FOI laws broken thousands of times by Scottish authorities

EXCLUSIVE by DOUG COLLIE

Local authorities and many other public bodies in Scotland routinely break Freedom of Information laws on a daily basis by failing to respond to requests within the statutory 20-day period.

Statistics on the website of the Scottish Information Commissioner show that in 2018 some councils barely conformed with the regulations in 80 per cent of cases while others with similar FOI demands were able to comply 95% of the time.

FOI laws (Freedom of Information Scotland Act - FOISA and the Environmental Information Regulations - EIRs) specify a statutory timescale for compliance with (issuing a response to) information requests. So any failure by an authority to meet the statutory timescale for complying with any request is a breach of FOI law. In other words the law sets a 100% target.

A performance report on Scottish Borders Council's service delivery which will be consifered by councillors next week includes a section on Freedom of Information handling.

It shows 85.8% of FOI requests were completed on time in 2018/19. This is a reduction of 7.5% from the level of 93.3% in 2017/18.

The report says: "FOI numbers were 139 higher in the year, growing to 1,418 in 2018/19 from 1,279 in 2017/18, an increase of 10.9%. Completions on time were impacted by volumes and the complex nature of some requests."

In a more detailed critique the document also says: "Whilst we always endeavour to reach 100% there are a variety of reasons which contribute to the occasions when this is not achieved. Requests continue to be voluminous and complex and take considerable time to collate the information, especially if more than two services require input and if there are exemptions to be considered and applied.

"In addition, access to information and data within some areas can impact on our ability to retrieve information timeously. The FOI process is under review to see if we can make changes to improve efficiency. In Q4 2018/19 82% were completed on time, this is down on the 85% in Q3 2018/19 and again on the 86% in Q2 2018/19."

And the report continues: "Performance is reviewed by SBC’s Corporate Management Team on a monthly basis, with response times from individual departments monitored so that any problems or delays can be addressed. Performance information is also being discussed at SBC’s Information Governance Group and improvement actions identified. 

"All staff must undergo training on dealing with FOIs, and the streamlining of processes within departments, as well as the availability of information on SBC’s website, means that we can respond to the majority of FOI requests quickly and efficiently. Services continue to be encouraged to seek advice from the Information Management Team in the early stages to avoid any potential issues."

SBC's statistics on the Commissioner's website indicate that in 2018 there were 836 FOISA requests with late responses in 140 cases. In addition the council received 511 requests under the EIRs, 467 were handled within the 20 working days timescale while 33 received a late response.

FOISA figures for other local authorities include Argyll & Bute 1379 requests (1280 answered on time); Dundee City Council 1306 (1185) Highland 1391 (1154); Clackmannan 1218 (1101); Fife 2141 (1794); Glasgow City Council 3239 (2887); Moray Council 1274 (1232); Perth & Kinross 1493 (1432); and South Lanarkshire 1417 (1339).

Other performance indicators in the Scottish Borders Council report cover a wide range of topics from recycling to creation of modern apprenticeships.

Under the heading Performance Measures - Summary of Charges the report includes the following:

Recycling rates reduced in 2018 (calendar year). The Household Waste Recycling rate reduced to 38.17% in the year, a reduction of 1.71% from 39.88% in 2017. A corresponding increase in the Household Waste Landfilled rate occurred, increasing by 1.74% to 61.50% in 2018 from 59.76% in 2017. Recycling at Community Recycling Centres reduced 0.59% to 57.95% in 2018 from 58.54% in 2017.

Tragically there were 11 fatalities on Borders Roads during 2018, up from 7 in 2017. There were 65 seriously injured in 2018, up from 54 in 2017.

Overall School Exclusion numbers increased during 2018/19 to 265 exclusions, an increase of 50 (23.3%) over the level of 215 in 2017/18. Primary school exclusions fell by 40.8% to 29 in 2018/19 from 49 in 2017/18. In contrast Secondary School exclusions rose by 42.2% to 236 in 2018/19 from 166 in 2017/18. Schools continue to focus on reducing exclusions and providing a more inclusive education.

Meanwhile a section outlining Key Successes has the following 'good news' stories:

"Across our 26 key sites, consumption of Electricity and Gas has reduced in 2018/19. Electricity Consumption has reduced by 5.6% from 8,395,393 kilowatt hours in 2017/18 to 7,921,217 kilowatt hours in 2018/19. Gas Consumption has reduced by 7.3% from 12,671,961 kilowatt hours in 2017/18 to 11,744,734 kilowatt hours in 2018/19. Unfortunately higher unit costs have driven an increase in expenditure, with Electricity costs rising 6.0% from £0.920m in 2017/18 to £0.975m in 2018/19. Similarly Gas costs have risen 4.5% from £0.300m in 2017/18 to £0.313m in 2018/19."

Thirty-three new Modern Apprentices were employed by Scottish Borders Council in 2018/19. This is the largest yearly intake to date. 

A total of 1,497 businesses were assisted by Business Gateway in 2018/19, an increase of 173 (13%) over 1,324 in 2017/18.

And 191 additional Affordable Homes were provided in the Borders in 2018/19, an increase of 31.7% from the figure of 145 in 2017/18. This included 130 new completions and 31 existing home purchases by Registered Social Landlords.

Partnership's performance 'risk' to Council finances

by EWAN LAMB

Councillors will be warned the monetary problems which dogged the Health and Social Care (H&SC) partnership between local authority and health board last year threatens the financial sustainability of Scottish Borders Council.

The cash shortages experienced by the service in 2018/19 meant more than £3 million of top up funding had to be found from council sources to 'subsidise' the partnership in the face of increased demand for services.

In a report to next week's SBC Executive meeting finance officers also warn that it is essential the H&SC joint board takes robust steps to balance its books this year as the council will not be able to plug any gaps this time round.

According to the report: "2018/19 represents the third operational year of the Health & Social Care partnership which has resulted in a fundamentally different way of working with NHS Borders through the Integration Joint Board (IJB).

"Within integrated Health & Social Care services, during 2018/19, additional in-year budget allocations were made to the value of £3.2 million to support delayed discharge and alleviate service pressures of £1.8 million. In year £1.4 million of savings which were anticipated by the Financial plan were not delivered and this required additional financial resources from the Council to ensure that the Service did not overspend its allocated budget. Of this identified £3.2 million budget shortfall, £1.2 million has now been vired in to the service on a permanent basis.

"The H&SC partnership budget presents significant risks to the Council and will require robust management action in 2019/20 and future years to both contain demand pressures within existing budgets and deliver required financial plan savings. It should be noted that the Council will not be in a position to allocate substantial additional resources to the partnership in 2019/20 and as such it is essential that managers manage their services within approved resource levels."

And the fuller version of the document has this to say: "The Council experienced significant financial pressures during 2018/19, primarily in Assets & Infrastructure and Health & Social Care, attributable to increased costs and delays in the delivery of planned savings in the revenue budget.

"[The Management Team] reviewed the position continually through the year and took action through a range of alternative measures to identify savings which offset this position and delivered an under-spend position by the 31st March 2019. 

"It is increasingly evident that the Council is finding it more and more difficult to balance the revenue budget given the sustained service demands e.g. in Adult Social Care. It is essential to ensure the financial sustainability of the council that the revenue budget is balanced and that this is achieved through the delivery of permanent savings in line with the timescales approved in the Financial Plan. 

