Council unaware of complaints against funders

EXCLUSIVE by EWAN LAMB

Scottish Borders Council was unaware of numerous complaints lodged by investors against the controllers of a group of offshore funds, one of which was supposed to finance a £21 million waste treatment facility to process the region's domestic rubbish.

The admission is included in a response to a Freedom of Information request in which SBC was asked if it had known at any time that Premier Group (Isle of Man), the managers of the New Earth Recycling & Renewables [Infrastructure] Fund (NERR) had been the subject of allegations from disgruntled shareholders since 2004 - more than seven years before a contract was signed between SBC and New Earth Solutions Group (NESG).

According to SBC: "The Council was unaware of any alleged complaints".

But the complaints against Premier Group - now in liquidation along with NERR - were well documented and available on web sites. The allegations were of serial failings by the directors of Premier Group, and claims they had designed and promoted a succession of "dubious" funds over 15 years.

The local authority has released several documents relating to NERR after being asked for information regarding the financial checks made by council officials or elected members as to the competence of NERR to deliver the treatment plant at Easter Langlee, Galashiels before a contract variation was approved in October 2012 to include unproven gasification technology.

Newly released reports and letters show two alternative methods of funding the project were under consideration in early 2013 involving financial input of £20 million  from the Co-op Bank with the rest of the capital to come from NERR. Alternatively, if bank funding could not be secured then NERR was prepared to bankroll the whole deal.

But neither cash source materialised: the collapse of NESG meant the company owed Co-op Bank over £50 million while NERR investors and shareholders are virtually certain to lose everything following the fund's liquidation. At the same time parent company Premier Group is also being dissolved.

However, a 2013 financial review prepared by consultants for SBC was largely upbeat. The report concluded: "Overall, the financial standing of the New Earth Group appears to have strengthened modestly since the signature of the original Project Agreement.

"While still loss-making, this reflects the fact that the Group is in start-up phase and investing heavily in new facilities and contracts. According to the Directors’ Report, its performance is in line with expectations, and the Group is continuing to be strongly supported by NERR, its principal funders."

In fact NESG had recorded an operating loss of £6.5 million in 2012, up from £5.9 million the previous year. It has since transpired that the millions of pounds provided to NESG from NERR was to keep the waste treatment company going.

Elsewhere in the consultant's report it is stated: "The [NESG] directors' report includes confident statements regarding the Group’s market position, stating that 'policy and fiscal support for the two sectors that the Group is active in – waste management and renewable energy – remain strong and attractive.... In contrast to many operators in the waste sector, the Group has a proven track record of funding its growth and new projects during a time of financial austerity and a sharp contraction in the availability of project finance,' drawing particularly on NERR.

The report goes on to state that "during the last 12 months, the Group has developed and demonstrated its own suitable treatment technology, which is patent protected and has been branded as New Earth Advance Thermal (NEAT).

This was the technology brand which Borders councillors appear to have been so impressed with that they sanctioned its inclusion in the contract variation even before NEAT had started development trials. The failure of the gasification and pyrolysis system was one of the two main reasons the Borders project failed, losing taxpayers at least £2.4 million in the process. The other was the inability of NERR to come up with the money.

The highly ambitious and eventually undeliverable Energy Recovery Facility (ERF) planned for Easter Langlee was meant to provide power for over 400 homes, industrial premises and council buildings in and around Easter Langlee with surpluses being sold to the National Grid.

According to the report just published New Earth Solutions were telling SBC in 2013 that the plant would be generating energy sales worth £2.31 million by 2016/17. Under a profit sharing agreement the council could expect to receive £61,880 in that year. There would then be similar payments throughout the 24 years of the contract.

The report says: "The prospect of additional income from this source provides a financial incentive to the Council to work with Project Company to ensure that it enters into a Power Purchase Agreement (PPA) on the best possible terms available in the market, and develops a robust, financially viable and economically beneficial heat off-take plan."

As it turned out the entire project, including the planned district heating plan, proved to be an expensive white elephant with negative consequences for the Borders environment.

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Second crushing defeat for secrecy

by DOUGLAS SHEPHERD

Another concerted attempt by Scottish Borders Council to cover up information linked to their costly and disastrous waste management project has been foiled yet again by the Scottish Information Commissioner [SIC].

