Borders Tory MSP attacks SNP-Libdem deal to run scandal tainted Scottish Borders Council, claims nationalists ‘will use platform to tear up UK’

SNP led coalition to run the Scottish Borders is attacked by local Tory MSP. WHILE many Borderers and those further afield WELCOME the formation of a new administration at Scottish Borders Council which will now be run via a coalition between the Scottish National Party (SNP), the Scottish Liberal Democrats & Independent Councillors, John Lamont, the Scottish Conservative MSP for Roxburgh & Berwickshire has attacked the coalition deal, alleging the new SNP dominated administration will use their position in the Borders as “a mouthpiece for separation from the UK”. Mr Lamont also blasted the LibDems, Independents & the now dissolved “Borders Party” for “propping up the SNP.”

John Lamont MSP (Scottish Conservative, Roxburgh & Berwickshire) Responding to the announcement of the new administration at Scottish Borders Council, local MSP for the area, John Lamont said in a Press Release issued yesterday : “I’d like to firstly pay tribute to the work achieved by the previous Scottish Conservative led Council administration. Under our councillors’ steady hand we saw finances kept in check, three new high schools built and a fivefold increase in recycling rates. There can be no doubting that this new administration has big shoes to fill.

However, Mr Lamont quickly moved to attack the deal giving power to the SNP, and accused the Conservatives former LibDem coalition partners for giving the Nationalists a platform to break up the union.

Mr Lamont continued : “It is important that they do not undo the great work done by their predecessors, and that they do not use the Council as a mouthpiece for separation from the UK. By falling in behind the SNP, the Lib Dems, Independents and Borders Party have given the Nationalists a platform to promote their agenda to tear the United Kingdom apart.

“The people of the Borders will not accept this, and I am sure a lot of those who voted for the Lib Dems and the Borders Party will be dismayed by the shoddy deal they have struck with the SNP. I know that many supporters of the Borders Party find it incredible that their councillors have disbanded themselves, joined the Independent Group under a new leader and then jumped into bed with the SNP, all within one week!

“The SNP’s sole political aim is to separate us from the rest of the UK. It would be naïve to think that the SNP will not now use the Council as a way to promote their plans to break up Britain.”

John Lamont MSP added: “The upcoming referendum is the biggest decision Scotland has had to make in 300 years. I am determined to keep Scotland in the UK, and like many voters, I will be keeping a close eye on this SNP led administration to make sure that they do not use the Scottish Borders Council to promote their separatist agenda.”

No reaction to Mr Lamont’s accusations has been issued by any of the other parties in the new coalition at Scottish Borders Council, however an openness campaigner in the Borders welcomed the change at Scottish Borders Council, voicing hope the new nationalist led administration would “clean up the endemic corruption at Scottish Borders Council and make sure citizens of the Borders were treated with a bit more respect from Council staff & officials who appear to pursue personal vendettas against members of the public.”

Commenting on the change of administration, an insider agreed it was time for change at SBC and said he hoped there would now be investigations launched by the new administration into the Council’s poor handling of its finances, which include millions of pounds of losses in now bankrupt Icelandic Banks.

He also called for a full inquiry and investigation into recent claims in local newspapers that the current leader of the Council, David Parker, authorised Press Releases containing false information regarding the controversial departure of SBC Chief Executive David Hume and speculation over how much of a taxpayer funded payoff Mr Hume received. The murky incident of Mr Hume’s departure was reported HERE and more recently HERE

SCOTTISH BORDERS COUNCIL : THE TORY LIBDEM YEARS LAID BARE

Since 2002, a multitude of scandals have hit Scottish Borders Council, from poor financial management to massive multi million pound losses in bankrupt Icelandic Banks, allegations of bullying, massive debts reported to be in the hundreds of millions of pounds, individuals councillors charged with criminal offences while other councillors pursued personal vendettas against members of the public, and more recently, scandals involving the sacking of it’s very own Chief Executive, David Hume, all of which can be found HERE

Scottish Borders Council hit the headlines with revelations of huge salaries, expenses & more, here : Reasons your Scottish Borders Council tax is so high : 15 Councillors soak up £1/2 million, Officials & Chief Exec on £100K plus & golden pensions & MONEY TO BURN : Millions lost in Icelandic banks yet 34 Scottish Borders Councillors soak up another million in salaries & expenses claims

More on the Icelandic Bank-SBC scandal can be read here : “Akin to Money Laundering” : Tory-LibDem Scottish Borders Council ‘played Russian Roulette’ with taxpayers £172 million in bankrupt Icelandic Banks

Scottish Law Reporter also reported on the calls for a full investigation of Scottish Borders Council during November 2010 where it was revealed by the former Scotsman journalist Mr Chisholm who carried out his own investigation of SBC’s Icelandic finance deals, that Audit Scotland had been asked to investigate claims Scottish Borders Council acted negligently & recklessly in investing a staggering £10 million pounds of taxpayers money in the now collapsed Icelandic banks. The Council, which is now cutting posts & public services across the Borders is expected to lose more than £3 million pounds on its investment and that the final payment (if indeed any payments are made) of its expected return is not due until October, 2018.

