Tuesday, 29 September 2015

A law unto themselves?


The weekend revelation that Scottish Borders Council had invited firms to tender for a £6 million contract even before the project had received planning permission must have set alarm bells ringing among local taxpayers and residents who believe in democracy.

But surely there are implications too for those who are supposed to be responsible for proper procedures in local government, although it is increasingly difficult to find any watchdog with the willingness to intervene when mistakes are made or decision making processes are flouted and ignored.

At the same time there appears to be a complete lack of opposition and dissent inside the council chamber and throughout the local authority's structure. Have councillors been silenced or are their criticisms not covered in the local press for fear of lost advertising revenue? Those public notices must be worth a fortune!

The recent disclosure that SBC frequently doesn't bother to record internal discussions and briefings in writing, preferring instead to conduct even important items of business verbally, also points to an air of arrogance, and disdain for accountability.

In addition there have been examples of a complete lack of public consultation on topics which taxpayers considered to be important in their daily lives - perhaps most notably the withdrawal of garden refuse collections in 2014.

The concerted efforts to cover up potentially embarrassing and damaging information linked to the council's disastrous waste management contract with New Earth Solutions, and the decision to commit millions of pounds of public money to pay for the tapestry museum at Tweedbank before allowing electors to have their say adds to the impression that the current administration has become a law unto itself.

So much for the promises of a wholly transparent regime when the various political groupings got together to run local affairs after the municipal elections of 2012. Even attempts to extract data and statistics via the Freedom of Information route can be blocked or delayed by legal arguments or through the use of exemptions in the legislation. Many requesters concede defeat by throwing in the towel. Much more information should be published without the need for FOI requests.

Last Friday's publication of an official notice on the Scottish Government's Public Contracts Scotland website makes no mention of the fact that planning permission for the Great Tapestry of Scotland museum has yet to be secured. Nor does it outline the considerable level of local opposition, with a 4,400 signature petition due to be considered by councillors later this week.

It surely means planning approval for the expensive project at Tweedbank is a given, and the petition will be consigned to the litter bin despite its strong backing from disgruntled members of the public. Senior planning officers are recommending approval for the council's own development application which will, no doubt, be rubber stamped at committee next Monday.

In the circumstances the application for consent should be considered by a neutral planning authority - say East Lothian or Dumfries & Galloway Council - whose officers could examine the proposals objectively, and purely from a planning perspective without the influence of internal vested interests.

It is a course of action which is not available at present, but in the current circumstances it certainly should be. The only other option would be for the case to be called in and decided by Scottish Government planning officials without input from Ministers.

Instead what we are witnessing is a process more akin to Putin's Russia or Xi Jinping's China rather than an outcome based on a genuinely Scottish democratic procedure. It does SBC no credit whatsoever.

Saturday, 26 September 2015

£6 million tapestry contract up for grabs


The publication of a notice by Scottish Borders Council, which invites developers to bid for the lucrative £6 million contract to build a museum to house the Great Tapestry of Scotland will have angered many of the objectors to the scheme.

The appearance of the contract notice on the Scottish Government's Public Contracts Scotland website on Friday of this week precedes consideration by the council of a highly controversial planning application, involving the removal of hundreds of trees from land at Tweedbank, near Galashiels to make way for the flat-roofed building.

One opponent told us: "Planning consent is now guaranteed otherwise this invitation to tender would not have been issued at such an early stage. The entire process has become farcical; first the local authority decided an environment impact study wasn't needed, and now it seems objecting to this costly project is a complete waste of time."

According to the notice SBC expects five potential developers will be asked to submit bids for the museum scheme which will cost £7.2 million, including VAT.

The notice claims: "The new Great Tapestry of Scotland Museum will be a high class visitor attraction and an asset of architectural importance to the Borders. It will provide a properly designed solution for displaying the tapestry and will be an instantly recognisable setting to hold local and international events."

Trustees and patrons of the tapestry charity have repeatedly slapped down critics of the proposal to house the 160 panels in the Borders. And yet the Borders public have yet to be given details of the arrangements under which the 143-metre long embroidery will be passed from Trust to Council.

Before any contract is awarded the terms and conditions attached to the arrival of the tapestry at Tweedbank should be made clear, an objector claimed. He said: "Presumably, the charity will retain ownership so that the visitor attraction can hang on to its charitable status. Does that mean SBC will lease the tapestry or will the local authority assume guardianship? We need to know".

