Tuesday, 6 March 2018

Regulator urged: "End this scandal now"


Financial advisers who persuaded unwitting clients to invest millions of pounds in unregulated offshore funds like the one chosen by Scottish Borders Council to bankroll a £23 million waste treatment facility should be banned from the sector, it has been claimed.

It follows the latest revelations involving the liquidated New Earth Recycling & Renewables [Infrastructure] fund (NERR) which loaned over £30 million to insolvent waste management contractors New Earth Solutions Group (NESG).

Back in 2011 NESG was handed a 24-year £80 million contract by Borders councillors to solve the region's refuse disposal problems before landfilling of rubbish is outlawed in a few years time.

But the deal had to be abandoned in 2015 when the local authority finally realised NESG and its "funders" NERR were incapable of delivering the planned treatment plant on a site at Easter Langlee on the outskirts of Galashiels.

While the contract was 'live' over a four year period SBC provided credibility for the useless partnership to lure hundreds, if not thousands, of investors to sink their savings and pension pots into what turned out to be a bottomless pit. At the same time the council squandered £2.4 million of taxpayers' money pursuing their dream which developed into a horrific nightmare for all concerned.

The latest tragic story resulting from Isle of Man-based NERR's collapse has been told by The Sunday Times, which had already uncovered other tales of woe linked to the New Earth businesses.

Meanwhile liquidators financed by the Manx financial services regulator continue to pore over 200,000 documents in a bid to establish the reasons for NERR's catastrophic collapse which has left more than 3,000 investors out of pocket. Action may be taken against the parties responsible.

The Sunday paper's latest expose centres on friends Jackie Naghten and Louise Brassey, two clients of adviser Terence Brimble, who lost over £650,000 of pension savings they invested on his recommendations, with fees totalling £100,000.They ended up having to claim on the Financial Services Compensation Scheme (FSCS), receiving the maximum £50,000 each.

The newspaper told how Naghten and Brassey, sought advice from Brimble in 2011 - the same year SBC awarded New Earth that £80 million deal - after their employer offered an enhanced defined benefit transfer value. 

The pair described themselves as low to medium-risk investors. However, Brimble recommended they invest in a "high-risk, unregulated offshore fund called Premier New Earth Solutions Recycling Facilities". Over the following five years the fund’s value fell by 35%. The fund was suspended in 2014. It collapsed in 2016.

. According to the FSCS, Naghten’s lost a total of £471,462 and Brassey lost £181,698, as a result of Brimble’s advice.

Speaking to The Sunday Times Brassey, said: ‘At no time did [Brimble] tell me New Earth was high-risk, but actually sang its virtues, saying he had his entire pension invested in it. At no time did he say it was unregulated.’

To compound matters, Brimble is said to have applied to have his company struck off the Register of Companies in 2016 only to have it replaced by a different advice firm which means he is still advising clients on how to invest their cash.

Frank Field MPO, chairman of the Commons work and pensions committee, told the paper the Financial Conduct Authority (FCA) should 'get a grip on this scandal now and start to act like the consumer protection agency they are supposed to be’.

Only last month the same newspaper told the story of David and Sheila Solomon whose adviser Paul Herd persuaded them to invest their remaining savings of £281,000 in NERR.

At one stage Mr Herd even wrote to them advising that they ignore a written warning from their pension provider about the risks of the New Earth fund.

But sure enough, it hit financial difficulties in 2013 and was frozen – along with their money. The couple complained to the ombudsman about Herd's advice. An investigation revealed that he had also encouraged an 82-year-old woman with a "low attitude to risk" to invest £99,000 of her £125,000 savings in the fund. 

The ombudsman ordered Herd's firm to pay the Solomons' £500,000 in compensation, but the business did not have insurance to cover such a vast sum.

It is worth reminding readers that Scottish Borders Council claimed to have carried out "all due diligence" before placing its faith in the New Earth companies. In fact the local authority has stated: "We do not believe that the contract with New Earth Solutions was handled badly".

