Remote [Building] Control

EXCLUSIVE by EWAN LAMB

More than 80 applications for building control warrants lodged by developers with Scottish Borders Council were processed by local government officers based 170 miles away in Lochgilphead, Argyll & Bute.

The "somewhat unusual" arrangement which covered a three month period from October 2018 through to January 2019 was reached in a bid by SBC to overcome a staffing shortage in its Building Control section. 

As a result, the Borders local authority paid Angus & Bute Council more than £28,000 to handle 82 warrants - equivalent to £341 per individual case.

In a Freedom of Information response earlier this year, SBC revealed it had made two payments to Argyll & Bute of £17,080 and £11,253 on January 4th 2019 and March 1st 2019 respectively, but did not specify why the money had changed hands.

Subsequently, Argyll & Bute Council, in response to a FOI submitted to them, confirmed the two payments were for ‘Processing of Building Warrants’.

SBC was then invited to supply details concerning the payments in a follow-up FOI request. That request asked: 1- Please supply details of any other payments made by Scottish Borders Council to Argyll & Bute Council for the processing of building warrants. 2 – When did the arrangement with Argyll & Bute for this service begin and how long is it expected to last? 

3 – How many building warrants have officers from Argyll & Bute processed for SBC so far? 4 – Why was it necessary to outsource building warrant work in the first place, and why was Argyll & Bute Council selected when its HQ is 170 miles from St Boswells – an excessive distance for site visits with considerable travel costs?

Scottish Borders Council answered each question in turn, as follows:

1 – None other than listed previously.

2 –The first Building Warrant file was sent to Argyll and Bute Council on 25.10.2018. The last file was sent on 10.01.2019 and as such, effectively the service ended on the 10th January this year. 

Two files do however await conclusion and will remain with Argyll and Bute until they are either resolved or refused. Unresolved Building Warrant applications remain open for a nine month period following issue of the first technical report.

3 – 82.

4 – At the time of engaging Argyll and Bute Council, SBC had gone through an extensive period of staff loss and recruitment. This had culminated and resulted in Building Warrant application turnaround times that did not serve our customers well and were failing national targets.

Using another local authority to undertake warrant processing resolved the issue until such time as the service was back up to a full complement of staff.

Argyll and Bute Council were selected as they were an experienced local authority who could provide the service required. Using a local authority also meant the assessments were still independently carried out.

The location of the provider chosen has no bearing on time or cost. It was only the warrant assessment process being contracted out.

No site visits were necessary and post approval site inspections on these files are still undertaken by Scottish Borders Council. File transfer was all carried out electronically through the Scottish Government national portal.

A council insider commented: "This somewhat unusual temporary arrangement came at a time when building warrant applications were taking an age to process with a risk that developments could be seriously delayed.

"Perhaps this type of inter-council co-operation is something which could be looked at again in future although perhaps any link could be with a local authority a bit nearer to hand than Argyll & Bute".

SB Cares is only the latest 'business' failure

by OUR INVESTIGATIONS UNIT

The recommendation to kill off SB Cares, the arms length company set up by Scottish Borders Council to deliver adult social care follows an almost identical debacle in faraway Buckinghamshire with a similar range of services having to be rescued from potential meltdown.

And the link between the Borders and Bucks is much closer than appears at first sight. For in both cases the plans which led to out-sourcing with such far-reaching consequences were partly hatched by the same firm of consultants, Care and Health Solutions.

Within the last few weeks companies called Buckinghamshire Cares Ltd. and Buckinghamshire Supports Ltd have been dissolved, their functions having been taken back in-house by Buckinghamshire County Council who 'externalised' them in the first place.

On Thursday of this week members of SBC are expected to approve taking back services currently run by SB Cares Ltd and SB Supports Ltd with both companies - formed by the council in 2015 - to be dissolved like their Bucks counterparts. It seems setting up special vehicles to handle some of the most sensitive and vital services in local government is fraught with risk and uncertainty.

Our research reveals that Borders and Buckinghamshire followed very similar paths to failure.

Buckinghamshire Care was established in October 2013 as a limited company known as a Local Authority Trading Company (LATC) and was a wholly owned subsidiary of Buckinghamshire County Council. It employed 394 staff (approximately 250 Full Time Equivalents). 

Council members were assured in a report dated June 2013 that: "The LATC is forecast to generate a cumulative surplus of £600,355 at the end of the fifth year of trading. The total investment cost is circa £400,000 for set-up costs. The total cumulative benefit to the Council over 5 years of establishing the new company is £2,354,692."

So how did that pan out?

The last full accounts for the Bucks LATCs covering 2016 stated: "As a result of continuing losses, additional funding was provided by the company's sole ultimate shareholder, Buckinghamshire County Council in the form of a working capital loan. The balance of the loan stood at £1.749 million on 31st December 2016.

"In late 2016 the county council decided that it was in the best interests of clients, staff and suppliers to retake direct control of all of the services that were transferred to the group in October 2013." 

Financial returns for Buckinghamshire Supports showed a loss of £1.234 million had been incurred for 2016 and £1.210 million in 2015.Yet when the fledgling Buckinghamshire Care Ltd advertised for senior staff in 2013 potential applicants were told the managing director's post would command a six-figure salary while the finance and commercial director would receive between £75,000 and £85,000 a year.

County councillor for Ryemead and Micklefield, Julia Wassell, called the move to return the services in-house a “good example of a crisis” and said it had the potential to be “disruptive” to staff, service users and carers, despite reassurances from the council that it would not be.

She said: “It is a good thing that the county council has taken it back in-house but the question remains whether it should have been outsourced in the first place." 

The sheer scale of the issues facing Buckinghamshire's social care LATCs was set out in a report to the county council by Trevor Boyd, its managing director for Communities, Health and Adult Social Care.

He wrote: "The Council has lost confidence in Buckinghamshire Care Ltd’s ability to manage and deliver services to the high standards it requires. It decided that it was in the best interests of service users and their families to bring the services and eligible staff back 'in-house', while a longer term solution is considered.  Notification of the termination of the contract needed to be provided immediately to enable the Council to take the necessary steps to ensure that the appropriate governance and financial arrangements are put in place to secure the sustainability of services."

Mr Boyd added : "Over the last year there have been a number of operational issues related to leadership, financial management and more recently service quality.

"Service Quality - The Council lost confidence in Buckinghamshire Care Ltd’s ability to work to its required standards when, in November 2016, it was made aware that a number of operational and quality issues first raised by the Care Quality Commission during an inspection of one of their regulated services run by Buckinghamshire Care Ltd in April 2016 (Seeleys House) had not been satisfactorily rectified and were still in evidence.