"The 2019/20 Financial Plan recognised the demand challenges within H&SC, robust management action is now required to both manage demand pressures within existing budgets and deliver required financial plan savings. The performance of the H&SC partnership and ongoing concerns regarding the NHS Borders budget is a key risk facing the Council."

The financial report for 2018/19 records an unaudited outturn net underspend of £1.344 million was achieved in the 2018/19 revenue budget. The £1.344 million net underspend (0.52% of final approved budget) was delivered following a number of earmarked balances approved by the Executive Committee during 2018/19.

" It should be noted that, overall, as required in the Financial Plan, savings of £16.414m were successfully delivered during 2018/19. Of these, £11.656m (71%) were delivered permanently. The remaining £4.758m (29%) of savings were achieved on a temporary basis", the report says.

Borders Local Development Plan faces a new issue

by DOUGLAS SHEPHERD

Town planning specialists are warning of "turmoil and confusion" with Local Development Plans becoming out of date following the decision by Scottish Ministers to reject strategic proposals on housing and transport for the whole of South-east Scotland.

Scottish Borders Council is just one of the authorities certain to be affected after SESplan2, a 400-page document outlining future plans up to 2030 in the Edinburgh City Region was deemed to be flawed.

A planning consultant with many years experience and who has worked on issues in the Borders told us: "Where things will get more problematic for SBC is the emerging Local Development Plan Two (LDP2).  They have prepared a Main Issues Report and consulted on it but the new LDP needs to be consistent and aligned with the Strategic Plan for the wider region. 

"Furthermore, planning reform will introduce further change with proposed abolition of strategic plans and longer ‘shelf lives’ for LDPs.  This all indicates uncertainty and delay for Development Planning in the Scottish Borders".

And Douglas Hope, a former top planning official in the Borders, writing on his Scottish Borders Planning blog said: "It was proposed in the council’s Development Plan Scheme of March 2019 that the proposed LDP2 would be published in the autumn/winter of 2019/2020.  With the rejection of SESplan 2, this programme has been placed in doubt.  It will be interesting to see how the council intends to proceed.

"Scottish Ministers have put development planning in the south east of Scotland, including the Scottish Borders, into a state of confusion with the rejection of the Strategic Development Plan (SESplan 2), submitted in June 2017."

Mr Hope explained how on May 16th the Scottish Government’s Chief Planner announced that Scottish Ministers were not satisfied that the proposed SESplan 2 had been properly informed by an adequate and timely Transport Appraisal and that it did not take sufficient account of the relationship between land use and transport. 

It was the view of Scottish Ministers that the Plan did not properly acknowledge and address the region’s infrastructure constraints to support the spatial strategy for delivering housing land across the area.  And it did not include sufficient information on the transport interventions required to support the spatial strategy.

SESplan 2 was assembled by planning authorities across the vast region over four years to guide planning decisions into the future.It was submitted to the government for approval in June 2017.

A letter signed by Scotland's chief planning officer John McNairney cites three reasons for refusing the plan:

"Ministers are not satisfied that the plan was informed by an adequate and timely transport appraisal. It does not take sufficient account of the relationship between land use and transport.

Ministers do not support the use of supplementary guidance to resolve this issue."

The letter refers to paragraph 274 of Scottish Planning Policy, which states the transport appraisal should be carried out in time to inform the spatial strategy of the plan. Adoption of the plan ahead of the preparation of supplementary guidance on transport is not an acceptable solution. Mr McNairney said: “I recognise that the authorities will have significant concerns about the implications of this decision for planning in their areas."

Planning consultants Lichfield's commented on their website: “The rejection of the plan at this time will be a hindrance to local authorities in the area who have awaited approval of SESplan 2 before progressing their own Local Development Plans. This will likely result in development plans across the city region becoming out of date.”

However, the Scottish Government had voiced its dissatisfaction with the shortcomings in transport mitigation measures in a submission to Reporters who examined the plan prior to July 2018.

In that submission the Government said: "The Transport Appraisal (TA) undertaken for the SDP (Strategic Development Plan) fails to recognise, or identify transport interventions required to support delivery of the impact of the spatial strategy given the longstanding issues with SDP1, and does not identify specific infrastructure measures to mitigate the SDP2 allocations.

The TA effectively defers to the SDP1 focussed Cumulative Cross Boundary Study (CBS) to provide such details and information and fails to clearly identify the mitigation measures required on the trunk road network to support delivery of the SDP allocations, and how they will be funded and delivered. SDP2 TA report fails to identify the infrastructure required to deliver the SDP strategy, which, given the lack of information on this within SDP1, is a significant issue.

"Overall the Appraisal states 'the strategic impacts are widely distributed and relatively minor', yet the evidence presented suggested there are several junctions along the A720 trunk road which are forecast to exceed capacity with no mitigation measures identified. TA work undertaken for SDP2 requires providing a greater level of detail. It is not appropriate that subsequent LDPs should be left to identify mitigation measures."

And in her conclusions, Inquiry Reporter Sinead Lynch stated: "I understand Scottish Government’s concern that the Transport Appraisal does not identify the specific measures required to deliver the spatial strategy of this Plan. In looking at the overall conclusions of the Appraisal, it appears that there are mitigation measures on the road network within the region which remain to be addressed, and where the level of detail provided appears minimal."

Can Tweedbank Masterplan Two outperform its predecessor?

SPECIAL REPORT by DOUG COLLIE

For the second time in half a century blueprints are being pored over prior to the investment of millions of pounds on infrastructure, house building and extra commercial premises at Tweedbank, the 'new' community regarded as the trigger for prosperity and economic growth in the Central Borders since the 1960s.

This renewed attempt to beef up the role of the village situated between Melrose and Galashiels will hopefully proceed more smoothly and achieve more tangible results than the initial Tweedbank project.

It was mired in legal wrangles and public inquiries for five years before being mothballed several times not long after its launch in 1973. At one stage in its chequered history it remained shelved and in limbo for twelve years before being resuscitated.

The bold if risky scheme drawn up to reverse decades of population and employment decline in the Central Borders was scheduled for completion by 1976, delivering a thousand new homes plus a range of industrial premises in what was supposed to be a rapid fire initiative.

But lack of demand and national economic crises meant it took not four but 37 years to 'complete' the job. Even then Tweedbank's population only just exceeded 2,000 rather than the 4,500 originally envisaged by Government and local authority planners.

Renewed activity on fallow areas of the site in 1992 included proposals for a 24-bed dementia unit, a business park and a major hotel development. None of those facilities have been delivered 27 years later and all of them feature in Tweedbank Masterplan Two. Perhaps they will get past the drawing board this time around.

The visionaries who first came up with the idea of developing the new village reckoned without the redoubtable owner of Lowood Farm, septuagenarian Constance Hamilton and her equally formidable husband Ian.

Their court battles to prevent their beloved farm from falling into developers' hands frustrated officialdom but gained the admiration and respect of many members of the Borders public who would rather have seen £15 million of public money - the price tag would eventually spiral to £30 million - spent in the existing towns, some of them struggling for economic survival as traditional manufacturing industries withered away.

Mrs Hamilton told a public inquiry into the proposed compulsory purchase of Lowood in March 1969 that if she had believed Tweedbank was a necessity she would have been only too pleased to negotiate the sale of the land. But she maintained unemployment was not a great problem and the scheme would not benefit the whole of the Border area. She was to be proved right.

