Hawick companies with different yarns to spin!

by OUR BUSINESS EDITOR

The starkly contrasting fortunes of two of  the leading Scottish luxury knitwear brands which made Hawick-produced cashmere sweaters famous across the world during the Twentieth Century are revealed in the latest financial reports from Pringle of Scotland and Barrie Knitwear.

While Barrie, owned by the Chanel fashion house saw its turnover grow by an impressive 21 per cent in 2023, and its workforce increased to 280, Pringle - now in the same stable as Moss Bros - suffered a 34 per cent decrease in income while staff numbers now total a mere 14, including the company's three directors.

At one time, both businesses were owned by Dawson International, the global textiles group which provided the Scottish Borders with thousands of jobs and considerable economic prosperity.

But after Dawson's financial collapse, the Pringle name was sold to the Chinese-based Fang family for £6 million. And following the liquidation of Dawson's, Chanel acquired Barrie in 2012 in a deal which safeguarded the jobs of the firm's 176 workers in Hawick.

As we reported, Pringle of Scotland was subsequently acquired for £10 million last year by a group called Broadgate 1960 Ltd. without any public statement being made. The ultimate parent company, according to the latest filing at Companies House, is Three Wishes Ltd., a business incorporated in Hong Kong and controlled by Dominican national Menoshi Shina.

But in its first financial report since the takeover, Pringle reports that turnover in the 11 months to December 2023 was £2.669 million, down from £4.045 million in 2022. The firm's gross profit is given as £1.985 million, down from £2.767 million in the previous 12 months under the Fang regime.

Even ten years ago Pringle of Scotland employed over 60 workers although that was a pittance compared to the several thousand on the payroll between the 1940s and 1960s. 

The 2023 accounts include this reassuring paragraph under the heading Going Concern: "After making enquiries of Broadgate 1960 Ltd and its fellow subsidiary Crew Clothing Ltd who are companies under common control, the directors have no reason to believe that a material uncertainty exists that may cast significant doubt about the ability of the company to continue as a going concern.

"The directors have a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future".

The fairly downbeat figures from Pringle's are at odds with the very positive returns from Barrie - turnover up from £25.636 million in 2022 to £31.069 million last year. Gross profit of £8.599 million is similar to the previous year's figure of £8.264 million.

According to a strategic report from managing director Jan Young: "Turnover increased by £5.433 million due to continued strong demand from the luxury market and very good performance from everyone to consistently develop and deliver pieces in a tight timeframe".

Gross profit margins fell to 28 per cent from 32 per cent due to increased material costs, sub-contracting costs and investment in training of direct labour. Operating profit also fell due to planned expenditure on recruitment, training and consultancy support for business improvement projects.

It is made clear in the report that if Barrie required assistance to meet its financial obligations, Chanel UK would be able to provide that support, if needed.

In the eleven years since Chanel bought Barrie for an undisclosed sum, the workforce has increased from 182 in 2013 to 261 in 2022 and 280 last year. The company's annual bill for wages and salaries now totals £9.409 million.

During 2023, Barrie took out two new leases to establish production facilities in Galashiels and Leicester, adding to their other manufacturing centres in Hawick and Arbroath.

Several years ago the business made a £2 million loan to a company in Mongolia who Barrie is working with to establish an improved supply chain for cashmere fibre.

Wind powering more Borders jobs than textiles

by EWAN LAMB

The booming wind farm industry in the Scottish Borders will require approximately twice as many workers for construction and maintenance next year than the region's dwindling 'traditional' textile trades of spinning and knitting, according to skills forecasters.

But Scotland's wind energy sector is growing so rapidly that wind farm projects in the Borders and elsewhere may not be delivered on time unless there is a major influx of new well trained employees in the rest of the present decade.

It has been estimated the current textile industry workforce in the Borders totals about 1,000 individuals although more than 20 per cent of the posts are part-time.

Meanwhile, a report by Climate X Change, Scotland's centre of expertise connecting climate change and policy, based at Edinburgh University, has predicted wind farm construction and installation in the Borders will require 1,436 staff in 2025 plus a further 123 for operations and maintenance.

The numbers needed for construction in future years are: 2026 - 1,095; 2027 - 909; 2028 - 1,022; 2029 - 981; 2030 - 1,012. At the same time, full time equivalent (FTE) requirements to run developed projects will be: 2026 - 140; 2027 - 154; 2028 - 174; 2029 - 202; and 2030 - 218.

These figures compare to the 2024 numbers of 955 working in the construction of Borders wind farms, and 77 involved in maintenance.

So far as the national picture is concerned, the report states: "To meet the 2030 ambition, the workforce serving the onshore wind sector needs to increase from around 6,900 FTEs in 2024 to a peak of 20,500 in 2027. Over 90% of the roles will be in construction and installation of wind farms".

The report's authors claimed that overall, stakeholders in the industry felt that those working in the sector have the right skills, but there are skilled workforce shortages. 

"In the short term, there is a need for more people to join the sector and for individuals from other sectors to be reskilled/ upskilled. Without this, the sector faces challenges in delivering new projects on time, maintaining existing wind farms and maximising economic and environmental benefits. 

"Not addressing skill shortages is likely to have a severe impact on the ambition to install 20 GW of onshore wind by 2030. By 2027, our model predicts that, on average, four times more FTEs will be required for construction and installation than in 2024. Within this, five times more civil contractors will be required."

