EXCLUSIVE - by DOUG COLLIE
Not Just Sheep & Rugby can reveal that the waste management company awarded a £65 million contract by Scottish Borders Council was sponsoring a Jeremy Irons movie while the council was acting as guarantor for a £315,000 insurance bond the firm could not afford.
The revelation that New Earth Solutions and its offshore funder Premier Group Isle of Man were dabbling in show business but "could not afford to set aside the capital" to cover a requirement from the Scottish Environment Protection Agency is the latest in a long list of embarrassing and incredible disclosures since the contract between SBC and NES had to be "trashed" in February 2015.
New Earth was supposed to look after waste management issues and services in the Scottish Borders for 24 years, and was charged with the construction of a multi-million pound treatment plant at Easter Langlee on the outskirts of Galashiels.
But while the council was squandering well over £2 million of public money on consultants and on procuring and arranging the contract, NES had neither the funds nor the technology to deliver the urgently needed waste management solution.
The 'security' bond was required before an operating licence could be issued by SEPA for the
planned facility at Easter Langlee. The guarantee was to
ensure funds were available should an environmental event occur that required
clean-up at the facility.
It would also cover the cost of cleaning up/getting
rid of any waste left in the facility should NES cease trading. The undertaking
was required to ensure the permit was obtained, and SEPA would not issue a
certificate without it. But the council was forced to step in during 2012 after NES indicated it didn't have the money for the guarantee.
Ironically - or perhaps appropriately - the 2012 'docu-feature' in which NES became the main sponsor was entitled "Trashed". The Blenheim Films production was selected for a special screening at the Cannes Film Festival.
The blurb issued to promote the movie starring Jeremy Irons with music by Vangelis explained how Irons set out to discover the extent and effects of the global waste problem "as he travels the world to beautiful destinations tainted by pollution".
An official press release from Sally Fischer Public Relations told us "This is a meticulous, brave investigative journey that takes Irons (and us) from scepticism to sorrow and from horror to hope".
The lengthy news release goes on to confirm that New Earth Solutions is delighted to be a proud sponsor of Trashed. The firm is described as "a UK based waste treatment and renewable energy specialist dedicated to delivering robust technical and environmental solutions to the UK's challenge of finding sustainable ways to manage the waste society creates, promoting recycling and reducing customers' carbon footprint through quantifiably beneficial processes".
A glowing testimonial for a business which took Scottish Borders Council on a journey of less positive discovery!
And the Isle of Man-based Premier Group, named in confidential council documents as the funders for the Galashiels waste facility, was quick to jump aboard the "Trashed" bandwagon with its own upbeat 2012 news release.
According to Premier's David Mackenzie, the Group's Head of International Distribution: "We are delighted to announce that New Earth Solutions is the main sponsor of a new hard hitting documentary about waste and its impact on the environment.
"Whilst the film does not directly refer to New Earth Solutions, it certainly paints a picture of the growing need for their type of waste management solutions, not just in the UK but globally. The energy from waste initiatives which will be coming online around the year end will also contribute to resolving the problems highlighted by the film".
But as readers of these columns will know, after spending £60 million in a bid to develop and perfect a brand of Energy From Waste technology which was intended for use at Galashiels, NES was forced to dispose of the entire untried, flawed system to its lenders for a pittance. It is a pity that SBC decided to use council taxpayers' money to 'buy' this useless type of waste management kit before it had even been passed fit for commercial use.
The value of the sponsorship invested in Trashed by NES and Premier Group has not been made public. But perhaps there is scope for a sequel telling the story of how a gullible local council spent six years and millions of pounds on a project which produced the square root of nothing. Suggestions for a title on a postcard please....
Friday, 15 January 2016
Sunday, 10 January 2016
It Is With Regret We Announce....
OSSIE SHEARER on the passing of the Hawick News [office]
'LOCAL MEDIA DRIVES RESPONSE & ACTION' screamed the panel down the centre of page 16 of last week's Southern Reporter. Unfortunately the juxtaposition of the advert right next to a virtual obituary notice for the "death" of the Hawick News office this coming Friday could hardly have been more inappropriate.
Imagine the sense of outrage in the columns of the Hawick News if Scottish Borders Council announced it was closing its contact centre in the middle of town, forcing local inhabitants to pay their council tax in Selkirk or Jedburgh.
No doubt the paper would be running a campaign with online petition and no-nonsense editorials to preserve a local authority presence. Hawick's councillors wouldn't know what had hit them while senior officials at Newtown St Boswells would be branded 'enemies of Hawick'.
