Scotland's top judge dismisses Frost debt appeal

EXCLUSIVE by OUR COURT REPORTER

The latest attempt by bankrupt businessman Martin Frost to have responsibility for a £3.25 million debt shifted from one of his Avocet companies has failed after a ruling in a Court of Session appeal case delivered by Scotland's leading judge Lord Carloway.

In an Opinion published on the Scottish Courts website today it was confirmed that Lord Clark's earlier decision to approve a so-called Petition of Rectification - the correction of a legal drafting error - from United Kingdom Agricultural Lending (UKALL) Ltd would not be overturned.

Mr Frost, the former chairman of the Avocet "disruptive technology" group of companies, had repeatedly claimed the £3.25 million was owed to UKALL by another firm, Hamilton Orr Ltd., and not by Orrdone Farms Ltd., one of his insolvent businesses which is now in administration.

Lord Clark, in a judgment handed down in May, also rejected Mr Frost's allegation that the appointment of joint administrators to Orrdone Farms had been "illegal and invalid".

The new Opinion shows Mr Frost was not in court for the appeal hearing on December 17th "on grounds of ill health". There was no appearance either from his wife Janet Orr Frost while Hamilton Orr, the first reclaimers (appellants) were represented by Paul Newsham, the Lancashire-based accountant who has served as a director of several Avocet companies.

In his judgment, Lord Carloway (the Lord President) sitting with Lord Malcolm and Lord Turnbull explained a loan facility for Orrdone Farms had been created with UKALL.

"Unfortunately, and as was admitted by the drafter, namely Russell Spinks, a solicitor, in an affidavit lodged with the court, the standard securities were in error framed in respect of the indebtedness of Hamilton Orr and not Orrdone Farms" said the judge.

The Lord Ordinary (Lord Clark) granted the rectification petition. Hamilton Orr and the third and fourth respondents (Mr and Mrs Frost), who are personal guarantors of the debtor, reclaimed (appealed) the Lord Ordinary’s decision. They contended that the standard securities reflected the true picture - that the loan was to be made to Hamilton Orr, not Orrdone Farms.

Lord Carloway states: "In the respondents’ joint grounds of appeal, joint note of argument, and in written submissions for Hamilton Orr and the fourth respondent, which were presented at the hearing, it was argued that the Lord Ordinary erred in failing to draw various conclusions from the productions which were before him, and generally in failing to prefer the respondents’ submissions.

"The respondents made particular criticisms of the Lord Ordinary’s acceptance of the evidence contained within Mr Spinks’ affidavit; alleging that Mr Spinks had acted unprofessionally. The respondents criticised the Lord Ordinary for failing to take into account that Orrdone Farms was a wholly owned subsidiary of a parent company with “no commercial benefit” at the time of the transaction. Criticisms in relation to the manner of the appointment of administrators to Orrdone Farms were also made."

The judgment goes on to say: "The fourth respondent’s [Mrs Frost] submissions detailed complex family relationships between various actors involved in the farming business of the group of companies owned by the Orr family and their associates. She alleged that the present dispute arose as a result of both certain members of her extended family and the lawyers involved in the transactions telling lies."

In dismissing the appeal, Lord Carloway adds: "There is no merit in any of the respondents’ arguments. In order to grant their rectification, the Lord Ordinary required to be satisfied that the standard securities did not accurately reflect the intention of the parties at the date when they were executed. The weight of evidence contained in the productions and the affidavit of the principal solicitor involved in the transactions overwhelmingly pointed to the conclusion that the identification of the debtor in the securities did not reflect the parties’ intentions.

"It demonstrated that the parties’ intention at the time was that the loan relative to the securities would be made by the petitioners to Orrdone Farms and not Hamilton Orr. That loan was to be secured by a number of means, including standard securities over the farms owned by Hamilton Orr. The court has not been provided with the commercial reasons for that arrangement, but it is not unusual for related companies to provide security for debts owed by one another."