However, the Hamiltons could not stop the juggernaut that was the Scottish Office, and the couple were eventually forced to throw in the towel in 1972. The Court of Session judgements went against them after they racked up massive legal fees and paid for the services of a QC.

At long last the bulldozers were free to move onto Lowood's coveted acres and the birth of Tweedbank was marked by a tree-planting ceremony on March 19th 1973. Constance Hamilton was invited to attend but was unable to join in the celebrations due to a "prior engagement".

Instead she told The Scotsman newspaper: "I feel just as strongly as I ever did about this mad scheme. I fear it will become a very large white elephant and taxpayers and ratepayers in the Borders will regret they did not do more to stop it. The whole thing is just crazy".

And in October 1976 she appeared to have been proved correct when the public housing programme was brought to a halt by the Government agency known as the Scottish Special Housing Association [SSHA], later replaced by Scottish Homes. Only 234 of the planned 800 homes for rent had been completed.

The demand from incoming workers, including the expected "Glasgow over-spill"  was so low that in order to let the completed houses the SSHA accepted applications from local people, among them families living in flats barely a mile away in Galashiels.

But even in 1980, with housebuilding again at a complete standstill the planners remained hopeful Tweedbank would grow into a community with 4,500 residents. However, little or nothing happened over the next twelve years.

Scottish local government reorganisation in 1975 meant Tweedbank became the responsibility of the newly formed Borders Regional Council. The arrival of four accompanying district authorities in the Borders soon resulted in representatives from Hawick, Kelso and Jedburgh and from Berwickshire claiming the 'all eggs in one basket' approach that was Tweedbank was failing the region and choking off public investment elsewhere.

As early as 1977, only four years into the project, Roxburgh district councillors were calling for the entire concept to be abandoned completely. Hawick elected member Bill Douglas declared: "Tweedbank so far has not proved attractive to industrialists. It is time we had a change of emphasis to the towns and encouraged development there".

'TWEEDBANK DREAM IS SMASHED' screamed a headline in The Scotsman from February 1987. It followed the decision by the SSHA to sell off its entire undeveloped land holding of 17 hectares at Tweedbank with only 300 of the 800 houses for rent completed, and 30% of those sold to sitting tenants.

Secretary of State for Scotland Malcolm Rifkind told local MP David Steel: "Following decisions on the policy review of the SSHA, the economic expansion programme has now been discontinued. Accordingly, there is no scope for further development by the Association at Tweedbank and the surplus land is, I understand, being disposed of". A spokesman for SSHA concluded: "The demand for much of the Tweedbank scheme failed to materialise".

So the UK Government, which had poured millions into Tweedbank, no longer thought further public investment in housing at the site was justified or worth while. How much of that public investment already committed to the site had been wasted?

In a scathing comment on the SSHA's decision to pull out, David Steel said: "There is an element of dubious morality in buying land by compulsory purchase with public money and then selling it off privately. Your [Mr Rifkind's] action may not be, in Harold Macmillan's phrase disposing of the family silver, but it strikes me, as it will I believe the public, as akin to selling part of the family's garden for the sake of a quick profit". Constance Hamilton would no doubt have agreed.

The Scottish Office performed a bit of a reverse ferret in 1989, announcing that Scottish Homes wanted to see 400 more houses built at Tweedbank by housing associations, housing trusts and private developers.But the largesse from Treasury coffers largely dried up.

It would take until 2010 before an announcement could be made claiming that Tweedbank was 'complete' albeit with only 860 households, well short of the original target.

Presumably the bulky Tweedbank file in the archives at Scottish Borders Council catalogues the many ups and downs experienced by the original Masterplan. The multi-million pound public investment had only a limited impact on Borders prosperity and left communities on the periphery out in the cold. So why concentrate resources in the same way at the same location again?

It remains to be seen whether much the same strategy achieves greater positive outcomes the second time around. But at least those promoting Tweedbank Mark Two won't have Constance Hamilton to deal with.

8,000 per cent 'mark up' in Lowood land values

EXCLUSIVE by EWAN LAMB

The price paid by Scottish Borders Council for the last 110 acres of the Lowood country estate, near Melrose, was more than eight thousand per cent per acre higher than the sum budgeted for 47 years ago when 190 acres of the same farm was acquired for development.

Information found in a long neglected archive of files shows that in 1972, following a five year legal battle between Roxburgh County Council and reluctant seller Constance Hamilton the local authority of the day had allocated £200,000 to pay for 192 acres.

The money set aside for what amounted to more than half of Lowood Farm - the fields were required to allow a start to be made on the development of Tweedbank village - equated to £1,041 per acre.

The figures were contained in a report to county council members in October 1972 after Mrs Hamilton and her husband Ian, a retired architect, agreed to abandon their long-running fight to hang on to the portion of their agricultural holding which had been made the subject of a Compulsory Purchase Order. The couple claimed they were 'surrendering' because of crippling legal fees.

According to the Bank of England's inflation calculator £200,000 in 1972 would have had an equivalent value of £2,592,000 by 2018.

In late 2018 Scottish Borders Council agreed to pay Lowood's owners at the time - Alexander and Erica Hamilton - £9,600,000 (£9.6 million) so that hundreds of additional houses can be built on the estate's parkland, thereby boosting Tweedbank's size and population, and hopefully helping to take advantage of the Borders Railway terminus in the village.

This latest transaction with Constance Hamilton's successors works out at £87,272 per acre, an increase of 8,283% over the price per acre assigned by the county council in 1972, and equivalent to an average rise of 176% per annum in the 47 year gap between the two land transactions, both funded by taxpayers' money. An annual inflation rate of that magnitude would even put Zimbabwe or Venezuela to shame!

It has been claimed by critics of the 2018 deal entered into by SBC that the amount of money paid for the outstanding 110 acres of Lowood was excessive, and represented a speculative gamble with public finances.

However, the local authority says it believes the decision to acquire the land to be 'robust' and economically sound, allowing it to control the pace of development in a key Central Borders location.

At the same time SBC has refused to reveal details of the valuation placed on their targeted purchase by the District Valuer, the independent public official who deems how much plots of land are worth.

And elected members have been warned by at least one high ranking council officer they must not divulge details of the council's dealings with the Hamiltons and their agents under any circumstances. It is therefore difficult to judge whether the agreed price was 'over the odds' or represented value for taxpayers' money.

It was recently confirmed SBC paid for the land via Lowood Estates Ltd. and Genesis Trust and Corporate Services, both entities registered in George Town, Cayman Islands. The payments were made after SBC handed an agency more than £3,000 to check out the veracity of the two offshore businesses.

After transaction tax of more than £400,000 plus other fees, and interest charges of three quarters of a million pounds are added the total bill for the public purse will be some £11 million. But when questions were asked and information was requested Mark Rowley, a senior Executive member at SBC dismissed those who challenged the council's decision on Lowood as 'mischief makers'.

The cost of developing Lowood's parkland, including land acquisition costs, has been estimated at around £90 million.

Back in 1972 the county council's contribution towards the construction of a planned one thousand new homes plus industrial premises and services was £1,740,500 as its share of an overall estimated investment of £12 million with most of the cash coming from Scottish agencies of the UK Government.