Yet as we exclusively revealed before Christmas, Johnston Press, the non-local owners of several Borders weekly papers, have decided to shut down the only newspaper office in the region's largest town as part of the company's latest cost cutting measures. It may prove to be a misguided decision, and certainly one which will not go down well with loyal readers of the News.
From this weekend the Hawick News which has been part of the fabric of The Auld Grey Toon since 1882 "will become part of The Southern Reporters [sic] Office in Selkirk", according to that 'It is with Regret' notice referred to earlier. Apparently there will be a drop off point for potential editorial contributions at a local gym.
The demise of the Hawick office is the latest in a string of closures by the Johnston Press Group which has seen newspaper offices disappear from Galashiels, Jedburgh, Kelso and Duns in recent years.
This regrettable trend has been repeated across Scotland and the rest of the United Kingdom by Johnston and many of its competitors.
When every small and medium sized town had an editorial presence the potential for members of the public to drop into an office with tips for stories and features resulted in far better editorial content than readers enjoy today. The local reporter was a valued member of the community, like the local 'bobby' who has also all but disappeared from our town centres.
But in a definite change for the worse the diminishing number of journalists now find themselves based in a central office - some refer to this as a news factory - and spend much of their time in front of computer screens processing editorial content on templates.
The opportunity to mix with potential contacts and to investigate wrong doing or even cover local events - once primary roles for the local press - have largely disappeared.
The lads and lasses who continue to produce your weekly paper do a sterling job, but they are working with at least one hand tied behind their backs as levels of investment in the editorial function are cut, then cut again.
Of course readers now have the option of turning to newspaper websites as the cost of paper editions spirals to unjustifiable heights. But a good deal of the content has little or no relevance locally with adverts for cruises and jewelry waiting to snare extra customers.
The closure of the Hawick News office is indeed regrettable, and marks yet another backward step in the decline of Borders local newspapers following their acquisition by national conglomerates.
Perhaps the time is right for the formation of a series of ultra-local websites to serve the distinctive communities that make up the Borders.
According to the industry magazine Press Gazette new research shows there are 550 active local and "hyperlocal" news websites across the UK. These are sites which are run independently of the regional newspaper industry and which, in some cases, fill gaps in coverage.
Over the last ten years there has been a net reduction of 200 in the number of local newspapers in the UK with thousands fewer regional press journalists employed in the industry. The new sites are generally run by volunteers, with a minority employing professional journalists.
Over the last ten years there has been a net reduction of 200 in the number of local newspapers in the UK with thousands fewer regional press journalists employed in the industry. The new sites are generally run by volunteers, with a minority employing professional journalists.
But here in the Borders are the resources, the momentum and desire for such a venture out there waiting to be tapped?
Sunday, 3 January 2016
'Financial health' check reveals debt mountain
DOUG COLLIE on why Scottish Borders Council may have been so keen to protect a private firm's 'economic interests' from public scrutiny
A ruling by Scotland's information commissioner which dashed Scottish Borders Council's hopes of covering up damaging financial facts about their former waste management contractor marked a fairly minor breakthrough in the long campaign to get at the truth behind the disastrous loss of millions of pounds of public cash.
But subsequent material compiled by Not Just Sheep & Rugby researchers may demonstrate why the local authority did not want the 'financial health' of New Earth Solutions Group opened up to scrutiny by council taxpayers and critics.
The Dorset-based company was selected by SBC in 2011 to deliver a £65 million contract including the development of a modern waste treatment plant at Easter Langlee, Galashiels. Original estimates valued the 24-year deal at up to £87 million.
But it became apparent in early 2015 that NES could not fund the project while their plans had also encountered insuperable technical issues. The entire contract was torn up and abandoned with SBC forced to write off the millions it had squandered over four years.
When faced with one of several Freedom of Information requests linked to the fiasco SBC refused to reveal a passage of text from a confidential March 2012 committee report, arguing that disclosure would substantially prejudice NES's legitimate economic interests.
The council told Commissioner Rosemary Agnew that the sentence they wished to hide contained information which would "give a clear indication of the financial health of NES".
But in her decision report Ms Agnew rightly asserted that the company's financial status was readily accessible in annual accounts lodged with Companies House. She went on to point out that since 2012 NES had submitted two sets of accounts which clearly contained information on its 'financial health'.
So what kind of financial picture was painted by the New Earth Solutions Group accounts for 2010/11 - BEFORE the council signed its original deal with NES in April 2011?