Climate X Change has recommended the Scottish Government along with other public agencies, industry and the education sector, take the opportunity to address expected skill shortages in relation to the 20 GW capacity ambition by 2030. 

"Investing in skills development is not only essential for the success of individual onshore wind projects but also for Scotland's broader renewable energy goals. Addressing these shortages will require a comprehensive approach, including workforce development initiatives, training programmes and industry-academy collaborations. In this regard, collaboration between stakeholders from the public, private and education sectors will be crucial to bridge skills divides and unlock the full potential of Scotland's onshore wind resources."

According to the university team, the most pressing action is to raise awareness of the broad range of career opportunities directly or indirectly associated with the onshore wind energy sector, especially for regional workforces. 

"There is scope for targeted campaigns in rural areas where the majority of the new installations will take place – to demonstrate well-paid, highly skilled jobs for local people. For example, according to UK Government statistics a wind turbine technician can expect a starting salary of £25,000 reaching £47,000 with experience. This could also help address population decline, due to younger people moving to more populated parts of the country." 

Troubled waters for Borders flagship scheme

SPECIAL FEATURE by OUR LOCAL GOVERNMENT EDITOR

A £29 million flagship infrastructure project designed to transform the Scottish Borders economy has become totally becalmed after civil servants demanded revised business cases to justify further financial investment.

The Borders Innovation Park [BIP], close to the Tweedbank rail terminus, is already well behind schedule. It was originally intended as a vehicle to provide quality office space for incoming businesses.

But the Covid pandemic in 2019 crushed demand for new offices in the Borders and elsewhere, and the park's promoters Scottish Borders Council decided to revise the make-up of the buildings to deliver a higher proportion of top end industrial units.

The park is being partly funded by a £15 million grant from the Edinburgh & South-east Scotland City Region Deal which is investing £600 million in a bid to bring additional prosperity to the region. 

The original business case for BIP claimed the Tweedbank facility "represents very high value for money". Programme implementation was given as: phase one completion by September 2020; phase two by March 2022, and phase three by March 2024. 

Only the first phase has been completed with most of the space occupied by the council's Inspire Academy and by CGI, the authority's IT provider.

A meeting of the city deal joint committee was told by Andy Nichol, head of the deal's project management office that BIP was due for reconsideration by committee members in December but it was likely that date would need to be rescheduled. 

Said Mr Nichol: "We had hoped to progress changes to the the phase two approach and these were largely in terms of revisions to the proportions of traditional office space and altering that to higher end industrial units on the back of changed behaviours that have arisen following the COVID pandemic. We had hoped to to make those revisions via a change control process, but the government signalled that we're going to have to provide a revised business case instead."

Earlier this year South of Scotland Enterprise confirmed it was providing £3 million in funding to help facilitate phase two of BIP.

At the time Councillor Scott Hamilton, Executive Member for Community & Economic Development at SBC commented: “The announced funding from our partner SOSE is extremely welcome news and helps fund a critical next step in the development of the Borders Innovation Park at Tweedbank. 

"The site has incredible potential and will help to transform our area’s economy by tapping in to nearby transport links like the Borders Railway and attracting new workers, homeowners, businesses and visitors to the region. All of this together will help stimulate new rural economic growth whilst delivering lasting benefits to the wider region.”

The strong feeling of frustration at Scottish Borders Council in the wake of the latest setback was expressed by council leader Euan Jardine when he addressed the city deal committee.

Councillor Jardine told the meeting: "it was disappointing to receive the feedback from the Scottish Government civil servants last week that phase two of the Borders Innovation Park needs an updated full business case to cover the extension of the existing site. 

"Civil servants have also advised they need a separate new full business case for the next [third] phase, which would significantly delay project delivery. This is particularly frustrating as we had requested a simple change control process."

This would have allowed a different business use mix between office and flexible hybrid industrial space to reflect changes in the economy since the pandemic. 

"The experience in both Scottish Borders and in Fife is evidence of demand for business space. It's complex to demonstrate this significant market demand, but that initial phases of development in both Borders and Fife have been successfully let shows the need for public sector intervention to support business growth."

And the Borders council leader added: "Scottish ministers said at the Convention of the South of Scotland in September 2023, that they would explore a more pragmatic and responsive approach to business development in the south to support the development at Tweedbank and other key assets and sites. However, its clear civil servants are struggling to give us that flexibility."

There was support for that view from Midlothian councillor Russell Imrie who commented: "Things are not the same as they were in 2019. Civil servants are going to have to be more nimble on their feet. This may be the first example of its kind, and to hold back on this project is not acceptable".

Officials told Borders councillors in a March 2023 report there would be external funding for BIP of £4.972 million in 2023/24 and £6.183 million in 2024/25.

However, papers for the city deal committee meeting showed a sum of only £1 million for the innovation park in 2024/25. Just £0.1 million had been drawn down in the first quarter of the financial year. In fact total investment from city deal funds is £2.9 million, 20% of the £15 million allocated.

There is said to be considerable concern in local government circles that delays in project delivery like that now emerging in the case of Tweedbank's BIP may soon be commonplace.

We were told: "There is - all of a sudden - a need to “relook” at some projects which everyone thought were progressing OK; more/revised business cases needed.  The Borders BIP seems to be falling foul of a climate of civil servant anxiety about spending commitments in light of budget and monetary worries."