When asked about the loss of £2.4 million - mainly on fees for specialist advisers and consultants - a senior officer declared: "The majority of these costs were incurred through the employment of various industry experts who provided SBC with the due diligence assurances that the processes and decisions that were being taken were sound and in the best interests of the Scottish Borders public. We view these costs as the costs associated with ensuring best value rather than failure".

The fact that not a single brick was ever laid at Easter Langlee between 2011 and 2015 appears to have been completely overlooked. And not a single Scottish politician has been prepared to back calls for an investigation into a saga which resulted in the loss of many millions of pounds for investors and taxpayers alike.

Wednesday, 21 February 2018

Common good reform kicked into long grass


An initiative aimed at reforming laws governing Scotland's centuries old Common Good property and funds has been scuppered after the Scottish Law Commission (SLC) deemed the subject was not worthy of consideration.

It means work done by Holyrood's Local Government and Communities Committee, including evidence taking and a call for written submissions appears to have been rendered a complete waste of time with the controversial topic stamped 'completed'.

Committee convener Bob Doris MSP had written to Lord Pentland, the SLC chairman to include proposals for Common Good legislation in the next programme of law reform.

Mr Doris, whose request followed deliberations by his committee, told Lord Pentland: " Over a number of years the issue of modernising the statutory framework for common good property and funds has featured in the work of Scottish Parliament Committees. The Local Government and Communities Committee has sought written views and taken oral evidence on this issue".

The letter continued: " At the meeting on 20 December 2017 the Committee heard that whilst work is underway at the Scottish Government to provide for a register of common good other challenges remain. These challenges stem, in part, from the ancient patchwork of legislation and subsequent court rulings which have arisen in this area over time. It is fair to say that it is an area where legal expertise is particularly vital in understanding how those aspects work together.

"Work in this area is long overdue but we also recognise that as a Parliamentary Committee we could not do justice to this issue in the time we have available and given the specialist legal knowledge required to modernise legislation in this area."

Mr Doris invited Lord Pentland to consider a late request to include consideration of modernising the law in the area of common good property and funds as part of the SLC's agenda. 

In his response the SLC chairman said that In the course of last year "we consulted widely on topics for inclusion in our Tenth Programme of Law Reform.  I should say that one consultee did raise the issue of common land and common good as a potential law reform project.".

But Lord Pentland added: "We took the view that there was inadequate support for a project on the law of common good property and funds, and that other topics had to be given higher priority."

As Not Just Sheep & Rugby reported recently many local government lawyers are against reform of the common good legislation. One of them told the committee he would prefer to see all common good assets - across Scotland these value tens if not hundreds of millions of pounds - handed over to local authorities to "do with as they please".

But according to retired Selkirk GP Dr Lindsay Neil, a fierce campaigner in the defence of Selkirk's common good property and funds, such a proposal was likely to provoke a riot in Hawick.

Some of the strongest written submissions to Mr Doris's committee did in fact emanate from Hawick.

Former Hawick councillor Andrew Farquhar told the committee: " Common Good assets have not fared well under Council Stewardship due to councils having to do more with less.   Administering the Common Good is low down in their list of priorities.  E.g. Progress made with registers of assets! 

"In communities which still have Common Good assets their full potential is not being realised. The assets could do much more if properly managed under some form of local democratic control with good management."

Meanwhile Hawick businessman Derick Tait, who has served on a number of local civic committees wrote:"Sadly, as local government has become bigger (but not better), management of individual common goods has merged and passed into the trusteeship of those who neither appreciate their significance and importance to local communities, nor care particularly about their management.

"In recent years, I personally have been aware of instances of failure to manage common goods properly in three towns, principally because of lack of local knowledge.  There have also been recent instances in my home town Hawick, where public meetings have been convened to demand proper and dedicated management by trustees (councillors) from outwith the town.  Unfortunately, as the drive towards centralisation and city regions develops, remoteness of trustees from local knowledge will continue."