The latest setback for the local authority - it appears more than 80 documents were withheld from Freedom of Information requester Bill Chisholm - follows a similar defeat in April when the then SIC Rosemary Agnew ordered SBC to release six reports which had been heavily censored to hide vital facts and figures.

When those documents were finally made public earlier this month they showed that elected members at SBC sanctioned a Deed of Variation with contractors New Earth Solutions Group (NESG) before a series of technological trials had even been initiated at a research and development centre.

The brand of technology was to have been used in the construction of a £21 million "cutting edge" waste treatment centre at Easter Langlee, Galashiels, to deal with Borders household rubbish.

But as has been well documented in these columns the entire project collapsed in disarray in February 2015 when it was realised the technology did not work and the scheme could not attract funding. As a consequence SBC had to write off at least £2.4 million of taxpayers' money while the now bankrupt NESG are believed to have lost several millions too.

Since the Easter Langlee plans were abandoned, leaving SBC's waste treatment strategy in tatters, the council has repeatedly refused to disclose information under freedom of information.

They have claimed on every occasion that to divulge reports and documents would harm NESG and its partners even though all of them are either in administration or being dissolved by insolvency experts. Despite previous SIC decisions dismissing this stance SBC has continued to cling to the 'commercial confidentiality' clause in the doomed contract.

But in a damning decision notice issued to Mr Chisholm this week, the current information commissioner Margaret Keyse has instructed the local authority to release the information it withheld. They have been given until a date in August to comply with her orders.

The original FOI request in this case was lodged with SBC in May 2016, and it has taken over a year to resolve the issue of the council's refusal to supply the documentation they were asked for.

Ms Keyse' 18-page 'judgement' describes how the council was late in responding to the request, then provided reports some of which the requester considered to be irrelevant. There was no index supplied with the CD containing limited information, and the reports were not in chronological order.

The Commissioner explains: "Having considered the documents that fell within scope of Mr Chisholm’s request (calculated by the Commissioner to be 201 in total), it was not clear what information had been withheld or disclosed from some of the documents. In a series of discussions with the investigating officer, the Council clarified what information had been withheld."

She added: "The investigating officer found that some of the withheld information had been published on the internet by another Scottish public authority. The Council was asked to comment on this. It did not respond directly to this request".

In rejecting SBC's arguments yet again the SIC points out: "Having considered the information which the Council has withheld in this case, the Commissioner is not persuaded that it is all covered by the confidentiality agreement in the contract.

"The Council has not explained clearly why the parts of the documents containing withheld information are covered by the confidentiality clause. It has not explained why the information is commercially sensitive, and has provided only general arguments in relation to the harm that would, or would be likely to be caused by disclosure."

The Council stated that disclosing the withheld information would place it in the public domain. The information was considered to be of market value. It could be used not only for the advancement and exploitation of the innovative technology, but for future contract bids within the waste industry.

The Council submitted that it was impossible to determine a timescale as to when specific harm would occur, if the information was disclosed. However, as soon as it was placed in the public domain, it would strip the owner of the benefit to which they were entitled, as owner. Therefore, to that extent, the harm would be immediate.

Ms Keyse observes: "There also appears to be little consistency about what has or has not been withheld. For example, information about the time taken to test the waste processing system has been withheld throughout, except in one document where it was disclosed.

"Not all the withheld information relates directly to NESG, and the Council has not explained why information relating to its own matters is still sensitive, or why this information is excepted from disclosure".

In investigating this case, the Commissioner’s staff spent several weeks reviewing the information withheld from Mr Chisholm and trying to establish why, in the Council’s view, it was considered to be sensitive, especially where similar information had been disclosed.

The Commissioner concluded there was comparatively little information in the withheld documents about the financial status of NESG or details of the technology it was developing which had not already been published.

Mr Chisholm argued there was an overwhelming case for release of all information relating to the Council’s dealings with NESG, given the loss of at least £2.4 million resulting from the collapse of the project. Mr Chisholm argued that the Council should have been aware that NESG was on the brink of insolvency when a Council delegation carried out a “due diligence” visit to NESG’s headquarters in October 2014.

He commented that when the Council entered into the contract with NESG, taxpayers were told it was a £65 million contract over 24 years which would divert 80 per cent of waste from landfill, provide heat and power for hundreds of homes in Galashiels, and make the Council the leading waste management authority in Scotland.

