£190 million IT contractors still to deliver promised 200 jobs

by OUR LOCAL GOVERNMENT EDITOR

Councillors in the Scottish Borders have been told in a report that CGI, the IT company awarded a £190 million contract by the local authority without competition has only delivered a fraction of the 200 highly skilled jobs promised when the deal was signed eight years ago.

The original outsourcing IT contract, worth £92 million and set to last for 13 years, was signed off by Scottish Borders Council and CGI in 2016. An upbeat statement declared the 200 jobs would be created by 2019 in a locally based delivery centre. The partnership was set to generate a potential gross value added of £107 million, it was claimed.

However, three years into the arrangement, only 71 staff were on the CGI payroll, more than forty of them previous employees of the council transferred under TUPE terms (Transfer of Undertakings Protection of Employment).

Then, in October 2020, SBC announced the contract with their IT providers was being extended until 2040, adding £99 million to the deal's value,

According to a report prepared for the council's External Services/Providers Monitoring Group by Director of Finance Suzy Douglas: "CGI currently employ 65 members in the Borders region and have between 80 and 96 members working on Borders activity."

The figure means fewer staff are employed locally by CGI than the 71 on the payroll five years ago.

Ms Douglas's report, to be considered at a meeting of the monitoring group next week, adds that the numbers in the document "can be compared against the 169 projected target for 30/09/24 and the 209 aspirational target for the same period. 

"Two new graduates have commenced from the region, a further list of candidates have been aligned to open roles and further roles have been actively recruited. The next recruitment event in Tweedbank is now being planned. CGI intend holding these events twice per year in conjunction with the continuous drive to increased headcount from within the Borders region."

A critic of the £191 million deal commented: "It is outrageous that even counting CGI employees 'working on Borders activity' who are by implication - not located here - they don’t get to the 200 jobs talked up in 2016.  The important issue was skilled jobs in the Borders…that was one of the reasons behind CGI getting prestige new office premises right at the Tweedbank railway station. It feels as though the Borders has been 'had'”.

Outsourcing work has certainly been lucrative for CGI IT UK, according to the Canadian-controlled British subsidiary's accounts. Revenue from outsourcing services is quoted at £512.798 million in 2023 (up from £388.479 million in 2022).

Profit before tax of £280.406 million last year was well above the 2022 figure of £162.037 million. This allowed the firm to pay dividends of £229.695 million.

CGI IT UK employs a total workforce of 5,730 in this country.

We asked the company: "Can CGI offer a comment on the figures, and explain why the promised 200 Borders-based jobs have never materialised?"

In reply, a spokesman told us: "We do not comment on our commercial arrangements with clients".  

A-listed bridges not in great shape

by OUR LOCAL GOVERNMENT EDITOR

A second nationally important road bridge at an iconic Borders location is in urgent need of restoration with an initial phase of masonry repairs likely to cost the local council around £100,000.

Concerns over the current condition of Old Drygrange Bridge, which spans the Tweed near Melrose follow the closure several years ago of another A-listed structure, the Kalemouth suspension bridge over the River Teviot between Jedburgh and Kelso.

An extensive project to replace the deficient timbers on the Kalemouth bridge is estimated at £1.1 million. The work will not commence until Scottish Borders Council learns whether its applications for grant aid have been successful.

The Drygrange structure is currently the subject of a planning application by the council for listed building consent to restore some of the stonework.

According to a report prepared by council bridges staff: "Drygrange Old Bridge carried the A68 trunk road traffic until 1974 when it was bypassed by a prefabricated box-girder bridge by Sir Alexander Gibb and Partners. A short distance upstream stands the towering, 126ft high Leaderfoot Railway Viaduct of 1865. Together, these three intervisible bridges reflect changing approaches to bridge engineering over a two century period. Old Drygrange Bridge is sometimes referred to as the ‘Fly Boat’ bridge in reference to an earlier ferry crossing at Leaderfoot."

Alexander Stevens, the designer of the Drygrange bridge, saw his plans completed in 1778.

According to the listing: " Elegantly proportioned, the crown of its broad central arch is less than 3ft thick. Longitudinal cavities within each spandrel are designed to reduce the weight of the structure.  The use of prow-like cutwaters was also very new to Britain in 1780 and this is one of the first examples. 