City deal committee members decided the organisation should write to appropriate Scottish ministers expressing their concerns and pressing the case for work on the BIP to restart without any further significant delays.

Teviotdale's new 'residents' may need special treatment!

by LESTER CROSS

The arrival of two majestic incomers to the Teviot valley in the Scottish Borders has prompted reconsideration of the possible impact a 53-turbine windfarm could have on these leading predators of the countryside.

A pair of golden eagles apparently settled in the area where the Teviot windfarm would be constructed in May 2023, introducing the potential for collision risk with turbines and turbine blades.

Now, in a revised submission to the Scottish Government's Energy Consents Unit, wildlife watchdog NatureScot says: "Whilst they do not appear to have to date, if this establishing pair build a nest, and this is close to the proposed development, further consideration of potential impacts would be required."

At the same time, an ornithological report prepared for developers Muirhall Energy concludes there would not be significant loss of golden eagle habitat if the vast project goes ahead.

The various applications seeking permission to deliver the facility across a large swathe of the valley have been under consideration since 2022. The original scheme envisaged 62 turbines before scaled down proposals were substituted earlier this year. Planning authority Scottish Borders Council is expected to take a decision on the application later this year.

Anne Brown, National Operations Officer (South) for NatureScot, writes in the recently published submission: "The AEI [Additional Environmental Information] Report includes an assessment of the impact of the proposed development on resident and dispersing golden eagle. 

"We agree with the report that collision risk is the lesser concern for golden eagles at this location, with displacement the main impact of the proposal. Using the satellite tag data, the report estimates a 3.2% loss of range habitat, which is not of concern in this context. We support the proposal for monitoring of golden eagle and habitat management for them, in consultation and partnership with the South of Scotland Golden Eagles Project (SSGEP)."

The original bird data report lodged by the developers before the arrival of the golden eagles stated: “Surveys have included flight activity surveys, breeding bird surveys (including specific surveys for black grouse, raptors, nightjar and waders), prey transects to assess habitat quality for raptors and winter walkovers. 

"These surveys have found that the site is of overall low ornithological sensitivity in relation to its potential for wind energy development. A number of species of conservation interest are known to pass through the study area, including barnacle geese and hen harrier. Breeding birds of interest include curlew, merlin, peregrine and goshawk.”

The SSGEP has been releasing tagged birds throughout the South of Scotland in recent years. Analysis  had indicated that sufficient habitat exists in the South of Scotland for 14 – 16 pairs of golden eagle, and of relevance to the Teviot windfarms project was the identification of suitable habitat in the nearby hills, mostly to the south-west towards Langholm.

According to the updated ornithological report commissioned by Muirhall: "The Golden Eagles project aims to reinforce the small breeding population of golden eagles in South Scotland through translocation of birds from other parts of Scotland. To date 26 birds have been released with satellite-tags. Satellite tag data was purchased from the project enabling an analysis of potential effects on golden eagles."

A pair of satellite-tagged golden eagles had established a territory which partially overlaps the area where turbines are proposed. 

A widely used approach for evaluating the impact of turbines in a golden eagle's territory showed 6.1% of the birds' range would be lost, marginally over the 5% threshold typically adopted to determine significance in such analyses. 

"However, in this case, due to the availability of satellite tag data from both the male and female birds in the range to define habitat use and loss, a loss of 3.2% is predicted; this is within the 5% threshold and thus on balance the impact is not likely to be significant. 

"Monitoring and habitat management are recommended. Consideration has also been given to the potential for effects on dispersing (non-territorial) birds. Analysis of the satellite tag data set provides strong evidence that there would not be significant loss of good golden eagle habitat used by dispersing golden eagles."

A golden eagle's range or territory can extend to 77 square miles.

Muirhall's report explains that prior to construction, further consultation will be undertaken with the SSGEP. Any additional measures required to mitigate the risk of construction disturbance will be implemented. 

Measures would include: Define any Sensitive Working Zones and Exclusion Zones in consultation with a recognised eagle ecologist following an updated review of sat tag data from (SSGEP), and share details of these zones with SSGEP, NatureScot and Scottish Borders Council’s Ecologist; Schedule works to minimise the level of activity in sensitive working zones during the period February to May inclusive. This restriction to be extended until August should it be confirmed that golden eagles are breeding within the sensitive working zone.

 

Climate change consequences on Borders agenda

by DOUG COLLIE

The likely impact of climate change on residents of the Scottish Borders will be considered at an event in Stow this week following detailed analysis of flood and weather warnings included in a report outlining measures to combat global warming locally.

Scottish Borders Climate Action Network, Change Mental Health and NHS Borders are organising the one-day get-together in a bid to build community resilience and outline ways of supporting rural mental health and combat climate anxiety.

The report - Climate Change Impacts Scottish Borders - is the work of Dr Lisa Adams, Specialist Registrar in Public Health at NHS Borders.

The analysis shows that from September 2023 until the end of January 2024 there had been 35 yellow warnings issued, in comparison to 29 within the same time frame the previous year. The trend in yellow weather warnings was likely to continue to rise. 

"Data regarding flood alerts and warnings (combined) was examined for Scottish Borders over the last 6 years. . When this is looked at annually, it can be seen that the overall trend for flood alerts and warnings is increasing across Borders, with the highest number recorded in 2023. 