Instead, the Council had written off £2.4 million of public money on a project which could not be funded and did not have the necessary technology to guarantee success. Mr Chisholm told the Commissioner that the Council is now at, or near, the bottom of the Scottish recycling league.

"The Commissioner accepts that there is significant public interest in understanding what steps the Council had taken to ensure that the project was robust. There is a strong public interest in understanding the measures that the Council had taken in order to limit its financial exposure in a project which had been on-going for four years and had involved substantial sums of public money", concludes Ms Keyse.

She continued: "In the Commissioner's view, disclosure of the withheld information would serve the public interest in informing the public about the actions and decisions taken by the Council, the basis for those actions and decisions, and the reasons why the project failed. As noted above, the project had involved many years of work, and substantial sums of public money. The integrated waste management project would have had a direct effect on the residents in the Council area.

"The Commissioner has given weight to the particular circumstances of this case, which incurred the Council investing substantial time, money and resources, in a project that ultimately did not come to fruition. In these circumstances, the Commissioner finds it is legitimate for the public to seek to understand what happened, and in the public interest for this understanding to be as complete as possible".


 

Hike in homeless across southern Scotland

EXCLUSIVE by DOUG COLLIE

The number of applications to services for the homeless across Scottish Borders, East Lothian and Dumfries & Galloway rose sharply in 2016/17 at a time when appeals for help nationally fell by two per cent.

The statistics, published by the Scottish Government this week, reveal a 23% spike in applications to Dumfries & Galloway Council (up from 668 to 820), a 12% rise in East Lothian (681 to 766) and a 10% increase in Scottish Borders (623 to 686). The Borders figure was the highest recorded since 2011/12.

Meanwhile the number of households living in temporary accommodation in the Borders rose from 82 to 87, far above the 2002 figure of 35 households. At the same time the number of children living in temporary accommodation went up from 38 to 41.

The temporary accommodation statistics for Dumfries & Galloway showed a significant improvement, down from 240 households to 199 with 73 children included in the latest figures compared to 76 in 2015/16.

However, in East Lothian households in temporary accommodation increased from 410 to 440, with the number of children involved up from 184 to 251.

In February, in answer to a Freedom of Information request, Scottish Borders Council confirmed it was renting 85 properties from Registered Social Landlords (RSL) and 49 from Private Sector Landlords (PSL) in meeting its statutory homeless duty.

Total rents paid to RSLs in 2015/16 was £310,000, and to PSLs £253,170. The equivalent figures for 2016/17 are  £316,934 and £233,264.

A research report by Shelter Scotland into evictions by social landlords in Scotland between 2012-2016 revealed a 13% increase in evictions by Scottish Borders Housing Association, the main landlord in the region following a whole stock transfer of council housing in 2003.

In 2015/16 SBHA instituted 535 proceedings against tenants, 68 were taken to court, decree was granted in 44 cases and 17 evictions occurred.

East Lothian's eviction rate increased by 162.5% between 2013/14 and 2015/16 from eight to 21. At the same time RSL Dumfries & Galloway Housing Partnership completed 33 evictions, a 2.9% reduction from 2013/14. There were 925 notices of proceedings, 297 tenants were taken to court and decree was granted in 58 instances.

The Shelter Scotland report concludes: "From the evidence and analysis, it is apparent that landlords, especially local authority landlords, are increasingly making use of eviction actions in response to rent arrears. In the years leading up to 2013/14, there was a decrease in the use of eviction action. However, since then the number of evictions has risen.

"Between 2007/08 and 2013/14, evictions fell by 52 per cent, while over the course of 2013/14 to 2015/16 evictions have increased by almost 25 per cent. Shelter Scotland is concerned that this upward trend will continue unless clear changes to policy and practice are made.

"With the significant changes to the backdating of housing benefit and the introduction of the benefit cap in 2016, it has become even more important for the rest of the social rented sector to learn from their examples. Social sector landlords should seek to actively engage with their tenants and try to prevent rent arrears as much as possible by providing help and advice when needed.

"The increasing uncertainty regarding the UK economy following Brexit is likely to further impact social sector tenants. It is therefore vital that the policies and practices of social sector landlords reflect the challenges that their tenants face and adequately address them in a way that reduces rent arrears and, ultimately, helps tenants to stay in their homes."

Common Good revisited: still under-performing?

EXCLUSIVE by EWAN LAMB

The nine Common Good funds in the Scottish Borders received only £69,000 from a combined investment portfolio of £2.7 million in 2016/17 while the common land and property in a former Scottish burgh just a few miles away  recorded a £600,000 return for its trustees.