Well, in the 12 months to January 2011 the business recorded a loss of £8.358 million on an annual turnover of £11.103 million. The NES net debt totaled £55.572 million compared to £26.992 million in 2010.
SBC has been asked to disclose details of financial and technical checks carried out on NES prior to the contract being let. But the council has refused, again citing grounds of commercial confidentiality, and disclosure now hinges on further decisions from the Scottish Information Commissioner.
At this stage it is not clear whether councillors were aware of NES's 2011 losses and sizeable debts as they negotiated the multi-million pound contract. But the annual accounts for that year, running to 50 pages, included a detailed catalogue of the firm's indebtedness.
Here is a summary of various debts which formed part of the profile of NES's 'financial health':
“Nord LB bank has a fixed and floating charge over certain
Group assets and contracts. They also hold the right to set-off on certain
project account balances. £18.47 million of the Nord LB bank debt is repayable
in instalments by July 2022 with interest fixed at 6.76%. £9.203 million of
Nord LB bank debt is repayable in instalments by July 2017 with interest fixed
at 6.19%”.
NES also had loan notes of £1.5 million with an
interest rate of 10% repayable by September 2012; £3.029 million of loan notes
at 15% repayable by September 2020; £4.133 million of loan notes at 12%
repayable by September 2022; £12 million of loan notes at 8.75% repayable by
June 2023; £6 million of loan notes at 8.75% repayable by March 2025, and
£13.478 million of loan notes at 12% repayable by March 2025.
Did any of these significant entries from the NES financial records feature in risk assessments or "due diligence" reports considered by elected members in 2010 and 2011 prior to the crucial contract being rubber-stamped? Only the council knows the answer to that question, although surely the public has a right to know having seen large sums of their money disappearing with nothing to show for its loss.
When the contract notice inviting bids for the so-called Borders waste treatment solution was first published on January 7th 2009 the requirements were set out in great detail.
Unfortunately the failure of NES to deliver on the terms of their contract, and the years of dithering and delay by the local authority means the Borders is already missing Government targets on recycling and diversion from landfill by a country mile.
A key condition attached to the contract notice read: "All candidates will be required to produce a certificate or declaration demonstrating that they are not bankrupt or the subject of an administration order, are not being wound up, have not granted a trust deed, are not the subject of a petition presented for sequestration of their estate, have not had a receiver, manager or administrator appointed and are not otherwise apparently insolvent".
But waste management "specialists" with burgeoning net debts of £55 million were not excluded from the tendering process, and were expected to source the £23 million needed to build the Easter Langlee facility. It seems to have taken SBC four years - not to mention more than £2 million of wasted expenditure - to realise this financial scenario amounted to Mission Impossible.
Other important conditions outlined during the bidding process were apparently designed to ensure the local authority had access to the state of the successful tenderer's "financial health".
Those conditions were:
Other important conditions outlined during the bidding process were apparently designed to ensure the local authority had access to the state of the successful tenderer's "financial health".
Those conditions were:
"All candidates will be required to provide a statement,
covering the three previous financial years including the overall turnover of
the candidate and the turnover in respect of the activities which are of a
similar type to the subject matter of this notice.", and "All candidates will be required to provide statements of
accounts or extracts from those accounts relating to their
business."
The question is, did those councillors, senior officials and highly paid consultants responsible for drawing up and finalising the costly and ultimately useless contract study the figures and conclude that the "financial health" of NES was robust enough to deliver a 24-year solution for the Borders' waste management service? If they did, then it seems they made a dreadfully expensive mistake.
Monday, 21 December 2015
Thirteen little words tell a very worrying story!
by DOUGLAS SHEPHERD
Waste disposal contractors selected by Scottish Borders Council to deliver a £80 million contract over 24 years could not afford the capital for a modest insurance policy associated with the project, it has been revealed.
The shock disclosure - outlined in just thirteen words - has been made after the Council was told to release information previously classified as top secret following an unsuccessful attempt to block a Freedom of Information (FOI) request.
This newly published information seems certain to represent an acute embarrassment for councillors and leading officers associated with the ill-fated Easter Langlee waste management plans which were abandoned in February 2015 at a cost of more than £2 million to the public purse. At the end of the day the contractor was unable to fund the project and technical issues associated with it could not be overcome.
The information which SBC was keen to suppress dates back to March 2012, shortly after the multi-million pound deal with waste management "specialists" New Earth Solutions (NES), of Verwood, Dorset, was signed.