At the outset the intention was to build 800 houses for rent between 1973 and 1977 with the Scottish Special Housing Association [SSHA] scheduled to complete 200 new homes in 1974, then 300 in 1975 and a further 300 in 1976 at an overall cost of £5.3 million. Private building firms were to weigh in with the other 200 dwellings.

The industrial expansion elements of the project were forecast to create 700 jobs with the vast majority of new housing tenancies on offer to incoming workers. Despite the five year delay to accommodate legal proceedings the scale of the Tweedbank scheme was still considered to be necessary to kick start economic activity in the area.

NEXT: HOW THE TWEEDBANK MASTERPLAN OF 1972 PANNED OUT 

Nature and history could constrain design of Lowood scheme

EXCLUSIVE by DOUGLAS SHEPHERD

The presence of a rare species of bat and traces of a medieval village with bridge footings in the vicinity of the River Tweed have been flagged up as possible constraints on the £200 million worth of developments planned for Lowood Estate, near Melrose.

Mention is made of both issues in Scottish Borders Council's briefing note for consultants preparing Supplementary Planning Guidance on how mixed use development should take place as an extension to Tweedbank village.

According to ecology officers working for the council: "The most significant issue is regarding impacts on bats (European Protected Species).  The presence of bat roosts of a scarce species such as noctule bat (Latin name nyctalus nocula) could significantly constrain the design of any development. 

"A significant unknown factor is the presence of bat roosts and their supporting habitat. The design of the development should be informed by an assessment of impacts on bats to protect bat roosts and their connecting/supporting habitats.  

"As a long-established parkland habitat on the banks of the lower River Tweed, with a range of built structures, it [Lowood] is likely to support a number of bat species and their roosts including common and widespread species such as common pipistrelle, soprano pipistrelle, brown long-eared bat and widespread species such as daubenton’s bat and natterer’s bat and scarce species such as noctule bat (the latter recorded here in 2010)."

The ecology department's observations explain: "Development that requires disturbance or destruction of bat roosts may be possible under a derogation under the Conservation (Natural Habitats & c.) Regulations 1994 (as amended) (a European Protected Species licence) provided that the three key tests are met. 

"There is a risk that a disturbance or destruction of a noctule bat roost (a tree roosting species, scarce in Scotland) would not meet the three key tests as it may affect the favourable conservation status of the species in Scotland, where it is at the edge of its range. This may require the retention of certain bat roosts and the supporting habitat (woodland, parkland, hedgerows) which may constrain the design of a development at this site."
The Bat Conservation Trust says the noctule bat has become scarce in some areas of intensive agriculture. "The noctule bat has declined in Britain, owing to modern intensive agricultural practices resulting in the loss of suitable feeding habitat such as permanent pasture and woodland edge/hedgerows rich in invertebrate fauna. Intensive management and loss of suitable trees for roosting is a major factor", according to the Trust's website.

SBC's own Technical Advice Note on Bats, aimed at developers, states: " Before considering whether or not to approve a planning application, Planning Authorities must establish whether European Protected Species (EPS) such as bats are present on development sites and what the implications of this might be.

"Applications for planning permission may be recommended for withdrawal or refused without adequate information, including relevant surveys. Planning Authorities require adequate survey information to determine whether bat roosts are present, are likely to be affected by the development and to fully consider potential impacts on bats prior to the determination of an application.

" Planning permission will not be granted without the Planning Authority having satisfied itself that the proposed development either will not impact adversely on an EPS on the site or that, in its opinion, three tests necessary for the eventual grant of an EPS licence are likely to be satisfied".

Jim Hume, formerly a Liberal Democrat list MSP for South of Scotland was the noctule bat’s designated species champion, nominated by Environment Link.

Meanwhile the council's archaeological section has this to say about the presence of Bridge End cottages on the Lowood estate:

"The name ‘Bridgend Cottages’ refers to a medieval bridge that formerly stood north of the site connecting Lowood with Easter Langlee.  It’s likely this was constructed by Melrose Abbey and connected the Girthgate to the north with the Selkirk and Eildon roads. 

"Not only is it likely for bridge footings to survive, but the old historic road may as well.  There are historic sketches of the bridge from the 17th and 18th century showing Lowood in the background, which leads on to the biggest issue.  There would be an opportunity to replicate the design of the former medieval bridge through any new footbridge design.

"The sketches clearly show a settlement at Bridgend which likely pre-dates the existing structures.  The village of Bridge-end is listed in the First Statistical Account for Melrose Parish (1790s).  The size and extent of the village is unknown but the sketches suggest several large buildings.

Much of the archaeology can be dealt with through conditions, though the presence of a medieval village is a major constraint that will need to be addressed certainly in advance of development and ideally in advance of consent."

Senior officers' reservations over Lowood housing plans

EXCLUSIVE by DOUG COLLIE

A number of leading officials in several local government departments at Scottish Borders Council expressed doubts and concerns over the scale of planned residential development on the Lowood estate, near Melrose, when the proposals were first presented to them for comment.

The views of the department heads form part of a briefing note which the council has circulated to consultants in the process of assembling Supplementary Guidance (SG) for Lowood, the remains of which SBC bought last year for £9.6 million.

As we have already reported, independent planning experts claim the construction of even 300 new homes - the number originally indicated in a council Masterplan - as an extension to Tweedbank village would cause untold damage to landscapes, the environment, and threaten the ecology of the River Tweed Special Area of Consultation.

At the same time there have been suggestions from within the council that the highly attractive green spaces on the country estate could comfortably accommodate more than 300 houses.

The SG briefing note sets out the reaction of the various SBC departments which would have a part to play in Lowood's development when they were confronted by the initial Masterplan.

According to the Forward Planning section at the council: "It is understood the Masterplan sought to, in the first instance, address whether the land at Lowood could feasibly accommodate 300-400 dwelling houses.  It is noted that this is primarily provided on the western half of the site which may be less contentious in landscape terms.

"However, it is noted that to achieve these numbers in this relatively limited area, the house types are quite small in size, have a high density and would be unlikely to meet the range of housing wants within this popular housing market area."

And Forward Planning went on to say: "There is longer term need to consider alternative options for an alternative Lowood Bridge.  This will be subject to a separate detailed study by appropriate consultants to consider feasible options."

The Landscape department also had some criticisms of the proposals. Their comments included the following passages: "Unconstrained development at Lowood would cause some significant losses in terms of parkland and associated policy woodland, specimen trees and riparian zones along the Tweed.

"The eastern end of Lowood, in particular, is very visible from the B6374 Gala to Melrose road.  If this eastern area was to become developed, it would contribute to visible urban coalescence between Galashiels / Tweedbank and Melrose contrary to our policy on 'Countryside Around Towns’.

"My concern however, is that a concentrated, high density, development with limited road access, based only on existing single track roads, as proposed, will prove impossible to deliver!  Any new ‘standard width’ road access is likely to require some substantial interventions in the existing landscape fabric, especially at the more vulnerable, steeply sloping, eastern end where there is a gap between the river and the railway.  This would weaken and potentially destroy the character of the existing landscape."

Roads Planning/Strategic Transport had this to say: "Much as the proposed pedestrian/cycle access is very good, proposed vehicular access is very poor with external connectivity very weak. To rely on a minor network of narrow roads, all from the largely undeveloped eastern part of the site, is not acceptable.