The £69,000 figure represents a 2.5% investment 'dividend for Scottish Borders Council, administrators of the funds in a year when the council's own pension fund achieved a 21.5% return

Serious concerns were voiced four years ago over the alleged poor management of the Borders funds with a dismal financial performance and a failure to fully exploit the valuable assets granted to local burgesses and freemen by various charters of the Scottish kings over 500 years ago.

While the Common Good lands and properties in Duns, Galashiels, Hawick, Jedburgh, Kelso, Lauder, Peebles and Selkirk appeared to be in the doldrums in 2013, the single fund managed by the Berwick-on-Tweed Freemen Trustees was chalking up impressive financial achievements.

At that time SBC announced that the £2 million cash balance in their funds was to be transferred to a “private firm of global fund managers.”

Berwick, one of the four original Scottish burghs founded in 1125, received its common from the monarch in 1491, around the same time as several of the other towns in the Scottish Borders.

The trustees at Berwick have 2,550 acres of land under their control with a value of £6.508 million, according to the charity's latest available accounts (2015/16). The fund generated more than £600,000 from investments and was able to devote more than £500,000 to "charitable activities".

A new set of accounts covering 2016/17 for the now nine Borders Common Good funds - Innerleithen has been added to the list since 2013 - allows a modern day comparison to be made with Berwick-on-Tweed.

Between them the funds, amalgamated into a single charitable trust several years ago by SBC, have land holdings in excess of 5,000 acres including three Selkirk farms extending to 1,300 acres, 800 acres of farmland at Hawick and a 1,700 acre common at Lauder.

Total income from investments in the last financial year added up to £69,000 made up of £66,000 from the £2.7 million investment portfolio in the Newton Real Return Fund plus £3,000 in bank interest from the "Scottish Borders Council loans fund".

The council charged  £48,000 for 'governance costs' incurred in administering the trust - the same figure was levied in the previous fiscal year - and Common Good donations to worthy causes totalled £171,00 (£89,000 in 2015/16).

When the various deductions were made from the funds net income last year was a decidedly unimpressive MINUS £139,000 compared to PLUS £433,000 the year before. The bottom line was a reduction of £149,000 in the net movement in funds against an additional £503,000 for 2015/16.

Total funds carried forward fell from £13.895 million to £13.746 million.

Meanwhile over in Berwick-on-Tweed a seemingly highly efficient regime saw total funds carried forward increase from £21.687 million to £22.024 million. In March 2011 the Berwick fund stood at £17.9 million, so there has been considerable value added since then.

In a section headed Plans for the Future, the report carrying the Borders accounts declares:" The Common Good Funds will continue to maintain their heritable assets and will look to maximise their income from any of these assets which are let commercially. Where assets are used by third parties towards the Common Good of the Burgh then rental levels may reflect this aspect of the tenants’ activity."

The Common Good agenda item for this week's committee meeting appeared alongside SBC's draft accounts for 2016/17 which we have already reported on, and the local authority pension fund.

There was much better news for members of the pension fund than the slim pickings for the Common Good trustees who happen to be all 34 members of the council.

The SBC Pension Fund accounts reveal: "Strong three-year annualised investment performance of 10.9% - 0.9% above benchmark; 2016/17 Strong one year performance to March 2017 with investment returns of 21.5% in the year to a benchmark of 19.5%."

It means the pension fund now has £654m in net assets, an increase of £112m on 2015/16.

Another ‘under-spend’ at council HQ yet debts climb by12%

EXCLUSIVE by DOUG COLLIE

Scottish Borders Council has declared a wafer thin under-spend on its £261 million revenue budget for the fifth year in succession while at the same time running up more than £21 million of extra external debt during the 2016/17 financial year.

The situation is outlined in draft annual accounts which will be presented to councillors later this week.

Research by Not Just Sheep & Rugby staff has confirmed that in every fiscal year since 2012/13 the council has recorded an under-spend of less than one per cent, demonstrating an apparently remarkable control on expenditure over scores of different budget headings.

This time round the books were closed with a miniscule 0.05% (£128,000) ‘in the black’ figure. The corresponding returns in previous years were 2012/13 0.30%; 2013/14 0.18%; 2014/15 0.16%; and 2015/16 0.49%.