And according to Lord Carloway: " The court is not persuaded that it would be contrary to business common sense for it to find in the petitioners’ favour. The allegations made against the lawyers involved in the transaction and the fourth respondent’s various family members are unsubstantiated and largely irrelevant. There is no reference to a loan by the petitioners to Hamilton Orrin any of the productions, with the exception of the standard securities themselves. The court therefore accepts, for the reasons given by the Lord Ordinary, that the securities were drafted erroneously in that regard. No substantial basis for interfering with the Lord Ordinary’s findings in fact on the central issue have been presented.

"The third and fourth respondents do not have title and interest to resist this petition. Their only interest is in their capacity as guarantors of the debtor. The basis of that liability is contained in the terms of personal guarantees and a facility letter. The rectification of the standard securities will have no bearing on their personal obligations to the petitioners. The standard securities do not require to be rectified in order to enforce the guarantees. The arguments regarding the appointment of administrators to Orrdone Farms do not add anything to this. The appointment, as highlighted by the Lord Ordinary, has not been challenged."

Destroying information and an "amicable divorce"

by DOUGLAS SHEPHERD

Newly released documents reveal how senior Borders council officials and top brass from a debt-ridden waste management company discussed the possible need to destroy sensitive information following the decision to pull the plug on a multi-million pounds treatment project.

One of the last acts in the disastrous relationship between Scottish Borders Council and New Earth Solutions Ltd. (NES) was the signing of a six-year confidentiality agreement which kept hundreds of documents and items of correspondence under wraps from 2015 until this year. But now the vast collection of paperwork is being made public for the first time after a Freedom of Information request to SBC. 

At the centre of the abandoned £80 million contract between SBC and NES was a £23 million project for a "state of the art" waste treatment plant to deal with the region's black bag rubbish at Easter Langlee, Galashiels.

But as most locals know the 24-year contract, signed in 2011, had to be shelved four years later when NES could not come up with the money for the treatment facility while the company's much trumpeted New Earth Advanced Thermal [NEAT] technology simply would not function.

The decision by council officials to terminate the contract was conveyed to NES executives at a private meeting on February 10th 2015. The notes of proceedings at that meeting are among the documentation obtained via FOI. The identities of a number of the participants have been redacted so that only initials are used. But the names of council representatives are included.

This paper shows the council had already drafted a press release before telling NES of their intention to deem the project agreement (PA) dead in the water.

At a pre-meeting before New Earth directors were called in, CS from law firm Brodies, the council's legal advisers for the project who collected more than £650,000 in fees, said he would talk them  through/show them [NES] the relevant parts of the PA that set out that no compensation was due.

The council's Rob Dickson (RD) told colleagues that on funding NES were in a far weaker position than they were at signing of the PA or the Deed of Variation (2012). He added that the financial model was only marginal and was based on a lot of assumptions and on this basis NES were overly optimistic on funding.

When the two sides did get together and the decision was conveyed to the NES team their man DS commented that this was "not a complete surprise". He added that NES were looking for an “amicable divorce”.

But after reviewing the council's draft press release DS said that while the general flavour was OK there was too much detail in the middle section. He added that NES want to emphasise that the project was an innovative project that NES and SBC had been working on for some time and that the market landscape had changed.

The meeting note then goes on to show: "DS asked whether there were any termination obligations on the transfer of information/documents between NES and SBC.

"CS said that there are provisions in the PA regarding “confidential information” and that Brodies would advise on this.

"RB said that NES considered the financial model and NEAT technology documents confidential.

"CS, having consulted the PA, confirmed that while there was no obligation on either party to return confidential information there was an obligation to maintain records for five years after the termination of the PA. He added that the parties could reconfirm or restate these obligations.

"RD said that if NES thought that there was information SBC held that NES wanted returned or destroyed to let SBC know.

"RB highlighted that NES would like the NEAT data that had been passed to (consultants) SLR returned/destroyed and asked about Freedom of Information/Environmental Information matters.

"RD said that this was a good point and that SBC needed to establish a party line on this. He also said SBC and NES should agree between them what information was “confidential” and how to deal with it.

"CS mentioned that Freedom of Information/Environmental Information legal requirements could trump confidentiality provisions.

"RD said that SBC’s base position was not to release any information from the PA or Deed of Variation and if they were under pressure to release any such information they would speak to NES first."

The so-called 'amicable divorce' cost Borders taxpayers more than £2 million while NES - soon to be dissolved with huge debts - also spent several millions on the doomed project.