Before an operating certificate could be secured from the Scottish Environment Protection Agency for the "state of the art" waste management centre to serve the Borders, NES was supposed to provide an insurance guarantee of up to £315,000 to cover the cost of potential environmental incidents at the plant or to pay for the removal of waste in the event of NES crashing out of business.
So it was both unusual and puzzling when it came to light that in fact SBC - not their contractors - had to step in and provide SEPA with the necessary 'Letter of Undertaking'.
When a FOI request was submitted to the council earlier this year the requester was told a report covering the topic was confidential and would not be released due to 'commercial sensitivity'.
Rosemary Agnew, the Scottish Information Commissioner, was asked to intervene, and during the course of her inquiries SBC did release parts of the secret document, written originally by their Director of Environment & Infrastructure.
But they insisted part of a sentence would continue to remain "off limits", claiming its publication would be likely to cause substantial harm to the legitimate economic interests of NES. The Commissioner threw out SBC's arguments for withholding the material and gave the local authority until January 15 to comply with her decision.
Three weeks after Ms Agnew's decision notice was issued SBC released copies of the thirteen missing words from the secret document.
The relevant paragraph with the previously redacted words in capital letters reads as follows: "NES cannot obtain £315k of insurance without incurring costs that would have to be passed back directly to the council, NOR CAN THEY AFFORD TO HOLD THE CAPITAL ASIDE TO COVER THIS REQUIREMENT.
"As the council are ultimately responsible for the facility, the authority is being sought to issue a letter of comfort/guarantee to SEPA to cover this requirement, without the need for a fixed bond".
The undertaking was required to ensure the permit was obtained, and SEPA would not issue a certificate without it. The confidential report states: “The bond requirement is a recent requirement by SEPA for private sector companies”.
If NES could not afford the insurance premium for a £315,000 guarantee in March 2012, how did SBC expect the company to finance even a fraction of the massive waste management project which was so vital to the environment of the Scottish Borders?
But despite this potentially explosive insight into NES's 'financial health' not a single councillor appears to have asked questions or demanded assurances that the firm could deliver the facility.
A former council insider commented: "The case for full disclosure is now more pressing than ever. It seems clear those responsible for this fiasco failed to ensure NES was even capable of paying an insurance premium. Alarm bells should have been ringing not long after the original contract was awarded. Yet SBC stuck with NES for three long and costly years before the balloon went up".
Waste disposal contractors selected by Scottish Borders Council to deliver a £80 million contract over 24 years could not afford the capital for a modest insurance policy associated with the project, it has been revealed.
The shock disclosure - outlined in just thirteen words - has been made after the Council was told to release information previously classified as top secret following an unsuccessful attempt to block a Freedom of Information (FOI) request.
This newly published information seems certain to represent an acute embarrassment for councillors and leading officers associated with the ill-fated Easter Langlee waste management plans which were abandoned in February 2015 at a cost of more than £2 million to the public purse. At the end of the day the contractor was unable to fund the project and technical issues associated with it could not be overcome.
The information which SBC was keen to suppress dates back to March 2012, shortly after the multi-million pound deal with waste management "specialists" New Earth Solutions (NES), of Verwood, Dorset, was signed.
Before an operating certificate could be secured from the Scottish Environment Protection Agency for the "state of the art" waste management centre to serve the Borders, NES was supposed to provide an insurance guarantee of up to £315,000 to cover the cost of potential environmental incidents at the plant or to pay for the removal of waste in the event of NES crashing out of business.
So it was both unusual and puzzling when it came to light that in fact SBC - not their contractors - had to step in and provide SEPA with the necessary 'Letter of Undertaking'.
When a FOI request was submitted to the council earlier this year the requester was told a report covering the topic was confidential and would not be released due to 'commercial sensitivity'.
Rosemary Agnew, the Scottish Information Commissioner, was asked to intervene, and during the course of her inquiries SBC did release parts of the secret document, written originally by their Director of Environment & Infrastructure.
But they insisted part of a sentence would continue to remain "off limits", claiming its publication would be likely to cause substantial harm to the legitimate economic interests of NES. The Commissioner threw out SBC's arguments for withholding the material and gave the local authority until January 15 to comply with her decision.
Three weeks after Ms Agnew's decision notice was issued SBC released copies of the thirteen missing words from the secret document.
The relevant paragraph with the previously redacted words in capital letters reads as follows: "NES cannot obtain £315k of insurance without incurring costs that would have to be passed back directly to the council, NOR CAN THEY AFFORD TO HOLD THE CAPITAL ASIDE TO COVER THIS REQUIREMENT.