The report containing the latest set of unaudited accounts claims under the heading Highlights of the Year: “Against a very difficult financial background, the Council has achieved a great deal during 2016/17 as follows: signed a 13-year contract with CGI to establish a digital services partnership;

“Achieved £8.9 million of planned Financial Plan savings on a permanent recurring basis; Delivered £261.6 million of revenue spending within budget; Delivered Capital Investment of £51.5 million on schools, flood protection, roads, lighting and other assets; Supported a successful first year operation of the new integrated Sport & Culture Trust (Live Borders)”.

However, for some reason, the accelerated rate of borrowing does not feature among the highlights. A few pages further on Borders residents are told: “External Debt: The Council’s external debt as at 31 March 2017 was £197 million. Additional long term borrowing was undertaken during the year amounting to £12 million.

“Short term borrowing for cash flow purposes was also undertaken with £9 million outstanding at the end of the year. The average rate of interest paid on outstanding external debt was 6.2%”.

One wonders if the many extra millions borrowed are taken into account when calculating that 0.05% "under-spend".

In fact the total debt figure had soared by 12.1% from its level of £175.25 million in March 2016. And no less than £11.879 million of taxpayers’ cash was required in 2016/17 just to service SBC’s portfolio of loans.

There was a hefty bill too for the long-term PFI scheme which delivered new secondary schools a decade ago in Eyemouth, Duns and Earlston. The accounts show there will be a service charge of £6.024 million in 2017/18 plus an additional £2.66 million to cover interest. The total cost of the Initiative will be more than £238 million, including an eye-watering £34.7 million in interest charges.

The ‘Remuneration’ section of the accounts will no doubt be of special interest to many of those who take the trouble to scrutinise the authority’s financial house-keeping.

For example: the number of employees at SBC who earn £50,000 or more increased from 115 to 125 last year. And the top 13 senior employees received total remunerations of £1,002,622 (up from £989,519 in 2015/16).

But the exit door at Newtown St Boswells appears to have been less busy; 2016/17 saw 23 exit packages for departing staff at a total cost of £430,745. In the previous financial year SBC offloaded 71 staff members who took £2.233 million with them.

The report concludes: “The operating environment for the Council continues to be very challenging with financial and economic influences such as increasing demands on services, reducing Scottish Government funding, low interest rates and cost pressures from pay and price inflation all affecting the Council’s finances. The Council, despite these challenges, remains financially sound and well placed to serve the people of the Scottish Borders in the future”.

No doubt the people of the Borders can also anticipate another wafer thin under-spend when March 2018 comes round. The level of external debt may be more difficult to predict.

According to monthly lists of loans displayed on the Public Works Loan Board website SBC borrowed £8 million over 10 years on February 24th 2017, the money to be applied to expenditure 'within one month'.

And on April 26th 2017 the local authority borrowed another £10 million over 10 years. This time the cash was to be applied to expenditure 'immediately'.

Will May keep this gravy train running?

by ROLY MEADOWS, OUR RURAL AFFAIRS EDITOR 

Farmers in the Scottish Borders and elsewhere must be hoping at least one Tory manifesto policy survives the political carnage which has seen many of the party's flagship pledges ditched and shredded.

Gone even before a deal with the DUP could be stitched up were promises to introduce more grammar schools, to legalise foxhunting in England and Wales, to levy a 'dementia tax' on folk requiring care, to deny many pensioners their winter fuel payments along with the removal of the triple lock on the state pension. All conveniently abandoned to keep a lame duck prime minister in power for a while longer.

However, the well worn Hammond/May mantra "we must live within our means" continues to get regular air time, and there was nothing in the Queen's Speech this week to suggest there would be extra billions for education, the NHS and for other suffering public services.

So if there is no spare cash floating around The Treasury, where will the estimated extra £9 billion come from to deliver the Tories' commitment to guarantee the current level of financial support for British farmers post-Brexit? In other words, to extend the Brussels Common Agricultural Policy's (CAP) 'dripping roast' from 2019 to 2022. Or will this solemn promise be quietly buried too?

Last year more than 154,000 UK businesses collected in excess of £2.86 billion in subsidies, slightly less than the £3.185 billion which supported 183,000 separate recipients the previous year.

In 2016, more than 26,000 different Scottish rural businesses received a CAP payment from EC funds. The hand-outs were worth over £647 million, and a significant proportion of the money was used to promote environmental projects and schemes aimed at resisting climate change.

