since 2001. 

"Although not as stable and therefore not so persistent in the atmosphere as CFCs, HBFCs or Halons, they can still end up in the higher atmosphere (stratosphere) where they can destroy the ozone layer"

Estate bought by Borders council 'not worth £9.6 million'

by EWAN LAMB

Scottish Borders Council, which purchased a country estate for £9.6 million following a string of private meetings and briefings, will have to sell on the 109 acres for at least £11 million just to break even, it has been claimed.

The decision to buy Lowood Estate, near Melrose, from the Hamilton family to accommodate over 300 new houses has sparked widespread criticism locally. The deal, which equates to £88,000 an acre, follows years of spending cuts by cash-strapped SBC whose leaders have often blamed the Scottish Government for their financial plight.

The council has failed to publish meaningful details concerning the transaction which has resulted in the estate being handed to an arms length company Tweedbank Lowood Ltd., wholly controlled by the local authority.

Although members of the Tory-led administration seem to have rubber-stamped the multi-million pounds purchase en bloc, it has now been revealed that the Opposition's nine-member SNP group were and are far from happy with the price paid and are dissatisfied with the way the deal has been done.

The Lowood purchase was fiercely attacked at a council meeting yesterday by Councillor Stuart Bell, leader of the SNP team.

He told councillors: "The separate Lowood Estate acquisition which we are undertaking by ourselves remains a tortured tale.  The £9.6 million outlay, plus expenses, plus cost of maintaining the land and assets, plus the cost of borrowing mean we’ll need to sell it all for over £11m just to break even.  Reports we have seen in private say there will also be significant infrastructure costs to develop the site. 

"I don’t believe this site is worth £9.6 million, when you go into the detail of the terms and conditions of the sale; and that – as we know – was the opinion of the District Valuer whose assessment with vacant possession (which we will not have) was much lower than 9.6m. Even when adjusted up for a “special assumption” she valued the land at a price lower than we are paying".

Councillor Bell described the deal as a speculative and risky expenditure of public money at a time when – quite apart from Brexit - there was shuddering uncertainty in markets. House prices and land values can down as well as up, he warned.

"We should not be spending public money on buying this estate at this time, for more than it is worth", he said. "Yes.it is a good place for housing – but SBC has the power of the planning authority
to dictate how this site is developed".

In what alternative opportunities could we invest £10m?, he asked. "This Council should invest enough in roads to significantly improve the Road Condition Index – But we cannot afford to do that. This Council should commit to 4 new High Schools in 10 years.  But you won’t make that commitment. I will not tell the electors in Peebles – as you will have to – that they cannot have a new High School within 10 years when you have tied up £10m for 10 or so years in Tweedbank. We can’t even cut the grass properly in our cemeteries but this Administration glibly spends £10m on buying a private estate. This is a decision I fear you may come to regret.”

New shopping centre threatens Melrose businesses

EXCLUSIVE by DOUGLAS SHEPHERD

Long-established businesses in the centre of Melrose could be forced to close if councillors approve plans for a multi-million pound retail centre with 70-bedroom hotel in nearby Tweedbank, it has been claimed.

Meanwhile Scottish Borders Council's own landscape architect has lodged a written submission which is heavily critical of proposals to chop down scores of mature trees to clear space for the scheme. The local authority's ecology officer has already warned against the mass felling of over a hectare of woodland on the site.

Melrose & District Community Council has told the planners it is strongly against the development of the so-called Borders Gateway centre close to Tweedbank railway station.

In a written objection the community council claims:"The proposal includes a retail outlet which Melrose & District Community Council strongly oppose as we feel this will further dilute the shop and hotel businesses on the High Street of Melrose.

"We need to support what is one of the few still strong vibrant High Streets in the Borders. Most of our shops are occupied making Melrose somewhere people aspire to stay and shop".

The Melrose submission goes on to warn that there is a strong possibility that some long-established businesses will be forced to close as has happened in Galashiels and Hawick if the proposal is given the go ahead.

It continues: "At present we have one closed hotel hopefully getting refurbished with plans to re-open and one reopening under new management. We cannot support anything which will affect this fragile economy.

"This proposal contravenes Planning Policy as it is placing this retail development on land retained for Commercial Business having denied previous retailers the opportunity to develop a retail outlet on this land SBC must stand by this.

Not Just Sheep & Rugby has already reported on the misgivings over the loss of so many trees at the Tweedbank location as expressed by the ecology officer and by Scottish Natural Heritage. Now council landscape architect Siobhan McDermott has weighed in with a critical written contribution. 

Over a hectare of woodland is "protected" by a Tree Preservation Order, imposed by the council in 2006. But given SBC's track record on chopping down protected trees at Tweedbank in 2016 the TPO is unlikely to be allowed to stand in the way of development.

Ms McDermott points out: "The woodland was planted at the time the Industrial Estate was developed in the 1970s alongside the development of Tweedbank village as a residential area. Tweedbank Village, Industrial Estate and Tweedbank Business Park were developed within a scheme of structure planting that aimed to create a woodland framework into which development would fit. This structure planting approach was also adopted at the Borders General Hospital site continuing this design philosophy.  

"The resultant structure woodlands and woodland belts have helped to reduce the visibility of development in an area that lies within the Borders Strategic Green Network that is ‘a network of green spaces and green corridors through, within and around settlements, linking open spaces within settlements to the wider countryside, which can assist in enhancing the biodiversity, quality of life and sense of place of an area."

In a withering comment on the felling proposals. Ms McDermott writes: "I consider the proposed development turns the SG Development Vision on its head – proposing the removal of the woodland which will result in the landscape screening being lost, the uninterrupted visibility of the development and does not comply with the SG Development Vision aspiration to develop an internal principal frontage along the western side of the site.

"I acknowledge that there might be scope to remove a portion of the internal edge of the woodland to increase the developable area but I do not consider this proposal gives due consideration to the visual amenity that the woodland provides".

The landscape architect goes on to list specific concerns:

1 I suggest that the proposals amount to over development of the site and this has required the removal of the majority of the screening woodland. The requirement for car parking exacerbates the requirement for woodland removal as does the assumed desire for visibility from the surrounding road network.

2.       I suggest the southern elevation of the retail store, and petrol filling station, seen as they will be, entering Tweedbank do not achieve the high quality built environment that meets the design standards aspired to in its development vision.