"When the alerts and warnings are broken down monthly, the two highest peaks were in February (2020 and 2021). In February 2020, 3 severe flood alerts were issued to Hawick (Slitrig), Hawick (Teviot) and Newcastleton village."

A section of the document explaining the likely impacts of climate change in the Borders region lists areas most at risk.

"Specific high areas of concern for flooding include Hawick, Peebles, Jedburgh, Newcastleton and Eyemouth, based on projected risk and historic events.

"Areas that have a higher number of private water supplies are at increased risk of water quality issues from a number of climate related consequences, as well as water scarcity. New builds, and purpose built flats (especially top floor) are more at risk of overheating and ventilation issues. 

"Care homes, education settings and hospital sites are also at greater risk of overheating. Coastal communities are at risk of sea level rises as well as coastal erosion and the consequences of these. south facing areas, particularly on slopes and with good vegetation are most at risk of wildfire events. Steep sided river valleys are most at risk of landslides. Remote communities are at risk of much if the predicted changes to climate, imminent weather events and further impacts of all of these."

People most at risk, according to Dr Adams' report, will be older adults who are particularly vulnerable to the changes in climate, and some of the events and consequences that are predicted to occur. In the short term.

"The older adults of today are at risk of current climate changes, but it is important to remember that the 45-64 year age group are those that are likely to be most vulnerable to the impacts that are anticipated by the 2050s (which in Borders is our current largest proportion of the population)."

And the report warns: "Those who live in the most deprived areas of Borders are at risk of many of the impacts of climate change due to their baseline vulnerability and inability to adapt quickly to any severe weather events or infrastructure disruption and destruction. 

"They are also at risk of some of the mitigation and adaptation measures for climate change if these are not carefully considered. This is important as 21% of the population of Borders live in [areas of multiple deprivation]. The most deprived areas to consider are Langlee (part of Galashiels), Hawick, and Bannerfield in Selkirk."

As well as raising public awareness, other suggestions outlined in the report include:

*Working with health and social care to identify those who are most at risk from climate change, and to ensure that these services are also resilient to any climate impacts.

*Continue to work towards the actions outlined in the NHS Borders Climate Change and Sustainability Action Plan. Partnership Working.

*Consider specific vulnerable settings such as schools, care homes and workplaces, identifying measures could be put in place in these locations to enhance resilience and reduce vulnerability to some of the health impacts of climate change. 

Huge rise in Borders home educated children

EXCLUSIVE by OUR LOCAL GOVERNMENT EDITOR

The number of school age children in the Scottish Borders being educated at home has increased by a remarkable 770 per cent in seven years, according to new figures obtained by an organisation which supports parents who decide to eschew the state system.

Educational Freedom's joint founder Cheryl Moy submitted Freedom of Information requests to scores of educational authorities throughout England, Scotland and Wales, asking for data and other information relating to home education.

She was told in a response from Scottish Borders Council that as of August 2024 148 children from 120 households were being home taught. 

Figures provided by the local authority in a separate FOI request lodged in 2022 showed that just 17 pupils were receiving their education at home in 2017. The statistics for subsequent years were: 2018 - 67; 2019 - 53; 2020 - 41; 2021 - 73; and 2022 - 110. The 2024 figure for neighbouring Dumfries & Galloway is 185 children from 153 households.

Data from Scotland's education authorities suggests over 2,200 children are currently being schooled at home, up 40% in two years.

Earlier this year the NISAI Educational Institution declared: "This increase is due to lower educational standards and more classroom violence. Scotland’s decrease in international league tables for Reading, Maths and Science among 15-year-olds, along with stories of growing violence in schools, has resulted in a loss of trust in state education." 

Educational Freedom told us their survey work showed more and more people were choosing to self educate their children.

They said: "We really don’t think there’s any one reason, but awareness of home education being an option is probably the most important factor. Years ago parents forced unhappy children into school, kept trying to fight for Sen [Special Education Needs] to be met, but now there’s so much more knowledge about the choice, and people are starting to home educate."

This week the group published a major report based on the findings from their research. 

The report says: "Research and evidence regarding home education remain limited, with the perspectives of home educating parents and children frequently absent from official discourse. Drawing on statistical data from surveys, anecdotal insights from casework and discussions, and information obtained through Freedom of Information (FOI) requests, this report seeks to inform discussions and decision-making around home education."

Educational Freedom has supported tens of thousands of home educators, engaged with the majority of Local Authorities, participated in government consultations, and provided information to the Department for Education.

The report explains that many home educators expressed reluctance to participate in the survey, citing a lack of confidence that their voices would be heard and respected by either their council or the government. 

"This sentiment should be considered by the authorities when formulating policies and legislation, as meaningful consultation with home educators is essential. Home educators take their responsibility to provide a suitable education very seriously, and overwhelmingly oppose further restrictions, registers, or increased involvement from local authorities."

KEY FINDINGS - Researchers were told home education is often not a choice, but a last resort for many families. Those contacted cited a variety of complex reasons for choosing home education.

But even when initiated due to negative circumstances, many families reported wishing they had started home education earlier and intend to continue it. Home education is generally viewed as a positive experience by families. Unmet Special Educational Needs (SEN) were a significant factor for many families, with some feeling that schools and councils did not adequately support their children.

The 2024 survey results includes data from 178 local authorities although some were slow to respond to FOI requests from Educational Freedom.

