Council fails to lodge accounts for arms length "business"

EXCLUSIVE by OUR LOCAL GOVERNMENT STAFF

A Limited Liability Partnership [LLP] which may or may not have been founded by Scottish Borders Council to run commercial activities at the local authority's Inspire Academy, is breaking business rules by failing to file accounts at Companies House.

The first set of annual accounts for SB Inspires LLP, established by the local authority in November 2021, should have been submitted to the Registrar of Companies by August 3rd this year. But the Companies House internet web page for the Partnership now carries an accounts overdue 'label'.

The absence of the LLP's financial records means its bosses are already liable for a £375 fine (more than one month but less than three months late) with the penalty due to double to £750 after three months.

 According to the UK Government website: "Consequences of not filing: Not filing your confirmation statements, annual returns or accounts is a criminal offence - and directors or LLP designated members could be personally fined in the criminal courts. Failing to pay your late filing penalty can result in enforcement proceedings." 

The LLP's designated members are named in Companies House filings as Scottish Borders Council and another council-run company called SBC Nominees Ltd., a non-trading business.

Several Scottish Borders Council elected members told us last year that they knew nothing about the decision to set up the arms length organisation.

One councillor remarked at the time: "SBC is currently setting up an educational facility to be based in an office at Tweedbank which will be known as Inspire Academy. The LLP may be needed to conduct the commercial side of the operation".

That certainly seemed to be a possibility in February 2022 when council architects submitted a design statement linked to a planning application for the academy.

According to that statement: "The business is an LLP and is a partnering project between Scottish Borders Council and Inspire. The purpose of the business is to equip their clients with digital skills to enable them to fortify their digital business abilities, personal software skills and teach others how to use this technology. Their demographic includes: local businesses, teachers and people who wish to expand on their personal abilities to use digital solutions for everyday activities.

"It is proposed that clients may access the space with pre-agreed booking. The business will be set up to enable research by the clients into new products and provide them with instruction in a workshop type environment. The proposed layout of the space will include a workshop area, a meeting room, focus area and exhibition space."

The design statement made it clear the business would be of a commercial nature, and would also be  "profit making". 

This document added: "There are several elements which make up the business including: research, workshops and teaching. The sole purpose of space is not for Academia or Educational purposes, it is to provide a service which supports a broad demographic. Parts of this commercial enterprise is similar to IT providers, website designers and technology suppliers. It is anticipated the maximum number of occupants within the area will not exceed 80 and would typically be around 45 (including 15 staff members)."

After Not Just Sheep & Rugby’s coverage of the design statement and the Inspire project, we carried a follow-up article on March 2^nd, 2022 which revealed the original design statement produced by SBC staff for the flagship Inspire Academy project had been 'factually inaccurate' and had been withdrawn, meaning the 'private commercial enterprise' had become a 'non-commercial education programme' within the space of two weeks. 

A revised Design Statement declared: "The proposal for this building is to occupy one area of the ground floor as a base for the award-winning Inspire Learning Programme. The pioneering programme seeks to transform learning in Scottish Borders and the building will provide a physical base for the Inspire Learning team to allow the programme to grow and expand its horizon.

"The space will enable Inspire Learning, and SBC, to keep it’s place at the forefront of education. transformation at a time where it forms an important part of the national conversation around education. It will also provide the potential for developing relations with other local authorities and education projects The proposed layout of the space will include a workshop area, a meeting room, focus area and exhibition space. 

"The Business Inspire Learning is an SBC Education programme and, as such is non-commercial.”

We asked the council to explain why there had been a complete U-turn from 'commercial' to 'non-commercial' in less than a fortnight. And we also asked: "It is now apparent that SBC will be funding the venture. We did ask previously for costs associated with the project, but none were provided. So can we again request details of the cost of the project and how it will be paid for?"

There was still no detail concerning the level of expenditure required to set up the academy. But according to a spokesperson at SBC: “The initial design statement was submitted in error and was removed due to its factual inaccuracy. This has now been replaced with an updated brief which more accurately reflects the nature of the proposal."

Scottish Borders Council has been asked for comment.