3.       The scale of the hotel- with a roof height of more than 15 metres - is likely to dominate the immediate area, with only a small number of trees retained to reduce the visual impact and with not much more than a dozen trees, beech hedge and some ground cover planting proposed.

4.  The Planting scheme does not compensate for the woodland removed. The planting of 45   standard trees (some native but the majority horticultural varieties of native species) along with ground cover and beech hedging will not adequately  screen or soften the proposed elements of the development.   As a planting scheme it seems more appropriate for the interior of the Business Park  but falls short of achieving key landscape screening as per the Development Vision

Ms McDermott concludes her report:"I would welcome the developer reconsidering how a much greater proportion of the woodland along the east and south boundary could be retained whilst achieving some visibility through the existing structure planting.

 "Given my above concerns and the precedent that the almost complete removal of the largest block of TPO woodland would create, I cannot support the application as submitted".

Liquidators still pursuing fund's 'controlling minds'.

EXCLUSIVE by DOUG COLLIE

The 3,000 investors who lost over £170 million in an offshore fund which was supposed to bankroll a major infrastructure project for Scottish Borders Council have been assured by liquidators that a lengthy investigation into the company's affairs is set to continue.

An Isle of Man judge has yet to rule on an application seeking to have Michael Richardson and JOhn Bourbon, directors of New Earth Recycling & Renewables [Infrastructure] Fund (NERR) brought before the courts to be interviewed on oath. The fund went belly up in 2016.

The Borders council expected NERR to fund a £23 million waste disposal facility at Easter Langlee, Galashiels as part of a £80 million 24-year contract with the now dissolved New Earth Solutions Group (NES). But the arrangements had to be scrapped in 2015 as a result of financial and technical issues with the project which could not be overcome. It later emerged that NES had been practically insolvent while the contract with SBC remained 'live'.

SBC's involvement with the two insolvent businesses cost local council taxpayers at least £2.4 million while investors in NERR both at home and overseas have been warned they may not get any of their money back.

The Manx court heard how, during their management of the NERR fund Mr Richardson collected over £900,000 in fees while Mr Bourbon's involvement earned him £128,000. Both men have refused to be interviewed by Alexander Adam and David Craine, of accountancy firm Deloitte's, joint liquidators of NERR. The liquidation is being funded by the Isle of Man Financial Services  Authority.

In the first update to shareholders and creditors since June, the liquidators write: "As you are aware, from our previous reports, the role of the Joint Liquidators is, in the circumstances of this case, to investigate the reasons for the failure of NERR, determine whether liability for the failure can be attributed to one or more parties and thereafter to consider whether there are viable claims which can be brought against those parties".

Reporting on their investigation, Mr Adam and Mr Craine tell creditors: "As previously advised, we have obtained several hundred thousand documents from various parties who were involved in advising or managing the Company. However, documentation in and of itself does not provide the full picture and for that reason we sought to conduct formal fact finding oral interviews of the Company’s directors.

"Whilst two of the directors have attended interviews and provided assistance in this regard, two have refused to do so. An application was therefore made to Court, pursuant to the provisions of the Companies Act 1931 (the “Act”), for those directors who have yet to be interviewed, to be examined in Court on oath.

"Whilst those directors were two of the Company’s ‘controlling minds’ and are therefore clearly able to provide details and context to the Company’s management, operations and ultimately the reasons for its demise, that application has been vigorously resisted by them.

"Whilst we are optimistic, given the directors’ fiduciary duties and the provisions of the Act, that our application will be successful, we have yet to receive the Court’s decision. Should the application be rejected then we will have no option but to engage in what is likely to be a protracted exchange of written correspondence with the directors which will be inefficient from both a time and costs point of view and is unlikely to provide the same context as would be obtained during an oral interview. In such a circumstance, we would anticipate returning to Court to seek a further order for oral examination".

The report adds that despite a number of requests from the Joint Liquidators, a substantive response has yet to be received from the third party service provider "to which we have submitted a letter of claim. We are considering the appropriate next steps to progress this matter with our legal advisers".

The liquidators indicate there is no change to the funding arrangement with the Isle of Man Financial Services Authority but add "you are aware, the funding of the liquidation remains subject to ongoing review by the FSA and can be withdrawn at any time"..

Funding cuts followed by culture shock

EXCLUSIVE by EWAN LAMB

Efforts to promote participation in sport and foster culture and the arts across the Scottish Borders appear to have taken a knock last year following a £500,000 cut in the management fee paid to the firm which delivers leisure services on behalf of the local council.

In a newly published annual report LIVE Borders Ltd. reveal visits to sports facilities fell by more than 50,000 in 2017/18 (down from 1,164,085 to 1,110,085) while in the same period so called cultural visits dropped from 730,614 to 695,460, a reduction of more than 35,000. The company recorded a deficit of £459,000 on the financial year.

The business which is also a charity took over responsibility for Scottish Borders Council's museums, libraries and other cultural services in 2016, adding to its remit for sports facilities. LIVE Borders was a victim of local government spending cuts last year when councillors decided to trim the annual management fee by ten per cent from just over £6 million to £5.5 million.

LIVE Borders' objectives are listed as "advancement of health through helping people to improve or maintain their health; the advancement of the arts, heritage, culture and science; provision of facilities and services for recreational, sporting and other leisure time occupations in the interests of social welfare".

According to the annual report: "The sports cost per visit (£7.67 pence compared to £7.15 pence in 2016/17) was adversely affected by the change in allocation of management costs. The culture visits were adversely affected by a change in the recording methodology at our largest site as well as a small decline in library visitor numbers".

In a section dealing with the financial position, the accounts from the company says: "Unfortunately LIVE Borders was not immune to the pressures on public finances and our management fee was reduced by ten per cent."

As a result of the cash cuts LIVE Borders carried out several staffing reviews over the year with six members of staff taking voluntary redundancy for which they were paid a total of £121,898.

The report warns: "Ongoing challenges with regards the levels of public funding being available to local authorities remains a major uncertainty and risk to the ongoing success of LIVE Borders Ltd. There remains concern that the management fee from Scottish Borders Council is only committed for one year at a time and this restricts the ability of the Trust to pursue new investment for larger projects".

* Meanwhile one of the main Scottish Borders arts venues which receives a chunk of its core funding from LIVE Borders has expressed concern that its future allocations of money are to be cut.