"Despite the Council taking decisive remedial action to ensure services were able to continue in line with the standards it expects (this included additional staffing and training) the Council does not have the confidence that quality services will be delivered consistently. This poses a potential risk to the safety and wellbeing of our service users. With this knowledge the Council feels unable to leave delivery of care services under the management of Buckinghamshire Care Ltd."

"Resource Implications - There will be some one-off costs (£364,000) relating to bringing Bucks Care back in-house. These costs mainly relate to ICT expenditure which had been capitalised and was being charged to the profit & loss account over a 5-year period. Additional gross recurrent costs (£594,000) will be incurred relating to pension costs. Although no disruption to services is anticipated we have sent reassurance letters to all service users, carers and parents explaining our decision to terminate Buckinghamshire Care Ltd’s contract and transfer services to Buckinghamshire County Council."

Scottish Borders Council has taken similar steps within the last few days. But to claim the switch to in-house is merely administrative must surely be challenged.

The Buckinghamshire 'model' was one of those included in a 2014 options appraisal report which SBC commissioned from Care and Health Solutions. The firm of specialist consultants had previously been involved in the set up and implementation of Buckinghamshire Cares.

SBC was told by the consultants: "The [Borders] review and analysis is based on the knowledge and expertise within the CHS consultancy and our experience of alternative service delivery model implementations with other Local Authorities in both Scotland and England. This assessment is based on our extensive experience in designing and implementing alternative delivery models such as LATCs and comparing these successful externalised bodies with those in scope in this appraisal."

And this was another message included in the appraisal report: "Historic attempts to reduce costs have often resulted in reducing service provision. This “salami-slicing” of services has been seen to reduce quality and capacity of services to the point of extinction and is generally accepted as a non-viable option. Experience in implementing and managing recently launched vehicles evidences a cultural change in the new company that leads to a “team environment” and a sense of individual responsibility towards colleagues and the organisation as a whole."

Perhaps Scottish Borders Council and Buckinghamshire County Council should compare notes...while external auditors might wish to investigate the circumstances surrounding the SB Cares collapse.

SB Cares still a winner, according to designers' website

by DOUG COLLIE

The directors of the firm which convinced Scottish Borders Council it should transfer adult social care services to a soon to be liquidated arms length organisation continue to promote SB Cares as a successful case study in a bid to win business from other clients.

Care and Health Solutions (CHS) devote an entire page on their website to their part in the creation of the Borders Limited Liability Partnership (LLP) including a glowing quote from a senior officer at SBC who describes the project as "a major success".

It seems news of the impending demise of SB Cares - Borders councillors are expected to vote it out of existence this Thursday - has yet to reach Russell Thompson, director of CHS, and the consultancy's associate director Clive Dove-Dixon who worked on the business case and implementation of the SBC's malfunctioning ALEO.

As reported here and in the local media the problems and issues facing SB Cares is forcing councillors who voted for its establishment in 2015 to now sanction taking the services back in house, a move which can only be regarded as embarrassing for all involved.

But that is certainly not the impression given by the project's drivers at CHS who claim to have carried out similar appraisals and carried out other work on social care for 24 councils throughout the UK.

The story of SB Cares is portrayed in a very upbeat manner and tells how the project team dealt with "challenging media enquiries and challenging trade union relationships" along the way.

According to CHS: "In late 2013 the commissioners and directors of Adult Social Care in the Scottish Borders were facing serious problems in relation to their In-House Provider Services, which included, Older Peoples Residential, OP and LD Day Centres, a Homecare Service and a Community Equipment Store with telecare monitoring.

"The problems that they were facing were not untypical of most councils, including drastic budget costs to be made, increasing numbers of personal budget-holders, a weak private sector that was vulnerable to failure and an expensive workforce with low morale from continual service re-designs and management reorganisations. The senior management team recognised that the Members needed to see a comprehensive and independent appraisal of how these services could be transformed so they could continue to be delivered for the benefit of residents and at best value to the Council."

The Council decided to commission Care and Health Solutions Ltd to prepare and deliver an independent appraisal of the options available to their services. It is claimed CHS were selected for this work as their experience in this area of adult social care was extensive and they and had worked with over 10% of the councils in the UK on the future of their adult social care services.

CHS's report recommended that the services be transferred into an LLP and also included an indicative timeline and project plan for the implementation of the selected option. 

"The recommendation was accepted as the LLP option provided the following: • The Council would still have ultimate control of the services through 100% ownership • The transfer would allow a cultural change in the services to enable better working practices and develop efficiencies • The services could provide/sell services to budget-holders and self-funders.

"Full-time senior management would provide focus and scrutiny of costs and productivity not experienced before. • All efficiencies, cost savings and income from new services would benefit the Council through reduced service costs, additional service provision or profit-share. • The LLP would be the “Provider of Last Resort” commissioned by the Council in the event of a market failure."

The web page goes on to explain"The Business Case (BC) was written for the preferred option (LLP) and involved working with a wider group of stakeholders over several months, investigating the preferred option in more detail and building a report that was robust enough for the Members to be able to justify their decision to implement and launch the LLP.

"The detailed BC was scrutinised and tested by the Corporate Finance team, the Commissioners, Procurement and the Legal department. The ultimate sign-off was given by the Section 95 Officer (equivalent of S151 Officer in England and Wales) and was a legal requirement before implementation could be started."

In SBC's case the so-called Section 95 Officer happens to be the council's head of finance whose report to council this week recommends the radical move to bring the SB Cares functions back under full control of the local authority.

CHS go on to write: "The project created, registered, named and branded a new company, written and signed complicated Partnership Agreements, undertook detailed consultation with 800 staff and created almost as many new email accounts. The project team designed, built and published a new company website and moved into a new head office, wrote new leases and sent letters to over 3000 clients."

Philip Barr, Interim Managing Director of SB Cares and Depute Chief Executive at SBC is quoted as saying: "The implementation of SB Cares has been a major success from both the Council’s and the Company’s point of view. There is no doubt that this result would not have been possible without the advice, knowledge and involvement of Clive and Russ from CHS. Their experience helped the project make the right decisions at the right times and their continual reminder of timelines and deadlines ensured the project was delivered on schedule.” 

Will councillors vote for 'not viable' option?

by EWAN LAMB

The continued in-house provision of Borders adult care services is not viable in the medium and longer term, concluded a firm of consultants hired by Scottish Borders Council back in 2014.