The charity's latest published accounts show an operating loss of £59,068 for the financial year compared to a £58,827 profit in 2012/13. Total income fell from £180,351 to just £67,813 in 2013/14.

But the equivalent of more than half of the charity's income (£35,224) was loaned to a limited company called Tapestry Trading (Scotland) Ltd with the same registered address as The Great Tapestry of Scotland. Two of the charity's trustees are also directors of Tapestry Trading.

Will Scottish Borders Council take control of the trading company if and when the tapestry arrives for display in the region? Or will it remain a separate business entity?

The limited company's accounts record a trading loss of £15,000 for the year. The report adds: "Turnover includes amounts received from Royalties. The Royalties are generated from an exclusivity arrangement".

Does any proposed agreement between the parties mean the Royalty payments will become the property of the Council which may need all of the income it can get if the project is to become financially viable? Or will this income stream remain with Tapestry Trading's directors?

Critics have already claimed that calculations contained in the business plan,which estimates 47,000 visitors a year each paying a £10 entry fee will be required if the newest Borders tourist attraction is to break even, are totally unrealistic.

Wednesday, 23 September 2015

Black ink...now comes the whitewash!


The decision by Borders councillors to terminate their expensive and useless waste management contract with New Earth Solutions - the only thing they got right during the entire financial disaster - has, as predicted, been fully backed by the council's external auditors.

But the report from KPMG, the accountancy firm which will be paid £302,000 by Scottish Borders Council taxpayers for auditing the local authority's 2014/15 accounts only covers the decision taken in February to abandon the 24-year contract. It does not look at the background which led to the multi-million pound gamble with untried and untested technology.

The 51-page document, now available to read on the SBC website, deals with the waste management issue in a few sentences. Here is the relevant section of the report in full:

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 recommendations were approved by Scottish Borders Council in February 2015 and a joint statement issued publicly thereafter.

As one observer remarked: "We've already had the generous helpings of black ink from the council's own censors when dealing with requests for information on this controversial topic. Now we have a complete whitewash from the 'guardians' of  public expenditure."

According to an experienced consultant contacted by Not Just Sheep & Rugby : "Interestingly it is what is not said that speaks volumes. The audit refers to having followed the correct process: there is no comment in relation to whether the business case was sound in its assessment, if there were additional costs to the council or whether it was a saving, whether they supported the recommendations, and there's no commentary on assumptions made
"In my experience of dealing with auditors and their reports, they generally make very limited commentary to avoid overly embarrassing officers/council. Most audit reports I have seen on reviews similar to this have generally been around 15-25 pages long. To summarise to this extent indicates their scope was very restricted.

"Generally there would at least be commentary around the written off £2.2m (e.g. this could have been avoided if….). So why was the remit so narrow".

Even the implications of the move to end the deal with NES will be massive. The council has already indicated it will have to borrow millions of pounds for an alternative waste management strategy, adding considerably to the volume of loan charges payable over the next 30-40 years.
Their intention is to take all of the Borders household rubbish out of the region in fleets of lorries which would represent one of the biggest "anti-green" initiatives in Scottish local government history.

SBC's outstanding debt - according to the auditors - stands at £172 million on which they are paying an average interest rate of 6.5%. The annual bill for loan charges totals £29.4 million....more than enough to build several waste management facilities which actually work.


Saturday, 19 September 2015

700 council jobs axed..well,er no!

DOUG COLLIE on the long running numbers game featuring Scottish Borders Council and the Government's statisticians

The publication of Scotland's latest public sector employment statistics this week revealed a potentially sickening blow for the Borders economy with figures for the second quarter of 2015 recording a 700 fall in the council payroll headcount at Newtown St Boswells in the space of a year.

So the editorial team at Not Just Sheep & Rugby was initially shocked (if not saddened) to see the 13 per cent reduction in Scottish Borders Council's staffing level appeared to have gone completely unnoticed by politicians and the local media.

 It was surely time for a task force to be parachuted in to help those affected find alternative work, to offer counselling to the people finding it difficult to cope with unemployment, and to form an overseas mission to sell the Borders to potential investors.

The picture was equally gloomy on the so-called Full Time Equivalent (FTE) front with the total down by 500 to 3,900 or 11.9% in just 12 months. Such a cull of well paid local government salaries and wages must have stripped millions of pounds from the spending power of the Central Borders. Cue shop closures and empty passenger trains on the newly opened railway to Edinburgh.