Eastgate Theatre (Peebles) Ltd., in its annual accounts, points out: "In the current ckimate and in common with other charities, a guarantee of core funding for more than one year in advance cannot be obtained in writing. Indeed LIVE Borders have indicated an ongoing reduction in funding over future years".

The 21-year-old theatre company received £81,000 from LIVE Borders last year, down from £83,000 the previous year. Its report illustrates the key role played by volunteers.

Eastgate say: "The company...will depend both on volunteers to fulfil many functions coupled with fundraising and grants to bridge the gap between revenue and expenditure.

"During the year the number of hours of voluntary work was estimated at 5,000 hours equating to £40,000 worth of donated services. The use of volunteers in the day to day running of the Eastgate including administrative tasks, assistance in the cafe, front of house and event support has been invaluable".

The theatre increased its total income last year from £496,000 to £580,000 and finished the financial year with a deficit of £942.

Businesses booming at Borders council

DOUGLAS SHEPHERD reports on Scottish Borders Council's expanding portfolio of arms length companies

The creation of Tweedbank Lowood Ltd, a new private company which will be involved in estate and property management means there are now five separate arms length external organisations [ALEOs] in which Scottish Borders Council has either a stake or wields complete control.

As we revealed a few days ago the latest business venture by the council has involved the acquisition of the 109-acre Lowood Estate, near Melrose, for £9.6 million including "an attractive and substantial principal dwelling" and a further eight residential properties.

Following the deal which works out at £88,000 an acre, Tweedbank Lowood Ltd., wholly owned by the council, has been set up specifically to take on the responsibility of managing the shiny new multi-million pounds asset. Councillors will be told at a meeting later this week that officers from the local authority's Neighbourhood Service will take the lead on managing the estate.

So far SBC has not released any details concerning its decision to establish this latest ALEO which has as its stablemates Bridge Homes LLP, Scottish Borders Cares LLP, Scottish Borders Supports LLP and Live Borders, the limited company with charitable status responsible for delivering sport and leisure services, libraries, and promoting culture and the arts.

The lack of public information about Tweedbank Lowood Ltd. does not appear to meet Audit Scotland's recent recommendations regarding ALEOs which included a request for greater openness.

The financial watchdog's 2018 report on arms length businesses run by Scottish local authorities stated: "Councils should put in place more formal processes to demonstrate that their use of an ALEO provides Best Value. They should take steps to be more transparent about their use of ALEOs.

"Councils need to set clearer criteria for councillor or officer involvement with ALEOs. These should consider the associated risks and how conflicts of interest should be dealt with. Alternative arrangements can be made to reduce the risks of conflicts of interest. The principles of openness, integrity and accountability apply to councils in their decisions on spending public money.These apply equally to funds or other resources which are transferred to ALEOs."

Audit Scotland estimates the 130 ALEOs being run by Scotland's 32 councils spend £1.3 billion of public money between them which means it is vital that accountability is in place.

Here is how the report put it: "Councils need to better demonstrate how their use of ALEOs improves outcomes for people (by outcomes we mean the local improvements councils and their partners seek to make such as people’s health and well-being, and a better-quality environment).

"The context in which ALEOs operate is changing and cost pressures remain. Councils must have clear reasons for establishing ALEOs and consider alternatives. In doing so they should be clear on the risks involved, and work closely with local communities and businesses."

The clutch of SBC-run ALEOS have a combined spend running into many millions of pounds. Most of them were established around 2014 when councillors decided to hive off adult social care into two Limited Liability Partnerships. At the same time Bridge Homes LLP was formed to try to increase the amount of affordable housing in the region.

Latest annual accounts show Bridge Homes currently has net assets worth £6.3 million in the shape of 45 houses and flats. It failed to make any further acquisitions in 2017/18.

Scottish Borders Cares LLP which employs 550 full time equivalents who deliver adult social care registered a gross loss of £2.337 million in 2017/18 while its "sister" business Scottish Borders Supports LLP recorded a loss of £316,000.

Meanwhile Live Borders also found the financial going tough in 2017/18 after the council voted to cut its management fee by 10 per cent (£521,000). The end result was a deficit on the year of £459,000.

Statement on Lowood: no mention of financial arrangements

by EWAN LAMB

A statement issued today by Scottish Borders Council - eight days after it agreed to pay a local landowner £9.6 million for his 109-acre country estate - makes no mention of how the deal has been funded or what the financial implications will be for council taxpayers.

The local authority, in an upbeat press release more than 12 hours after Not Just Sheep & Rugby broke the story, confirmed the purchase of the Lowood Estate next door to Tweedbank village, and claimed hundreds of jobs would be created once the land is handed on to house builders and other developers.

Lowood is now in the ownership of a newly formed business, Lowood & Tweedbank Ltd., 100 per cent owned by SBC. But details of the transaction, including where the cash has come from to fund the deal is being kept a closely guarded secret at this stage. Presumably the local authority has borrowed the money.

It is understood councillors who sanctioned the multi-million pound deal [even though SBC claims to be extremely strapped for cash] along with those who may have expressed concerns and doubts at confidential meetings have been warned not to discuss the Lowood purchase in public.

According to the press release: "Potentially over 670 jobs will be created with the development of five sites in Tweedbank, including Lowood Estate, which has been purchased by Scottish Borders Council."

A report to full council on Thursday 20 December outlines a series of development plans for four sites on the Borders Innovation Park which could create 160 new jobs as well as another estimated 160 during construction.

The council statement continued: "The multi-use development of parts of Lowood Estate, acquired for £9.6million, could create an estimated 179 new jobs as well as 173 construction jobs.

Councillor Mark Rowley, Scottish Borders Council’s Executive Member for Business and Economic Development, said: “There are a series of opportunities for significant development on some key sites in Tweedbank, with many of those well progressed. This will be carried out and funded by the Council, a range of partners including Scottish Enterprise and the Scottish Government, and the private sector.

“We look forward to all these coming to fruition and seeing very substantial employment opportunities, both in the construction phase and longer term, which is extremely exciting for the whole of the Scottish Borders due to the wider economic benefits this would provide.

“In addition, by acquiring Lowood Estate the Council now controls a vital site which has significant development potential for both the public and private sector, associated employment benefits and the scope for the delivery of a large number of homes.