Wolverhampton-based Care and Health Solutions [CHS] warned the council's direct provision of home care by its workforce of 850 carers with an annual budget of £17 million "would be likely to lead to an ongoing rationalisation of services and these services would therefore be vulnerable as a target for savings through service reductions."

The quality of service was bound to deteriorate and there could be a requirement to close facilities and possibly a need for 'reactive externalisation'. The CHS written appraisal of the in-house set up contained a bright red-coloured warning that it was 'not viable'.

However, it looks as though all of those dire predictions will be conveniently ignored later this week when SBC's elected members are being invited to plump for the in-house option to rescue the service. It follows the failings of SB Cares, the arms length company handed the adult care contract when councillors voted for its formation on the recommendation of their senior officers.

As we reported a few days ago virtually the same management team is now advocating the taking back of the crucial service into full council control after predicted savings were not achieved and the promised upgrade in services never materialised. And the malfunctioning business - known as a Limited Liability Partnership (LLP) - which emerged from CHS paperwork seems certain to be dissolved before the end of 2019.

Based on the CHS appraisal there could be serious issues ahead should council members sanction the in-house option.

Here's what the consultants had to say about in-house in their appraisal report setting out the choices available in January 2014: "In the current climate and given the service has already undergone reconfiguration and cost saving exercises, this option is unlikely to achieve value for money and will struggle to achieve savings and cannot generate external income. 

"Whilst this option allows flexibility in terms of policy initiatives and allows the Council to maintain ultimate control, it is inherently unsustainable and commercially inflexible. This option is preferable to most staff and service users, as there is a perceived level of job and service security. Achieving future savings will require significant reconfiguration of services which is likely to require the closure of some existing provision."

 And there was much more in the CHS document. It continued: "Financial and demographic pressures and consequential top down Government policy means that to continue in-house provision is not viable in the medium to longer term.

"As the Government follows its ambitions to increase the number of Direct Payment service users, the Council will ultimately bear the cost of both running a service and paying out Direct Payments which service users may not be prepared to pay the high cost. Eventually, the need to make savings will result in a stripped down service where quality is compromised and service user needs are unmet. 

"The benefit of this option would be a continuation of ‘business as usual’ and this enables the SBC to remain a direct provider and could continue to facilitate the management of the modernisation agenda. However, this would be likely to lead to an ongoing rationalisation of services and these services would therefore be vulnerable as a target for savings through service reductions. 

"This in turn could lead to a reactive externalisation not necessarily in a planned or productive manner which may not be in the best interests of the Council. Creating an internal business model either through zero based budgeting or creating a Direct Services Organisation will not deal with the inherent structural issues of providing the services from within the Council nor provide the appropriate commercial culture needed to achieve the required outcomes."

So clearly a high risk option, in CHS's view. As one local government observer put it: "If the in-house set-up was close to meltdown in 2014 then surely it must be far more dangerous now as demand grows and the number of elderly folks living in Scottish Borders rises. Will clients be faced with service cuts in the not too distant future, as forecast by CHS?"

It should be remembered that the council was told in no uncertain terms: "Doing nothing is not an option - without significant change the results will be increased costs and reduced service provision to residents of the Borders.

"The new organisation (SB Cares) will be more business focussed. It will not have to pay any Corporation Tax and will be able to maximise VAT opportunities available to SBC.

"The additional benefits from the new service are not available to the Council services as it is illegal for any council to deliberately sell its services at a surplus. The LLP has a legal right to sell services at a surplus."

Then came another panning for the in-house system in June 2014 when a full council meeting approved the LLP Business Case which included the following: "Without a significant change in approach and the application of a more balanced business-focussed approach to these service areas, costs will continue to increase, efficiency opportunities will not be maximised and fewer people will buy Council Services through Self Directed Support. This in turn will lead to reductions in service quality and availability and less future choice for service users and carers." 

The thick volume of evidence virtually outlawing in-house provision of adult social care surely makes it difficult if not impossible to justify the complete U-turn now being contemplated.

SB Cares - an abject failure in all but name?

EXCLUSIVE by DOUG COLLIE

SB Cares, the much troubled arms length company (ALEO) set up by Scottish Borders Council to deliver adult care services only four years ago will be wound up in December with its functions taken back in-house if councillors rubber-stamp recommendations at a meeting next week.

A fair sprinkling of those elected members will have previously voted on three separate occasions in 2014 and 2015 to set up the ALEO with 850 staff who transferred from SBC to join SB Cares which required £1.8 million in set-up and marketing costs.

The bombshell report to next Thursday's full council meeting from the chief executive's department falls short of admitting the ALEO set up has been a dismal failure. But questions should be asked as to why it was set up in the first place with all of the accompanying upheaval for staff and clients.

Heavy emphasis is placed on the contents of a recent report on the function and performance of Scottish ALEOs by Audit Scotland, the spending watchdog.

The SBC report says: "Audit Scotland noted that the operating context under which ALEOs deliver services does change, and that the original rationale for their establishment may weaken over time.

"Audit Scotland also concluded that the establishment of an arms-length ALEO is a major strategic consideration for any Council. Elected Members should therefore have a clear understanding of how their ALEOs are performing and how they fit with the Council’s culture, its overall strategic priorities and those of the local community.

"These priorities can change over the years in response to changing demographic, financial, market and political considerations. It is essential therefore that Councils regularly review their ALEOs to ensure they deliver the benefits expected and that their continued operation delivers demonstrable best value. Where this is not the case alternatives should be considered."

A detailed case is made for taking the vital adult care services back under direct council control.

According to the top officials who recommended setting up the ALEO only four years ago:"This report assesses the current operational performance, the management structures, and the effectiveness of the governance mechanisms in place to monitor SB Cares. 

"The report evaluates the additional costs and financial benefits directly attributed to the current service delivery model, with SB Cares operating as a separately managed LLP. It also identifies and evaluates the mechanisms in place to review how SB Cares is performing, to oversee the quality and safety of its services, and how the current arrangements fit with the Council’s culture and priorities and those of its partners and communities."

It concludes: "After careful consideration it is the view of the Council management team that the benefits of the ALEO structure for SB Cares no longer outweigh the challenges and risks now facing the business. These risks, which are likely to increase in future, make it appropriate for the Council to now reintegrate SB Cares LLP and SB Supports LLP into the Council."

It is recommended that It is recommended that Elected Members agree to voluntarily terminate SB Cares LLP and SB Supports LLP on 1 December 2019 and reintegrate all of the services presently directly delivered by the ALEO into the Council from that date; authorise the Chief Executive to take all necessary steps to reintegrate SB Cares within the Council management structure; including the necessary changes to personnel, financial, pensions, procurement, IT, property and legal agreements.