One advocate for change who observed the committee's discussions at close quarters told us: " You can tell there was a lack of interest by the fact that three members didn’t even ask any questions. Not sure many committee members even read the written evidence."

The decision to kick this issue into the long grass - possibly for decades - must be regarded as regrettable. It means past abuses of common good assets, and the mismanagement of land, property and cash may well continue into the future.

Monday, 12 February 2018

Coincidence or conflict of interest?

Research reveals Borders council auditors' links to offshore trusts registered at same British Virgin Islands address as managing shareholder of council's failed waste management investment fund.


The global accountancy firm KPMG which checked the books of Scottish Borders Council for five successive financial years, and gave the local authority 'a clean bill of health' following the New Earth Solutions waste management scandal, audits the accounts of more than a dozen offshore trusts registered in the British Virgin Islands (BVI).

Thousands of files made public following the "leak" known as the Paradise Papers contain information showing those trusts - audited by KPMG Glasgow - are based in the offices of Panamanian lawyers Mossack Fonseca at  24 De Castro Street, Wickham’s Cay, Road Town, Tortola, British Virgin Islands.

Not Just Sheep & Rugby has previously revealed that Premier Group Distribution Inc (PGDI), the managing shareholder of New Earth Solutions and New Earth Recycling & Renewables [Infrastructure] Inc (NERR) is also registered at 24 De Castro Street, Wickham’s Cay, Road Town, Tortola, British Virgin Islands.

So was this "coincidence" or potential conflict of interest declared when KPMG signed off SBC's accounts for 2014/15, including the loss of £2.4 million of taxpayers' money after NERR could not come up with the £23 million needed to provide a waste management solution for SBC? And how deeply did KPMG delve into the conduct of NERR and its controllers and promoters Premier Group Isle of Man?

The NERR fund, as we reported last week, continues to be the subject of detailed investigations by liquidators Deloitte who have managed to assemble 200,000 documents linked to the failed investment fund. How many of those papers were inspected by SBC's external auditors?

Unfortunately not a single politician has been prepared to raise the issue despite compelling evidence of council incompetence throughout the four-year contract with New Earth Solutions Group (NESG). Instead they have been content to accept KPMG's assurances that everything was handled properly while the accountancy firm acted on behalf of Audit Scotland between 2011 and 2016.

The auditing of public authority accounts in Scotland provides highly lucrative contracts for KPMG and other accountancy businesses as a result of out-sourcing by Audit Scotland, the country's public expenditure "watchdog".

.On June 27th 2011 Audit Scotland published a contract award notice which revealed that 38% of the audit work for Scottish public bodies, including councils, government departments and further education colleges had been placed with various accountancy firms including KPMG, Ernst & Young, Deloitte’s and several others. The total value of these lucrative contracts came to £31.889 million, covering the financial years 2011/12 to 2015/16.

KPMG was successful in securing 28 separate accounting appointments across the three sectors after tenders were submitted by their Edinburgh office. The value of their share of the work was: Local authorities £4.204 million; Central government bodies £1.511 million; FE Colleges £500,000; a combined total of £6.215 million.

The tendering exercise was repeated in 2016. In March of that year Audit Scotland again published a contract award notice covering the financial years 2016/17 to 2020/21. This time the notice did not provide amounts won by individual firms from a pot worth £23.295 million representing 36% of Scotland’s public audit work. KPMG’s Glasgow office was among the successful bidders.

The external auditors’ report on the abandoned Borders/New Earth Solutions debacle dated September 2015 stated:
Termination of waste management contract In 2014-15, £2.2 million was written off as a result of the termination of a waste management contract. We have reviewed the Council’s decision making process in relation to the termination of the contract. Key points include:
These costs do not include any early termination fees or additional costs claimed by NES, as a “no fault” termination provision formed part of the contract;
The decision was considered and made by the Council in February 2015:
Information was provided by an internal project team, supported by appropriate external professional advisors; and
Appropriate options were considered and due diligence processes are evidenced as being followed. We are satisfied that the Council has followed appropriate procedures in relation to this decision. We have reviewed the business case relating to this decision, which was presented in February 2015 and set out the options available to the Council. 

