Council has 761 empty properties as market fails and debt rises

The old Earlston High School
The old Earlston High School
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plans by Scottish Borders Council to keep abreast of its rising debts by selling off some of its vast estate of empty buildings have hit the recessionary buffers.

It follows the news that the Newtown-based local authority currently has no fewer than 761 empty properties under its control.

The revelation comes in a response to a Freedom of Information (FoI) request which also confirms there is no public register of all these properties.

Meanwhile, in a written answer in Holyrood earlier this month, finance secretary John Swinney gave a rundown of levels of debt across Scotland’s 32 councils.

He confirmed that SBC’s total debt – the sum of traditional borrowing and credit arrangements, such as those acquired under the Private Finance Initiatives (PFIs) which funded the construction of three new high schools in Earlston, Duns and Eyemouth – stood at £262.555million in 2011, compared with £179.757million in 2009.

It was in that year that amounts due under PFI arrangements were included in total local authority debt and it is thus not surprising that annual interest repayments incurred by SBC rose from £9.118million in 2009 to £12.273million last year. Council leader David Parker said that the debt figures for the Borders “remained eminently manageable”, given that total debt across all Scottish councils exceeded £14billion last year while annual interest payable stood at more than £710million.

Mr Parker, who returned for a third term at the helm at last week’s statutory meeting of SBC, conceded that both the current and previous ruling administrations at Newtown did have proposals to rationalise property holdings. He said: “However, the current market conditions have made this strategy very difficult to deliver,” he told us. “We have marketed a number of properties without any success as there are simply no buyers in the current downturn.”

Ironically one of the most significant assets is the old Earlston High School which gave way to the debt-gathering PFI replacement in 2009.

“This is a good example of an asset which, if we had marketed it in 2005, we would have sold, along with its associated land, without any difficulty and would probably have realised a much more significant capital return than anticipated.

“In the current market, no-one is interested in acquiring such a site and actually it may be advantageous to us to landbank sites rather than sell them cheaply now and lose out.

“Our property staff constantly review the opportunities for rationalisation and take them where opportunities that are worthwhile arise.”

Meanwhile, Mr Parker stressed that his council was keeping “under constant review” the cost of both team-building exercises for staff and recruitment processes. It follows revelations to two recent FoI enquiries. The first revealed that, from 2009 to 2011, just over £9,000 had been spent on team-building sessions, including an event in Kelso for 60 library service staff which cost £2,250 and two catering staff team-building conferences which incurred expenditure of £1,500. In addition, a two-day team-building event for five professional staff in the passenger transport department last year cost £1,000.

The other request elicited that during the selection process for a new chief executive to replace David Hume, an event was held at Kingsknowes Hotel in Galashiels last autumn. It was attended by the four shortlisted candidates, two members of staff and 10 councillors and the bill for meals came to £419, including £96 for drinks. The response acknowledges that one councillor paid his share of the hospitality from his or her own pocket.

Mr Parker told us: “We keep these issues under constant review and do our utmost to secure value for money at all times when undertaking these exercises.”