"As the council are ultimately responsible for the facility, the authority is being sought to issue a letter of comfort/guarantee to SEPA to cover this requirement, without the need for a fixed bond".
The undertaking was required to ensure the permit was obtained, and SEPA would not issue a certificate without it. The confidential report states: “The bond requirement is a recent requirement by SEPA for private sector companies”.
If NES could not afford the insurance premium for a £315,000 guarantee in March 2012, how did SBC expect the company to finance even a fraction of the massive waste management project which was so vital to the environment of the Scottish Borders?
But despite this potentially explosive insight into NES's 'financial health' not a single councillor appears to have asked questions or demanded assurances that the firm could deliver the facility.
A former council insider commented: "The case for full disclosure is now more pressing than ever. It seems clear those responsible for this fiasco failed to ensure NES was even capable of paying an insurance premium. Alarm bells should have been ringing not long after the original contract was awarded. Yet SBC stuck with NES for three long and costly years before the balloon went up".
Friday, 18 December 2015
Incredible ups and downs in SBC staffing levels
by EWAN LAMB
EXCLUSIVE
The headcount of people on Scottish Borders Council's payroll fell by a staggering 700 in the space of three months during 2009 then rose by an equally dramatic 300 full-time equivalents in a single quarter in 2010.
Those are just two of the seismic shifts in the staffing levels which have come to light after radical adjustments and amendments to Borders local government employment data during lengthy consultations between SBC and the Scottish Government.
The revised information - the council had neglected to include casual workers and relief staff in their quarterly returns ever since national record keeping began more than a decade ago - was published on the SNP Government's website earlier this week.
The accuracy of the council's information was called into question earlier this year after three different totals for headcount (total number of full and part time workers) and so-called full time equivalents (FTE) were issued in the space of a few weeks. Headcount totals given out to Freedom of Information requesters and contained in reports to council varied from 5,700 to 6,421.
SBC was contacted for an explanation after the matter was drawn to the attention of the Government's statistics division in Edinburgh. It was then discovered that casual and relief staff had been left out of the calculations.
The council has now submitted "corrected" figures for both categories of statistics right back to the first quarter of 2009. And the local authority is now believed to be assessing what information could be made available for the period prior to that.
However, there would seem to be a number of bizarre statistics, even after the completion of the rejigged staffing levels. For example, the inclusion of casual staff from the first quarter of 2009 meant the headcount went up from 5,700 in the last quarter of 2008 to 6,100 to take account of the "missing" employees. That seems entirely logical.
But during the same period FTEs actually fell from 4,700 to 4,600. It means that while the headcount went up by more than 7% the FTE total fell by 2.1%. A real puzzler that for mathematicians to ponder over.
It is difficult to comprehend how the payroll total was slashed by 700 (6,200 to 5,500) between the second and third quarters of 2009, representing a drop of more than 11% in the headcount. In the same three months the number of FTEs went down by 500 (4,700 to 4,200) or 10.6%.
But then SBC appear to have recruited 300 extra FTEs between the fourth quarter of 2009 and the first three months of 2010. In the same period the headcount only increased by 100.
One observer of local government affairs asked: "How did the finance department manage to budget and allow for such incredulous fluctuations in the SBC wage bill?"
In an explanatory note accompanying the Government's latest official quarterly publication covering public sector employment, readers are told: "Prior to quarter one of 2009 SBC head counted and FTE figures do not include casual/relief employees who were paid in the reference period. This means that these figures under-estimate the headcount and FTE for Scottish Borders Council."
There was another major reduction in staffing levels during 2015. The headcount fell from 5,600 to 4,800 in the second quarter of the year after hundreds of care staff were transferred to SB Cares, an arms length company.
It would certainly seem from the masses of tables on the Scottish Government's website that the yo-yoing Borders figures may require further scrutiny.
EXCLUSIVE
The headcount of people on Scottish Borders Council's payroll fell by a staggering 700 in the space of three months during 2009 then rose by an equally dramatic 300 full-time equivalents in a single quarter in 2010.
Those are just two of the seismic shifts in the staffing levels which have come to light after radical adjustments and amendments to Borders local government employment data during lengthy consultations between SBC and the Scottish Government.
The revised information - the council had neglected to include casual workers and relief staff in their quarterly returns ever since national record keeping began more than a decade ago - was published on the SNP Government's website earlier this week.
The accuracy of the council's information was called into question earlier this year after three different totals for headcount (total number of full and part time workers) and so-called full time equivalents (FTE) were issued in the space of a few weeks. Headcount totals given out to Freedom of Information requesters and contained in reports to council varied from 5,700 to 6,421.