A quick check on the national figures showed the entire public sector in Scotland had only shrunk by 1,300 (0.5%) in the equivalent period which made the Borders situation appear more desperate. So was it the controversial council tax freeze to blame for the mass exodus or had the politically multi-coloured administration discovered a large element of over manning in the various departments at council HQ?

But as the alarm bells started clanging one of our staff member with a better memory than most, and with the aid of a brand new pair of powerful reading glasses managed to solve the mystery. The moral of the story is - always read the small print.

On the face of it the Borders now has 4,700 local authority staff compared to 5,400 at this time last year. But an explanatory note at the foot of the tables of data published by the Scottish Government tells us: "SBC headcount and FTE figures do not include casual/relief employees who were paid in he reference period. This means that these figures underestimate the true headcount and FTE for SBC. This will be resolved upon receipt of revised figures from SBC".

In other words the official statistics for the Borders are worthless and meaningless. Might have been better had they not been published, but replaced with a couple of sentences telling us the council had failed to supply appropriate data.

However, this situation which appears to be unique to SBC - no other public authority in Scotland requires a special note to explain their statistics - is not new, as readers of our columns may recall.

A virtual array of different headcount totals issued by the council earlier this year left taxpayers and statisticians confused in equal measure.

In March, the Scottish Government, on its Public Sector Employment website, stated the headcount figure at SBC was 5,700.
This was at variance with a Freedom of Information response issued by the council in January when the requester was told there were 6,421 employees on the books. And then, in April, a workforce data report to councillors claimed the actual jobs total was 6,131.
A council spokesperson said at the time: “The council is currently working with the Scottish Government to review the figures and arrange for amended figures to be published.”
Six months on and the uncertainty surrounding this aspect of data collection still hangs in the air. Surely it is time to bring this highly unsatisfactory situation to an end and get the Borders back in step with the 31 other local authorities who seem capable of keeping their employment statistics in order.

Tuesday, 15 September 2015

Suckers for the unknown cost us millions

EWAN LAMB asks why so many publicly funded organisations seem prepared to gamble by investing our cash in unproven and decidedly risky technology 

Question: What do Scottish Borders Council, Scottish Enterprise and The Carbon Trust have in common?

Answer: They've all wasted millions of pounds of public money on untried and untested technology, leaving each organisation with burnt fingers and forced to write off unnecessary losses without having to provide a meaningful explanation to taxpayers.

Not Just Sheep & Rugby has attempted to expose the recklessness and fecklessness of Borders councillors who were warned of the dangers of allowing a waste management company to use them as guinea pigs for a method of converting household rubbish into heat and power, using a brand of technology which was untried and untested.

A council source told us: "It's easy to criticise us with the benefit of hindsight. But just imagine if the New Earth Advanced Technology (NEAT) had proved to be a roaring success. The Borders would have become national leaders in the field of waste management".

The fact that the experiment/gamble failed spectacularly with over £2 million down the drain and significant extra borrowing on the way appears to have been a minor detail to the council and to its external auditors who, we are told, will exonerate the local authority in a report to be made public later in September.

And no-one is prepared to take the elected members to task because of the embarrassment the findings of an investigation might pile on all political parties after their various representatives signed up for a completely useless piece of kit without any thought for the high risks attached to their stupid strategy.

No doubt the same will apply at Scottish Enterprise (SE) whose annual report for 2014/15 revealed that more than £23 million had been written off after 47 different investments ended in complete failure. Several of the companies which persuaded SE to part with huge wads of dosh are now either dissolved, in liquidation or administrators are pocketing six figure fees for clearing up the financial messes.

The £16.326 million lost by SE during a "partnership" with Pelamis Wave Power Ltd makes the Borders fiasco look like a kids' tea party, although local council taxpayers hereabouts may not see it that way.

The enterprise company had more than 1.1 million shares in Pelamis as well as five outstanding mortgages which will not be repaid.

Other creditors of the Orkney based wave power pioneers when the business bombed last November included The Carbon Trust, a company set up by the UK Government in 2001. The Trust held 228,000 shares in Pelamis and was owed £2,470,456 as part of the firm's estimated deficiency of at least £15.69 million.

Such a loss is probably small beer for The Carbon Trust which has racked up a number of environmentally friendly successes over the years. It received grants of £15.131 million from the Department of the Environment & Climate Change in 2014 alongside a £5.356 million contribution from the Scottish Government.