"The recessed roundels within the spandrels with carved urn ornaments provide additional character. The dentilled string course marks the level of the original roadway which was raised toward the ends at a later date to make the carriageway more level. The bridge remains an outstanding example of late 18th century bridge engineering."

However, recent inspection reports on the condition of the masonry show it in a less than outstanding light.

One of the papers in support of the planning application states: "The bridge stonework is in a deteriorating condition.  There are separation cracks to the arch barrels behind the voussoirs, water ingress in areas, damaged / cracked voussoirs, cracked / loose / delaminated stonework to the spandrels, loss of rendering, vegetation growing from the spandrels and areas of weathered stone, particularly in areas where cement pointing is evident. 

"The curved section of the south-west corner of the bridge where the bridge widens is in particularly poor condition with the stonework being heavily cracked, fractured, loose and voided and is now in need of intervention from a safety perspective and to prevent the current defects manifesting into a more considerable issue."

A council spokesman told us: " The current scheme will see a small area of stonework on the south-west corner of the bridge repaired.  This isolated area of stone repair will be funded by SBC and the associated costs are, as yet, unknown but likely to be circa £100k."

As previously reported here, the local community in the vicinity of Kalemouth Bridge, the creation of naval captain Sir Samuel Brown in 1830, has been concerned over the state of the 180-ft. long structure for some time. It was closed to road traffic in August 2020, and remains shut to this day.

When asked about the latest situation regarding Kalemouth, the council said: "SBC continues to progress plans for the timber deck replacement of Kalemouth Suspension Bridge.  Applications are being made for external funding from Historic Environment Scotland and the National Lottery Heritage Fund to help with the total estimated £1.1M costs for this project, however, the success of these applications will not be known for some time."   

Borders archaeological projects to feature at conference

by LESTER CROSS

The discovery of a pre-historic settlement on the site of a Roxburghshire distillery development, and the use of heritage at Jedburgh Abbey to benefit people with dementia are just two of the projects for discussion at this weekend's Edinburgh, Lothians and Borders annual archaeology conference.. 

Experts and enthusiasts will gather in Queen Margaret University, Musselburgh on Saturday to hear accounts of archaeological fieldwork and research being carried out across the region.

A total of four projects in the Scottish Borders region are included on the conference programme.

An update on multi-period archaeology uncovered at the Mossburn Distillery site, south of Jedburgh, will be provided by David Sneddon, of Clyde Archaeology.

According to an abstract of Mr Sneddon's talk which is available on the conference website pages, during 2024 archaeological excavations were undertaken in advance of a new distillery being constructed on the site of the former Jedforest Hotel. 

"Initial trial trenching identified six areas where archaeological remains were present that represent both prehistoric and more recent activity. Although construction is still in progress and no post-excavation analysis has yet been undertaken, the presentation will provide a short summary of the findings so far focussing on two of the most significant areas of archaeology uncovered. 

"These include prehistoric burial located on the raised edge of the Jed Water where evidence of enclosed space, cairns covering possible burial pits, a cist and a later stone lined structure were all found in close proximity to each other. Both the cairns and cist appear to have been modified after their initial use and questions remain over whether this represents organised reuse of the features or robbing. On the lower lying flat ground closer to the river several features were also excavated that indicate late prehistoric or early medieval metal working was taking place on the edge of a formerly wet and boggy area, likely away from the main settlement."

Fiona Davidson, from Historic Environment Scotland, will outline the connections that have been forged between Jedburgh Abbey's globally known remains, Alzheimer Scotland and a group of individuals with dementia. 

The abstract for this topic explains: "Opportunities to explore history and culture have been found to offer a range of benefits to people with dementia, including social engagement, cognitive stimulation and improving general feelings of well-being. 

"The At Home @ Jedburgh Abbey project, delivered by the Learning & Inclusion Team at Historic Environment Scotland in partnership with Alzheimer Scotland, used local heritage to support people impacted by a dementia diagnosis. Using archival and archaeological material, participants compared the abbey as a home with their own home, sharing stories and making links, while also finding out about the history of the site, and feeling more comfortable accessing and being on a historic site.

