Audit approves scrapping of council contract

Galashiels Community Waste Recycling Centre & Easter Langlee Landfill Site.
Galashiels Community Waste Recycling Centre & Easter Langlee Landfill Site.

The scrapping by Scottish Borders Council of a major contract for a heat generating plant to treat the region’s waste has, as expected, been given a stamp of approval by external auditors.

In its 51-page report on SBC’s 2014/15 accounts, KPMG devotes just a few paragraphs to the decision which was taken in private in February and involved a £2.2million write-off of public funds.

“We have reviewed the council’s decision-making process in relation to the termination of the contract,” stated the accounting company, which is charging more than £300,000 for the annual audit.

“We are satisfied that the council has followed appropriate procedures in relation to this decision.”

The KPMG appraisal does not, however, address a local authority procurement process which began in 2008 and which saw, three years later, a 24-year deal signed with New Earth Solutions (NES) for a mechanical biological treatment (MBT) composting plant at Easter Langlee in Galashiels.

In October 2012, councillors agreed in private to legally vary that contract, with NES charged instead to deliver a heat-generating advanced thermal treatment (ATT) solution at the same site.

That agreement was finally torn up in February because the ATT technology was untested and NES could not secure the required investment funding.

Shortly afterwards, SBC admitted it had spent £2.2m on the failed procurement, to be written off. Notable beneficiaries included city law firm Brodies whose legal advice had cost £679,000.

Subsequent attempts via Freedom of Information to discover what had convinced councillors to endorse the radically amended ATT deal proved unsuccessful, with the council citing a commercial confidentiality agreement, enduring until 2021.

Elsewhere in the audit, KPMG revealed that the local authority’s outstanding debt at March 31 stood at £172million, incurring annual loan charges of £29.4million.