Information collected shows that across the UK 100,340 children were known to be home educated, with 92,424 being reported as resident in England.

A search for home education guidance and policy on Scottish Borders Council's website produced a set of guidance produced by the Scottish Government in 2007. The authority's Education & Lifelong Learning Home Education policy document is dated 2008. 

'Shameful' cost of Borders PFI schools

by DOUGLAS SHEPHERD

Scottish Borders Council has come under fire from SNP politicians after Not Just Sheep & Rugby revealed the local authority has already paid £153 million for three secondary schools which only cost £72 million when they were built using the controversial Private Finance Initiative [PFI] system.

The drain on council resources via annual payments - currently running at over £16 million per year - is set to continue until 2038 when the deal with Luxembourg-controlled Scottish Borders Education Partnership is due to end.

In a media release issued today, SNP MSP Christine Grahame, who represents the  Midlothian South, Tweeddale and Lauderdale constituency in the Scottish Parliament declared: "It is shameful that at a time when Scottish Borders Council is cutting services to save money, it continues to be obligated to pay millions of taxpayers money to unanswerable, offshore equity firms who make huge profits. 

“Imagine the difference this money could have made if it was spent on local services. As we continue to deal with this horrendous legacy we must ensure it is never, ever allowed to happen again.”

As we reported, it is exactly 20 years since Borders councillors decided by 27 votes to two to use a PFI project to deliver replacement schools for Eyemouth, Earlston and Duns.

As Ms Grahame's statement explains PFI was heralded as a way for local government to fund public construction projects by partnering with private companies. Instead of the Council paying upfront, a private company builds the project, and the Council pays them back over time, meaning the cost can be spread. 

"However, many of the PFI contracts have astronomical charges and interest built into the contracts which leave the final cost often being multiple times more expensive than the original project."

Our analysis of council accounts and papers issued by the Partnership showed, among other things, the owners of the PFI contract made its highest annual profit of £851,000 in 2023 at the expense of the Council by providing operational and maintenance services, including related financial arrangements for the three schools.

SBC's unaudited accounts for 2023/24 reveal the Tory-led council will have to find a total of £16.694 million (including £3.468 million in interest) to meet its PFI commitments this financial year. The payment also includes £8.6 million for maintenance services and £4.623 million for reimbursement of capital expenditure.

Ms Grahame said: “The pursuit and promotion of PFI by successive Tory and Labour governments, until the SNP abolished the practice upon entering government in 2007, continues to be a blight on the public purse.

Meanwhile, Councillor Fay Sinclair [SNP] a Galashiels & District member of the Borders local  authority has submitted a question on PFI spending for consideration at a full council meeting next week.

Councillor Sinclair, who works part-time as a case manager for Ms Grahame, asks: "It is now 20 years since SBC voted to proceed with a PFI scheme to replace three secondary schools.

1. What was the cost of building these three schools?

2. How much has been paid by SBC for the scheme to date?

3. How much will be paid over the remaining 14 years of the deal?

4. What will be the overall cost to SBC of these three schools?

£72 million PFI schools have cost £153 million - so far!

SPECIAL FEATURE by OUR LOCAL GOVERNMENT EDITOR

Exactly twenty years after councillors in the Borders sanctioned the replacement of three secondary schools using the controversial PFI system, research shows taxpayers have already paid more than double the construction costs of the properties with fourteen years of the concession deal still to run.

Not Just Sheep & Rugby carried out the research using Scottish Borders Council's annual accounts and financial reports issued by Scottish Borders Education Partnership Ltd., the business which manages the Private Finance Initiative on behalf of a global Group based in Luxembourg.

The latest results for SBEP show it made its highest annual profit of £851,000 in 2023 by providing operational and maintenance services, including related financial arrangements for the schools in Eyemouth, Earlston and Duns which became fully operational in 2009.

But despite the healthy returns, the report shows Scottish Borders Council could face having to pay even more following confirmation the interest rate charged by the providers has been increased for the first time in seven years. 

The fixed rate of 5.72% which has been in place since 2015 was restated at 6.92% in 2022 and was 6.24% during 2023. The hike is attributed to the impact of inflation

The SBEP accounts also show the partnership company which has no employees generated turnover of £7.607 million compared to the adjusted total of £4.927 million in 2022. Maintenance of the schools is sub-contracted under a £58 million contract signed at the outset of the project which is scheduled to run until 2038.

According to archived reports, the design and construction of the schools by John Graham (Dromore) Ltd. totalled £72.512 million, and in 2009 the council's debt stood at £75.169 million.

An analysis of financial records show that by the end of fiscal year 2024/25 next March, the local authority will have paid a total of £153.121 million, including £42.086 million in interest rate charges.

The rest of the money - £111.035 million covers reimbursement of capital and maintenance services. The council's annual bill for PFI has more than doubled from a figure of £7.491 million in 2011/12. At the same time the capital sum remaining to be repaid has fallen from £75.168 million in 2009 to £53.675 million in 2023.

According to SBC's unaudited accounts for 2023/24 the council will have to find a total of £16.694 million (including £3.468 million in interest) to meet its PFI commitments this financial year. The payment also includes £8.6 million for maintenance services and £4.623 million for reimbursement of capital expenditure.

At a council meeting on September 16th, 2004, elected members voted by 27-2 to proceed with the PFI project. The only dissenting voices were Councillor John Mitchell and Councillor Vicky Davidson.