A confidential report on the fiasco submitted to SBC councillors on February 19th 2015 also referred to the possibility of a PR disaster.

The document, written by Ewan Doyle, the Easter Langlee project manager, says: "There is an obvious risk that the decision to terminate the New Earth Solution contract, after the Council has spent circa £2M to get it to this point, will be the opportunity for press to create a negative story that will be published locally and there may also be national press interest. 

"The Project Team will endeavour to get a joint statement prepared with New Earth Solutions to proactively go to the media with, otherwise the Project Team and Corporate Communication have drafted a press release to answer the anticipated media enquiries."

Later the published statement told readers: "Since the contract was signed in April 2011 there have been significant changes with regard to Scottish waste policy and regulation, and project-specific issues in terms of technology and funding, the council revealed."

There was no mention of the substantial loss of public money which had to be subsequently written off by the council.

£30 million "Mayo pot" for sale on Frost company website

by OUR OWN REPORTER

A 'rare' 18th Century Chinese three-legged pot, said to have been stolen when the country's Imperial Palace was ransacked during the second opium war is being offered for sale online with a price tag of £30 million by a company with close links to bankrupt businessman Martin Frost.

The recently developed website of Frost Books & Artifacts (FBA), a business concern with premises in Bar Street, Scarborough, offers 3,500 rare and antique books for sale as well as over 500 tapestries, weapons and ancient artifacts.

But the undoubted star item of stock is that Oriental relic which carries the description: "Chinese. Three legged pot. 'Mayo'. Date: 18th Century; size (cm) 25 X 25 X 25. Condition, Excellent. £30,000,000.00. History & Background. Commission sale by FBA on behalf of a third party".

Shareholders in the Avocet group of companies, formerly chaired by Mr Frost, will already be familiar with the so-called Mayo Pot for it was featured in a letter he sent to investors only three months ago.

On September 21st - a month before his bankruptcy hearing - Mr Frost wrote: "The Frost family is donating one million pounds to the crowdfunding entity being setup by my colleague Dr. Bob Jennings. This crowdfunding entity is non-profit making and will give money to deserving individuals caught up in any web of insolvency practitioner deceit.

"The Frost family is donating a further one million pounds to promote a commercial enterprise to offer third party finance which overcomes the difficulty a claimant might have in bearing the often-high costs of litigation. Further publications shall explain.

"The Frost family is donating ten million pounds to an Irish institution to seed corn finance the Avocet ‘hydroponics’ & ‘heathy beef’ concepts."

He then went on to describe how this largesse would be financed.

The newsletter stated: "Frost funding to the above derives from the ‘Mayo Pot’ sale. By arrangement, on Thursday 23rd September 2021 the ‘pot’ will be lodged with a Leeds solicitor. Subject to internal agreement, the Frosts have mandated its sale subject to an export license. 

"Note: an Irish ancestor of my mother, Lord Mayo, basically stole it from a mate who had physically sacked China’s Imperial Palace during the Second Opium War. 

"Some years ago, Sotheby’s valued the ‘pot’ at over £30 million – two similar pots have recently gone to Chinese collectors for over £40 million.  In 2018 & 2019 the family discussed the ‘Mayo pot’ sale with accountants Ryecrofts of Newcastle who thought the wisest thing for the Frost family to do was to tax efficiently sell the ‘pot’. Bottom line if sold tomorrow one should expect net of tax and fees some £20 to £30 million depending on who turns up to the auction."

It appears the extremely valuable artifact did not sell in September although presumably it remains in the ownership of the Frost family.

Companies House records show the sole director of Frost Books & Artifacts Ltd. is Lancashire accountant Paul Newsham who has also served on the board of a number of Avocet businesses. The shareholders in the book selling and antique business are two of Mr Frost's relatives.

A Facebook post by Advantage Web Designs, of Scarborough, the firm which designed the FBA website gives further details about the Bar Street operation.

Advantage state: "We'd like to say a big thank you to Martin and Janet Frost, of Frost Books & Artifacts for asking us to work with them on a brand new website. They have taken their first step in to selling rare books and artifacts online.

