MSP ramps up pressure on council's £11 million deal

by DOUGLAS SHEPHERD

A Member of the Scottish Parliament whose constituency includes Tweedbank has used her regular newspaper column to reveal she has reported Scottish Borders Council to the Accounts Commission over the cash-strapped local authority's decision to buy Lowood Estate for £11 million.

A number of submissions are believed to have been made to the public spending watchdog in a bid to force an investigation into the deal which resulted in the council acquiring 110 acres and nine properties including a mansion house. Critics claim the transaction was speculative and risky with potential long-term implications for taxpayers.

Now Scottish Nationalist Party MSP Christine Grahame, who represents the Midlothian South, Tweeddale & Lauderdale seat in Holyrood, has told of her 'increasing concerns' after reading reports linked to the Lowood transaction.

She writes: "There is a very big stushie about the purchase by SBC of Lowood Estate, partly because the purchase price appears to have been above valuation".

The council has repeatedly refused to release the District Valuer's valuation on Lowood so that it could be compared with the £9.6 million SBC paid over to Lowood Estates Ltd. and Genesis Trust & Corporate Services, businesses based on the tax haven of Grand Cayman in the Caribbean. And all 34 elected members have been warned they must not quote the DV's figure in public.

Freedom of Information requests have shown the council paid £420,000 in transaction tax  and when other fees and charges are added the overall cost adds up to £11 million. SBC even paid the sellers' legal fees and charges of £72,000.

In her column, Ms Grahame states: "There are also challenges to the housing development plans (which the council needs to recoup the money) which are seemingly light on necessary detail, raising serious questions about this Tory council's grasp of economic reality.

"In the meantime I have read through reams of material, including both the Ryden report on the purchase [Ryden was the firm of consultants commissioned by SBC] and a report by JLL [Jones Lang Lasalle were asked to prepare a report for a neighbouring riparian owner].

"My concerns have, as a result, increased, so I have now reported SBC to the Accounts Commission and as it refuses to publish the District Valuer's report (which is key) have asked the assessor's office for sight of that".

The JLL document, handed to the council in March 2018, around nine months before the Lowood deal was wrapped up last December, warned their costings of the housing element of the so-called Tweedbank Masterplan was financially unviable for developers.

It has been claimed since that at least some councillors were not shown the damning report which warned there was no strong demand for housing plots in the Central Borders at that time. A redacted version of the Ryden report carried a similar cautionary note.

The 'highly unusual' procedure used by SBC to obtain legal advice as to the standing of Lowood Estates Ltd. and Genesis Trust has also been questioned by critics.

It has been disclosed that the so-called Opinions on both companies came from a law firm working for the sellers and also based in the Cayman Islands. Under the terms of the sales contract SBC picked up the £3,100 bill for the advice.

There was no mention of the Lowood land and property deal in the recently published council accounts for 2018/19 which are currently being scrutinised by external auditors Audit Scotland.