In a section dealing with quality of services the report explains: "Recently concerns have emerged with regards to the safety of (sic) individual some services, and the challenges of meeting the requirements of the Care Inspectorate.

"One example was exposed in 2018/19 report on Homecare Service South where the Care Inspectorate were required to repeat a previously un-actioned requirement from a previous inspection. This failure may suggest that SB Cares are increasingly struggling to maintain consistently high standards and improve services across the Borders in all of its care settings while managing the day to day requirements of this complex front line service.

"Recently visits by senior management to care homes operated by SBcares has identified that the quality of the fabric, and furnishings is not being maintained at an acceptable standard in all instances. Consequently, the Chief Executive has instructed a variety of direct interventions, including additional management capacity and instructing immediate action to improve the quality and cleanliness of the environment within care homes."

Hidden Borders Railway issues brought to light

by DOUGLAS SHEPHERD

Scottish Government ministers do not have powers to construct a cross-border train link by extending the Borders Railway from Tweedbank to Carlisle while the UK Department for Transport (DfT) doubts the extended route with its 'slow, un-electrified' trains would do much to reduce pressures on the West Coast Main Line (WCML).

These are two of the revelations to emerge following the Scottish Government's decision to release correspondence - some of it marked 'sensitive' - relating to discussions it has had with its Westminster counterparts about an extension to the Borders rail line to Hawick and eventually into England.

A Freedom of Information request to ScotGov asked for any correspondence and documentation between the UK Government and the Scottish Government regarding a feasibility study for the extension of the Borders Railway.

The collection of emails and documents include a so-called Transport Position Paper, dated September 2018 which includes the following: "  It should also be noted that Scottish Ministers do not have the powers to construct a cross-border railway line as they only have the powers to construct a railway which starts, ends and remains in Scotland.  Accordingly, the power to construct a railway line from Tweedbank to Carlisle in its entirety would rest with the UK Government."

Any new transport infrastructure to be developed locally will be closely associated with the Borderlands Inclusive Growth Deal partnership made up of five local authority areas, namely Cumbria County Council, Northumberland County Council and Carlisle City Council on the English side of the border, and Scottish Borders Council together with Dumfries & Galloway Council in Scotland.

The newly released papers show the partnership wrote in June 2018 to Hamza Yousaf, then Scottish Transport Minister regarding the Borders Railway extension.

According to that letter: "The Settle-Carlisle line shows the benefits of having alternative routes to support the resilience of the rail network. The line was threatened with closure in the 1980’s but following a successful campaign to keep it open the line was reprieved in 1989. Since then the line has played a key role for re-routed main line passenger services when the West Coast or East Coast Main Lines have been closed and for freight services between Scotland/Cumbria and the rest of England.

"The Borders Railway between Carlisle and Edinburgh could be equally successful in providing this vital role as an alternative route to the West and East Coast Main Lines for freight and passenger traffic and through this help maximise the growth of the Scottish and UK economy."

However, that suggestion appears to have received short shrift from the DfT. Feedback provided by the Department in July 2018 declares: "We are not convinced an extended Borders Railway would help with capacity issues on the WCML.

"Assuming any such extension would have similar characteristics to the existing line i.e. slow and un-electrified, it would not be attractive for re-routing any of the existing services using the WCML.  Diesel hauled trains not in a hurry already go via Dumfries so having another diversionary/alternative route would not add much."

There has been a long standing proposal that each of the governments would contribute £5 million to pay for feasibility studies of rail infrastructure options.

In April 2019 Borders MP John Lamont issued a press release announcing the UK Government's commitment to the studies.

Mr Lamont said at the time: "“We need to improve transport links across the whole of the Borders and extending the Borders Railway is part of this. A full feasibility study will look in detail at the costs and benefits of bringing the railway to Hawick, Newcastleton and on to Carlisle.

"I’d expect this to look at things like impact on businesses, jobs and tourism as well as the implications of getting freight off our roads. “With the UK Government now publicly backing the study, the ball is now very much in the SNP’s court."

However, the latest FOI releases suggest the UK Government at least had reservations over £10 million worth of expenditure for the feasibility study.

One of the documents contains this comment from UK officials: "Under the “Rail Network Enhancements Pipeline“ the focus of activity at the Determine Stage is to establish the case for an intervention, which means identifying both the outcomes sought for customers and considering the range of potential interventions which could deliver those benefits. This places emphasis on establishing a strategic case and £10m sounds a lot of money for the production of what amounts to a Strategic Outline Business Case."  

SBC's lamentable landfill legacy

EXCLUSIVE by DOUG COLLIE

Scottish Borders Council's place among the country's highest landfillers of rubbish was cemented in 2018 when the amount of waste buried in the ground even exceeded the 2011 tonnage and stood at a distinctly unimpressive 58.4% of all garbage generated by the region's households.

According to figures just published by the Scottish Environment Protection Agency (SEPA) the Borders' 2018 percentage was the second highest in mainland Scotland, only exceeded by Glasgow City Council on 68.3%.

The Borders' consistently high annual landfill tonnages - 30,671 tonnes buried last year - should come to an end following the recent decision to award a multi-million pounds contract which will involve transporting all waste out of the region for treatment and disposal in Lanarkshire. However, hundreds of lorry movements each year will do little for air purity and will generate a significant volume of harmful emissions.

The SEPA data reveals that neighbouring councils managed to landfill far less than SBC. The table of statistics for all 32 local authorities includes Midlothian 29.4%, East Lothian 42.9%, Dumfries & Galloway 44.2%, City of Edinburgh 52.1%, Fife 42.6% and West Lothian 24.4%.

A trawl back through the numbers for previous years shows SBC landfilled 28,688 tonnes of household waste (53.3%) in 2011. The figures for the last two years were: 2017 30,593 tonnes (57.2%); 2016 30,702 tonnes (59.1%).

On the other side of the waste management coin, when it comes to recycling the Scottish Borders remains rooted close to the bottom of the national recycling league. Performance has been hampered ever since councillors sanctioned the scrapping of garden refuse collections. And the recent cut in opening hours for local recycling centres cannot have done much to boost the drive.to divert waste away from the landfill option.

In 2018 only 20,365 tonnes of collected waste (38.8% of the total) was recycled, more than a full percentage point less than was achieved in 2017 (39.9%, 21,234 tonnes). Next door Dumfries & Galloway diverted 28.4% of waste from landfill and recycled a further 22.1%.