According to the Trust's accounts it recorded an operating loss of £7.5 million last year yet its chief executive received a salary of £175,497, a bonus of £84,605 and "other benefits" of £46,941 making a grand total of £307,043, up from £277,018 in 2013.

Pelamis's annual report for 2013 enthused: "It is planned to build a new generation machine (wave power) commencing in 2015 ready for testing in 2016. If successful this will form the basis for commercial development of the technology".

Sounds a bit like the NEAT technology which so impressed/took in SBC. But like the council, SE and other funders might have been wiser to 'ca' canny' until at least a few results were on the board. After all, under the heading of RISK, the same Pelamis report warned: "The company's technology may not work as envisaged".

Administrators KPMG - coincidentally they also happen to be SBC's external auditors - sold off Pelamis' assets for just £305,000 to the highest bidder who happened to be Highlands & Islands Enterprise, another publicly funded enterprise agency with close ties to SE.

Meanwhile KPMG has clocked up administration costs of £292,336.50 for 803.3 hours work at an average of £362.49 per hour.

SE's tale of technological woe does not end there. The winding up of a company called SESMOS Ltd resulted in another £1.047 million lost in a fruitless venture.

The main activity in this case was the development of drug discovery techniques. But despite the sizeable investment by SE the company lost £1.035 million in 2014 and also had outstanding liabilities of £2.246 million.

A company report tells us: "The directors and shareholders (one share held by SE and one by Siemens Technology) concluded it was not appropriate to continue to fund the company due to the lack of sufficient technical progress."

But just imagine....if the technology pioneered by Pelamis and by SESMOS had proved successful then The Carbon Trust and Scottish Enterprise, like Scottish Borders Council. would have become beacons of light at the cutting edge of scientific progress. What a shame it has cost all of us so much to finance their shattered dreams.

Sunday, 13 September 2015

Bamboo and bamboozlement!

With Scottish Borders Council about to be given the "all clear" by external auditors KPMG for their handling of the disastrous waste management contract with New Earth Solutions, DOUG COLLIE catalogues more disturbing information about the offshore consortium chosen to bankroll the abandoned deal.

Four years after commissioning a contractor, and an investment fund based in a tax haven to build a waste management facility at Easter Langlee, investigations by officials at Scottish Borders Council confirmed the firm's technology was not fit for purpose while their funder was incapable of financing the project.

The devastating conclusions from this overdue bout of so-called due diligence carried out earlier this year resulted in the abandonment of the project contract with New Earth Solutions (Scottish Borders) Ltd, but not before millions of pounds were squandered on the failed venture.

SBC had obviously been sufficiently impressed by NES and its financial partner, Isle of Man-based Premier New Earth Recycling and Renewables (Infrastructure) PLC (known as NERR), when the original contract was signed in March 2011. So were rigorous checks made into the background of the two organisations at that time?

Were councillors and officers aware, for instance, of the links between NES (Scottish Borders) Ltd, NERR, and a collection of other Premier Group funds investing in a diverse range of real estate and commodities, among them bamboo plantations in Nicaragua and South Africa?

At least one director of the council's contractors - David Whitaker - is also a board member of Premier Group and finds time to serve as a director of several funds in that group's portfolio. Management shares in the NERR fund are held by Premier Group Distribution Inc, a British Virgin Islands company part owned by a trust of which Mr Whitaker is the major beneficiary.

According to NERR's promoters (Premier Group) the Fund had assets of over £100 million by 2012 and net assets of £200 million in 2013. But Premier Group warned during 2014 that up to £150 million would be required to develop planned waste treatment facilities including the one involving SBC. The sum needed was "well beyond the capacity of the fund without substantial external finance".

Dealings in NERR were suspended in February of this year, only days after the Borders contract collapsed in complete disarray. Investors and shareholders continue to make strenuous efforts to rescue their cash while Mr Whitaker and his colleagues mastermind the planned split of the New Earth Solutions businesses into separate entities.

NERR may have been incapable of providing cash for the Easter Langlee facility, but its six directors and various other administrators and a custodian [?] have been collecting lucrative fees along the way.

Literature promoting NERR to potential investors shows the extent of payments and rewards being taken from the fund. Administrator Moore Fund (Isle of Man) is entitled to a minimum annual fee of £75,000 while Premier's involvement as promoter guarantees them up to five per cent of subscription monies for shares plus a performance fee.