"They already have a small shop and see this as a way of expanding their business and drawing in customers from all over the world. They stock a wide range of rare books and artifacts from around the world. Prices range from £30 to £30 million with free shipping for all items costing £150 or more."

"Avocet" farmhouse haul under the hammer

by OUR BUSINESS STAFF

A vast treasure trove of antiques, paintings, furniture and books recovered from the Berwickshire headquarters of the troubled Avocet empire overseen by bankrupt businessman Martin Frost is being auctioned off by agents for the liquidators of one of the failed companies.

Representatives of specialist firm Eddisons removed the valuable contents of Harcarse Hill farmhouse, the former home of Mr Frost where plans were laid for a number of ventures, including the development and production of a so-called revolutionary fuel alongside "ground-breaking" agricultural methods.

However, none of the projects produced an end result before Harcarse owners Orrdone Farms Ltd collapsed into administration. A second firm in the Avocet stable, Omega Infinite PLC was the subject of a compulsory liquidation last year, and the house contents will be sold on behalf of liquidators Begbies Traynor.

A progress report by Omega's liquidators explained: "Assets at Harcarse Hill Farm: Eddisons attended the premises owned by Orrdone Farms and recovered assets.

"As there is some ambiguity regarding the ownership of the items an arrangement has been reached with Orrdone Farms administrators that the net proceeds from the sale of the items are held jointly by solicitors to Omega Infinite PLC (in liquidation) and Orrdone Farms Ltd (in administration) and not released to either party without prior agreement or court order".

Mr Frost, who was made bankrupt by a judge in October has repeatedly claimed in letters to Avocet's hundreds of shareholders that personal family items kept at Harcarse Hill had been stolen.

A report in today's Scotsman newspaper includes details of some of the more notable and usual items among more than 600 lots which will go under the hammer.

According to the newspaper: "Among the art and antiques, Mr (Paul) Cooper, [a director of Eddisons] said that the picture section was particularly exceptional and featured work from a number of Scottish artists including "six watercolours by the Berwick-born marine artist, and Royal Family favourite, Frank Watson Wood."

"Mr Cooper said the book, furniture and ceramics sections also had several priceless pieces, including items that originated from China.

"He said: "There are more than two dozen lots ranging from vases and urns to chargers, plates and decorative pots."

"The farmhouse also yielded well over 2,000 books including numerous rare and collectable volumes that are being sold individually."

He added: "The furniture ranges from George III right the way through to IKEA.

"There are some particularly fine early-19 century pieces that were bought at considerable cost from well-known Edinburgh antiques emporiums."

Mr Cooper told The Scotsman that it was an extraordinary" find. He said: "The place was quite extraordinary, absolutely rammed with stuff.

"There were so many pictures that you could hardly see the wallpaper.

"Every room was crammed with furniture, some antique, some not so antique. "On top of that, there were Oriental ceramics, books, militaria and collectables of every description, everywhere."

The sale catalogue can be accessed here: https://auctions.eddisons.com/auctions/8022/eddiso11213

Truth behind abandoned £23 million Borders waste project

EXCLUSIVE by EWAN LAMB

Leading members of Scottish Borders Council continued to put a positive public spin on a planned £23 million waste treatment centre on the outskirts of Galashiels during October 2014 even though the project remained entirely unfunded while contractors were unable to make their embryonic technology perform satisfactorily.

But though council leaders remained convinced the "state of the art" facility which was designed to convert household waste into energy would actually materialise, behind the scenes a very different situation had already developed.

The combination of factors which resulted in the entire project being abandoned just four months later in February 2015 have been disclosed for the first time following the release of a large collection of commercially sensitive documents which had been inaccessible under a six-year confidentiality agreement signed by SBC and New Earth Solutions Group (NESG) in 2015.

The paperwork shows how councillors granted New Earth a six-month 'moratorium' - despite the project already being behind schedule - from February to October 2014 to see if the company could resolve its funding and technology issues. But at the end of the six months the state of the scheme was "significantly weaker" than when the original deal was signed in 2011, according to the documents.

A revised project with completion pushed back to 2017 included the incorporation of the so-called New Earth Advanced Thermal (NEAT) gasification technology to convert waste into electricity.