The disclosure concerning PGDI's BVI connection came in April 2016 courtesy of another set of files known as the Panama Papers.

This aspect of the Scottish Borders project was not mentioned in any audit reports, and SBC has confirmed in a Freedom Of Information response they were unaware of these complex offshore “arrangements” even though the details were available in successive NERR annual reports from 2011.

In the Paradise Papers KPMG Glasgow,which houses the firm's "UK Tax Centre of Excellence", is identified as auditor for 15 offshore entities, most beginning with the name Windsor, and registered in Jersey and British Virgin Islands.

So KPMG Glasgow appears to work closely with Mossack Fonseca, registered intermediary for at least 14 of the offshore trusts, and who also happen to be the agent for PGDI, the managing shareholders of New Earth Solutions/NERR Fund.

 PGDI beneficiaries and shareholders included David Whitaker, a director of numerous NES Group companies, including (from April 2011 to November 2015) New Earth Solutions (Scottish Borders) Ltd, the special vehicle set up to deliver the £23 million waste management project at Easter Langlee, Galashiels.

 The so-called "Panama Papers”had come from Mossack Fonseca’s offices and revealed the law firm’s involvement in activities which brought allegations of corruption and money laundering. The contents of the leaked documents have been reported in media and newspapers around the world.

Mossack Fonseca’s BVI ‘branch’ where PGDI and those entities audited by KPMG are registered was hit with a $440,000 financial penalty in November 2016 by the British Virgin Islands Financial Services Commission for eight breaches of BVI’s anti-money laundering and terrorist financing codes. The penalty was the largest ever imposed by the BVI FSC. But anti-corruption activists claimed it was “too little, too late”.

It is perhaps somewhat surprising that none of the above factual information gleaned from detailed research requires neither an investigation nor a public explanation.

Wednesday, 7 February 2018

Liquidators locate 200,000 documents linked to failed council fund


Liquidators of the failed offshore investment fund which was selected by councillors in the Scottish Borders to bankroll a planned £23 million waste treatment facility believe it may still be possible to salvage something from the wreckage for the benefit of thousands of shareholders and creditors.

Three years after the Borders local authority was forced to abandon their worthless waste management contract with insolvent New Earth Solutions Group at a cost of £2.5 million to local taxpayers, the intensive efforts to discover what led to the collapse of the firm's partnership fund may soon reach a conclusion.

Isle of Man-based New Earth Recycling & Renewables [Infrastructure] Fund (NERR) had 3,249 investors and a published value of $292 million when it collapsed in 2016. It was later discovered that £39 million of the NERR resources had been used to shore up the New Earth Solutions companies which were in serious financial trouble while their contract with Scottish Borders Council was 'live'.

NERR was managed and promoted by Premier Group (IOM) Ltd., another business which was liquidated shortly after the fund crashed, apparently leaving investors and creditors with little or no chance of seeing the return of their cash. Premier's bosses collected many millions of pounds in fees from NERR and a range of other 'high risk' funds.

And in the intervening period a number of disgruntled investors successfully took their grievances to the Financial Ombudsman Service who found they had been wrongly recommended to put money into the unregulated NERR fund by financial advisers.

The NERR fund's joint liquidators Alexander Adam and David Craine, of accountancy firm Deloitte's, have just published an update for the fund's shareholders...their first report since September last year.

In it they remind readers the Company’s [NERR] assets were principally investments by way of equity and unsecured loans in three companies which were located in the United Kingdom.

"The value of those investments at the date of winding up was close to nil. The role of the Joint Liquidators is therefore principally to: investigate the reasons for the failure of NERR; determine whether liability for the failure can be attributed to one or more parties; working alongside our legal advisers, establish whether there is any legal recourse against one or more of those parties; and to the extent that that those third parties are expected to have the resources to meet any successful claim, seek to recover value from them."