The custodian - BNP Paribas Securities, of St Helier, Jersey - receives a minimum of £40,000 per annum while each of NERR's six directors plus two members of the investment committee pick up at least £15,000 each - a grand annual total of £120,000 because the fund has assets of more than £100 million. All fees are payable even if the fund is suspended.

The arrangements at NERR are mirrored in several other investment funds controlled and managed by Premier Group.

In the case of Premier EcoResources Fund, which appears to have more than $36 million riding on the success of several bamboo plantations in Central America and the eastern cape of South Africa, the fees are even more generous than those emanating from NERR. Again the management shareholder is Premier Distribution Inc, registered in the tax haven of British Virgin Islands.

The bamboo forests, which represent the fund's underlying assets, are not producing income at the present time and will not do so until the first harvest set to take place towards the end of 2015. Meanwhile the fund's listing on the Channel Islands Securities Exchange was suspended in May 2015. 

The latest financial statements reveal there has been a "disappointingly high" level of redemption requests from investors, and the directors have closed the fund to redemptions until the liquidity position improves, possibly in 2017. But a further $15 million will be required to guarantee success.

Fees paid to the manager, administrator, custodian, promoter, directors, investment committee members together with sales and marketing costs are stated in two separate currencies, and add up to £87,000 and $2.67 million respectively. But the net asset value of the fund is "less than £5 million".

Individual payments included management and promotion fees of $90,906 and $585,071 to Premier Group. Those sums represent a massive increase from 2013 when the management fee was $21,740 and the promotion fee totalled $233,138. Moore Fund picked up an administration fee of $121,339 ($52,450 the previous year) while sales and marketing expenditure increased from $905,897 to $1,843,371. In addition, individual directors were rewarded with pay-outs of £12,500.

There isn't enough space here to set out details of at least  five other Premier Group funds and their affiliated fees.

Premier Property Options Fund recorded a total loss of £1.389 million in 2011 - the year SBC signed their original deal with New Earth Solutions and NERR. The Premier Balanced Fund racked up fees of £170,758 in a single year while the Premier Diversified Property Fund's accounts for 2014 reported a net loss after tax of £13.6 million with redemptions from the fund deferred.

Meanwhile the Premier Portfolio Fund, in the year to October 2014, sustained a total comprehensive loss of £531,150 but disbursed total fees of £206,000. And the Premier Low Risk Fund with nine sub-funds including with-profits endowment policies handed out £373,000 in fees to Premier Group and others.

A representative of a group of investors now attempting to extricate their cash from NERR joked: “Perhaps SBC could rekindle their relationship with Premier Group with a view to developing a waste plant powered by bamboo shoots!”

Thursday, 10 September 2015

Living wage accreditation needs an increase


A national initiative launched 18 months ago in a bid to persuade employers to seek accreditation as payers of the £7.85 living wage has been virtually ignored by bosses in the Scottish Borders and many other areas of Scotland, according to the latest statistics.

Only three local employment providers have taken the trouble to acquire the special status. They are a community bakery based in a remote corner of Peeblesshire, a Selkirk company which sells broadband packages, and one of the region's SNP politicians.

The accreditation initiative, established north of the border in April 2014, is organised by the Poverty Alliance. The scheme works in partnership with the Living Wage Foundation and is funded by the Scottish Government. There are now 1,100 living wage employers in the UK, 318 of them in Scotland.

A breakdown of the number of accredited employers in each of the 32 local authority areas was given by SNP Cabinet minister Roseanna Cunningham in a written Parliamentary answer published on Wednesday of this week. In many cases the totals are in low single figures with Moray returning a zero along with South Ayrshire and the Western Isles.

Ms Cunningham said: "Peter Kelly, Director of the Poverty Alliance, who run the initiative, has highlighted that Scotland now has the highest public awareness of the Living Wage, and has a faster rate in terms of growth of number of Accredited Living Wage Employers than any other part of the UK. More people in Scotland are paid the Living Wage than in any country in the UK."

Each accredited employer is identified on the Scottish Living Wage website which also outlines the benefits of paying workers more than the minimum allowed by law.

Those bosses who pay the £7.85 hourly rate are said to have experienced a 25% fall in absenteeism while 80% of employers believe the living wage has enhanced the quality of the work of their staff. In addition, 66% reported a significant impact on recruitment and retention within their organisation.