"The intended one-way system on this part of the network is a real concern as the outcome would likely be traffic speed issues and operative difficulties if any of the roads were temporarily closed for whatever reason." 

And on the issue of the replacement of Lowood Bridge to accommodate the project:“If we do not carry out this feasibility work at the present time, we run the risk of trying to retrofit a bridge at a later date which will significantly reduce the options available to the Council in terms of providing a suitably enhanced road and transport network in an area that is considerably constrained at the present time.”

Meanwhile Economic Development's contribution included the following: "I am very critical of the narrow single track looped road as the only means of access to a major village expansion development. 

"Whilst this may provide an attractive route, it is not practical to serve a development of this size.  Any breakdowns / punctures, or road repair works, would just freeze any traffic flow into and out of the site.  By all means retain these minor routes with passing places as two way routes, but not as major access links.

"The illustrated density of residential development is understood as a concept, at a railhead, but is somewhat alien in the Borders and more demand analysis is needed to prove the marketability of this form in a non-urban location.  As has been said, in the Borders car ownership would appear to be a necessity, yet the development layout makes delivery of normal parking standards problematic."  

NEXT: IS LOWOOD'S DEVELOPMENT A THREAT TO NYCTALUS NOCTULA?

Lowood briefing note hints at increased housing density

EXCLUSIVE by EWAN LAMB

Scottish Borders Council told consultants bidding to provide Supplementary Planning Guidance (SPG) for the development of the Lowood country estate, near Melrose, that the high quality parkland "can satisfactorily accommodate" more than the 300 houses indicated in original Masterplan proposals.

There have already been warnings from development experts that the beautiful landscape around the Lowood mansion house would be ruined by residential construction on such a vast scale, and there would be environmental and ecological issues if the council proceeds to "over-develop" the 109-acres it recently bought for £9.6 million.

It has even been suggested a maximum of 50 new homes should be erected on Lowood which stands close to the banks of the River Tweed, a Special Area of Conservation.

But according to a briefing note, prepared by the council to assist in the preparation of a £20,000 report outlining SPG issues and solutions: "It should be noted that although the indicative site capacity for housing is 300 units, it is likely the overall site can satisfactorily accommodate an increased number."

The briefing note claims: "Development of the Lowood site represents a major opportunity to deliver a sustainable and successful mixed use development taking full advantage of the new Borders Railway line.  The development will complement and have strong links with the settlement of Tweedbank and will contribute towards the wider regeneration of Galashiels.

"The site is set within an extremely attractive location offering a range of opportunities to produce a high quality development.   Given the large size and sensitivity of the site it is important that a detailed SPG is produced to a high standard which will ensure a high quality and appropriate development is delivered at the end of the process. It is important that development proposals within the SPG are realistic, deliverable and free from significant / major constraints."

And the council says the site has many features which make it attractive to both potential developers and purchasers in the area "with a proven housing market".

But the alleged strength of the local housing market has already been challenged by independent consultants who have variously described demand as "weak" and "fragile". There is said to be little or no interest in the area from major house builders which makes SBC's strategy somewhat risky, they claim.

The generally upbeat Lowood brief from the local authority says the project "offers very substantial employment opportunities for the private and public sector both in the construction phase and longer term, and has scope for delivery of a large number of homes. The site is located within the heart of the Scottish Borders where there is a well proven market interest and demand."

A number of site constraints have also been listed by SBC. The note indicates the extreme western low lying part of the site is at 1:200 year flood risk and could not be developed upon.  The River Tweed is a Special Area of Conservation and a Site of Special Scientific Interest.  

"The landscape character and setting in which the sites are located have significant importance. The SPG must ensure the design of a development which will not have a negative impact, allowing the development to enhance residential opportunities without impacting on the setting of the landscape assets and River Tweed.

"The second part of the process should identify appropriate land uses within the identified developable areas.  This should include appropriate sites for a variety of mainstream market sector housing types, care housing (discussions are taking place to provide an on-site dementia unit), affordable housing (currently 25% of overall housing total), industrial / business uses, open spaces, potential small scale convenience needs retail and landscaping."

 Instructions aimed at potential contractors say the SPG should:

*Promote a popular neighbourhood which complements Tweedbank and Galashiels

• Produce a site development which will encompass and promote high quality sustainable building design and low carbon heat 

•Maximise the regeneration opportunity that the Borders Railway offers

• Stimulate regeneration of the riverside through a vibrant mixed use development integrating with the existing character and environmental context of Tweedbank

•Ensure long term economic and social benefits for both Tweedbank and Galashiels existing and future residents and visitors

•Create an inspirational approach to building design, architecture and public realm including indicative layouts where appropriate.

The final report on Lowood SPG is scheduled for presentation to councillors by the end of June. However, there are only officers and no elected members on the SPG steering group.

NEXT: MORE FROM THE BRIEFING DOCUMENT

Cayman deal challengers demonised by Council

by DOUGLAS SHEPHERD

Individuals who revealed Scottish Borders Council's £9.6 million Cayman Islands property deal have been criticised for a second time by the local authority while allegations of mischief-making have been thrown at critics by a senior member of the ruling Tory-led executive.

There are already calls for an investigation into the secretive transaction between SBC and agents working for the Hamilton family, who sold their 110-acre country estate at Lowood, near Melrose to the local authority last year. But at this stage there is no sign the local government regulatory bodies  plan to get involved in the contentious issue.

As we have already reported, the identity of two Cayman-based businesses which received millions of pounds of council taxpayers' cash - Lowood Estates Ltd. and Genesis Trust & Corporate Services - was uncovered via a Freedom of Information request lodged by ex-SBC councillor Andrew Farquhar.

But when that information was published here and media outlets followed up the story the council launched an attack, condemning publication of a publicly available FOI answer.

In a statement they said: "“As a public authority SBC was required to provide the information requested by Mr Farquhar.  Mr Farquhar and Mr Chisholm have now chosen to publicise this information in a way that, in our view, is entirely inappropriate.

"The Council believes private individuals should not be subject to this level of scrutiny regarding how they conduct their personal financial and legitimate tax affairs."

As a result of the press coverage, Hawick councillor David Paterson (Independent) who, like many other elected members was unaware the £9.6 million paid for Lowood had ended up offshore, submitted a question for answer at Thursday's full council meeting.

Mr Paterson's question to council leader Shona Haslam asked: "Will Scottish Borders Council be scrapping the deal regarding Lowood estate that was recently agreed with a company based in the Cayman islands?  I am convinced that the vote, which was extremely close, would have been much different."

In reply Councillor Mark Rowley, the ruling group's executive member for business and economic development told Mr Paterson: "The Council negotiated the acquisition of the Lowood estate with agents representing the Hamilton family. As a public authority SBC was required to provide the information requested by Mr Farquhar. 

"Mr Farquhar and Mr Chisholm have chosen to publicise this information in a way that, in our view, is entirely inappropriate.  The Council believes private individuals, in this case, the Hamilton family, should not be subject to this level of scrutiny regarding how they conduct their personal financial and legitimate tax affairs."

So SBC deployed the same tactic for a second time, using the same words in a bid to blame those who submitted FOIs for the developing storm over the controversial deal which will cost taxpayers £11 million, including fees, taxes and interest charges.