“The development potential of these sites has been hugely boosted by the presence of the Borders Railway. By maximising the economic impact of the railway in its current form we strengthen the case for its potential future extension to Hawick and beyond.”

A year ago SBC awarded a £400,000 contract to Edinburgh-based Turner & Townsend to prepare a Tweedbank Masterplan incorporating the land at Lowood. A range of consultants have been involved in the process which has also seen parts of the area become a so-called Simplified Planning Zone (SPZ) to speed up development without the need for planning permission.

In their statement the council explain: "The Tweedbank Masterplan identifies the potential for new residential and business space development on Lowood Estate, as part of a wider Tweedbank expansion proposal, which would seek to attract existing and new residents and businesses moving into the area, including those who would wish to use the nearby Borders Railway as a key transport mode.

"The prospectus also identifies opportunities to expand Tweedbank village and reposition the current industrial estate as a new Borders Innovation Park.

"The Tweedbank Masterplan was developed as part of the Borders Railway Blueprint Programme, and was carried out at the same time as a similar piece of work on Galashiels.  Both these masterplans present a variety of proposals to encourage people to live, learn, visit and work in the area, as well as attract inward investment through public and private investment and partnership working."

Cash-strapped Borders council buys country estate for £9 million

EXCLUSIVE by DOUG COLLIE

Scottish Borders Council, which has repeatedly cut front line local government services in recent years after pleading poverty and laying the blame for their financial woes at the door of the Scottish Government has just completed the purchase of the Lowood Estate next to Tweedbank village for £9.6 million, Not Just Sheep & Rugby can reveal.

Details of the transaction were posted on the council's website tonight (Thursday) as part of a report which will be submitted to councillors next week by the authority's executive director Rob Dickson. The deal with Lowood's owners is for the remaining 109 acres which were in private hands.

Fifty years ago Lowood owner Constance Hamilton fought a long battle with SBC's predecessors to prevent them from taking her land for the construction of Tweedbank. Her opposition was eventually worn down by legal procedures and compulsory purchase orders.

The new report to council reveals that the remaining Lowood land is now in the ownership of a newly formed company called Lowood Tweedbank Ltd., yet another arms length company set up and wholly owned by SBC.

According to Companies House documents the sole director is David Robertson, chief financial officer at the council. The company has just one £1 share with SBC as the shareholder.

Mr Dickson's report confirms that Lowood Estate was acquired by the Council on 6 December 2018. The property comprises a compact residential estate set on the south bank of the River Tweed and extends to 44.38 hectares (109.66 acres). It includes an attractive and substantial principal dwelling and a further eight residential properties. Of the total land area approximately 15.78 hectares (38.99 acres) is parkland and a further 14.28 hectares (35.29 acres) is woodland.  .

"The Council paid £9.6 million for the estate (lower than the price cap previously agreed by Council) and is now finalising the expenses due on the purchase which will form part of the overall project cost", says the report.

"The existing Lowood Estate has several tenants occupying the residential properties. The Council has ascertained the basis of those existing agreements. Following extensive legal review these residential properties are now held by Lowood Tweedbank Ltd, a company wholly owned by SBC. 

"The tenant’s existing lease arrangements will continue and the Council will act as property manager. SBC Property officers held face to face meetings immediately in advance of acquiring the estate with each tenant. These were positive discussions with no immediate issues identified by any tenant.

"It is now possible to commence work on the Supplementary Guidance in the light of the acquisition of Lowood Estate and this will commence early in 2019 and is anticipated to be completed in the final quarter of 2020. In parallel with the development of the Supplementary Guidance an appropriate marketing and development strategy will be developed for Lowood Estate. This will require careful analysis of both desirable public and private sector potential uses and will need to ensure an appropriate balance between the two. This strategy will be heavily influenced by the emerging Supplementary Planning Guidance and is likely to be come forward to Council for approval at the same time."

The purchase of Lowood is seen as part of a so-called Tweedbank Masterplan.

According to Mr Dickson's report: "Lowood Estate - This project would cost £90 million, including the cost to purchase the land. It would potentially generate £150 million of Gross Value Added (GVA) in the Scottish Borders economy. It would create a maximum of 179 jobs and a maximum of 173 construction jobs. The project would give a benefit-to-cost ratio of £2:£1 (comparing the value of the economic benefits with the cost of the Lowood Development).

"Overall Tweedbank Masterplan. This project would cost £203m and would potentially generate £1.3 billion of GVA. It would create a maximum of 1,412 jobs and a maximum of 1,276 construction jobs. The project would give a benefit-to-cost ratio of £8:£1 (comparing the value of the economic benefits with the cost of the overall development). It is that evident from market analysis and the lack of current speculative development in the region, that without a comprehensive approach, strong Council leadership and public-sector pump priming these development opportunities are unlikely to be delivered in the immediate future."

Councillors will also be asked to consider a financial model for the entire venture. Mr Dickson writes:

"The Council has developed a detailed financial model for the costs of acquisition of the Lowood site and the wider redevelopment of Tweedbank. The model shows the costs of development of the various tranches of the Tweedbank development, including Lowood, as these are currently understood along with and the associated economic benefits and a range of scenarios associated with funding. The full development appraisal of the site is now in draft; however, initial modelling indicates that the Council’s investment in the site should be recouped through the development phases through the onward sale of the site with 179 jobs created during the construction phase and a further 173 jobs created in the post construction period, and a potential economic impact of £150 million GVA in the economy.

"The Council is currently assessing whether to opt to tax the new site; to ensure there is no future impact on the Council’s partial VAT exemption."

In a previous report to the council in November 2017 Mr Dickson claimed that the overall cost of delivering Lowood/Tweedbank was (at that time) estimated to be £58 million.

He explained that Scottish Borders expected to get £15 million from the Edinburgh and South East Scotland City Deal (against an “ask” of £26.9 million). After all financial factors were taken into account there was an estimated shortfall of £25.7 million to deliver the project.

He wrote: “The annual cost of borrowing to meet the shortfall would be £1.2 million. Commercial rents and contributions of £10.6 million are assumed as part of the funding package”.

The City Deal provision of £15 million was said to be payable over 15 years. Mr Dickson claimed: “The key risk to the council [from the City Deal] is that it will be required to front fund the net costs of capital and revenue projects taken forward within the Scottish Borders. At present the grant funding levels and mechanisms around the City Region Deal and whether any ‘payment by results’ model will apply remains subject to agreement with the UK and Scottish Governments”.