Once accredited employers become licenced to use the living wage employer mark and receive a wall plaque to display to visitors.

So far the only plaques dished out in the Borders have gone to Breadshare, a bakery producing organic bread at Lamancha, West Linton, TenTel, a broadband services provider based at Ettrick Riverside, Selkirk, and Scottish Cabinet minister Paul Wheelhouse MSP, the South of Scotland SNP member with an office in Hawick.

In his recent Budget statement , UK Chancellor George Osborne announced plans for a National Living Wage of £7.20 an hour to be increased from next April and rising to £9 by 2020.

Many who watched the Budget speech  on television may have seen Works and Pensions Secretary Iain Duncan Smith jigging with delight on the floor of the House of Commons even though he is unlikely to benefit from Mr Osborne's modest measures to help the poorest paid.

There has been a less than enthusiastic response from many employers with dire predictions the new wage levels will result in tens of thousands of job losses and stifle growth. A significant number of directors and others near the top of the employment tree fear their double figure pay rises and eye-watering six-figure bonuses could be under threat if their low paid staff have to be given a decent increment.

Wednesday, 2 September 2015

Councillors ignored risk warnings from top officials


The chief executive of Scottish Borders Council has confirmed publicly that elected members were made aware of the risks associated with the energy recovery technology to be installed in the now abandoned waste treatment facility at Galashiels before they decided to gamble with millions of pounds of public money.

According to a report in this week's Border Telegraph Conservative member Gavin Logan sought clarification of what councillors were told when they signed up for a radical variation in their 24-year contract with New Earth Solutions Group.

The Telegraph report says that during a council debate last week, Mr Logan asked "Were councillors told the technology was untested and high risk?" He was assured by chief executive Tracey Logan that all elected members had been made aware of the risk.

If that was the case then why did the full council vote unanimously to take such a huge gamble on October 25th 2012 - a gamble which has already cost taxpayers over £2 million and will involve spending many millions more as the local authority pursues an alternative waste management strategy?

Those warnings that NEAT (New Earth Advanced Technology) represented a potentially dangerous path for the authority appear to contrast sharply with the recommendation to council that day from the director of Environment & Infrastructure and a team of other senior officers.

A very heavily redacted (censored) version of that document, obtained under Freedom of Information legislation, states under the heading RECOMMENDATIONS:

"I recommend that the Council [a] - (this recommendation is completely blacked out); [b] Agrees that the proposed changes to the project still represent value for money in the current market; [c] Agrees to issue a Contract Variation, within the parameters set out in this report, to New Earth Solutions to deliver the facility at Easter Langlee.

[d] Agrees to delegate powers to the Chief Executive, Director of Environment and Infrastructure, Chief Financial Officer and the Head of Legal and Democratic Services to vary the existing Contract within the parameters set out in this report; [e] Agrees to re-profile and increase the current Capital budget, as per the table overleaf, to cover the additional risk sharing proposal in (more black ink).

Far from pointing up risks and dangers, the report declares: "The proposed changes to the project still represent best value for the Council, to meet the legislative and financial drivers. The new integrated facility will actually deliver added benefits and reduced risk to the Council.

"Once funding is in place and the construction contracts have been signed the main contract does provide the Council with better protection from future changes in the financial viability of the project for New Earth Solutions. Therefore, this proposed Deed of Variation will provide New Earth Solutions with a fundable project that should provide the Council with an assured Waste Treatment Facility".

A ringing endorsement in anyone's language with no mention of untried and untested technology in any sections of the report which escaped the censor's liberal use of indelible black ink.

The upbeat enthusiasm for the contract variation to include NEAT at Easter Langlee soon proved to be completely misplaced. At that stage the only other facility of its type at Avonmouth, near Bristol, had yet to generate its first ampere or watt of electricity.

Within a short period of time the technology turned out to be a troublesome failure, and now the pilot plant is on the verge of being sold at a bargain basement price with heavy losses for shareholders and investors.

But as reported in these columns previously, a delegation from the Borders which toured the Bristol energy recovery facility last October returned convinced the technology would allow SBC to become a national leader in the field of waste management.

Just four months later (February 2015) the contract with NES was shredded and those dreams of civic glory were smashed to smithereens. The multi-million pound gamble with other people's cash had blown up in councillors' faces. But no-one accepts responsibility or is held to account.