The recycling statistics for other nearby councils included East Lothian 51.8%, Midlothian 51.4%, City of Edinburgh 44.7%, Fife 54.7% and West Lothian 48.5%.

Now it is all change after a major procurement exercise by SBC which followed the well documented and costly collapse of a waste management project in 2015.

The council announced in July that around 42,000 tonnes of municipal waste produced in the Borders each year was to be hauled by road the 50 miles from Galashiels to Forth, on the West Lothian-Lanarkshire border to be treated for disposal.

A contract award notice published by SBC informed readers "A decision was taken not to expand the Easter Langlee landfill site once its current capacity is exhausted (by mid-2019) but instead develop a new Waste Transfer Station in its place." The new station has cost £5.5 million.

The notice added: "This will enable the Authority to comply with the ban on sending biodegradable municipal waste to landfill which comes into effect from 1st January 2021 by exporting waste out of the Borders for treatment and disposal. The Authority reserves the right to take responsibility for haulage for part of the Contract Waste to the Contractors Delivery Site in order to gain benefits through utilising its own Authority Haulage Vehicles."

The contract won by Forth-based Levenseat is worth £47 million.

 As well as the multiple trips which will now be needed to Levenseat's treatment centre SBC sends its dry recyclabes on an even longer journey - to J B Recycling's premises in Hartlepool, 108 miles from Galashiels.

Mild rebuke for council's Lowood oversight

by EWAN LAMB

Scotland's public spending watchdog has 'ruled' that Scottish Borders Council should have mentioned the small matter of a controversial "£10.2 million" property deal in the authority's 2018/19 annual accounts.

But Audit Scotland, which acts as the external auditor for SBC, has concluded that despite several complaints linked to the purchase of Lowood Estate for housing developments the accounts were not "materially misstated".

The £10.2 million purchase price for the 94-acres of Lowood together with nine properties is quoted in Audit Scotland's 2018/19 annual audit report which will be presented to the council's Audit & Scrutiny Committee next week. That figure differs from the £9.6 million mentioned in council press releases.

As we have previously reported, when fees, charges, the cost of consultants' reports, taxation and interest charges are taken into consideration the deal will set taxpayers back £11 million with infrastructure costs still to come. 

There was widespread surprise when the estate's purchase from two companies based in the Cayman Islands failed to feature in the unaudited accounts' management commentary even though a number of relatively insignificant events and achievements were awarded 'Highlights' status.

According to the Audit Report from Audit Scotland: "During the year the council purchased Lowood estate for £10.2 million as part of its Tweedbank masterplan. This was not referred to in the unaudited accounts. 

"The management commentary in the accounts is intended to provide information on the council’s business during the year, including information about amounts in the financial statements, and should have included reference to the purchase. Management agreed to include comments regarding the purchase of the estate within the management commentary in the audited accounts."

 And later in the document the watchdog has this to say: "There were four objections to the accounts. These related to the council’s purchase of Lowood estate during the year and its measurement and disclosure in the accounts.

"As part of our audit work we confirmed that the estate had been correctly accounted for as an addition in the year and concluded that the accounts were not materially misstated. At the year end the asset is valued in accordance with the accounting policies of the council, which is in compliance with the Code of Practice on Local Authority Accounting in the UK 2018/19.

"As no further contractual commitments have been taken out in connection with the development of this site, there is no requirement to disclose future capital plans in connection with this site. Issues with disclosure of the purchase were corrected for the audited accounts."

The revised set of accounts now features in the Highlights section the following entry: "Lowood estate During 2018/19 the Council took the strategic decision to purchase the Lowood estate for development purposes. The 44-hectare site will provide up to 350 jobs and an estimated Gross Added Value (GVA) of £150million over 30 years.". There is no mention of either purchase price.

A list of key messages from the external auditors includes the following:

"Scottish Borders Council and its group financial statements give a true and fair view and were properly prepared. 

"The audited part of the remuneration report, management commentary and annual governance statement are all consistent with the financial statements and prepared in accordance with relevant regulations and guidance.

"The statement of accounts of the six section 106 charities administered by the council are free from material misstatement.

"The Council has a good track record of delivering services within its budget. Financial management is appropriate and effective with a budget process focussed on the council's priorities.

"We concluded that adequate internal controls were in place for the key financial systems we reviewed.

"The council and its group financial position is sustainable in the foreseeable future although rising demand, increasing costs of services and reductions to central funding will continue to place a strain on the council’s capacity to deliver services at current levels. 

"The council has a good track record of delivering savings in recent years. The size of the future funding gap and a reliance on non-recurring savings means it may struggle to make the required savings in future years.

"There are appropriate governance arrangements in place that support the scrutiny of decisions made by the council. 

"The council demonstrates a commitment to transparency in the way it conducts its business, although it considers business in private where there is a need to consider commercially sensitive information."

Council valuer did not inspect Lowood estate before £9.6 million deal

by DOUGLAS SHEPHERD

The public official who provided Scottish Borders Council with two valuations for the Lowood country estate, near Melrose, did not inspect the property before deciding it was worth either £8 million with vacant possession or £9 million with "special assumptions".

District Valuer Erin Herd also gleaned her factual information about the 94-acre estate from a previous valuation exercise, conducted for Lowood's owners in 2016 and which placed a £14.425 million price tag on the Hamilton family's estate.

The local authority ended up paying £9.6 million for the estate in December last year, and when fees, taxes and loan charges are added the total bill for taxpayers will total almost £11 million.

The decision to rely on a so-called "desk-top" valuation - a value calculated on restricted information - is contained in the newly published reports from Ms Herd and from private valuer Rob Forrest, released by the council under Freedom of Information.

It has also been disclosed that Mr Forrest concluded the available land for housing development when woodland and low lying areas susceptible to flooding were eliminated could be 37.48 acres while the council's own Masterplan for the area quoted a figure of 52.4 acres.

Mr Forrest concedes that the 37.48 acres quoted could change in a positive or negative direction depending on the outcome of detailed surveys.

He explains in his 37-page report dated October 2016 that he had been instructed to undertake a valuation of Lowood for the potential sale to SBC for strategic development to create approximately 300 new houses on greenfield land, and an enterprise centre within Lowood House.

His valuation did not contain information in respect of site servicing, access, land contamination or geotechnical surveys.. He adds: "Only Lowood House was inspected internally, and it is therefore assumed that all of the other [eight] properties are in good condition".

Commenting on the type and scale of housing development at Lowood before the council Masterplan was unveiled, Mr Forrest wrote: "It is considered that an appropriate planning density for the net developable area at Lowood is in the order of 20 units/hectare, thus 304 units in total and in accordance with Scottish Planning Policy it is probable that 25 per cent would require to be affordable housing. This equates to 228 prime residential units and 76 affordable units".