Here is a complete list of payments (in £millions) made by the local authority since 2011/12 as recorded in financial documents produced by the council and by SBEP:

Year            Interest          Total Payment           Outstanding Debt

2011/12       3.104                7.491                         2011   72.573

2012/13       3.055                7.836                         2012   71.954

2013/14       2.963                8.330                         2013   70.554 

2014/15       2.867                8.763                         2014   68.994

2015/16       2.776                8.296                         2015   69.440

2016/17       2.742                8.488                         2016   67.851

2017/18       2.661                8.685                         2017   66.106

2018/19       2.766              10.810                         2018   64.266

2019/20       2.804              10.999                         2019   62.434

2020/21       2.830              11.457                         2020   60.168

2021/22       3.202              13.944                         2021   58.129

2022/23       3.431              15.152                         2022   55.817

2023/24       3.417              16.176                         2023   53.675

2024/25       3.468              16.694                         2024   N/A 

All profits from payments the council makes using public money find their way to Group headquarters in Luxembourg. A similar three-school PFI project in Clackmannanshire and an Aberdeen road scheme are among more than 50 'assets' controlled worldwide by parent concern BBGI Global S.A.

The ultimate parent of SBEP enjoyed an extremely successful year in 2023 with more than £55 million paid out in dividends to shareholders.

As BBGI management state in their report: "Global paid a dividend of 7.93 pence per share in 2023, a six per cent increase on 2022 returning substantial index-linked gains to shareholders".

One of the directors of SBEP - he'd been on the board for 12 years and served as BBGI co-Chief Executive Officer during the same period - retired in January 2024 not long after approving the interest rate increase for the Scottish Borders PFI.

The parent company's remuneration report reveals that the total amount received by Frank Schramm in 2023 was £1,939,768 against total remuneration of £1,593,421 in the previous 12 months.

Last year's package consisted of a basic salary of £518,444; benefits of £14,547; annual bonus £542,708; pension £77,767; and long term initiative payment £786,303. 

Critics of the PFI system were warning before SBC signed off its deal that projects bankrolled by public authorities would provide "excessive returns for equity investors". It certainly appears to be the case in this instance. 

Could the £153 million spent so far have been put to better use? The often cash-strapped authority has been forced to cut services and save millions in recent years to  balance its revenue budget.

"Insufficient evidence" to disqualify Avocet top brass

EXCLUSIVE by OUR BUSINESS EDITOR

An investor who lost more than £35,000 after buying shares in the worthless Avocet Group of 'disruptive technology' businesses has spoken of his dismay and frustration after being told lengthy investigations by the UK Government's Insolvency Service failed to collect enough evidence to ban the firm's directors from running companies.

The angry shareholder who is also a pensioner is now demanding to see a copy of the report compiled by those who investigated the conduct of the directors of Omega Infinite PLC and three associated companies following the total collapse of the Group.

A Police Scotland investigation continues two and a half years after allegations of fraud and embezzlement involving millions of pounds were made and supported by 50 disgruntled shareholders. 

It is estimated that in total more than 600 investors in the 'revolutionary' agricultural and fuel production processes promoted by Avocet chairman Martin Frost and his colleagues have lost £17 million.

The investor contacted by Not Just Sheep & Rugby - he claims a group of 10-15 individuals in his area lost £500,000 between them - first wrote to his MP in 2022 asking for assistance after realising he had suffered a sizeable financial loss. We have decided not to identify him.

He told us: "My loss amounts to over a year's wages and while I realised the risks associated with share purchases I did not take into account that my money might be embezzled or stolen. I want the perpetrators held accountable. I now leave for work at 6 am to try to make good what I've had stolen".

The MP he turned to for help - Sir Julian Smith (Con) the member for Skipton & Ripon - passed his constituent's concerns to the then Secretary of State for Business, Energy & Industrial Strategy. But the matter appears to have been given a very low priority rating as nothing further was heard by the complainer.

But after a further approach to Sir Julian Smith in August, the Yorkshire MP received a very detailed response from Justin Madders, the recently elected Labour Government's Parliamentary Under-Secretary of State for Employment Rights, Competition and Markets. 

Mr Madders thanks Sir Julian for his correspondence of 15 August addressed to the Secretary of State for Business and Trade on behalf of his constituent "regarding Martin Frost, Bob Jennings, Eirlys Lloyd and Omega Infinite PLC (Omega) previously called Avocet Infinite PLC. I am replying as insolvency matters fall within my Ministerial portfolio."

Dr Jennings was a director of Omega from 2015 onwards while Ms Lloyd was the Company Secretary between 2015 and 2021.

Mr Madders continues: "I am sorry to read of  ******'s situation and the financial losses he incurred through his dealings with Omega. I understand how difficult it must be to invest in a company in good faith to then see that company become insolvent with little prospect of recovering the investment."

The letter says the Government expected directors to act honestly and to comply with their legal duties in respect of the companies they run, and it had a range of enforcement powers to use where necessary. These included civil powers to investigate both the conduct of the directors of companies which have entered insolvency proceedings, and to investigate live companies which had not entered a formal insolvency process.