SBC was contacted for an explanation after the matter was drawn to the attention of the Government's statistics division in Edinburgh. It was then discovered that casual and relief staff had been left out of the calculations.
The council has now submitted "corrected" figures for both categories of statistics right back to the first quarter of 2009. And the local authority is now believed to be assessing what information could be made available for the period prior to that.
However, there would seem to be a number of bizarre statistics, even after the completion of the rejigged staffing levels. For example, the inclusion of casual staff from the first quarter of 2009 meant the headcount went up from 5,700 in the last quarter of 2008 to 6,100 to take account of the "missing" employees. That seems entirely logical.
But during the same period FTEs actually fell from 4,700 to 4,600. It means that while the headcount went up by more than 7% the FTE total fell by 2.1%. A real puzzler that for mathematicians to ponder over.
It is difficult to comprehend how the payroll total was slashed by 700 (6,200 to 5,500) between the second and third quarters of 2009, representing a drop of more than 11% in the headcount. In the same three months the number of FTEs went down by 500 (4,700 to 4,200) or 10.6%.
But then SBC appear to have recruited 300 extra FTEs between the fourth quarter of 2009 and the first three months of 2010. In the same period the headcount only increased by 100.
One observer of local government affairs asked: "How did the finance department manage to budget and allow for such incredulous fluctuations in the SBC wage bill?"
In an explanatory note accompanying the Government's latest official quarterly publication covering public sector employment, readers are told: "Prior to quarter one of 2009 SBC head counted and FTE figures do not include casual/relief employees who were paid in the reference period. This means that these figures under-estimate the headcount and FTE for Scottish Borders Council."
There was another major reduction in staffing levels during 2015. The headcount fell from 5,600 to 4,800 in the second quarter of the year after hundreds of care staff were transferred to SB Cares, an arms length company.
It would certainly seem from the masses of tables on the Scottish Government's website that the yo-yoing Borders figures may require further scrutiny.
Monday, 14 December 2015
New Earth fund's new potential victims
by DOUG COLLIE
who discovers the suspended fund which was to have financed a multi-million pound waste treatment facility for the Scottish Borders is having a negative impact worldwide.
Almost a year after the disastrous contract between waste handling 'specialists' New Earth Solutions (NES) Group and Scottish Borders Council (SBC) collapsed, owing local council taxpayers more than £2 million, the sub-plots involving companies and funds linked to the ill-fated project are hitting investors and shareholders on a global scale.
It was the Isle of Man-controlled New Earth Recycling and Renewable (NERR) Fund which was to have provided the capital for the development of a "ground breaking" treatment centre at Easter Langlee on the outskirts of Galashiels.. So presumably SBC lead councillors and senior officials carried out rigorous checks before awarding the vital environmental deal to NES and their paymasters, Premier Group.
A few months after the original contract was agreed in 2011 for the tried and tested conventional facility which would have diverted 80% of Borders rubbish from landfill, Premier Group director Jamie Sutton told the renowned Wealth Advisor website the various funds under his company's control were managing £500 million of investments with NERR gaining £2.5 million per month and achieving double figure returns annually.
According to Mr Sutton: "With a decent track record, we are confident that new investments will continue to grow at least at this rate and higher if the economic recovery can gather pace. Investors in the fund are high net worth individuals investing directly or through international life companies and/or pension funds".
He added that investment risk was managed from the outset when the full cost-benefit case was prepared for consideration by the investment committee. Mr Sutton explained: "Corporate risk is monitored at board level, where the fund has director representation of the New Earth Solutions Group as well as in any SPV (Special Purpose Vehicle) set up to hold recycling facility assets".
In the Borders case the SPV was New Earth Solutions (Scottish Borders) Ltd, a company established in 2011 with just two £1 shares held by another New Earth business called NES Management Services LLP.
But barely two years after Mr Sutton's upbeat interview the NERR fund was suspended with all subscriptions into it ceasing from January 8th 2014 and all redemptions to investors and shareholders banned from November 7th 2013.
That remains the position to this day, and it seems clear NERR could not have funded the Easter Langlee plant. In a recent missive to those affected by the fund's suspension, Premier director Michael Richardson warned: "The Fund is currently considering a number of restructuring options with potentially different outcomes for the calculation of the net asset value. As a consequence, at this time, the directors are unable to provide any indicative value for investors."