The valuation report for Lowood's owners also contains the following passage: "The residential development market remains relatively static within the Borders with only a small number of developments being built out at present.

"Developers remain cautious and are generally concentrating on developing out existing land banks before acquiring new sites. However medium to large strategic development requires years of planning and the new settlement of Tweedbank is testament to this. The benefits of the new railway link are already evident and further prosperity and growth forecast".

In the document provided for SBC and dated May 2018 Ms Herd says: "I have been provided with a copy of the valuation report carried out by Rob Forrest Rural in October 2016 and have relied on this for my factual information on the estate".

The report adds: "As agreed the property has not been inspected. The advice and valuation has been prepared on a desk-top basis - i.e. it is provided on the basis of restricted information. No detailed site survey, building survey or inspection of covered, unexposed or inaccessible parts of the property were undertaken. It has been assumed good title can be shown".

Ms Herd also says the site currently has an indicative capacity of 330 units, "however we have been advised that there is the potential for a substantial increase in this figure".

With reference to the council's plan to convert Lowood House into a so-called boutique hotel, the DV comments: "This is a risky project as it is debatable on the very limited information that we have on whether the finished hotel would be worth the cost of refurbishment".

It is explained that it was the council who approached Lowood's owners and offered to purchase the estate as a whole.

"The owners are also keen to sell to the council rather than dispose of various areas of land piecemeal over several years and more".

Spiralling costs of Jedburgh's 'sorry story of inaction"

EXCLUSIVE by EWAN LAMB

The cost of shoring up the crumbling listed building at the top of Jedburgh High Street in a saga that has so far lasted for four long years now stands at £380,000 with an additional £589,000 required for the anticipated demolition of the dangerous four-storey tenement.

Scottish Borders Council, which is currently paying the bills from contractors and consultants as well as the hire of scaffolding to keep 2 High Street from collapsing into the road, has released a thick file of correspondence in response to a Freedom of Information request.

Many of the 174 pages of emails and letters relate to the frequent contacts between the local authority and the main five shop and flat owners who, according to a council report "all vacated their properties effectively leaving the council to proceed with the necessary works in line with formal notices that had been served". There are 15 interested parties in total.

The locations of the absent owners are care of an Edinburgh law firm, Aberdeen, Ripon, Brechin and Ballymena.

SBC planners are currently processing an application for listed building consent to bulldoze the Victorian edifice which is riddled with rot and has 'moved' several times since a Dangerous Building notice was slapped on it in June 2015.

According to a written submission, Scottish Civic Trust director Dr Susan O'Connor declared: "This is a sorry story of inaction by neglectful ownership of an important building in the townscape of central Jedburgh."

The district valuer has indicated the C listed building, designed by Glasgow architects, has no value "unless the shops and flats can be brought back into economic use".

Letters sent to all of the owners by the council soon after the first pieces of masonry fell from the structure warned that the Dangerous Building notice placed legal obligations on the proprietors to have all necessary works undertaken within a prescribed period.

That correspondence added: "If the works remain outstanding it allows the council to organise the remedial work and invoice the owners for their share".

Last October Alan Gueldner, from SBC's enforcement team, wrote: "The cost of the work to date is £300,000. In addition the cost of monitoring the scaffolding and traffic management arrangements will be in the region of £3,000 per week.

"As I have previously explained, as an owner of part of the building you are legally liable to meet your share of these costs".

Another message from Mr Gueldner, also dated October 2018, included estimates for restoration and demolition. The money needed to make the entire property wind and water tight was put at £774,000, and to bring it back into use would require a further £268,000.

Meanwhile the expenditure involved in clearing the site and providing shoring to neighbouring buildings is quoted at £589,000.

The FOI request to the council also asked for costs incurred so far since concerns were first expressed about the state of the building.

SBC revealed: "Total to date £379,681.48. Total is made up of the following: Payment to Contractor £198,398.82 Scaffolding Costs £111,795.10 Consultants Costs £67,472.56 Misc Cost £2,015.00.

When the council was asked how much of the expenditure had been recovered from the owners, and how much it anticipated getting back in the future the response was: “When undertaking direct action works the costs associated with these works are not invoiced until the works have been completed. In this case given the complex nature of the project and the desire for the Council to acquire the property it is too early to comment on the recovery of costs.”

In November 2018 one of the owners told SBC: "We need legal assurances that if we give the council our deeds=nil [for nothing], we have absolutely no costs, neither for monies already spent nor in the future.".

Historic Environment Scotland, the national 'guardian' of important buildings, has commented on the application to demolish. HES says: "We consider a convincing, yet regrettable, case for demolishing this listed building has been put forward and we do not object to its loss."

A few individuals have lodged objections, but given the costs involved in any restoration project it would seem the days of Clarke & Bell's once attractive tenement are numbered. The priority will be to have the gap site suitably redeveloped as quickly as possible.

£6 million differential in Lowood estate valuations

by DOUG COLLIE

Two specialists who were asked to provide valuations for the 94-acre Lowood country estate in the Central Borders provided estimates of £8 million and £14.25 million respectively, according to documents released by Scottish Borders Council under Freedom of Information.

The £8 million price tag, based on vacant possession, was applied by the District Valuer who was called in by SBC before council officers and their representatives opened negotiations to buy the property from the Hamilton family, owners of the attractive estate with a mansion house and several cottages.

A second valuation by DV Elin Herd which was subject to so-called special assumptions worked out at £9 million.Her newly released report, submitted to the council in May 2018 describes Lowood as "a high risk asset to purchase".

Meanwhile a separate exercise conducted on behalf of the sellers by private valuer Rob Forrest in October 2016 had calculated a valuation figure of £14.25 million.

Last December the local authority handed over £9.6 million to two Cayman Islands-based companies to acquire Lowood. When legal costs, loan charges and taxes are added the final bill totals almost £11 million.

For several months SBC refused to disclose the valuation figures because of a confidentiality agreement with the District Valuer's office. But a number of people lodged FOI requests for the information, claiming disclosure was very much in the public interest.

It has taken an intervention by the Scottish Information Commissioner to ensure the figures and reports are available for public scrutiny.

According to correspondence from SBC: "The Scottish Information Commissioner has contacted us to advise that it has discussed this matter with the Valuation Office Agency (the District Valuer). We are advised that the DV is content now for the valuation information to be released, provided it is not done so out of context.