Research carried out by colleagues at Not Just Sheep & Rugby would suggest the Government will have to come up with more than £150 million over three years if farm related businesses in the Scottish Borders and North Northumberland are not to suffer financial losses once the CAP gravy train hits the buffers.

In the twelve months to October 2016 1,191 agri-linked entities across the region received £47.2 million following the 2015 statistics which showed some 1,300 businesses pulled in around £63 million from EU funds.

The loss of such a significant level of subsidy would blow a large hole in the Borders economy. According to tourism experts the money spent in the region by visitors on food, drink and accommodation is worth £65 million a year to hotels, restaurants and pubs. So the complete removal of CAP benefits from the Borders would be on a similar scale.

An economic profile for the Scottish Borders, produced by Scottish Borders Council in 2013, stressed: "It is critical for the local economy that CAP reform continues to deliver support for an innovative and competitive agricultural sector. Total income from farming in Scotland is less than subsidies received (£589 million income against subsidy of £633 million, so industry dependency on direct support is high".

Here is a postcode breakdown of the farm payments which found their way into the Scottish Borders in 2016, including some of the main beneficiaries:

TD1 - GALASHIELS - 49 businesses received a total of £2.304 million (2015 £3.620 million): including L G Litchfield, Bowland Farms £295,441; T & J Elliot £136,594; Torwoodlee & Buckholm Estates £127,536; Mrs C M Reid £126,541.

TD2 - LAUDER - 46 businesses received £1.664 million (£2.260 million); including W H Sharp & Son £108,415; W M Barr & Co £106,633; Firm of Sutherland £100,105.

TD3 - GORDON - 21 businesses received £1.671 million (£2.141 million): including G McDougal (Bassendean) Ltd £256,585; J & T F Macfarlane £484,213; Haddington Farms £152,502; R W Morris & Co £127,816.

TD4 - EARLSTON - 21 businesses received £1.067 million (£1.157 million): including Fans Farming £172,367; J W Fullerton & Sons £192,533; Hamish Morison Farming Ltd £120,450; Messrs R & J Scott Aiton £110,078.

TD5 - KELSO - 163 businesses received £7.249 million (£9.450 million): including C G Greig Farms Ltd £258,886; Balgonie Estates Ltd £197,634; Floors Farming £231,378; James Mitchell & Partners £187,847; Lochtower Ltd £128,629; D & D W D Thomson £151,835; Messrs J Jeffrey £168,460; Playfair Farms £129,882; T W & T B Edgar Ltd £203,876.

TD6 - MELROSE/ST. BOSWELLS - 64 businesses received £2.016 million (£2.922 million): including Mertoun Estate Farms £173,218; Messrs Maxwell (Faughhill) £112,067; Scottish Borders Council (Woodlands) £97,252.

TD7 - SELKIRK - 83 businesses received £2.858 million (£4.909 million): including BQ Farming Partnership Ltd £212,248; Langholm Farms Ltd £182,256; Sir F M Strang Steel £146,152; W N Douglas £113,440.

TD8 - JEDBURGH - 86 businesses received £3.153 million (£4.270 million): including Firm of Nisbet Mill Farm £190,896; R G Barbour & Sons £177,815; Robert Neill & Partners £135,589; Messrs A A Scott £121,019; J W Ogilvie & Partners £107,560.

TD9 - HAWICK/NEWCASTLETON - 171 businesses received £5.204 million (£8.389 million): including G W & M Richardson £106,813; H & M Farms £180,262; R H Brunton & Co £101,738; R J & T J & M T Feakins £183,718; S H & P M Shirley-Beavan £115,093; W S Davies & Son £108,370.

TD10 - DUNS/GREENLAW - 24 businesses received £907,000 (£1.871 million): including J C & K C Constable Ltd £104,239; John Mitchell & Co £106,899; The Firm of James Orr £129,683.

TD11 - DUNS/ABBEY ST. BATHANS - 126 businesses received £5.987 million (£8.017 million): including A M & A Calder Farms Ltd £168,885; C A Ramsay Partnership £119,164; Catchelraw Trust £150,923; Charterhall Farm £101,631; Ellemford Farming Ltd £120,556; Harehead Farms £170,380; Macfarlane Farms Ltd £220,361; R & J McDonald £212,752; R P Cowe & Co £107,057; W Arnott & Co £131,160.