What's the point of a Scottish Borders Council TPO?

EXCLUSIVE by EWAN LAMB

In 2016 Scottish Borders Council committed "environmental mayhem" by chopping down 150 mature trees at Tweedbank, many of them fine specimens and which were supposed to be shielded from destruction by one of the council's own Tree Preservation Orders (TPO). It was as though the TPO did not exist.

The clear felling was said to be necessary to make way for a £6 million gallery and visitor centre to accommodate the Great Tapestry of Scotland close to the Tweedbank rail terminal. But shortly after the chainsaws had completed their needless carnage it was decided to shift the tapestry gallery to a site in the centre of Galashiels. It meant the death of many fine trees had been in vain.

Two years on and concerns are being expressed over the potential destruction of dozens more mature sycamores, limes and rowans bordering the Tweedbank estate even though they too are supposed to be protected by the same council TPO Number 39 which failed so miserably to spare their near neighbours the axe.

This time the bulldozers are set to move in and facilitate the much trumpeted multi-million pound Borders Gateway retail park complete with hotel, shops and drive through coffee houses once councillors give the project planning approval.

And suddenly many of those trees previously deemed worthy of protection have been branded virtually worthless by consultants in landscape reports which support the development.

However, misgivings at the loss of so much tree cover close to the Gateway entrance has already been voiced in written submissions linked to the planning application from developers New Land Assets, of Edinburgh.

According to an Arboricultural Assessment by Tree Consultancy: The development  would necessitate the loss of all of the trees comprising Group 2 of SBC Tree Preservation Order  No.39, and the majority of Woodland 1. These trees would either be lost to enable construction  directly, or have to be removed due to the significant changes in the existing ground levels which  would be required across the site.

Group 2 was described in the 2016 report on the Tree Preservation Order as follows: "A group of 11 individual trees comprising mostly limes with several rowans and dominated by a  large 'A' category sycamore. The limes are mostly 'B' category in satisfactory condition but a  couple are poorer and only warrant 'C' category due to their limited future potential. The rowans are  useful group components but are of negligible long-term value. 

Woodland 1 was described in the 2016 report as follows: "A large and diverse woodland belt which, due to the choice of species planted, can be readily  identified as defined areas. All have  been densely planted with the component trees being mostly narrow and drawn due to competition,  with some groups of Corsican pines starting to blow over. However, there are many  trees with the potential to develop into worthwhile long-term trees if selective thinning is carried out.  The areas described in the survey as W1/A2 and W1/A3 are generally the best with the most  individual trees likely to make good long-term specimens...."

The re-assessment carried out in July 2018 confirmed the generally poor quality of the component  trees. The better quality trees tend to be on the outer edges where availability of sunlight and reduced  competition has allowed the trees to develop fuller crowns and root systems.

And Pritchett, the Edinburgh-based planning consultancy, in a Supporting Statement lodged with the planning application explain: "The subject site whilst relatively flat has a significant amount of vegetation particularly around the periphery where there are mature trees set within embankments and other raised ground. The trees are also the subject of a Tree Preservation Order (TPO) which means that they cannot be lopped or felled without prior approval from the local authority.

"The detailed landscape appraisal considers that the tree belt is too dense and has not been actively managed over the years. There is therefore a requirement to manage the trees to enable the better 

specimens to flourish. As stated earlier it is also important to seek to maximise the development potential of this site as it is costly land to develop for whatever end use. The site configuration has therefore been carefully considered to retain a substantial landscape buffer around the majority of the site whilst allowing views into the development and beyond. 

"This will enhance the gateway access into Tweedbank and also lead visitors towards Tweedbank Station. It will also allow road users to clearly see the services that are available on the site within a high quality landscape setting. It is therefore considered that an encroachment of development into the tree belt has been fully justified. 

"It should also be noted that there is precedent for the removal of TPO trees on the industrial estate with the site clearance that the council undertook on the proposed Scottish Tapestry Museum site in the north west corner of the industrial estate which is also covered by the same TPO."

But those views are not shared by Scottish Natural Heritage nor by Liz Hall, an ecology officer with the council.

In her written observations, Ms Hall says: "I note the woodland has a TPO. I do not agree that the trees have a negligible ecological value. The proposals for the site do not appear to offer like for like compensation or enhancement in terms of biodiversity, in conflict with [Scottish Borders Council's] Local Development Plan policy".

From an ecological perspective, Ms Hall says her recommendation would be to avoid removal of trees on site.

Her arguments are echoed by Stuart Macpherson, Scottish Natural Heritage's Operations Officer for the South of Scotland.

He has told SBC: "The site currently has a thick wooded boundary, making it very representative of the surrounding landscape. This wooded landscaping helps to screen and soften the view of buildings within Tweedbank Industrial Estate from the main road and when seen from elevated positions within the NSA (National Scenic Area).

"This woodland is protected by a TPO and its landscaping and screening qualities are important in the local setting. The proposal is to remove virtually all of this woodland and open up views into the application site. Whilst accepting the economic value of the proposed development, SNH would like to see further consideration given to maintaining a landscape structure around the proposal that fits with the traditions of the NSA. 

"This will ensure a continuity of landscape between the NSA, the proposal site and the wider countryside. There is a danger of setting a precedent, especially where loss of a TPO is concerned, that erodes the wooded character in and around Tweedbank. Woodland provides an important sense of place for the community, which will be damaged by piecemeal removal. We would also highlight the local biodiversity benefits of this woodland, on its own merits and as part of the wider wooded landscape of Tweedbank and Darnick.

"In this regard, Scottish Borders Council should consider the Scottish Government’s Control of Woodland Removal policy. This policy aims to maintain woodlands as an important aspect of the Scottish landscape, and places a presumption against the felling of woodland to facilitate development. Where woodland is felled, compensatory planting is required.

"SNH is not necessarily seeking retention of the existing woodland. However, if woodland is felled it is important to maintain its landscape qualities in any subsequent scheme: continuity of landscape; filtering and screening views of the industrial estate; biodiversity; sense of place. Any new landscape should adopt and reflect these principles, and compensatory planting should ideally benefit Tweedbank and Darnick directly."

So will council planning officers recommend retention of the trees or will yet another Borders local authority TPO not be worth the paper it's printed on?