"As you will appreciate the purchase of land by local authorities for economic growth, housing and business space is not an unusual activity and occurs throughout the country, whether by city deals, urban regeneration companies, business gateway activities or directly by the authorities themselves".

In this case the council intends building upwards of 300 houses on the Lowood land, the residences to become an extension of Tweedbank village. But there have already been claims the transaction is 'speculative and risky' given the limited housing market in the area and the environmental implications for the nearby River Tweed Site of Special Scientific Interest.

The DV's report explains: "The main objective for Lowood is to develop medium density residential accommodation with the housing being arranged in “clusters”. These will be defined residential neighbourhoods built on the site of young tree plantations and surrounded by the retained deciduous tree belts. Each “cluster” will have a small area of community space such as local retail, studios/workshops at its centre to provide a mixed use character to the development.

When the document was drawn up the site had an indicative capacity of 330 units. "However we have been advised that there is the potential for a substantial increase in this figure."

The report also claim that taking into consideration the scale of the subjects the DV did not consider that in the current market conditions there would be a purchaser prepared to acquire the site in its entirety without an allowance for substantial risk. 

"Rather we would anticipate that fully serviced and remediated development land would be disposed in tranches of c.4 acres over a period of 10 years. Sales in the order of 4 acres would in our opinion offer an appropriate level of development and absorption so as not to saturate the market with new housing.

"We are yet to see significant rises in property prices due to the presence of the railway but this may come in time once the issue with Brexit is settled and there is more economic certainty. Journey times from Tweedbank to Edinburgh Waverley are less than an hour and residents in any new housing at Lowood will only be a short walk from the station.

"The development of Lowood Estate will require substantial investment and there is a restricted market for large scale developments of this nature. There are few developers who would wish to acquire such a quantity of land in one tranche, tying up capital for several years and with all the required infrastructure costs. This is a high risk asset to purchase."

59% of young salmon failed to complete run to coast

by EWAN LAMB

The first phase of a research project by the Tweed Foundation to discover survival rates among the river's sea-bound smolt (young salmon) population has produced results suggesting virtually all of the losses occur between Galashiels and the village of Sprouston, near Kelso.

The so-called smolt run by tens of thousands of juvenile fish involves a 50-mile journey from the Gala area to Berwick-on-Tweed is a vital element in the overall well-being of Tweed's salmon numbers. So a survival rate of just 41% as shown by the initial stage of the research would seem to set alarm bells ringing.

But the authors of the report on the 2019 pilot study involving the tagging of just 60 smolts from the Gala Water with transmitters warn the sample was too small to draw any firm conclusions. Much more work will be needed before recommendations to protect the smolts can be put forward. It has been suggested many of the smolts fall prey to predatory birds - cormorants and goosanders - as they head downstream.

The newly published report explains: "The salmon smolt is the final product of the river. Losses at this stage of the life cycle cannot be replaced. With numbers of returning adult salmon continuing to decline due to increasing marine mortality, a Tweed smolt tracking study has been setup by The Tweed Foundation to investigate in-river smolt survival and assess the management options available. 

"The 2019 tracking work is a pilot study that will guide more comprehensive work in 2020 and 2021. Sixty smolts from the Gala Water were tagged with acoustic transmitters and tracked down the main river (a distance of 80 km) with fixed and mobile receivers to determine smolt survival to sea and where losses took place.

"Thirty-nine of the 60 tagged fish came out of the Gala Water. The remaining fish either did not leave the Gala Water or were removed from the analysis due to a receiver not working in Berwick harbour.

Sixteen out of the 39 tagged fish that were detected at Galafoot were recorded at the receivers located in Berwick (41% survival).  With such a small sample relative to the overall population, it cannot be assumed that these results accurately reflect the wider population of smolts.

"Twenty-one out of the 23 tag losses were between Galafoot and Sprouston (91%), even though most of this stretch of the river has licensed mitigation in place for goosanders and cormorants (scaring and control). The remaining two smolt losses were between Sprouston and Cornhill, meaning that there were no recorded losses between Cornhill and Berwick."

According to the research team if the losses concentrated in the Middle Tweed accurately reflect the Tweed smolt population, then the implication may be that the current licensed management for goosanders needs to be reviewed, with planned tracking work in 2020 and 2021 testing alternative strategies for improving smolt survival.

It is hoped to expand the study for future years if sufficient funding can be secured. Smolt tag sponsorship will also be on offer for those who wish to support the important work.

But the report repeats its warning: "It is important to remember that a sample size of 39 tracked fish represents a fraction of a percent of the total smolt population. To provide some context, the annual Tweed salmon smolt production could be between one and two million smolts per year. For the Gala Water we have a more accurate estimate of salmon smolt output of 15 to 20,000 fish each year."

The report then goes on to say: "With the continuing caution of making strong conclusions about the results due to the relatively small sample size, some consideration can be given to the number of goosanders and cormorants in the river during the study and their potential impact upon the smolt run.

"Regular counts of goosanders and cormorants are carried out by the Tweed Foundation and River Tweed Commission staff with assistance from volunteers in January, April, May and October each year.

"On 4th April this year we counted 250 goosanders and 44 cormorants between Ettrickmouth and Berwick which covers the extent of the (smolt) tracking study area. The count of 250 goosanders was the second highest on record (compared to an average of 174). Through April and into May, male goosanders leave the river for their annual migration to Northern Scandinavia and female birds move into the tributaries to nest. May counts are therefore normally much lower: this year’s count, on the 22nd May, 2019, recorded 118 goosanders and 14 cormorants. 

"Cormorant numbers are much lower than goosanders, particularly in May, because they migrate back to the coast to breed. As their potential damage to the smolt run is therefore minimal, goosanders present the larger threat to the smolt run."

Previous research in the 1990s indicated Tweed goosanders were consuming five smolt-sized salmon per day during the smolt run, which is low relative to Northern rivers (often between 15 and 20). 

"To provide some context for potential damage to the smolt run, using a figure of 200 goosanders for April and May (higher than the average) and a consumption of five smolts per day produces a smolt loss of 61,000 fish. A loss of 61,000 smolts out of 1,000,000 (probably an underestimate) produces a ballpark figure of a 6% loss, which is much smaller than the figure of 59% produced from the 2019 tracking work."

Future smolt tracking work as part of the study may focus on the comparison of survival rates between areas of high bird predator management (scaring and removal) in the Middle Tweed with areas that have no management. 