Mr Madders goes on to say: "I am advised that following their insolvencies, the Insolvency Service conducted an investigation into Omega and two connected companies, Avocet Faculties Limited and Orrdone Farms Ltd to establish whether there was sufficient evidence, and whether it was in the public interest to bring director disqualification proceedings against any director of those companies, whether formally appointed as such or not. 

"Ultimately, after substantial enquiries, the investigation concluded that there was insufficient evidence to support an allegation of misconduct to the extent required to satisfy a court that any director should be disqualified. Consequently, the investigation was closed."

The Minister also reveals that The Insolvency Service additionally conducted an investigation into a live connected company, Genfro Limited. However insufficient evidence was established to form the basis of winding up in the public interest and the investigation was discontinued.

In April of this year Dr Jennings lodged an application with Companies House to have Genfro struck off the Register of Companies and dissolved. 

The company dubbed "Son of Avocet" by long-suffering shareholders in the Group seemed destined to be killed off in a matter of weeks, never having filed accounts since its birth in 2020. But the process was stopped in its tracks following an objection by an investor or a creditor.

After receiving the Madders letter, the complainer said: "I'm very disappointed with the outcome of the Insolvency Service involvement as this Avocet concept appeared to be promoted by the government in its infancy."

It appears this investor, like many others, was persuaded to part with money after reading glowing promotional articles about the Avocet Group in a magazine called Parliamentary Review and which they thought had the endorsement of the Conservative Government, and politicians Lord Blunkett and Lord Pickles.

In fact the publication is a pay-to-publish journal, with businesses having to write their own copy and pay up to £3,500 for it to be published. The journal is owned by Westminster Publications Ltd, a for-profit venture that is not affiliated with Parliament or the UK government.

Following a Sunday Times investigation into Avocet's collapse in 2022 the publishers removed all online content related to the Group companies.

The Yorkshire-based investor told us he was also influenced by a glossy brochure containing valuations of the Group's intellectual property [IP] which subsequently proved to be completely bogus. The Coller IP literature suggested Avocet held patents worth £60 million.

Avocet's sales pitch to investors also included the following entry in its 2017 annual accounts: "The agricultural division is expected to commence full trading in 2019. The Group also intends to launch its renewable energy division in 2019".

Neither 'division' managed to produce a single marketable product before their respective financial failures.

Our contact said: "So where was the due diligence by those who produced the IP valuations? My diligence was to trust the big players in all of this who unless things are ongoing in the background are too embarrassed and have scuttled away".

The individual has written again to Sir Julian Smith to say he believes the hundreds of investors in the companies led by Martin Frost would disagree with the Insolvency Service conclusions. He requests a copy of the investigation report.

He commented: "I am aware that a number of the shareholders have lost their life savings while others have now passed away. Yet the authorities who are supposed to regulate companies and their directors have failed to act".

We sent a detailed media enquiry to the Insolvency Service asking specific questions about the probe into the activities of Avocet's management.

In particular, we wanted to know: What did the ‘substantial enquiries’ involve? How many investors in the Group’s worthless shares were approached and interviewed? Was the Insolvency Service aware of a judgment in the Leeds Business Court which ruled that Mr Frost used well in excess of £400,000 of the company’s money to purchase two flats in Scarborough? Or that liquidators discovered a director’s loan account [DLA] in Mr Frost’s name which was used to pay for luxury holidays and a host of other items?

Mr Frost has claimed the DLA was fabricated. 

In a response, the Insolvency Service stated: "You will appreciate the Insolvency Service cannot comment directly on the enquires undertaken in the course of investigations or the responses received. However, an investigation was undertaken and it was concluded based on the information available that there was insufficient evidence to support an allegation of misconduct to the extent required to satisfy a court that any director should be disqualified."

Meanwhile, Police Scotland merely said: "Inquiries are ongoing".

Again, Mr Frost has denied any wrongdoing while running the Avocet Group and has repeatedly rejected claims the entire venture was a Ponzi scheme designed to defraud investors. 

 

Tweed project staff on lookout for another 'invader'

by OUR ENVIRONMENT EDITOR

Having successfully tackled a range of invasive non-native species across the River Tweed catchment over the last 22 years ranging from giant hogweed to American skunk cabbage, a specialist team is now ready to take on 'the worst aquatic weed in the UK' should it arrive uninvited in the Scottish Borders.

Floating pennywort, another unwanted immigrant from the Americas, has been confirmed in a nearby river system, according to the Tweed Forum which has been battling to contain if not eradicate fast growing foreign plants via the Tweed Invasives Project [TIP] since 2002.

In its annual report for 2023/24, the Forum outlines the vital work of the TIP in preventing the non-native species from smothering native vegetation along the Borders watercourses. 

Trustees of the Forum point out that with the most recent GB Invasive Non-Native Species (INNS) strategy estimating the cost of these species to the British economy at nearly £1.9 billion each year, as well as being one of the top five causes of biodiversity loss globally, the threat posed is clear.

"The Tweed Invasives Project, currently working on five target INNS within the Tweed catchment, aligns strongly with the aims of the national strategy", says the report, "in particular surveillance efforts to prevent the introduction of INNS from external sources".

Part of that work - with funding from two separate sources - will result in a revised and updated Tweed biosecurity plan to be published next year. This will provide a framework for the Forum and partner organisations to protect the freshwater environment from these harmful species by means of early detection and other measures.

"Recent early detection/prevention measures have included collaborating with North-east partners to develop an approach in dealing with floating pennywort if it is detected in the Tweed catchment".