This conversion technique was still being trialled by NES at its Avonmouth plant, near Bristol where a large deputation of elected members and officers from SBC made a site visit in October 2014,

An article published by the waste management trade magazine Let's Recycle that same month revealed a further delay to the Borders plans.

But Councillor David Paterson, executive member for environmental services, told letsrecycle.com that the Galashiels plant would implement the technology on a ‘smaller-scale’ than in Avonmouth, which he visited as part of a 16-strong delegation to the site earlier this month.

And Councillor Paterson added that the live demonstration of the technology had been ‘very informative’ and an ‘insight into what we could have in the Borders’.

Meanwhile council leader Councillor David Parker said the Avonmouth visit was “valuable and illuminating”.

“The integrated WTF [waste treatment facility] is a really big deal for our council as it will transform the way we deal with our waste and help us comply with our zero waste obligations,” he told the Border Telegraph following the Avonmouth trip.

However, a report compiled after the six-month standstill concluded: "Overall, the project team do not believe that NES have submitted satisfactory proposals following the moratorium period. The financial proposals are significantly weaker than submitted at contract signature, without a ‘funder of last resort’ and the marginality of the financial model is a major concern if NES wish to obtain financial close without a change to the gate fee [the cost of treating the waste].

And the newly released report on which the council decided to abandon the entire £80 million 24-year deal with NES also reveals that many of the goals set by the company had not been met. It states: "During the moratorium period NES did not achieve all of the targets set out and out of 30 tasks: only 15 tasks were 100% complete, 5 tasks were between 20-80% complete and the remaining 10 tasks had not started.

"Three of the major tasks that were not complete during the moratorium were the testing of the gas engine on full load, the installation and commissioning of the gasifier and the continuous operation of the syngas clean-up for 120 hours (100 hour test have been recorded subsequently). This delivery performance aligns with previous experience of the Research & Development plant, where, although progress has been made New Earth Solutions have not fully met their own expectations of technology development."

NES executives remained convinced the NEAT technology would become commercially viable, given time and further work at their R&D facility.

FOOTNOTE: The NEAT system merits a brief mention in a technical paper recently published by the UK Government's Department for Business Energy and Industrial Strategy (BEIS). The publication is called Advanced Gasification Technologies – Review and Benchmarking Review of current status of advanced gasification technologies Task 2 report BEIS Research Paper Number 2021/038 – Oct.2021.

Here is the NEAT entry in full which can be found at Page 151:

"New Earth Advanced Thermal technology description New Earth Advanced Thermal (NEAT) gasification system is a modular air-blown system. Each module has a thermal input capacity of 4.2 MWth. According to NEAT the process can be fired on biomass or waste feedstocks. The syngas produced is burnt in a combustor to raise steam for generation of electricity in a steam turbine.

"Reference plants - NEAT had a single operational reference plant at Avonmouth, UK which was closed in 2016.

"Conclusion - New Earth became insolvent in 2016 and the NEAT gasifier was discontinued. The NEAT process has not been proven and will not be considered in any further detail in this study."

Council's forced U-turn on transport of rubbish

EXCLUSIVE by DOUGLAS SHEPHERD

Councillors in the Scottish Borders were advised six years ago that dealing with the region's household rubbish locally represented better value than hauling vast quantities of waste to distant locations for treatment.

But following this week's revelation that 10,000 tonnes of Borders 'blue bin' recyclables will be shipped to Ulster each year for sorting alongside the 2019 decision to haul 42,000 tonnes of residual (black bag) garbage by road to a facility in central Scotland, the 2015 advice has been well and truly turned on its head.

Scottish Borders Council's entire strategy for handling waste had to be completely reassessed following the catastrophic collapse of a 24-year £80 million treatment contract with the now defunct New Earth Solutions Group [NESG] in 2015. The deal had included the planned construction of a £23 million state of the art treatment centre at Easter Langlee, Galashiels.

But the council contractor's inappropriately named NEAT technology could not be made to function in time to allow SBC to comply with Scotland's prohibition of untreated waste going to landfill. To compound matters the debt-ridden NESG was unable to source the money for the Easter Langlee facility.