"Detecting a significantly higher survival of smolts where bird numbers are managed would provide the evidence that more intensive, targeted, mitigation is required for a measurable improvement in smolt survival. Ultimately, the aim has to be the ability to strike a sensible balance between the management of the abundance of smolts, that are successfully able to negotiate their way to the sea and the number of avian predators.

"A pilot study to track goosanders is also being carried out in Autumn 2019, which will potentially allow birds to be tracked during the smolt run in 2020. This will allow us to gain a better understanding of their feeding behaviour and, in particular, where they feed, and to investigate the effect of scaring techniques."

End of SB Cares? - Yet another costly debacle?

DOUGLAS SHEPHERD reports

Borders councillors voted unanimously on three separate occasions to set up an arms length company with 850 staff to deliver social care services including additional expenditure of more than £1.8 million in set-up and marketing costs.

But just four years after the new company was born, reports in this week's local newspapers suggest SB Cares, a limited liability partnership (LLP), could be wound up with the vital care service, its £17 million annual budget, and its workforce of over 500 full time equivalents taken back in-house.

The business has been beset by management and financial problems throughout its short life. SB Cares is one of only three social care Arms Length External Organisations [ALEOs] in Scotland, the others are based in Glasgow (Cordia) and Aberdeen (Bon Accord).

Scottish Borders Council's elected members appear to have been highly impressed after local authority managers called in consultants to draw up a business case for the transfer of the service. Not one councillor voted against the proposals when they were considered in public in June and October 2014, and finally in private in January 2015.

The business case had been produced by 'specialist' firm Care & Health Solutions, based in Wolverhampton, and was backed up by a series of  highly positive reports and recommendations from the council's chief executive's department. A predicted saving of more than £5 million on the cost of delivering the service was included in the paperwork.

At the same time the June 2014 report to council proposed: "To ensure that the LLP can focus on the delivery of the benefits and shift towards a more flexible way of working offering additional services across the Borders additional running costs for staff management, property and marketing of the new services will be required of £1.827 million over 5 years.”

And in October of that year another report advocating the go-ahead for the ALEO warned: "Doing nothing is not an option".

The same report revealed: "“A recent visit to Cordia (Glasgow’s social care ALEO) by Officers and Members was helpful to discuss in practice the relationship between Glasgow City Council and Cordia, how efficiencies have been made, and business opportunities that have been developed."

The latest report to members, which was only published a few weeks ago and covered the 2018/19 financial year showed a comprehensive loss for SB Cares of £2.573 million, up from £735,000 in 2017/18. According to that report: "The major movement in the financial statements was a net increase of £3 million in the actuarial valuation of the LLP's pension liability obligation".

Over the twelve months covered by the report the company's hard-working staff supported over 12,000 clients involving 15,000 visits per week to enable 900 people to remain in their own homes.

A paragraph entitled Financial Management declared: "Cash flow management procedures are in place to ensure that resources are managed effectively". Cumulative 'savings' of £3.656 million were also recorded.

Net liabilities of £7.278 million showed a considerable increase from the 2017/18 figure of £4.705 million. In conclusion members were told: "The report and financial statements for the year demonstrate that SB Cares continues to improve and drive forward with its service and financial priorities".

However, a council statement published on the Southern Reporter's website says: "As part of our Fit for 2024 transformation programme, the council is conducting a review of all services.  This includes SB Cares as a council-owned limited liability partnership and is aimed at ensuring that we provide the best possible care to the people of the Scottish Borders.

"A report is being prepared for full council at the end of September which will consider the future operating arrangements for SB Cares as part of the Fit for 2024 programme. This may include a recommendation to bring SB Cares back under the direct control of Scottish Borders Council. SB Cares staff have been briefed on this position and reassured that, should there be any changes, these will not affect their terms and conditions. Further staff briefings will be provided in due course.”

In 2018 a special report on ALEOs by public spending watchdog Audit Scotland included the following passage: "Councils should consider the risks associated with ALEOs at the outset. Oversight, accountability and good management are essential. In managing ALEOs, councils should continue to apply the principles in the Following the Public Pound Code."

No Brexit worries for Borders PFI managers

EXCLUSIVE by DOUG COLLIE

The partnership which manages a Private Finance Initiative (PFI) for Scottish Borders Council has reported an operating profit of £945,000 for 2018 and passed on a dividend of £259,000 to its Luxembourg shareholders under an arrangement which is costing local taxpayers tens of millions of pounds.

SBC will have to find £10.9 million from its increasingly stretched resources in 2019/20 to meet its PFI payments to Scottish Borders Education Partnership Ltd. (SBEP), based in Maidenhead, Berkshire. According to its latest set of accounts the council will fork out £273 million over the next 25 years thanks to the PFI project, sanctioned by councillors in 2006/07.

In its 2018 directors' report filed with Companies House SBEP says: "The principal activity of the company is the provision of operational and maintenance services, including related financial arrangements for three schools in the Scottish Borders (Eyemouth, Earlston and Berwickshire High in Duns) in accordance with a project agreement entered into with SBC.

"The company is currently operating the facilities for the period to November 30th 2038, providing a full range of facilities management services under a contractual agreement that provides a regular income stream subject to deductions for service shortfalls and the unavailability of the facilities".

The SBEP directors Albert Naafs and Frank Schramm go on to say: "The UK is due to leave the European Union by October 31st 2019. The terms on which the UK may withdraw from the EU are not clear and it is difficult to evaluate all of the potential implications on the company's trade, customers and suppliers and the wider economy.

"However, the company is not affected by the continued uncertainty surrounding the UK's membership of the EU, as the cash flows generated from the PFI concession asset are secured under contract with SBC, a government body".

It has been calculated that SBEP has racked up over £8 million in operating profits during the lifetime of the arrangement so far. And it seems the company will continue to benefit from this extremely costly method of financing public sector infrastructure.

The report adds: "The project continues to perform generally in line with the modelled expectations, and management of the scheme both logistically and financially remains under control. The directors remain confident that the company will maintain the current level of performance and keep meeting the obligations under the contract".

SBEP's turnover in 2018 totalled £3.484 million (£3.429 million in 2017) while the operating profit of £945,000 was slightly down on the previous year's £1.054 million.

The partnership has loans, overdrafts and debts totalling £74.445 million. Borrowing of £68.33 million is made up of £15 million held by Prudential Annuities Ltd and £53.33 million held by Prudential Retirement Income Ltd with a 2.604% index linked coupon.

All of the share capital in the parent company - Scottish Borders Education Partnership (Holdings) Ltd. - is held by BBGI Investments SCA which is in turn an indirect and wholly owned subsidiary of BBGI SICAV SA, both registered in Senningerberg, Luxembourg.