TD12 - COLDSTREAM - 19 businesses received £759,000 (£1.162 million): including Ladykirk Estate Farms £152,584.

TD13 - COCKBURNSPATH - 16 businesses received £403,000 (£1.355 million): including J P H Wight & Co £78,596.

TD14 - EYEMOUTH - 55 businesses received £1.725 million (£1.583 million): including Eyemouth Freezers Ltd £319,313.

TD15 - BERWICK-ON-TWEED - 162 businesses received £6.902 million (£7.527 million): including A T Barr & Co £143,870; G H Millar (West Foulden) Ltd £106,810; Conundrum Farm Partnership £102,787; J A Frater £103,867; J E Armstrong & Son £166,147; Joicey Partnership £291,497; R T de Plumpton Hunter £184,552; Penmar Farming £443,295; R C Reed £136,936; Sunwick Farm Ltd £106,427; The President Estate Farming Partnership £240,133; Todd Farms £129,154; W L Douglas & Son £281,638.

EH45 - PEEBLES - 48 businesses received £1.515 million (£2.278 million): including Glenrath Farms £111,828; J P Campbell & Sons £212,171.

Creditors of SBC contractor will get 1.5p in the £

EXCLUSIVE by EWAN LAMB

The mountain of debt which finally engulfed Scottish Borders Council's waste management contractors New Earth Solutions last year may have been as high as £116 million, it has been revealed.

And non-preferential creditors who previously thought they might recoup between four and eight pence in the pound will get just 1.5 pence in the pound while claims from unsecured parties have rocketed fourfold from £9.1 million to a staggering £36.289 million.

The latest financial statistics in the New Earth Solutions Group disaster are disclosed in a progress report to creditors by joint administrators Sarah Bell and Philip Duffy, of insolvency specialists Duff & Phelps.

Yet again it must be emphasised that members of Scottish Borders Council either failed to check on or were completely unaware of the company's fragile monetary state throughout the lifetime of a four year contract.

The fact that the local authority even considered doing business with such a debt-ridden Group simply beggars belief. The council decision to hook up with NESG cost local taxpayers at least £2.4 million, and the urgently needed waste treatment facility at the heart of the deal was never even started.

Documents seen by Not Just Sheep & Rugby show that NESG was heavily in debt to banks in 2011 when SBC sanctioned its original multi-million pound deal, but was also in hock to its associated off-shore fund New Earth Recycling & Renewables [Infrastructure] plc or NERR prior to a contract deed of variation being signed by councillors in October 2012.

The Duff & Phelps report shows there is insufficient funds from sales of assets to pay off the secured creditor (Co-op Bank) in full. The Co-op was owed £41.8 million.

Next in the pecking order of so-called secured creditors came NERR, the now bankrupt Isle of Man investment fund chosen by SBC to bankroll the £21 million waste plant at Easter Langlee, Galashiels.

According to the report: "NESG was historically funded via quasi-equity from NERR. [The fund] provided the Group with funding for ongoing trade as well as capital improvements. The funds were provided under a debenture created on September 19th 2011.

"As at the appointment (of administrators) the indebtedness to NERR totalled in excess of £39 million. As NERR's security is subordinated to the Co-op's debt there is no prospect of any distribution being made to NERR under its security".

Hundreds of investors and shareholders in NERR who lost everything now know their money went to prop up the struggling NES Group even though they had been told the fund invested in new waste recycling facilities in the UK.

So did the millions of pounds which NERR handed over to NESG in September 2011 mean the "green" fund could no longer finance the Scottish Borders project?

Within three months of the debenture being finalised New Earth informed SBC that a conventional facility to treat the region's rubbish could no longer secure bank funding. Surely the paying public have a right to know the full facts relating to the disastrous contract failure.

Duff & Phelps had expected to conclude the administration of NESG this month with a move to dissolve the business and remove its name from the Register of Companies.

But the report explains that a request has been made to extend the administration by twelve months to June 2018.

"The extension is necessary following the requirement of the joint administrators to include a provision for a significant non-preferential claim", says the report. "The claim is currently the largest submitted within the administration.

"However, it has not yet been possible to conclude the position in respect of this claim and therefore the extension will be required to conclude the adjudication of this claim".

There is no indication in the report as to the identity of the claimant or the amount being sought. A further progress report is likely to be issued in the near future.