When the council sensibly abandoned their partnership with NESG in February 2015 much of the background which led to the decision, and reports and correspondence linked to the contract's issues and failures were buried under a six-year confidentiality agreement signed by the parties at the time of termination.

But following the expiry of that agreement earlier this year SBC has been asked via a Freedom of Information request to release copies of the confidential and sensitive documentation so far hidden from public scrutiny.

Among the minutes and reports so far provided by the council is a copy of the 18-page private report submitted to councillors back in early 2015 after it became clear the deal with NESG was doomed.

The report from Project Management Team Leader Ewan Doyle traces the four-year saga of SBC/NESG with the recommendation to pull the plug on the entire venture which cost taxpayers at least £2.4 million.

However, the report  explains that in 2014 the project team commenced the consideration of alternative options to evaluate whether there were viable alternative solutions if NES failed to provide a satisfactory way forward, or decided to walk away from the contract. 

"As part of the consideration of alternative options, the project team developed several solutions that demonstrated that it is better value to treat waste in the Scottish Borders and “offtake” the products produced than to transport large volumes of untreated waste out of the Scottish Borders for treatment."

The alternative solution analysis demonstrated that it would take four years to deliver a waste treatment solution by the Council. But the time allowed for NES to deliver the waste treatment facility had already been extended with a six month moratorium handed to the company to see if it could overcome its major technical and financial difficulties.

By this stage time was not on the council's side. 

The first legislative date and target that the Council had to meet was to treat black bin waste before any residues could go to landfill was January 2021, with the introduction of biodegradable waste restrictions to landfill as required by the Waste (Scotland) Regulations 2012.

In the end SBC had no alternative but to resort to road haulage to solve its waste disposal problems in time to meet the deadline.

We hope to feature further disclosures from the confidential files in the coming weeks.

Borders rubbish heading for Ulster

by EWAN LAMB

The award of a £5.6 million local authority contract to a Northern Ireland waste treatment company will see 10,000 tonnes of recyclable rubbish from the Scottish Borders being hauled the 230 miles to Newry in Ulster each year to be sorted.

Re-Gen Waste Ltd was the only bidder for the Scottish Borders Council 'blue bin' recyclable refuse contract which was up for grabs after being under the control of J & B Recycling, of Hartlepool, Tees-side since 2005. At the last renewal in 2017 that contract was worth £1.35 million over three years.

The new arrangement is scheduled to last for three years with the option of four one-year extensions, so potentially a seven year contract

A spokesman for SBC told Not Just Sheep & Rugby: "This contract is on a different pricing mechanism to the previous one. This one is more strongly linked to market prices for materials. The final cost will vary depending on market rates – right now, they are in our favour. The cost on the contract notice is based on an average of recent cost incurred under our previous contract."

After confirming that the material would be transported by road to Newry, the spokesman explained "We are working with the contractor to maximise the tonnage for each journey to minimise haulage impacts. The contractor also undertakes backload trips so the vehicles are not running empty on either leg of their journey from Northern Ireland.

"It is important to note too that it is a global market for the end products once sorted, so whether going to Hartlepool (as before) or Northern Ireland the end product from the contractor is then being transported all over the world."

Ross Sharp-Dent, Waste and Passenger Transport Manager for Scottish Borders Council, said: “Following the expiry of our previous contract for the transport and processing of dry mixed recycling, a procurement exercise was undertaken by the Council with the available contract put out to tender.

“The successful company, Re-gen, a Northern Ireland based recycling and waste management specialist is a market leader in the processing of and recovery of recyclable materials and currently works for a number of other Scottish local authorities.

“The contract will see Re-gen provide the same service as our previous contractor and process all of the same materials for recycling. As a result there will be no change experienced by the public in terms of what can be put in their bins.

“In 2019 SBC achieved a total recycling rate of 49%, representing an increase of over 10% from the previous year and the largest increase of any local authority in Scotland.

“This is significantly higher than the national recycling average (44.9%) and positions SBC as the highest performing rural local authority in Scotland.

“The increase in recycling performance also coincides with a significant reduction in the amount of waste reaching landfill and a reduction in carbon emissions of 11,000 tonnes CO2e between 2018 and 2019.