"This talk will look at how heritage can support health and wellbeing and how a dementia diagnosis doesn’t prevent people from exploring new interests and learning opportunities."

A third talk is entitled Phrenological Fortunes - The Halter Burn Story, a collaborative project on both sides of the England-Scotland border featuring Dugald MacInnes, of Archaeology for All and the Border Archaeology Society (BAS).

"The present survey of the Halter Valley undertaken by ACFA and BAS has its origins in the Cross-Border Archaeology Project, a BAS initiative that was supported by Scottish Borders Council and Northumberland National Park Authority with additional support being provided by Yetholm History Society, and Hawick Archaeological Society." 

The work undertaken by the project included field walking and excavation, the latter on Shotton Hill and a putative location for St Ethelreda’s chapel.

"The ACFA/BAS survey, undertaken from 2017 to 2024, employed tape-offset recording of the archaeological features in the valley, the results of which are presented here. The recorded features range in date from the Bronze and Iron Ages, unenclosed platforms and scooped settlements respectively, through the medieval in the form of agricultural-based settlement to post-medieval agricultural activities."

Also on Saturday's agenda will be 'Ancrum Old Bridge: Cutting Edge Science reveals precise date' featuring Coralie Mills, of Dendrochronicle and Geoff Parkhouse, from Ancrum & District Heritage Society.

As the abstract for this theme explains, in 2018, members of the Ancrum village society discovered the remains of a medieval bridge in the bed of the River Teviot.

"Remarkably, oak timbers survived well within the remains. The discovery happily coincided with the South East Scotland Oak Dendrochronology (SESOD) research project and the first set of dendro-samples were taken in 2019, supplemented by additional samples taken by Wessex Archaeology Coastal & Marine when surveying the bridge remains for HES in 2020."

But the timbers proved difficult to date through conventional analysis, so they were radiocarbon-dated . Those dating results were previously shared at the 2022 archaeological conference. 

"Radiocarbon-dating produces a probabilistic date range and, in our quest for more precise dating, Professor Neil Loader of Swansea University kindly offered to apply the relatively new dendro-isotope dating method, the first such application to a heritage site in Scotland. This has provided a (somewhat unexpected) precise felling date for the bridge timbers, in turn allowing a more focussed exploration of the bridge’s historical context. 

"In this update, we will announce the exciting new dating results as well as sharing some other news about Ancrum Old Bridge".

Those attending the conference are being encouraged to visit the Ancrum and District Heritage Society stall, which will focus on the work of the Society and includes a professionally modelled diorama of the medieval bridge.

Tickets, costing £30, can be purchased at the door for the all-day event on November 16th. The full conference programme can be downloaded via this link:

https://www.eastlothian.gov.uk/downloads/download/12728/el_and_b_archaeology_conference

Councils can't afford strategic housing programme

EXCLUSIVE by OUR LOCAL GOVERNMENT EDITOR

The UK Government is being asked to assist in developing seven strategic housing sites across the south-east of Scotland, including the extension to Tweedbank 'town' in the Borders, by joining a special task force which would also include Scottish civil servants and local government representatives.

The tripartite approach has been suggested even though housing is a devolved matter under the control of the SNP administration at Holyrood. 

But it appears none of the sites - between them capable of delivering 41,000 new homes and levering in over £4 billion of private investment - will be developed without government help to pay for expensive infrastructure. Council budgets in the Lothians, Borders and Fife are stretched and incapable of coming up with the necessary financial resources.

The so-called Strategic Sites Programme is one of the most crucial issues facing the joint committee which oversees the Edinburgh and South-east Scotland City Region Deal. The housing areas earmarked for development are  Blindwells, Calderwood, Dunfermline, Edinburgh’s Waterfront, Shawfair, Tweedbank and Winchburgh. They have long been identified as key areas of change and growth in the region.

A recent committee meeting heard the investment fund underpinning the city deal was inadequate, and there were obstacles to developing all of the sites. Members urged governments to prioritise the sites which are located in "the fastest growing region of Scotland".