'Disastrous' Tweed salmon catches down 25% in 2018

by DOUGLAS SHEPHERD

The annual hauls of salmon and sea trout by anglers on the world famous River Tweed fishing beats fell to their lowest levels for decades this year, fuelling even greater levels of concern for the future of the multi-million pound industry.

First estimates for the 2018 fishing season which ended on November 30th suggest a total of 5,580 salmon were taken by rod with 763 sea trout hooked. The figures are said to be 90% accurate at this stage with minor adjustments expected before official statistics are published by the River Tweed Commissioners in their annual report.

The figures compare very unfavourably even with last year's disappointing statistics of 7,003 salmon and 2,594 sea trout. And the figures for the five years before 2017 read as follows: 2016 - 7,680 and 1,671; 2015 - 8,091 and 2,323; 2014 - 7,767 and 2,050; 2013 - 20,316 and 4,608; 2012 - 14,556 and 3,314.

Factors which have been advanced as reasons for this year's devastatingly low catches include the so-called Beast from the East snowstorms in the early part of the year, the extreme drought during the summer, the continuing operation of the North-east Drift Net Fishery off Northumberland which is blamed for intercepting salmon and sea trout heading for Scottish rivers, and the activities of fish eating birds, notably goosanders and cormorants.

The poor prospects of catching fish has meant many stretches of the Tweed and its tributaries have lain unbooked by angling parties for significant periods of the season.

In an end-of-season report on its website, Fishpal Ltd., the Tweed angling business based near Kelso, declares: " Well that's the 2018 Salmon and Sea Trout fishing season over, quite a few will say finally as it has been a very tough one all round.

"The beast from the east played havoc in the early part of the spring, then the long hot drought which seemed to last forever. These conditions by no means helped the catches this season, but it's undeniable that there was a severe lack of fish in the river system, especially fresh fish in the autumn with the majority of fish caught been coloured.

"What does the future hold? Is it a cycle? Is it something more drastic? Predation is a huge concern on the river and recent report from the RTC says during the latest count the numbers of goosanders has fallen. Down with us this season we haven't caught a single grayling and very few trout compared to recent years - would appear they have been gobbled up or went on their holidays!"

In a long running war of words, representatives of the proprietors of the prime Tweed fishing beats have kept up pressure on the UK Government to close down the 150-year-old drift net fishery, accusing the licence holders operating out of ports in the north-east of England of "taking our fish".

In March this year it looked as though the netsmen had finally been "defeated" only to receive a last minute reprieve.

Borders Tory MSP Rachael Hamilton told local newspapers in the spring that she had received confirmation that the Conservative UK Government intended closing all drift-net salmon fisheries in 2018.

In a letter to Mrs Hamilton her party in government also confirmed its intention to stop the take of salmon from the majority of the remaining net fisheries by 2019. Genetic testing had apparently revealed over 70 per cent of fish caught by the North East drift-net fishery were of Scottish origin, the nets preventing fish reaching their home rivers.

The MSP for Ettrick, Roxburgh and Berwickshire, said: “I welcome the UK Government’s commitment to close all drift-net salmon fisheries in 2018. This action will help increase salmon stocks in the River Tweed. The UK Government is committed to keeping our Scottish rivers healthy with strong salmon stocks.” 

But it turned out to be one of the shortest "victories" in fishing's political history.

In April this year, the small number of drift netters who remain in northeast England won a significant victory following a strong campaign of opposition on their behalf by the National Fishermen's Federation with the announcement that proposals by the Environment Agency (EA) and DEFRA to close the traditional drift-net fishery with immediate effect, and severely curtail inshore beach fisheries for salmon and sea trout, would not be implemented for the 2018 season. 

According to a recent article in Fishing News there is almost certain to be a renewed effort to have the inshore fisheries shut down in 2019. And pressure seems certain to grow following the latest catastrophic drop in Tweed catches.

But there will be stiff resistance from across the Border. The Fishing News reported: "The drift netters argue they are just a convenient scapegoat. They say their small-scale, tightly controlled and limited fishery is insignificant when viewed against the huge area of the North Sea and out into the North Atlantic, and against the loss of fish to the constantly increasing number of predatory seals that kill unknown numbers of salmon and sea trout along the coast and in river estuaries annually.

"Further evidence that far more significant natural forces are affecting Atlantic salmon stocks comes from a recent report that argues powerfully that exploding mackerel stocks are eating salmon smolts and depriving them of food".

" The recreational salmon angling sector has applied pressure on the commercial salmon fishery for decades, maintaining that netsmen are one of the main reasons for reducing numbers of migratory fish – salmon and sea trout – returning to their rivers of birth to spawn.

"The angling lobby is feeding ministers the line that catches by netsmen are extremely high in the fishery this year, given the lower than average levels of water in the rivers because of the unusually hot weather experienced in June and July. This opportunist claim is completely fake news, as conclusively shown by the netsmen’s daily catch returns".

In 2017 the North East Fishery took 9,157 salmon (2016 18,824). Environment Agency figures include a five-year average of 11,930 salmon. Meanwhile sea trout returns for the two years were 35,148 and 38,863 respectively with a five year average of 41,569.

The Fishing News article warned: "Fishermen say the closure of the salmon and sea trout net fisheries  would make their whole operation unviable.The almost inevitable result would be further fleet downsizing and job losses in coastal communities where alternative forms of employment are few and far between."

The rich rewards for failure

CONTRIBUTED

It was fascinating, sickening and frankly heart-breaking to learn this week that the four former Tweeddale Press [TP] newspaper titles which circulate throughout the Scottish Borders had been valued by an administrator who is currently cleaning up the mess within publishers Johnston Press at just £102,000.

Each one of the former independent groups of weeklies [and dailies] which had fallen under the control of the Johnston empire during the last 30 years or so has been given a price tag, apparently at 'fire sale' rates although for now each of the titles has been swallowed up by a newly formed business named JPI Media.

The complete financial collapse of Johnston Press with debts of £220 million and a pension fund it has been forced to hand over to others is one of the biggest disasters in the recent history of the British newspaper industry.

But back to the Scottish Borders where the scale of the catastrophe can be graphically illustrated in terms of hard cash.

The generations who used to rush to get their Southern Reporter, Berwickshire News, Selkirk Saturday Advertiser and their more recent stablemate Hawick News may have largely deserted these bastions of local democracy after watching each of them starved of investment and denied adequate levels of of staff by their 'new' overlords.