This week's Telegraph reports that SBC chief finance officer David Robertson told last Thursday's council meeting: "After carrying out due diligence we concluded the technology for the advance treatment plant was untested and the firm had been unable to finance the project". No mention of the £2 million squandered.

The councillors may be keen to move on and put an end to the New Earth saga. But there are still numerous unanswered questions concerning one of the biggest financial disasters in the annals of Borders local government. The paying public demand and deserve answers.

Tuesday, 1 September 2015

Crumbs! That's about all South of Scotland gets

DOUG COLLIE on the yawning north-south chasm in rural economic aid

This week it was announced that the Scottish Government had allocated £4 million to the Scottish Borders LEADER initiative for the period up to 2020 to fund development in rural areas.

In the previous programme, which ran from 2007 to 2013, the Scottish Borders LEADER fund was worth £3.5m, and 71 projects were supported across the area. So that all tallies up to £7.5 million worth of support over thirteen years for the vitally important work LEADER carries out to maintain and nurture the region's fragile economy. It works out at £577,000 per year on average.

Meanwhile, at the other end of Scotland Highlands & Islands Enterprise (HIE) successfully bid for additional funding of £4.6 million from the Scottish Government in 2013/14, increasing grant aid for that SINGLE financial year to £57.9 million or 100 times greater than the Borders average figure. On that basis the north will have had more than £750 million in state hand-outs over thirteen years.

Although a comparison between the two regions on this basis may not be completely fair, and Government support for Dumfries & Galloway should be included in the equation, there remains a grossly inequitable and unacceptable difference between the budget Highlands has at its disposal in its efforts to deliver economic stability and prosperity for its residents and the crumbs dished out to the southernmost areas.

The issue was examined in the course of a recent investigation - Our Borderlands Our Future - by members of the House of Commons Scottish Affairs Committee when witnesses drew attention to the lack of financial backing for industrial development in the wake of the demise of local enterprise companies.

But there appears to be a real danger that the Committee's report will be left to gather dust, and the chances of establishing an adequately resourced South of Scotland development agency remain a remote possibility. Perhaps it is time for our local politicians and councillors to conduct some aggressive lobbying in the corridors of power, and for the Borders press to start asking some awkward questions.

On all available information, data and statistics Borders and Dumfries & Galloway should be in special measures when it comes to economic support. The area's GDP figure of £13,524 is a mere 67% of Scotland's average (£20,013) while a productivity level of £30,889 lags well behind the Scottish median of £43,095.

The south has no airport, has never benefited directly from oil and gas revenues, and has one of the lowest wage structures in the UK. There have been few really major inward investment projects in recent decades.

HIE has a staff of more than 250, an annual wages and salaries bill of £14.9 million, and Scottish Ministers even sanctioned a £2.7 million budget overspend in 2013/14. Expenditure on operating activities within HIE increased by 12.8% to £68.6 million.

The agency's achievements included the creation and retention of 882 jobs during that financial year alone. Grant-in-aid of £28 million to businesses secured investments totalling £113 million which were expected to support 2,128 jobs across the Highlands and Islands.

An examination of Scottish Enterprise's (SE) activities in Dumfries & Galloway and the Scottish Borders in the same year tell a vastly different story. From a Scottish budget of £52.76 million for regional selective assistance (RSA) - a total of 116 payments were made nationally - the south-west of Scotland received one RSA contribution of £110,000 to assist with the creation of 12 jobs. The Borders got nothing at all.

The number of SE 'products' delivered to other companies in southern Scotland (93 in D&G and 147 in the Borders) represented a tiny fraction of a Scottish total of 5,711. Scottish Enterprise assisted 2,708 businesses in total, 119 of them in the so-called Borderlands.

SE reported 84 inward investment successes, one of them in the Borders and one in Dumfries & Galloway. The agency's projects resulted in the creation of 4,834 new jobs - 18 in the south-west and 140 in Borders region. Ninety-four of those jobs were classified as 'high value' out of 2,515 across Scotland.

Meanwhile in the course of 2013/14 the Scottish Investment Bank (SIB) made 158 allocations worth £32.5 million. None of that money found its way into Dumfries & Galloway while one investment worth £200,000 came to the Borders.

It is high time elected representatives from this neck of the woods  started rattling a few cages and ended years of neglect from enterprise authorities which has damaged prospects of meaningful economic prosperity. We are undoubtedly Scotland's poor relations in this particular arena.