And, according to a news story on the Southern Reporter's website, Mr Rowley went further. He is reported as saying at the council meeting: “I think the mischief-making around this is really unfortunate, not least as some of the comment that has gone into the public domain has been provided by the adjacent owner, an Isle of Man-registered company.”

The company concerned is Middlemede Properties, proprietors of the top class River Tweed salmon fishing beat of Upper Pavilion which lies next to Lowood.

Consultants working for Middlemede submitted a detailed report to SBC in early 2018 outlining concerns over pollution risks and potential threats to salmon stocks if the council were to allow hundreds of new houses to be built on the land they subsequently acquired from the Hamiltons.

The local authority chose to ignore Middlemede's submission which also warned the housing market in the Central Borders was weak which meant house building on such a vast scale could not be justified.

Upper Pavilion's owners seem certain to vigorously oppose a number of the proposals contained in the so-called Tweedbank Masterplan, including SBC's development ideas for Lowood.

Tailgaters and Samaritans cost council £141,000

EXCLUSIVE by EWAN LAMB

A hunt is on for a contractor who would be willing to take over Scottish Borders Council's network of 41 loss-making public toilets.

The move towards privatisation of yet another front line Borders local government service follows the financially catastrophic introduction of 30 pence charges at 27 of the facilities - a policy which yielded a fraction of the expected revenue, mainly due to the activities of 'toilet cheats'.

SBC has just published a notice on the Public Contracts Scotland website inviting declarations of interest from businesses prepared to take over the provision of public toilet services from April 2020.

The notice says: "The Council currently manages and maintains 41 facilities and is seeking a long-term solution for the provision of all facilities at various sites situated within the Scottish Borders area.

"Of the 41 facilities, 27 are currently charged for access at the point of use at a rate of 30 pence, with the remainder being free (there is no charge for access to RADAR Accessible facilities). 

"Given current budget pressures the Council are seeking a service provision that is efficient and financially sustainable. Currently the income generated from paid access to the toilets at 27 locations, is insufficient to offset total operational costs of the network.

"It is intended that a Contract shall be for a period of 5 years with the option to extend for a further 5 years, commencing 1st April 2020.

"The Council would like to measure the level of interest from contractors who would be interested in providing and managing this service and would therefore request contractors who are interested in this opportunity to complete and return the attached questionnaire by 14th June 2019."

A decision by councillors in 2017 to levy the 30 pence entry fee on users was meant to bring in more than a quarter of a million pounds in a full year. But it became clear within a matter of months the target of £268,000 would not be reached with projections showing income of a meagre £89,000.

Elected members were told in a report compiled last year that 41-weeks into the charging regime a budgeted for total of £211,373 had, in fact, produced only £70,215. So a shortfall of £141,159.

The figures for some individual toilets illustrated how wide of the mark the estimates had been. For example, the site at Lothian Park, Jedburgh was expected to attract £29,041; the actual sum collected was £4,604.

There was a similar sorry monetary tale at the St Mary's Loch property which had an estimate of £15,009 but produced a hugely disappointing £1,139.

Councillors were informed: "What is apparent from financial monitoring is that revenue income received to date is significantly less than the estimated levels that were forecast. A revised full year of income of £89k is now being estimated, a shortfall of some £179k which in turn was expected to also cover the cost of the implementation of Comfort Schemes.

"A significant body of anecdotal evidence around payment avoidance has been received and observed, including from Elected Members. This centres around tailgating (following the previous paying entrant into the facility), the ‘good Samaritan’ (people exiting the facility allowing free access by holding the entry door open), families paying one fee for multiple usage or antisocial behaviour, where people vandalise doors or wedge them open, allowing free access to all."

Options considered, but rejected, included increasing the 30 pence charge to 50 pence while 24 of the 41 facilities were identified for possible closure although this option did not find support either.

The transfer of the toilets to a third party will mean the council retaining ownership of each facility. Other conditions likely to be attached to any privatisation deal will include agreement to an annual fixed management fee. Guaranteed retention of all facilities for a defined period. 

There is also provision for "Arrangements for third party provider taking over the service (provision, maintenance, staff TUPE). Income generation (Pain/Gain sharing mechanism). Reviewing the estate considering proposals to change/improve efficiency and generation of additional income. For example, where several cubicles exist to reduce the numbers of cubicles to improve efficiency and utilisation, provide bike wash facilities, implement new technologies, complimentary commercial ventures etc. Joint shared investment for improvements."

Has Council's attack on press freedom backfired?

COMMENT by JED FORRESTER

Not Just Sheep & Rugby has been the subject of rare media attention in recent days after Scottish Borders Council chose to attack our decision to publish details of their secretive and controversial dealings with two companies based in the Cayman Islands.

There is little doubt the council intended to keep their £9.6 million deal with Lowood Estates Ltd, of Elgin Court, Elgin Avenue, George Town, Grand Cayman, and Genesis Trust & Corporate Services Ltd, of the same address, a closely guarded secret.

It is now abundantly clear that a significant number of elected members of SBC were blissfully unaware that £9.6 million of public money had ended up in the Caribbean tax haven when the local authority concluded negotiations for the acquisition of the remains of Lowood Estate, near Melrose, for development.

And we now know Borders councillors were lectured in private by a senior officer who warned them in no uncertain terms that they must not reveal details of the multi-million pound transaction. They have been effectively gagged so far as the Lowood transaction is concerned, and for now the gags remain firmly in place.

SBC has "form" when it comes to secrecy. A trawl back through our archives will provide ample evidence of the strenuous efforts the council mounted to prevent potentially embarrassing documentation linked to their £2.4 million losses in the Easter Langlee waste treatment plant debacle finding its way into the public domain.

However, SBC's tactics in that affair were thwarted on more than one occasion by the Scottish Information Commissioner, and the paperwork ordered to be released showed the council had signed up for a form of technology that didn't work, and for an offshore investment fund which had no money.

It's early days in the Lowood case, but already Freedom of Information has proved useful in starting to uncover what has actually taken place. One FOI revealed the considerable 'extras' incurred by SBC (about £1.4 million) while another lodged by ex-councillor Andrew Farquhar confirmed the Cayman Islands connection.

But when Not Just Sheep & Rugby presented this information to a wider public - in particular the fact that Borders council taxpayers' money had ended up in a tax-free jurisdiction - SBC was far from amused.

An unnamed spokesman issued this 'unusual' statement to newspapers who had followed up our story: "“As a public authority SBC was required to provide the information requested by Mr Farquhar.  Mr Farquhar and Mr Chisholm have now chosen to publicise this information in a way that, in our view, is entirely inappropriate.  The Council believes private individuals should not be subject to this level of scrutiny regarding how they conduct their personal financial and legitimate tax affairs."

And presumably a local authority who repeatedly pleads poverty but manages to find £11 million to buy a country estate should not be subjected to this level of scrutiny either. It would certainly be interesting to discover who actually drafted that incendiary statement and ordered it to be issued.

In those few sentences SBC sought to turn Freedom of Information on its head. But once information is in the public domain no public authority can put the genie back in the bottle.

It wasn't long before we were being contacted by media outlets for our reaction to the council's "outrageous" claim...their word, not ours.

 Journalism website Holdthefrontpage carried a story under the headline

 Council attacks retired journalist for publishing FoI response on his blog.