For it is less than 20 years - December 31st 1999 to be precise - that Johnston Press was happy to pay £7,799,765 to get their hands on those Tweeddale Press titles currently valued at £102,000. A year earlier The Hawick News had been snapped up by North-east Press - soon to become another Johnston acquisition - for a very respectable £875,000.

Readers were promised investment for the TP Group with expansion on the editorial front. In fact the reason cited by the Smail family for selling their highly respected [and profitable] weeklies  to Johnston was "the firm could no longer compete when it came to investing in titles."

Instead Johnston soon welched on its pledge. It began to close local newspaper offices in most Borders towns while journalists and other members of staff were saddled with heavier workloads as employment levels were cut repeatedly to save money. Those who are left perform miracles each week just to get the papers out in a scenario which exists throughout Johnston offices nationwide.

The first 'threat' to the Johnston newspapers was probably delivered in 2000 when, after trumpeting a £65 million profit for the previous year, the bosses announced they would be investing heavily in "new media" having launched their first website in 1997.

According to the Johnston executives in their 2000 annual report: "The new media represents an exciting and rapidly growing opportunity. We believe we are strongly placed to resist any threat these new developments may pose to our traditional publishing activities".

So how did that forecast work out?

Well, so far as the Tweeddale Press is concerned failures by their proprietors since the takeover mean the Borders titles appear to be worth a miserable 1.5 cent when compared to their valuation for sale by previous owners back in 1999. However, even £102,000 looks like a small fortune compared to The Galloway Gazette where two titles have been valued at £4,000.

Apparently Scotsman Publications whose papers still sell in small numbers in this part of the world has been awarded a £4 million value by the administrator having been bought for £160 million in December 2005 from publisher Andrew Neil, of Press Holdings Group.

While hundreds of skilful, long serving and often dedicated reporters, photographers and sub-editors in Johnston subsidiaries throughout the land have had their employment terminated by redundancy, the rewards for those running the show seem to have been kept firmly in place as each annual report clearly shows.

Chief Executive Officer (CEO) Ashley Highfield, whose tenure stretched from 2011 until earlier this year presided over much of the so-called digital revolution as well as the more recent staff culls. At the same time newspapers, almost without exception, suffered significant losses of circulation and advertising revenue.

In 2016 and 2017 Johnston Press spent a total of £14.5 million on redundancy packages for hundreds of workers. Indeed the company told shareholders in 2017: "The need to invest in cost reduction limits the company's ability to invest in the business. The company's ability to invest in new digital product development is limited. This hinders its ability to stay competitive". Sound familiar?

However, the last annual report (for 2017) before the collapse into administration included a detailed  section on the work of the Remuneration Committee which recommends the levels of executive pay. It says the committee made "a careful assessment of performance": presumably after the annual loss of £29.6 million.

The report continues: "Over the period bonuses of 58% and 48.3% of salary were earned by the CEO and CFO (Chief Financial Officer David King)". This level of bonus was approved by the committee, and subsequently by shareholders at a desperate time for the business even though the two directors concerned voluntarily agreed the bonuses be deferred until the company had "a sound financial base". Some hope!

Mr Highfield's 2017 earnings, including deferred payments, totalled £808,000 (2016 total £556,000) made up of of a basic salary of £430,000, £11,000 in benefits - health insurance, car allowance,, telephone and life assurance - a bonus of £249,000 plus pension benefits of £115,000. Mr King's earnings in 2017, including deferred payments, totalled £452,000 (2016 £319,000).

It means their respective remunerations increased by 45% and 41% over 2016 levels at a time when the flagship Johnston Press was about to hit the rocks and be crippled fatally below the waterline.

Now it is to be hoped at least some of the smaller ships which make up the fleet, including Tweeddale Press, manage to sail into calmer waters after the financial storms that have buffeted them all in recent times.

Directors of council's chosen investment fund raked in over £1 million

EXCLUSIVE by EWAN LAMB

A director of the offshore investment fund which was lined up by Scottish Borders Council (SBC) to finance a £23 million waste treatment plant received £907,000 in fees during his tenure even though the fund itself turned out to be worthless and could not deliver the vital Borders infrastructure project.

This latest revelation concerning the Isle of Man-based New Earth Recycling & Renewables [Infrastructure] fund (NERR) emerged during a Manx court hearing last Thursday when a judge was asked to order former director Michael Richardson and his colleague John Bourbon - Mr Bourbon was paid £138,000 for his involvement with NERR - to be summoned and examined under oath.

Both men have declined requests from Deloitte's, the NERR liquidators, to be interviewed as part of the winding up process of the fund and two of its feeder entities. Premier Investment Opportunities Fund and Eclipse Investment Fund.

The highly complicated liquidation involving the examination of more than 200,000 documents has been ongoing since 2016 - a year after SBC terminated its failed contract with NERR's business partners New Earth Solutions Group. The investigation into NERR's affairs is being paid for by the Isle of Man Financial Services Authority (IOMFSA).

Ironically, Mr Bourbon was once Head of Supervision at the Isle of Man Financial Supervision Commission, IOMFSA's predecessor, then served as Managing Director of the Cayman Islands Monetary Authority from 2000 until 2002. He has previously accused the Manx regulators of mounting a witch-hunt against the managers of the ill-fated fund.

It is understood that the application in the IOM High Court to have both men examined on oath is the first such application to be made in the island.

A report of the court proceedings by Isle of Man newspapers says Deemster (judge) Andrew Corlett was told 3,000 investors had placed a total of £171 million in the NERR fund. But the investigation had so far failed to establish what had happened to the money.

"Last audited accounts at the end of 2014 showed the companies had a net asset value of £200 million. But despite that massive investment, the group of companies had failed and the assets are now zero or near zero, with no likelihood of any return to the investors", the court heard.

Advocate Rob Long, for the liquidators, told the court that neither Mr Bourbon nor Mr Richardson are subject to any proposed proceedings and currently there was no intention to bring proceedings against them.

‘In this case there are no proceedings afoot. They are currently not litigation targets although that may change,’ he said.

Although the liquidators had in excess of 200,000 documents relating to the companies’ failure Mr Long said these only told part of the story.

He said the liquidators wanted to know the ‘thought processes’ of the key individuals in relation to the companies’ promotions, affairs and dealings. ‘There is no other means of obtaining this information. It’s not in the documents,’ he said.