The report adds that investigations are focused on the matters which resulted in a direct loss to the Company (the value of investments made in the ultimately insolvent UK trading companies and the fees paid by the Company to the various service providers - many of which were based on the calculated NAV (Net Asset Value).

The sheer scale of the task facing the investigators can be gauged from the next section of the report which reveals: "We have secured in excess of 200,000 unique documents from the various advisers and service providers to the Company, many of which run to hundreds of pages.

"Our initial review of those documents identified a number of potential issues which we consider could lead to causes of action. These were passed to our legal advisers for further consideration. That review remains ongoing, as the review of such a volume of documentation is time consuming but essential to understanding the underlying business and transactions of the Fund and that process has inevitably identified areas where further investigation has been required to be undertaken."

"In the meantime we have also managed to secure access to the records of one service provider which had previously been unwilling to share their files with us and which have provided valuable insight into the Company’s affairs."

Mr Adam and Mr Craine say they are limited in what information they can share with shareholders and creditors on potential causes of action so that they do not prejudice any potential claims.

But they add: "However, we remain reasonably confident that our investigation will result in making claims for the benefit of creditors and shareholders in due course."

The joint liquidators expect to be in receipt of legal advice in respect of any possible causes of action by late April 2018. Following consideration of such advice they will write to update interested parties on how they intend to proceed.

Tuesday, 6 February 2018

Borders battle fails to make national inventory


A research project centred on a 16th Century Borders battle between Scots and English armies has concluded that the conflict should not be included in Scotland's national inventory of historic battlefields even though it resulted in a crushing defeat for Henry VIII's troops.

Historic Environment Scotland's assessment of the Battle of Haddon Rig, which took place near Kelso some 29 years after Flodden in August 1542, involved detailed studies of The Hamilton Papers, formerly in the possession of the Duke of Hamilton, and now held by the British Museum.

The collection of letters and papers illustrate the political relations of England and Scotland in the 16th Century.

An 11-page report covering the research findings tells how an English army led by Sir Robert Bowes was encamped near the town of Kelso, and had dispatched raiding parties to ransack nearby settlements. 

Meanwhile, a Scottish force under the Earl of Huntly, advancing to engage the English, encountered the raiding parties and pursued them back to the main English army, who in turn had advanced to meet them. Although the two parts of the English army did converge before the Scots reached them, the subsequent battle was still a heavy defeat for them. 

Many of the English army fled before the fighting, and Bowes himself was captured along with hundreds of his men. However, fears in England of an immediate Scottish invasion following the victory proved unfounded.

In a section setting out the reasons for excluding the battle from the inventory, the report points out that The Battle of Haddon Rig does not feature highly in the national consciousness but is of some interest on grounds of association with historical events or figures of national importance. 

No artefacts from the battle have been recorded but there is some potential that future investigations of the relatively undeveloped land south east of Kelso in the area around Haddon Rig may identify archaeological evidence for a chase and skirmish in August 1542. 

"Although the high ground known as Haddon Rig remains a likely site for the English camp, the primary sources considered by this assessment provide insufficient detail to enable secure identification of the camp’s location, or of other landscape features associated with the battle, with the exception of some named settlements raided by the English forces.

"The degree of interest on these grounds is unlikely to make a significant contribution to our understanding at a national level. Furthermore, while certain named places in the accounts of the battle can still be identified today, these are spread across a substantial area along the River Tweed and the River Teviot. There is also uncertainty about the precise location of the English camp, from which Bowes advanced with the main force, and it is unclear exactly where the raiding party rejoined the main English force and where it is likely the main fighting took place. 

"Without more certainty about the approximate locations of key elements of the battle, it is currently not possible to define an area of interest for the battlefield with a reasonable degree of certainty. As such the battlefield does not currently meet the criteria for inclusion in the Inventory as a battlefield of national importance."