It is claimed all of the housebuilding programmes must be developed rapidly to accelerate supply in light of the housing emergency.

A report which has been sent to Scottish Government Housing Minister Paul MacLennan, warns: "The impact of accommodating growth in capital and revenue terms is constraining the ability to deliver it, and same is true in terms of the ability to run services needed to sustain it. This situation places delivery, equality and our overall prosperity at risk."

To do nothing is not an option, according to the report from the joint committee.

"Underinvestment in housing and infrastructure will undermine our regional economy, cause overheating in the housing and labour markets, stifle positive transformation, impact access to affordable housing, and hold back equality for, and the potential and productivity of, our people, places and the region, as key drivers of Scotland’s and the United Kingdom’s overall prosperity".

The scope, scale and duration of government support needed for each site will be set during the respective business case development process, when it can be identified in detail.

Details for each of the locations includes a timescale for development. In Tweedbank's case the year quoted is 2040. A full business case is expected to be finalised in the summer of 2025.

The report says the Tweedbank Town Expansion will provide 300 mixed use homes, including 130 affordable houses. It adds: "Requirement - road and rail bridge; heating network; Homes excludes privately funded element; business space; care village".

It is recommended a Strategic Sites Task Force should be established by governments to oversee the delivery of the Strategic Sites Programme. 

The Task Force should comprise Scottish and UK Government civil servants as well as Ministerial and civil servant "champions", and include representatives from the Regional Partners as well as a representative for housebuilding interests. 

"The Task Force should be predicated on partnership working to deliver the strategic sites programme and ensure strategic alignment and collective action to unlock the delivery of our strategic sites.

"Financial innovation, both in capital and revenue terms, will be key to unlocking the strategic sites due to the scale of the delivery challenge and the significant challenges facing public sector finances. 

The last published assessment of infrastructure costs required to expand Tweedbank across the greenfield Lowood Estate related to a 2018 report, presented to Borders councillors in private as they decided to proceed with the purchase of the estate.

Details released following a Freedom of Information request in 2020 showed the Lowood element of the so-called Tweedbank Masterplan would require £106 million, including a £10 million sum to cover acquisition of the estate. Various infrastructure costs linked to the future developments at Tweedbank and set out in the report totalled more than £21 million.

The capital requirement for the project will have increased considerably over the last six years. The original intention was to have the first phase of housing (30 homes) built by Eildon Housing Association, and occupied by now. But the programme has been delayed several times with a firm starting date still to be announced.

In the report requesting the establishment of the task force, Nile Istephan, Eildon Housing's chief executive is quoted as saying: "This Programme has the potential to unlock the transformation of the region by removing barriers for growth and enabling prosperity to be delivered for citizens and the wider United Kingdom and Scottish economy.” 

Center Parcs, a gamechanger for the Borders

by LESTER CROSS

Today's announcement of a £400 million tourism investment by Center Parcs to create their first Scottish holiday resort represents the largest single financial injection of its kind for the Scottish Borders economy, bringing with it hundreds of jobs and millions of pounds in extra spending power.

The massive development is earmarked for a 1,000 acre site close to the A7 trunk road some three miles north of Hawick. The land is currently part of Buccleuch Estates, the region's largest landowner.

According to some campaigners, the delivery of the Center Parcs centre will strengthen the case for an extension of the Borders railway, at least as far as Hawick. But that could still be a long way off.

Statements issued today revealed that the proposals are at an early stage and Center Parcs intends to submit a planning application to Scottish Borders Council in 2025. 

During the construction phase of the project, the company estimates 750-800 regional jobs will be created, and management has pledged to use local contractors.

The site will include a range of indoor and outdoor activities, shops, bars, restaurants, an Aqua Sana Forest Spa and Center Parcs’ iconic indoor water park, the Subtropical Swimming Paradise.

Center Parcs also plans to undertake an extensive programme of tree planting as currently, to transform the site by expanding existing woods.

Representatives of the holiday firm outlined their plans in Hawick to a gathering of community leaders and business and political representatives. The project could transform the economy of the town which has struggled to attract jobs and investment in recent years.