But the advocate for the three companies said the liquidators had failed to demonstrate a reasonable requirement for the information sought in the order.

She said this was an ‘indiscriminate’ application that was ‘carte blanche’ in its scope.

In another interesting twist Isle of Man Newspapers has requested that Deemster Corlett makes a ruling on whether the examination, if it is approved, should be held in public, arguing it is in the public interest to have any proceedings conducted in open court.

Mr Long said the hearing would be held in private, although the section of the appropriate Companies Act used does not specify this. It is for the Deemster to decide one way or the other.

Judgement in the case has been reserved.

When SBC finally ditched New Earth Solutions Group and NERR after squandering at least £2.4 million of local taxpayers' cash the reasons given in a council press release were "project specific issues in terms of technology and funding".

It is only now, three years out from the abandonment of the disastrous venture that the public is beginning to learn why the funding aspect of the rotten deal collapsed. Perhaps there will be further disclosures to come as the liquidators continue their work.

The Borders local authority has repeatedly claimed that it carried out adequate "safety checks" on New Earth Solutions and its financial backers before and after it got into bed with them.

Yet it has since emerged that it was investors' cash from NERR which was used to keep New Earth Solutions from going under during the four years the contract contract was 'live' and long before the Group became officially insolvent. In fact the 'waste management specialists' handed a multi-million pounds contract by SBC owed NERR £39 million by the time both partners went bust.

Disgruntled investors believe NERR's links with Scottish Borders Council and other local authorities gave the fund credibility and assisted those financial advisers who promoted it even though NERR was unregulated and 'high risk' .

Unfortunately all efforts to have an independent investigation carried out into SBC's role in the Easter Langlee waste project debacle have fallen on deaf ears.

Common Good assets in the wrong hands

by DOUGLAS SHEPHERD

Common Good funds will be established in Coldstream, Eyemouth and Melrose after research revealed that a collection of ten heritable assets, including the former Coldstream Guards museum, should not be in the ownership of Scottish Borders Council.

Councillors are expected to sanction the transfer of the ten buildings and open spaces to new common good funds which will be set up in each of the three former burghs. It means that for the first time since local government reform in 1975 each of the 12 towns in the Scottish Borders will have its own fund.

The investigation into the ownership of assets was launched following the introduction of the Scottish Government's Community Empowerment (Scotland) Act 2015.

According to a report outlining the research findings - it will be considered at a full council meeting next week - "The Council’s current Scheme of Administration does not provide for Sub Committees to administer Common Good Funds for the former Burghs of Coldstream, Eyemouth and Melrose, as at 1996 no assets were identified as being Common Good."

The report goes on to state: "The titles for all assets held on the Council’s balance sheet in respect of Coldstream, Eyemouth and Melrose were identified, located and researched. Additionally the minutes and accounts of the former burgh councils have been examined where questions arose as to the nature of the title of any assets. Assessments as to the nature of titles in each case have been made with regards to the legal presumptions from case law as to what is common good, such as following the presumption in favour of former burgh property being common good unless there is clear evidence to the contrary".

The investigation identified the following list of assets which should be transferred to the common good in Coldstream, Eyemouth and Melrose:

 Coldstream Museum, Coldstream

 Home Park, Coldstream

 Lees Mill, Coldstream

 Home Park Play Area, Coldstream

 Lees Mill Play Area, Coldstream

 Home Park Pavilion Site and Pitch, Coldstream

 Brownsbank Park, Eyemouth

 Eyemouth Fort, Eyemouth

 High Street toilet, Eyemouth

 Melrose Town Hall, Abbey Street, Melrose (currently used as Scout Hall)

And here are the findings in full which established that each asset had been wrongly consigned to council ownership:

(a) Coldstream Museum (which was the former HQ of Coldstream Guards) was bequeathed to the Burgh in 1953 to be kept “in a manner in keeping with the wishes of the testator, and with their historical connection and association with said Regiment”. The Burgh Council minutes show no indication of a statutory purpose for acquisition and accordingly it should be assumed that the property is held for the Common Good;

(b) Home Park (including the play area, pavilion site and pitch) was gifted by Earl of Home in 1922 to the Burgh “as representing the community of the said Burgh” for use as a public recreation ground. This dedication to public use is evidence that the property forms part of the Common Good;

(c) Lees Mill (and play area) was acquired by Burgh in 1933 for the price of £150. Whilst there was no gift or dedication to public use, there was no statutory purpose stated or evidenced and, accordingly, the subsequent use of the property by the Burgh as a public recreation ground is sufficient to imply that the property forms part of the Common Good.

The research in relation to Eyemouth revealed that

(a) Brownsbank Park was gifted to the Burgh in 1962 for use as a public park only. It is this dedication to public use that determines that the asset should properly be classified as Common Good.

(b) Eyemouth Fort was gifted to the Burgh in 1974 by Mrs Home Robertson “for the benefit and enjoyment of the people of Eyemouth”. This dedication to public use determines that the asset should properly be classified as Common Good. The access to the Fort was separately conveyed and does not form part of the common good.

(c) The ground on which the High Street toilet has been constructed was gifted to the Burgh in 1971, with no purpose of acquisition stated. With no purpose clear from either the title deeds or the Burgh Council Minutes, it should be assumed that the property is owned by the Common Good.

The research in relation to Melrose revealed that Melrose Town Hall (the subjects on Abbey Street currently known as the Scout Hall) was gifted to the Burgh of Melrose in 1896. The title deeds contain a typical common good dedication, stating that the subjects were to be used "for the public uses thereof in all time coming...for behoof of the whole body and Community of said Burgh". Melrose Town Hall should therefore be classified as a common good asset.

Most of the assets have been given a "nil" valuation by the council. But the Coldstream museum has a price tag of £225,111 while the plot on which the Eyemouth public toilet is situated is valued at £47,778. Meanwhile Melrose Town Hall is worth £34,812.

The report prepared for councillors explains: "The Council’s primary aim with regard to this review is to have asset registers which accurately reflect the ownership of property. If the Council fails to amend the asset registers to take account of the findings of the research it will be in breach of the accounts rules and its obligations under Part 8 of the Community Empowerment (Scotland) Act 2015 which may result in the Council being subject to adverse public comments and legal challenge. The risk is mitigated by considering this report and the necessary changes to the Asset registers being carried out."