You can read their full article here:

https://www.holdthefrontpage.co.uk/2019/news/council-attacks-retired-journalist-for-publishing-foi-response-on-his-blog/

A couple of comments posted by readers of that article are worth reproducing here:

"Information that must be provided to the public shouldn't, er, be made public, according to SBC? If the information fell outside the scope of FOI then they should have refused the application"

And "This council needs to send its staff on a training course. Any information published under FOI is just that - published. Once they've given it to one person, everyone has the right to access it. Absolutely unbelievable that a council would not know this".

Scottish Borders Council may have successfully silenced its own members over the issue of Lowood's purchase. But silencing the press and media might prove to be slightly more difficult.

Three-quarters of a million - the cost of councillors

EXCLUSIVE by DOUGLAS SHEPHERD

Local government services in the Scottish Borders may have suffered significant spending cuts during the last financial year, but expenditure on salaries and expenses collected by the local authority's 34 elected members showed a small increase, topping £750,000 for the twelve month period.

A report on the 2018/19 'wages' and expense claims at Scottish Borders Council shows there are now 16 senior posts carrying enhanced payments which means almost half the entire membership receives extra money in the shape of a responsibility payment. These include council leader Shona Haslam and convener David Parker.

The document explains: "In addition to the Convener and the Leader, 14 Senior remunerated posts were agreed with sums payable from 1 April 2018 as follows: the Executive Members for Adult Social Care (and Depute Convener); Children & People; Finance; Business & Economic Development; Transformation & HR; Roads & Infrastructure; Culture & Sport; Planning & Environment; Neighbourhoods & Locality Services and Community Safety received £22,329 per annum; the Chair of Audit & Scrutiny and the Locality Committee (now Area Partnerships) Chairs, who do not hold an Executive Member post, received £18,524 per annum."

The level of expenses claimed by individual members varied from £419 by Independent Councillor Caroline Penman to £6,311 by Conservative Councillor Mark Rowley.

The report which forms part of the agenda for this week's full council meeting states: "Total remuneration and expenses paid to Members in 2018/19 amounted to £757,910.91, compared with a total of £747,698.02 in 2017/18.

"Travel expenses total £61,119.58 in 2018/19, compared to the 2017/18 figure of £58,744.61. The cost of Telephone and ICT Expenses in 2018/19 amounted to £29,001.12, compared to £30,133.52 in 2017/18."

Here are the amounts paid to each elected member. C = Conservative; N = Scottish National Party; I = Independent; and L = Liberal Democrat.

COUNCILLOR            SALARY            EXPENSES           TOTAL

A K Aitchison  I               22,329.00            3,398.00                 25,727.00
A C Anderson  N             16,994.04             1,873.38                 18,867.42
H J Anderson  N               16,994.04            4,899.90                 21,893.94
S Bell  N                           18,524.04             3,522.00                 22,046.04
J A Brown  N                   16,994.04             2,092.56                 19,086.60
K Chapman  L                  16,994.04             1,357.04                 18,351.08
K Drum  N                       16,994.04             1,129.88                 18,123.92 
R G Edgar I                      22,329.00             3,874.88                 26,203.78
J A Fullarton  C               18,524,04             2,678.16                 21,202.20
J Greenwell  C                 16,994.04             3,105.27                 20,099.31
C A Hamilton C               22,329.00            5,510.21                  27,839.21 
S A Hamilton C               16,994.04             1,996.59                 18,990.63
S R Haslam  C                 33,992.00             4,532.05                 38,524.09
E C Jardine  C                  22,329.00                820.05                 23,149.05       
H A Laing  N                   16,994.04             2,033.84                 19,027.88
S Marshall  I                    17,627.42             3,020.20                  20,647.62
A W McAteer  I               19,202.60             1,833.70                  21,036.70
T D Miers  C                    22,329.00             1,592.99                  23,921.99
D P Moffat  N                  16,994.04             3,255.03                  20,249.07
S J Mountford  C             22,329.00             4,476.29                  26,805.29 
D Parker I                        25,496.00             2,728.71                  28,222.71
D Paterson I                     16,994.04             2,532.33                 19,526.37
C A Penman  I                 16,994.04                419.84                 17,413.88
C H Ramage  N                16,994.04             1,745.24                 18,739.28
N M Richards C               17,890.66             1,572.21                 19,462.87
E M Robson L                  16,994.04                525.20                 17,519.24
M Rowley  C                    22,329.00             6,311.15                 28,640.15
A A Scott   C                    16,994.04             2,979.26                 19,973.30
H R Scott  I                       16,994.04              1,070.32                18,064.36
E M Small  C                    16,994.04             4,221.99                 21,216.03
C R Tatler  I                      20,753.82             3,150.04                 23,903.86
E Thornton-Nicol   N        16,994.04             1,616.14                 18,610.18
G Turnbull   C                   22,329.00             5,982.06                 28,311.06
T Weatherston  C              22,329.00              4,185.27                26,524.27

         

Another catastrophe for 'green' investors

by EWAN LAMB

Another investment firm managed by a director of the failed fund chosen by Scottish Borders Council to bankroll a £23 million waste treatment plant is to be investigated after collapsing with debts running into many millions of pounds.

John Bourbon, a former head of the Isle of Man financial services regulator who helped manage the bankrupt waste management investment entity is a former chairman of the Quadris Environmental Forestry Fund which featured in a Manx High Court case this week.

Borders councillors and chief officers were involved in a four-year fruitless relationship with New Earth Recycling & Renewables [Infrastructure] PLC (NERR) which eventually crashed, leaving 3,269 investors out of pocket to the tune of $292 million.

NERR was the investment partner of Dorset-based New Earth Solutions Group, handed a £80 million contract by SBC in 2011. But all of NERR's resources were being ploughed into propping up New Earth Solutions while the local authority spent at least £2.4 million on a venture which had to be abandoned in 2015.

Another Isle of Man fund called Eco Resources, "specialising" in bamboo plantations in Nicaragua also had Mr Bourbon as a director. Its 189 investors lost £60 million when that fund headed towards liquidation.

Quadris, formed in 2001, and chaired by Mr Bourbon before he and three fellow directors resigned, sunk shareholders' cash into teak forests in Brazil.

In an exclusive report in today's (Thursday) Isle of Man Independent newspaper, journalist Adrian Darbyshire tells the story of Tuesday's court hearing into the Quadris collapse. This is the text of Mr Darbyshire's report in full:

An island-based fund that invested in teak plantations in Brazil has been ordered to be wound up by the high court – as it is unable to pay its multi-million debts.

Deemster [judge] Andrew Corlett said the former directors of Quadris Environmental Forestry Fund PCC Plc had questions to answer about the company’s ‘lamentable’ financial situation.

It owes its American lender between £17.5m and £52m but the scale of its total debts is as yet unknown.

Quadris Environmental Forestry Fund PCC plc, which has a registered office on Athol Street, Douglas, was launched in 2001 and had more than £100m invested in the teak plantations of Floresteca in Brazil.

But in 2016 it posted a $20m loss, with the auditors saying there were significant concerns about the company’s ability to continue as a going concern.

The following year, it was declared in default by US hedge fund Crestline Arvore who appointed a receiver. Quadris’s bank accounts were frozen, leaving around 1,200 investors fearing they will lose all or most of their investments.

The court this week heard that the regulator, the Financial Services Authority, had recommended that Quadris be wound up as the fund could not pay its debts as they fell due.