Colin McKinlay, chief executive officer of Center Parcs, said: “This is a tremendously exciting project and offers the opportunity to transform leisure and tourism in the Scottish Borders. Center Parcs is an exceptionally popular destination for families in the UK and Ireland and there is robust demand to support a seventh village.

“Throughout our history, we have demonstrated that a Center Parcs village provides significant economic benefits locally, regionally and nationally."

He pointed out that many Scottish families already visited Center Parcs villages in England, and this village would offer the chance for people to enjoy holidays closer to home, which in turn would benefit the local economy."

He added: “We are at an early stage with these proposals and have a lengthy and thorough planning process ahead. We have already conducted a significant number of surveys to assess the site and we intend to continue with additional site surveys and design development, alongside a programme of pre-planning application consultation and community engagement.”

The estimated investment to build the new village will be between £350 million to £400m.

Benny Higgins, executive chairman of the Buccleuch Group, said: “This project promises to have an outstandingly positive impact on tourism and leisure in the Scottish Borders and we are delighted to have signed an option agreement that will enable Center Parcs to take the next steps towards fulfilling its ambitions.”

Council expected to borrow £170 million in next three years

by OUR LOCAL GOVERNMENT EDITOR

Scottish Borders Council took its borrowing total for 2024 to £76 million last month after arranging another £20 million short-term loan from the Treasury Debt Management Office with further sizeable cash advances likely to be needed over the coming financial years, according to Audit Scotland.

The money will be used to partly bankroll the local authority's £454 million of capital investment which is planned over the next ten years.

A report from John Boyd, the auditor appointed by the public spending watchdog to inspect SBC's books, notes: "The extensive capital plan is primarily focused on economic regeneration and the learning estate. £187 million is on the school estate including the new high schools for Galashiels, Peebles and Hawick estimated at £145 million, with the majority of this invested over the next three financial years. 

"Borders Innovation Park and Borderlands are the two main areas for economic regeneration. The main sources of funding over the ten years for this investment is £115 million of specific project funding, £107 million of general capital grants, and borrowing of £220 million. £173 million of borrowing is expected to be undertaken over the next three years to support, in particular, the school estate projects."

Details of the October loan of £20 million from the Public Works Loans Board [PWLB] show the council will pay 4.93% interest [approximately £986,000] over twelve months before the loan matures in October 2025.

It follows a series of similar transactions over the course of this year. As Mr Boyd points out in his annual audit report - his inspection cost the council £347,980 - at March 2024 short term borrowing increased from £3.5 million to £50.0 million. £40 million of new short term borrowing (1 year) was undertaken in year with PWLB.

"The capital financing need was not fully funded by external loan debt and instead by internal cash. The Council has applied this strategy on the basis that this is prudent and cost effective in an environment where investment returns are low and counterparty risk is high. The Treasury Management Strategy had estimated that £70 million might require to be borrowed in year to support capital investment, but with cash management, it was determined that only £40 million was required to be borrowed."

The report acknowledges  that SBC's total external debt, which includes the council’s long-term liabilities, is within the authorised limit and operational boundary set in the Treasury Management Strategy 2023/24. The current borrowing position complies with the Prudential Code, and the Council continues to consider the affordability of future borrowing.

In a commentary on the council's revenue spending [expenditure on services], the auditor states: "The Council has a good track record of operating within its annual budget. While facing financial challenges through inflationary pressures on pay and non-pay costs as well as demand on services, the Council continues to demonstrate sound financial management maintaining general fund reserves in line with the long term Revenue Financial Strategy."

Over the next five years of the revenue budget, revenue spend is planned at £1.89 billion, with savings required of £18.1 million (1%) over the same period. The Council has identified pressures totalling £63.1 million over the five years, which are dominated by pay pressures of £35.3 million, and non-pay and inflationary pressures of £14.9 million.

Although the revenue plan identified savings targets averaging just under £4 million per year, the report explains: "this does not reflect that temporary savings made in previous years will need to be made on a recurring basis. The savings target for 2024/25 has doubled to over £9 million, as a result of non-recurring savings being brought forward from the previous year. If this pattern continues over the medium-term this will make achieving a financially sustainable position more challenging." 