Nevertheless, this particular encounter is said to be of considerable interest so far as Scottish Borders history is concerned.

The report describes how on the morning of St Bartholomew’s day (24 August) 1542, an English force under Bowes made a cross border raid into Scotland. Accompanying Bowes was Archibald Douglas, the Earl of Angus, who had been in exile in England since 1528, when James V had escaped from the Earl’s control and began ruling Scotland directly. Having entered Scotland in the vicinity of Kelso, two sorties of around 100 soldiers were despatched to raid in the area around the town, one led by the Redesdale and Tynedale families, the other by garrisons from Berwick and Norham. 

The Scots advanced from Kelso with Sir Walter Lindsay’s men at the vanguard, and with the Earl of Huntly and the main battle array at the rear. 

"Fearing the loss of the cattle and sheep they had seized in raiding, George Bowes and Brian Layton’s account states that the men of John Heron (all of Redesdale), Angus and Sir Cuthbert Radcliffe, scattered and fled. This appears to have left Sir Robert Bowes, his brother George Bowes, John Heron of Ford, Sir Cuthbert Radcliffe and around 40 other men (described in correspondence by George Bowes and Brian Layton as ‘household servants’) who dismounted from their horses around their standard.

"Of these, around only 20 stood their ground to face the Scots. The majority of the fighting appears to have taken place following this disintegration of Bowes’ forces, with the Scots easily overwhelming the small remaining English complement."

"The exact number of losses is not clear from the accounts. Angus claims that eight men (out of around only 20 who stood their ground to fight) died in the main engagement. A further 70 of their company are also described as either killed or taken prisoner, although their fate was clearly uncertain to Angus at the time of his correspondence with the Privy Council. Lindsay of Pitscottie estimates the English losses at 10 score (i.e. 200 men).

"In addition to the casualties from the small remaining force who engaged the Scots, further losses were suffered in the groups who fled the field, with at least 400-500 captured, although one source suggests almost a third of the English force was taken, meaning just under 1000 captives taken."

The research report says there is potential for survival of remains of Bowes’ short-lived encampment, potentially in the land around Haddon Rig, for example evidence for fortified banks and ditches, and also scattered artefacts including pottery, soldiers’ personal effects, and weaponry (e.g. musket balls). 

Among the archaeological evidence which might survive of the engagement is evidence of archers, cavalry and possibly even shot from matchlock guns, and grave pits for the dead. However, as Haddon Rig was not so much a pitched battle but perhaps more a chase and skirmish with relatively low loss of life, many of the raiding parties fled the battle and some were killed on retreat. 

This might suggest that the likely quantity of remains will be small, and potentially widely scattered. The potential areas within which physical remains may be identified are numerous and extensive, and also probably hard to locate beyond a general area between Heiton and Hadden, a distance of around 10km, extending even to the English border.

Monday, 8 January 2018

Threat of Hawick riots didn't even make the papers!


An influential committee of the Scottish Parliament was warned just before Christmas that any moves to "abolish" common good funds and transfer their assets to local authorities could spark a riot in Hawick.

The dramatic exchanges between a panel of witnesses called to give evidence to the Local Government & Communities Committee - currently investigating common good property and funds - have not been reported in press or media.

But the publication yesterday (Monday) of the official report of proceedings shows how lively the debate became while at the same time illustrating the clash of attitudes towards the issue of common good across Scotland.

The "riot warning" was flagged up by retired Selkirk general practitioner Dr Lindsay Neil, a dedicated campaigner for the protection of his town's centuries old common good assets. Not Just Sheep & Rugby believes the good doctor deserves a much wider audience!

Other witnesses included Paul Nevin, senior solicitor at Moray Council, lawyer Craig Veitch from Aberdeen City Council, and Andrew Ferguson, of the Society of Local Authority Lawyers..