As hundreds of investors in the UK, Europe and beyond find their money locked up in the suspended NERR fund, Not Just Sheep & Rugby has learned that a New Zealand company involved in the transfer of pensions from Great Britain has been forced to place its own temporary suspension of all member redemptions.
GBP International, based in Auckland, had invested most of its 3.18 million New Zealand dollars in NERR and its sister EcoEarth Resources fund which has also been suspended by Premier Group. Apparently Premier had been inundated with requests for withdrawals from that fund which specialises in the development of bamboo plantations in Central America.
Investment News NZ reported that the GBP scheme accounts revealed: "The trustee is uncertain when the scheme will be able to lift this suspension as it is reliant on the lifting of redemption suspensions on at least one of the underlying investments..."
Tony Chamberlain, GBP International's co-director, confirmed that the scheme prospectus had been withdrawn. He was not at liberty to give any further information.
who discovers the suspended fund which was to have financed a multi-million pound waste treatment facility for the Scottish Borders is having a negative impact worldwide.
Almost a year after the disastrous contract between waste handling 'specialists' New Earth Solutions (NES) Group and Scottish Borders Council (SBC) collapsed, owing local council taxpayers more than £2 million, the sub-plots involving companies and funds linked to the ill-fated project are hitting investors and shareholders on a global scale.
It was the Isle of Man-controlled New Earth Recycling and Renewable (NERR) Fund which was to have provided the capital for the development of a "ground breaking" treatment centre at Easter Langlee on the outskirts of Galashiels.. So presumably SBC lead councillors and senior officials carried out rigorous checks before awarding the vital environmental deal to NES and their paymasters, Premier Group.
A few months after the original contract was agreed in 2011 for the tried and tested conventional facility which would have diverted 80% of Borders rubbish from landfill, Premier Group director Jamie Sutton told the renowned Wealth Advisor website the various funds under his company's control were managing £500 million of investments with NERR gaining £2.5 million per month and achieving double figure returns annually.
According to Mr Sutton: "With a decent track record, we are confident that new investments will continue to grow at least at this rate and higher if the economic recovery can gather pace. Investors in the fund are high net worth individuals investing directly or through international life companies and/or pension funds".
He added that investment risk was managed from the outset when the full cost-benefit case was prepared for consideration by the investment committee. Mr Sutton explained: "Corporate risk is monitored at board level, where the fund has director representation of the New Earth Solutions Group as well as in any SPV (Special Purpose Vehicle) set up to hold recycling facility assets".
In the Borders case the SPV was New Earth Solutions (Scottish Borders) Ltd, a company established in 2011 with just two £1 shares held by another New Earth business called NES Management Services LLP.
But barely two years after Mr Sutton's upbeat interview the NERR fund was suspended with all subscriptions into it ceasing from January 8th 2014 and all redemptions to investors and shareholders banned from November 7th 2013.
That remains the position to this day, and it seems clear NERR could not have funded the Easter Langlee plant. In a recent missive to those affected by the fund's suspension, Premier director Michael Richardson warned: "The Fund is currently considering a number of restructuring options with potentially different outcomes for the calculation of the net asset value. As a consequence, at this time, the directors are unable to provide any indicative value for investors."
As hundreds of investors in the UK, Europe and beyond find their money locked up in the suspended NERR fund, Not Just Sheep & Rugby has learned that a New Zealand company involved in the transfer of pensions from Great Britain has been forced to place its own temporary suspension of all member redemptions.
GBP International, based in Auckland, had invested most of its 3.18 million New Zealand dollars in NERR and its sister EcoEarth Resources fund which has also been suspended by Premier Group. Apparently Premier had been inundated with requests for withdrawals from that fund which specialises in the development of bamboo plantations in Central America.
Investment News NZ reported that the GBP scheme accounts revealed: "The trustee is uncertain when the scheme will be able to lift this suspension as it is reliant on the lifting of redemption suspensions on at least one of the underlying investments..."
Tony Chamberlain, GBP International's co-director, confirmed that the scheme prospectus had been withdrawn. He was not at liberty to give any further information.
Sunday, 6 December 2015
"Secrecy" agreements no guarantee of confidentiality
by EWAN LAMB
A six-year confidentiality agreement like the one signed by Scottish Borders Council and New Earth Solutions in March 2015 after their 24-year waste management contract collapsed in disarray does not mean parties can always rely on such agreements to withhold information from the public.
That is the significant conclusion reached by Scottish Information Commissioner (SIC) Rosemary Agnew who, as we reported last week, has ruled that SBC must release a single line of "secret" text to a Freedom of Information requester.