Mr Boyd adds: "One of the key measures of the financial health of a body is the level of reserves held. The level of usable reserves held by the Council increased from £62.2 million in 2022/23 to £72.4 million in 2023/24, a net increase of £10.2 million."

Total capital expenditure in 2023/24 was £90 million against a revised budget of £96.9 million. 

"Whilst there was an underspend on the planned budget, there is still a significant increase in capital investment from 2022/23 when £63.5 million was spent. The main ongoing projects are the Hawick Flood Protection Scheme and the building of new high schools in Galashiels and Peebles, and Earlston Primary School with £52.5 million invested in these projects."

Other areas of expenditure included roads and bridges, plant and vehicles and ICT transformation.

"The main challenges for delivery of capital projects in year has been the high levels of inflation along with supply chain issues relating to construction materials which have affected the public sector more widely. The impact of this has been price increases, material shortages and longer lead times for projects. The macroeconomic pressures of high inflation and significant increases in construction inflation has resulted in increased total expected spend for all the schools’ projects."  

 

Skills shortage challenge for local forestry industry

by LESTER CROSS 

The South of Scotland will need to recruit significant numbers of additional workers into the region's forestry industry if it is to continue producing a third of the country's timber into the future, according to a report  on the sector's prospects in the Borders and Dumfries & Galloway.

But efforts by Borders College to tackle forestry skills provision in recent years has had to be reined in due to a lack of applications for some courses. 

At the same time, it has been estimated more than £5 million of capital investment is needed to provide facilities and equipment for training in the region's key industries of forestry, construction and engineering. 

The report prepared for the Convention of South of Scotland [COSS] warns: "All options are being explored by skills providers – institutions are submitting proposals to the Borderlands Inclusive Growth Deal programme, and this may offer some options for providers to respond to the needs of these sectors. However, the reality of the situation is this – Regional Skills Planning processes have worked well to identify an evidenced based need arising in key South of Scotland sectors but responding to that need comes with significant financial challenges and, at the moment, there is a deficit in resources to overcome."

Official figures suggest that 900 people work within forestry and logging across the region. But industry body Confor estimate that between 3,000 and 5,000 jobs are associated with the wood supply chain in South of Scotland. 

As the report says: "Compared to some sectors, this is not a huge volume workforce, however it is a strategically important sector for the South of Scotland in terms of GVA and in the creation of well-paid jobs and spin off benefits to the associated supply chain. 

"And forestry activity in South of Scotland is strategically important for Scotland and beyond. It produces around a third of Scotland’s timber, which equates to nearly 20% of the UK production. Scotland cannot achieve its aims related to timber production and net zero without a sustainable forestry workforce in the South of Scotland."

COSS is told that forestry presents compelling evidence for future growth for various reasons: Afforestation is one element of the Governments approach to reaching net zero. The Scottish government target is to increase new woodland planting by 18,000 hectares per annum by 2025, as part of net zero plans.

The document sounds a cautionary note by stating: " The tensions between Sikta based afforestation and ambitions around biodiversity and planting of native hardwoods were discussed at the Convention of South of Scotland in February 2024. How these tensions are resolved moving forward will have an impact on the demand for skills somewhat, however it is felt that there is sufficient certainty around this issue; that it shouldn’t hold back plans for skills interventions."

 The issues facing recruitment are outlined by the report's authors. "The forestry industry has reported challenges with recruitment and retention for some time. Workforce and skills shortages are at all levels for the forestry sector – from entry level to higher level business, integrated land management and environmental management skills. There is also a significant lack of diversity within the workforce as traditionally it has struggled to attract women. The issues are compounded by an ageing workforce that needs replaced."

The expanding tourism industry in both local authority areas is also set to fuel demands for more staff.

According to the skills report the visitor economy is estimated to employ 13,000 people in South of Scotland and the South of Scotland. The local enterprise teams have set an ambition to take this employment above 20,000 within ten years. 

"Even if growth in the sector is not achieved, there remains the prospect of strong demand for labour to support the sector. Replacement demand (replacing workers leaving the sector) is forecast to be very high. It is forecast that 3100 workers will be required to satisfy demand in the sector to 2033 but over 90% of this estimated demand is replacement demand."