Mr Nevin told the committee: "Common good should absolutely be abolished; parity should be created with ordinary council assets; and the normal democratic process that all of us in unitary authorities work within should be used to call councils to account in selling or not selling—or in leasing or not leasing—land. It is a hangover from the past, and it is archaic. It is historically interesting—I love working with it and indeed have enjoyed doing so for the past 10 years—but it is really not a modern form of government."

But Dr Neil retorted: "All I want to say is that, if you abolished common good, you would immediately face a riot in Hawick, and I do not think that that would be a very good thing."

Earlier, in an opening statement to the committee, Dr Neil said he hoped to be able to illuminate further the question of ownership of common good, and to suggest practical measures whereby that could be achieved easily. Secondly, He have always wanted to democratise the common good and restore to the community some control over its common good.

But Mr Nevin - clearly not a fan of the current arrangements - declared: " The current legal framework creates a special status for this small area of property and funds, which represents less than one per cent, loosely speaking, of council assets. The legal framework has led to a disproportionately complicated process of administration of common good assets, which means that the cost of administrating them generally far outweighs the value of the asset that is being dealt with." 

Dr Neil proposed having greater involvement of local people in the management of a local common good. That way, such questions could be argued over, discussed and decided at a much lower level without having to involve the entire council and all its staff in the expensive chasing of documents.

A proposal for a 'national' register of common good assets, to be compiled over, say, the next ten years, also seemed to pose potential administrative difficulties for Mr Veitch.

He told the committee: "What is difficult, especially for the larger local authorities such as Aberdeen City Council, is the number of titles to be examined—we have several thousand individual titles that would have to be examined.

"Some will be obviously common good but, with others, we will have to delve into not only the title deeds but council minutes from the 1800s and 1900s, and check with archivists. If we are to do that with a relatively slim legal team, in the face of the current budget restrictions and the resource and cost cutting that is going on in all the local authorities, setting an early target date [for the register] will make it extremely difficult for a number of authorities to achieve that target."

Witnesses were asked by Andy Wightman, MSP, a leading authority on common good and land ownership if there was a case for allowing local communities to regain ownership of the assets if they so wished.

In Dr Neil's opinion: " If the matter is devolved to a local area, people will volunteer to help the established councillors. Between them, they will be able to sort out what is common good property and what is not. 

"If they do not agree, I presume that it would fall back into the council’s hands. That way, with a cut-off date, we will get a register. If people do not make a case for an asset to be common good before that date, with the input of equal numbers of elected councillors and local people so that nobody can bulldoze anybody else, that will be it: the register will be done—end of story."

However, Mr Nevin and Mr Veitch appeared to take a different view.

Mr Nevin said:"I would point out that we have had common good registers before—the burgh councils had them. Just because something is on an old burgh council common good register does not mean that it is common good. This is the 21st century, and we are creating registers again. They were not definitive in the past, and they are not going to be definitive today."

And Mr Veitch: "We have to remember that the law protecting common good was put in place generally to stop the misappropriation of funds by councils, but time has moved on and we now have a lot of legislation and financial regulation controlling councils, which have to get the best value for all their assets. I might not be moving towards suggesting the abolition of common good, but we must look at the issue as soon as possible.

It was back to the issue of the "Hawick riots" near the end of the evidence session.

Paul Nevin -Short of abolishing common good, which I agree  might not get you votes—

The committee convener (Bob Doris MSP): Not in Hawick, apparently.

Paul Nevin: I fully agree that we must avoid riots at all costs, convener.

Dr Neil: Never mind abolition—I think that you should bring in... (the relevant sections of the Community Empowerment Act)... as soon as possible and, if possible, extend (the legislation) to include more people who could act locally in the management of local common good.

For those who value their common good funds here in the Borders - between them worth many millions of pounds - there may be concerns over the apparent desire in some quarters to abolish the system altogether. Time, perhaps, to man the barricades before the rioting begins!

Sunday, 7 January 2018

Skills shortage warning for Borders


The impact of Brexit coupled with an unwelcome fall in the working population of the Scottish Borders may mean the task of replacing 17,400 workers over the next ten years will be made more difficult, leading to possible skill shortages.