The aquatic weed was introduced into the UK in the 1980s through the ornamental pond/water feature trade. Conservation agencies describe it as a strong contender for the title of worst aquatic weed in the country, having spread rapidly from garden ponds into waterways.

The Canal and River Trust warns: "It grows very rapidly in late summer, up to 20 centimetres per day, and is responsible for swamping waterways, blocking water flow, crowding out native plants and taking oxygen from fish and insects. It's becoming more and more of a problem across the country, blocking canals, rivers and other waterways.

"Like Japanese knotweed, floating pennywort also has the ability to grow from miniscule fragments, making its removal incredibly difficult and expensive."

In addition to its negative environmental impacts, the economic costs of this species can be high. Losses in tourism revenue are caused through disrupted fishing, river navigation and water sports. The weed also impacts commercial fisheries and blocks pipes and pumps which damages waterworks and can lead to flooding. Across Great Britain and Europe, these costs are estimated to exceed £25 million per year.

Meanwhile The Tweed Forum's continuing campaign against those invasives already present on the main river and its tributaries saw staff and project volunteers control 14,295 giant hogweed plants last year.

"Stands of American skunk cabbage have also responded to the ongoing control programme and the remaining large stands of Japanese knotweed are fragmented and much reduced." And the 'vigour' of Himalayan balsam has also been reduced, allowing native vegetation to co-exist with this 'smothering INNS'..

The Tweed project sends results of its work to the science team at CABI [ Centre for Agriculture & Bioscience International].

The Forum report concludes: "Surveys show that native vegetation is re-establishing at INNS control sites across the project area, demonstrating that nature can recover wherever those overpowering species have been removed".

Yet another Wull Muir windfarm appeal

by LESTER CROSS

The recent majority decision on a windfarm application by members of the Scottish Borders planning authority to ditch a recommendation by their own officers is being challenged by one of Europe's leading wind energy developers who failed in a previous bid to erect turbines in the same area.

Energiekontor UK Limited has been attempting to create an eight turbine windfarm called Wull Muir, near the village of Heriot, since 2018. But the original proposal was rejected by Scottish Borders Council at committee stage and again on appeal in 2020.

Grounds for the dismissal in February 2020 included "unacceptable landscape and visual impacts and a (subsequently resolved) potential impact on defence aviation safety. An appeal against the refusal was kicked out in October 2020. 

But it seemed Energiekontor's persistence would pay off when a revised and relocated scheme received the thumbs up [with conditions] from Borders planning staff. A recommendation for approval was submitted to councillors in July of this year.

The developers were surprised when the Planning Committee voted by a majority of six to three to throw out the new Wull Muir project. While one SNP member backed approval, two other Nationalist councillors successfully moved an amendment.

It meant the plans were rejected with the decision notice for refusal citing the following: "“The proposed development is contrary to Policy 11 - Energy of National Planning Framework 4 and Policy ED9 - Renewable Energy Development of the Scottish Borders Local Development Plan 2016 in that the windfarm would have significant adverse landscape and visual impacts particularly to the north and south of the proposed site. 

"The impacts are not localised, and it has not been demonstrated that design mitigation has been applied. The landscape and visual impacts do not outweigh the potential benefits of renewable energy in this location.”

According to the printed minute of the July planning meeting Councillor Viv Thomson, who moved for rejection of the application "omitted the word 'not' from her reason for refusal. The omission was subsequently identified and the decision reflects the accurate review of the committee".

Now, Energiekontor has lodged an appeal against that decision with the Scottish Government's Planning and Environmental Appeals Division [DPEA] and the case will be allocated to a planning reporter who will consider evidence.

An appeal statement includes a detailed assessment of the project by planning consultant David Bell who points out in his report that with an installed capacity of approximately 36 MW of wind, the proposed development would make a valuable and important contribution to the attainment of the UK and Scottish Government policies of encouraging renewable energy developments; and in turn contribute to the achievement of UK and Scottish Government targets.

Mr Bell explains: "There is now a distinct shift in policy emphasis from the displacement of higher carbon electricity generation to extending the use of electricity as the critical energy response to the climate emergency. The proposed development would generate enough electricity to power approximately 38,000 average Scottish households."

The Wull Muir windfarm would require capital investment of approximately £44 million; and in terms of the construction phase, the estimated employment at a local level is 60 jobs contributing £3.5 million into the Scottish Borders economy. According to Mr Bell, there would be a range of benefits to the local community that would be delivered through the proposed community benefit fund of approximately £180,000 on annual basis over the lifetime of the wind farm.

The assessment by Mr Bell says it is considered that the professional planning officers of the Council undertook, as they put it “a full and proper assessment”. The planners stated that “it is considered that repositioning the wind farm further south within the Moorfoot plateau, the proposed development has moved back from the edge of the Moorfoot Escarpment. 

"In comparison with the previous scheme, the potential landscape and visual impacts experienced from the north are reduced.”

Although the planning officers also claimed the proposal had not fully mitigated the concerns previously expressed by the Reporter in the Appeal for the previous application, they also stated that “it cannot be ignored that NPF4 is now more tolerant of significant landscape individual impacts arising from renewable energy development.” 

Mr Bell concludes that the proposed development would be consistent with all relevant policies of the Development Plan. Furthermore, the relevant material considerations support the position that planning permission should be granted.