“Recycling is one of the easiest everyday actions we can take to reduce our carbon footprint and I would encourage members of the public to play their part.

“A new online platform has been created to help people across the Scottish Borders recycle more by telling them what can and can’t be recycled in their area -https://wasteless.zerowastescotland.org.uk/recycling-sorter.” 

Background provided to us by the local authority explained: "Scottish Borders Council collects dry mixed recyclate at the kerbside from all households in the Scottish Borders as well as community recycling centres and traders. Examples of dry mixed recyclate include paper, cardboard, cans and plastic.

This material is all bulked up at the Council’s Waste Transfer Stations before being transported to a materials recovery facility where it is sorted into its separate parts. Once separated the materials are transferred onto the recycling marketplace for their reprocessing."

Borders Common Good register 17 years in the making!

by DOUG COLLIE

Councillors in the Scottish Borders will this week consider newly completed draft asset registers for the region's valuable Common Good funds, a facility which was advocated by external accountants as long ago as 2004.

There have been repeated complaints down the years that no official public records exist listing the lands, buildings and so-called moveable assets belonging to burgh funds, some of them bequeathed for the common good by royal charter hundreds of years ago.

In recent years it has even been necessary to create new funds for towns such as Coldstream after research showed property included in Scottish Borders Council's portfolio actually belonged to the "Common Good".

The funds which were once administered by local town councils prior to the reform of local government in 1975 are now under the control of the Borders unitary authority. Between them the various funds are valued at well in excess of £10 million with a proportion of the assets invested on behalf of the council by financial experts.

A proposal for a Borders Common Good public register was one of the recommendations contained in a report from accountants Scott-Moncrieff which received local publicity in January 2005 following its completion for Audit Scotland the previous year.

The Southern Reporter newspaper of 14 January 2005 reported: "A probe into how Common Good Funds are administered in the Borders has revealed major failings. Experts pinpointed a lack of control and stewardship in how parts of the funds are handled and produced a blueprint for improvements. The report recommended a review of assets; closer working between the council's planners and estate officers and drawing-up of a register of what is owned by Common Good Funds."

The subsequent attempts to compile a register became mired in controversy.

Public spending watchdog Audit Scotland, in a commentary on SBC's 2009/10 annual accounts, wrote: "The council has disclosed common good as a separate fund in the financial statements and established a common good register. However, objections have been lodged against the Council in respect of the completeness of the common good asset register, and associated income and expenditure.

"It is a complex exercise to conclude the provenance of assets, and officers from Legal Services, Estates and Finance have been involved in investigatory work to determine whether certain council assets ought to be transferred to the common good asset register. This work is not yet complete and additional specialist resource will be invested in this area in 2010/11."

The pressure on Scottish councils to produce public Common Good registers has been ramped up more recently by the Scottish Government following the introduction of the Community Empowerment (Scotland) Act 2015.

Government guidance to Local Authorities in July 2018 demanded: "Establishing common good registers. Section 102 of the Act requires each local authority to establish and maintain a register of property which is held by the authority as part of the common good (a “common good register”). Before establishing a common good register, the Act requires a local authority to publish a list of property that it proposes to include in the register, and to consult on this list.

"The Act provides that the list may be published in such a way as the local authority may determine. The local authority should be consistent in how and where it publishes both the list of common good property and the resultant common good register. Both documents should be available in the same place and in the same format. The local authority must ensure that the public can inspect the list of common good property free of charge and access it electronically.

"Members of the public should be able to access the list from the local authority’s own website. The local authority should ensure that members of the public can view the list in person at local council offices, council hubs and local libraries. The local authority should either produce paper copies of the list or ensure that staff in these locations are able to assist members of the public in viewing an electronic version. Advertising the list

"The local authority should publicise the consultation on its website, on social media or in publications which it produces. It may also be possible to invite expressions of interest from the public or have automated notifications. Equally, if the list of common good property is likely to be extensive, the local authority may also wish to place adverts or articles in local papers to reach a wider audience. Length of consultation. The list of common good property should be made publicly available for comment for at least twelve weeks."

In the Borders case, once local councillors have scrutinised their local draft registers the contents are likely to be submitted for public consultation early next year.