This is one of the key findings in a comprehensive report on future employment trends in the region from Skills Development Scotland (SDS) which warns the uncertainties surrounding Brexit have some particular implications for the Borders.

They include access to the Single Market for trading purposes which is of importance, given Borders exports in knitwear and high end cashmere; support for the agriculture and food production given its l emphasis here and, also, freedom of movement of EU nationals.

Meanwhile, in the period up to 2027, the report warns: "The Borders is expected to have a 15 per cent reduction in the size of the working age population (16-64), whilst nationally the working age population is anticipated to decline by 5 per cent.

"Growth will be greatest amongst those aged 75+, within the Borders this age group will grow faster than the equivalent rate across Scotland. This projected decrease in the working age population and increase in the older population may prove challenging for the Borders."

The document explains that in relation to the Scottish economy, the Borders is a low output and low productivity region. Based on 2015 statistics, it contributed £1,921 million in GVA (Gross Value Added generated in the production of goods and services) ; around two per cent of Scotland’s output and has the lowest output of all regions. 

A section in the report looks at numbers of business "births" and "deaths" in recent times.

It says: "The number of business births within a region can indicate dynamism in that region’s economy. By business births per 10,000 of the population, the Borders ranks 11th out of 14 regions within Scotland, whilst at the local authority level, the Borders ranks 22nd out of 32. Overall the picture before and after the recession for business births has been one of decline: currently at 32 businesses created per 10,000 population (2015); compared to 45 in 2005.

"Conversely, business deaths have increased over this period, from 25 per 10,000  in 2005 to 30 in 2015. Finally, if we look at the business survival rate, using 2010 as the baseline year, the business survival rate has decreased sharply on an annual basis from 89 in 2011 to 40 in 2015."

SDS estimate that over the next ten years jobs generated as a result of people who retire, change jobs or move away will require 17,400 people in total. However, this is driven by replacement demand, with expansion demand overall a negative figure.

The highest current employing industrial sectors in the Borders are human health and social work activities, with around 8,100 jobs, and wholesale and retail trade, with around 7,800 jobs. 

The same sectors are forecast to still be the highest employing sectors in 2027, although they will have switched places, with wholesale and retail becoming the largest with around 8,100 and human health and social work having 7,900. 

Next largest sectors for total employment in 2027 is forecast to be Manufacturing (4,800 jobs), although this will see the largest change of any sector, declining by 800 jobs. Agriculture, forestry and fishing will also decline slightly, but remain the fourth largest sector with 4,400 jobs, followed by Construction (4,000 jobs).

As the sector composition has been changing, so has the occupational profile of the region, where there has been a significant reduction in the proportion in skilled trades and operative roles, as the manufacturing and agriculture sectors have declined. These changes are largely expected to stabilise over the forecast period, although there are expected to be still fewer skilled trade and operative roles.

However, on a more optimistic note, the report says the introduction of the South of Scotland Enterprise Agency means providing dedicated support to the south of Scotland in the same way as exists for the Highlands and Islands, but tailored to the economic needs and local labour markets in the south of Scotland should help. 

"This focus should improve the level of investment in economic growth, enterprise, skills and innovation in the region as well as working in new ways with other partner agencies.

"There are proposals for a new Borderlands Growth Deal working with councils on both sides of the border to promote economic growth and competitiveness in the area including infrastructure projects and transport and connectivity, including improving the region’s digital connectivity and broadband speeds. The deal, working alongside the new South of Scotland enterprise agency, should boost productivity, innovation and growth."

In a reference to Fair Work, the document warns: "Given the lower levels of earnings in the Borders (below the national average), there is a need to ensure that inequality within the region does not mean those at the lower end of the labour market get ‘stuck’ in lower paid ‘non- standard’ jobs: part-time, temporary and self-employment. And also that there are adequate progression routes out of low skilled work for those who choose to move and decent pay and conditions for those who do not or cannot".