The Commissioner's Decision Notice in this case reveals that the local authority and their contractor, who could not deliver a state-of-the-art waste management facility at Easter Langlee after running into insurmountable technical and financial issues, re-signed their confidentiality agreement a month after severing their business relationship. Under the terms of that agreement disclosure of commercially sensitive information was to have been forbidden until March 2021.
During her investigation into SBC's refusal to provide the requester with the information he asked for, SBC claimed their confidentiality clause applied to the requested information. Apparently the definition of confidential information in the agreement with NES is "any and all information of a confidential nature relating to the other party, either in writing, orally or in any other form."
At the same time the agreement sought to recognise the existence of the Freedom of Information and Environmental Information regulations (EIRs). However, as the Decision Notice goes on to explain, the council took the view that where an exemption applied, they should seek to preserve the integrity of the confidentiality agreement and act in accordance with that exemption.
But according to the SIC, she does not accept that the existence of a confidentiality agreement will, in itself, mean that all information captured by such a clause should be, or will be, automatically considered confidential.
As Ms Agnew rightly asserts: "To accept such a proposition would essentially give public authorities the ability to contract out of their obligations under the EIRs, regardless of whether the information is actually confidential".
Her report reveals that a separate clause in the SBC/NES contract recognises that, regardless of their agreement, there will be times when information must be disclosed by the council in order to allow it to comply with its statutory duties.
Yet SBC has sought to invoke the provisions of its 'secrecy' agreement on no fewer than four occasions when requests for information about the waste contract fiasco were submitted to the local authority. Three other linked investigations by the SIC are continuing with decisions expected at some point in the future.
In this first case concerning SBC's decision to stand as guarantor for a £315,000 bond on behalf of NES (Scottish Borders) Ltd, the contractors selected to build the Easter Langlee plant, Ms Agnew has firmly rejected the council's confidentiality arguments.
"The Commissioner has considered all of these arguments carefully but she is not persuaded that disclosure of the withheld information would cause, or be likely to cause, substantial harm to a legitimate economic interest", she concludes.
A six-year confidentiality agreement like the one signed by Scottish Borders Council and New Earth Solutions in March 2015 after their 24-year waste management contract collapsed in disarray does not mean parties can always rely on such agreements to withhold information from the public.
That is the significant conclusion reached by Scottish Information Commissioner (SIC) Rosemary Agnew who, as we reported last week, has ruled that SBC must release a single line of "secret" text to a Freedom of Information requester.
The Commissioner's Decision Notice in this case reveals that the local authority and their contractor, who could not deliver a state-of-the-art waste management facility at Easter Langlee after running into insurmountable technical and financial issues, re-signed their confidentiality agreement a month after severing their business relationship. Under the terms of that agreement disclosure of commercially sensitive information was to have been forbidden until March 2021.
During her investigation into SBC's refusal to provide the requester with the information he asked for, SBC claimed their confidentiality clause applied to the requested information. Apparently the definition of confidential information in the agreement with NES is "any and all information of a confidential nature relating to the other party, either in writing, orally or in any other form."
At the same time the agreement sought to recognise the existence of the Freedom of Information and Environmental Information regulations (EIRs). However, as the Decision Notice goes on to explain, the council took the view that where an exemption applied, they should seek to preserve the integrity of the confidentiality agreement and act in accordance with that exemption.
But according to the SIC, she does not accept that the existence of a confidentiality agreement will, in itself, mean that all information captured by such a clause should be, or will be, automatically considered confidential.
As Ms Agnew rightly asserts: "To accept such a proposition would essentially give public authorities the ability to contract out of their obligations under the EIRs, regardless of whether the information is actually confidential".
Her report reveals that a separate clause in the SBC/NES contract recognises that, regardless of their agreement, there will be times when information must be disclosed by the council in order to allow it to comply with its statutory duties.
Yet SBC has sought to invoke the provisions of its 'secrecy' agreement on no fewer than four occasions when requests for information about the waste contract fiasco were submitted to the local authority. Three other linked investigations by the SIC are continuing with decisions expected at some point in the future.
In this first case concerning SBC's decision to stand as guarantor for a £315,000 bond on behalf of NES (Scottish Borders) Ltd, the contractors selected to build the Easter Langlee plant, Ms Agnew has firmly rejected the council's confidentiality arguments.
"The Commissioner has considered all of these arguments carefully but she is not persuaded that disclosure of the withheld information would cause, or be likely to cause, substantial harm to a legitimate economic interest", she concludes.
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