It had no assets or access to cash and it appeared that no compromise could be reached between the fund and its debenture holder.

Quardis’ directors had all resigned as had its registered agent, Estera Fund Services.

The petition for the winding up of the company was made by Ethical Investors (UK) Ltd, who the court heard are contributors who were ‘trying to get to the bottom’ of what happened.

Advocate for the claimants, Chris Webb, explained that the fund was set up to invest in teak forestry plantations in Brazil.

When it found itself with a liquidity issue, a lender was found, Crestline Arvore. This was owed somewhere between £17.5m and £52m but there was uncertainty over how much was lent and how was owed.

With the fund in trouble, the FSA appointed Gordon Wilson of  CW Consulting first as advisor and then in February 2017 as controller.

Mr Webb said there was a ‘myriad of issues’ and it was ‘just and equitable’ that the fund be wound up.

He said: ‘This isn’t a straight forward winding up. What is clear is that everything is unclear here. It would appear all the assets are now with CL Arvore.’

He said there was a large number of investors who would have expected a return in terms of the teak being cultivated but it was now anticipated they will be receiving zero pence in the pound.

Ethical Investors Ltd had been seeking the appointment of two directors of Grant Thornton as joint provisional liquidators. It was prepared to pay the cost of the winding up, the court heard.

The directors named in the claim form  – John Mudge, John Bourbon, Nicholas Sheard and Ernest Thorn – had all resigned between 2016 and 2018.

Ordering that Quadris be wound up, and joint provisional liquidators be appointed, Deemster Corlett said: ‘The liquidators are going to try to delve into what’s happened here. They will investigate what the directors were doing. It needs looking into.’

Quadris was not represented at the high court hearing.

Some investors in Quadris opposed Crestline Arvore’s action to appoint a receiver, insisting the fund was not in default. They also criticised the regulator for ‘sitting back and doing nothing’.

Directors of all three funds mentioned above took generous fees for managing and promoting the respective entities. We have already reported on the millions of pounds collected over the years by management of the NERR fund.

According to the annual report for the Quadris fund in 2012 Mr Bourbon received £36,000 for chairing the company while his fellow directors picked up £30,000 each. Total management fees (Manager Blue Seas International Ltd) for the year amounted to US$412,157.

In his chairman's report for that year Mr Bourbon wrote: "“Another negative feature of the last year has been the stance of the UK Financial Services Authority (FSA) with respect to Unregulated Collective Investment Schemes (UCIS). The FSA has been actively discouraging UK Independent Financial Advisers (IFA s) from investing their client s money in UCIS schemes on the basis of risk and suitability.

"The impact is to reduce new investment into the fund exasperated by the disposal of existing holdings by IFA s who fear loss of Professional Indemnity cover because insurers take into account FSA guidance. The fund is arguably unfairly disadvantaged with the UCIS mantle.”

Those who invested in Quadris and have now lost everything probably wish they had heeded the FSA's warnings.

Council deal taxing for Borderers!

EXCLUSIVE by DOUG COLLIE

Scottish Borders Council has confirmed it paid the £9.6 million needed to purchase the Lowood Estate, near Melrose, to two companies registered in the Cayman Islands, the offshore tax haven where corporations and individuals pay no tax at all on business transactions.

Ironically council taxpayers in the Borders who will fund the controversial deal SBC concluded with Lowood's owner Alexander Hamilton last December face a bill of £422,250 for UK Land & Buildings Transaction Tax which will be added to the purchase price together with a £30,000 VAT demand. Along with other fees and charges the true cost of the 109 acres of land will be £11 million.

The Cayman transactions involving island-based companies named as Lowood Estates Ltd. and Genesis Trust & Corporate Services Ltd have been uncovered by former SBC councillor Andrew Farquhar via a Freedom of Information [FOI] request.

Mr Farquhar's enquiry and the council's response seems certain to spark demands for full disclosure of the terms and conditions of the Lowood deal and for an independent investigation into the multi-million pound purchase using public funds.

The proposal to build up to 400 houses on the Lowood land is already mired in controversy with specialists warning development on such a massive scale could compromise the River Tweed Special Area of Conservation by increasing the risk of pollution.

In their response to Mr Farquhar's FOI, the council state: "Scottish Borders Council purchased Lowood Estate from Lowood Estates Limited, and Genesis Trust & Corporate Services Ltd, both companies incorporated in the Cayman Islands. The whole purchase price was paid to these companies."

An earlier information request revealed the list of additional costs incurred by the council on behalf of its taxpayers. These were:  Foreign Options  £3,100.00; Surveyors Fees  80,944.03; Sellers Solicitors Legal Fees & Outlays  £72,170.55; VAT on Surveyors & Legal Fees £30,596.92; Land & Buildings Transaction Tax  £422,250.00; Deed registration Lowood, Melrose  £7,500.00; Valuation Reports 16,163.80. On top of that the costs of temporary borrowing for the purchase of Lowood were estimated at £780,000.

When asked for clarification of the Foreign Options item on the list, SBC explained: "Our response should have read Foreign Opinions not Options. As the Sellers were Companies based in the Cayman Islands we couldn’t get the normal Company Searches so had to get Foreign Opinions instead to confirm the status etc. of the Companies. We had to get an Opinion for each Company."

Mr Farquhar said: "My reaction is that of a frustrated taxpayer whose money has been used for a questionable transaction which does not appear to be good value  and is being directed to an off shore tax haven. It makes no sense to me. Why should we be taxed on what we earn to pay taxes to fund millionaires who are tax exiles?"

According to its website Genesis Trust & Corporate Services Ltd. was incorporated in 1992 by the partners of [global accountancy firm] KPMG in the Cayman Islands. In 1998 Genesis Trust became fully licensed and regulated by the newly established Cayman Islands Monetary Authority ("CIMA"). 

"This allowed a broader and more comprehensive range of trust and corporate services to be offered to our clients", adds the company blurb. "In 2004 Genesis Trust separated from KPMG due to regulations introduced regarding auditor independence, namely the Sarbanes-Oxley Act and the revised Securities and Exchange Commission rules."

The KPMG connection is worth mentioning as the firm conducted external audits of Scottish Borders Council's books for a number of years before the work was taken in-house by Audit Scotland. Scrutinising the annual accounts carried a six-figure yearly fee for KPMG.

The accountancy firm continue to provide the external audit for the council's subsidiaries or arms length organisations SB Cares, SB Supports and Bridge Homes.

Genesis Trust's website claims: " Genesis Trust now provides services to several hundred entities and we are continually building upon our well-earned reputation as a quality service provider. Recruiting the right calibre of staff is essential to Genesis Trust. Our team is young, dynamic and made up of exceptionally well qualified professionals. Accordingly, we are ideally equipped to provide our clients the highest service standards in the industry.

"Companies can be set up in the Cayman Islands quickly and efficiently. A company can be formed within 24 hours, with the subscriber's meeting being held and the company's directors appointed."

Apparently Genesis can provide all of the following services for companies:

Maintenance of the Register of Directors and Officers.

Maintenance of the Register of Members.

Maintenance of the Register of Charges.

Maintenance of the minutes book and assistance with preparation of minutes for Directors and Shareholders, as required.

Submission of the Annual Return and payment of the annual fee to the Registrar of Companies.

Provision of company secretarial services, as required.

Provision of nominee shareholder if required.

Provision of Registered Office.