Justice in Scotland under Kenny MacAskill & the SNP : Jail your Granny, let the thugs go free

Justice Secretary Kenny MacAskill refused to intervene after his policies jailed Grandmother while allowing thug to go free. THE new sentencing guidelines launched by the Scottish National Party’s minority Scottish Government, which allow Sheriffs to issue “community payback orders” instead of sending convicted persons to jail, is so effective at combating crime & saving a few pennies on prison places, it was used to send an EIGHTY ONE YEAR OLD campaigning grandmother to jail, while career criminals walk free under Justice Secretary Kenny MacAskill’s ‘watchful gaze’ (or should that be faze ? – Ed)

Report from the Sunday Mail follows :

Outrage grows over decision to jail 81-year-old gran after thug escapes prison sentence

Feb 6 2011 Stephen Stewart, Sunday Mail

FURY at the decision to jail a campaigning gran was mounting yesterday after a violent thug dodged prison under new government guidelines.

Career criminal Laurence Winters - who has 160 previous convictions for offences including numerous assaults and thefts - walked free from court after a sheriff imposed Scotland's first community payback order.

On Friday, Winters, 39, of Perth, was facing sentence for his latest crime - shouting and swearing at police. Sheriff William Summers told him: "You have just about the longest record I have ever seen."

But under a new scheme launched by the SNP government, sheriffs have been told to impose community payback orders as an alternative to jail terms of less than three months. So instead of going to jail, Winters will work on community projects such as renovation and removing graffiti.

Meanwhile, frail 81-year-old Georgina Smith is still in Cornton Vale prison, serving a 45-day sentence for failing to pay a £1500 fine.

And justice secretary Kenny MacAskill has said he will not intervene over Sheriff Douglas Small's decision to jail her.

Politicians condemned the sentence yesterday after Georgina's neighbours held a candlelit vigil at her house in the village of Kilchoan on the Ardnamurchan peninsula.

Labour's justice spokesman Richard Baker said: "The situation where someone convicted of a string of offences escapes prison but an 81-year-old grandmother who hasn't paid a fine ends up with a jail sentence highlights the shambles of the justice system under the SNP.

"People are becoming more and more dismayed at a soft - touch approach to those who deserve a prison sentence while a granny is jailed for not paying her fine."

His Tory counterpart, John Lamont, added: "People who don't pay their fines should have money deducted from their income. "Prison should be for serious and repeat offenders who make the lives of others a misery.

"The public will wonder what on earth is going when those who shouldn't be in prison end up there - and those who should be in prison walk free."

Georgina was jailed at Fort William Sheriff Court on January 26 after she was found guilty of defacing an Edinburgh court on Armistice Day 2006.

She daubed slogans including "No Star Wars" and "No Cluster Bombs" on the building, causing £3000 worth of damage.

Sheriff Small said: "You have been given every opportunity to pay compensation but you refuse to do so for political reasons."

Georgina's own MP, Charles Kennedy, said: "Short prison sentences are almost always an expensive way of achieving very little. They should be used as an option of last resort, if at all.

"We need effective, enforceable community sentences that allow some good to come from offences that pose no threat to the public."

MSP Sandra White, who sits on the cross - party group for the elderly said: "The sheriff who sent Georgina to jail should pay the fine he imposed and take her out for a meal to apologise.

"It's a shocking situation for a woman of that age to be sent to jail for making a legitimate protest. Ok, she's put graffiti on a building - but when did anyone last see a graffiti artist being sent to jail?”

“Drug dealers and violent criminals who wreak havoc on our communities are allowed to walk free from court without more than a slap on the wrist.

"Where is the comon sense in jailing an 81-year-old woman?"

Georgina's daughter Lucy said: "What on earth is she doing in prison? This is a nonsense."

A Scottish government spokesman said: "Sentencing in individual cases must always be up to sheriffs and judges and it is fundamental to the independence of the judiciary that ministers do not interfere in those decisions."

Claims of negligence as Scottish Borders Council lose £3m+ in Icelandic Banks, authority’s Treasury advisers linked to Conservative Party Treasurer

AUDIT SCOTLAND are investigating claims Scottish Borders Council acted negligently & recklessly in investing a staggering £10 million pounds of taxpayers money in the now collapsed Icelandic banks. Such are the scale of the losses the council, which is now cutting public services across the Borders and has gone to two weekly garbage collections, is expected to lose more than £3 million pounds on its investment and that the final payment of its expected return is not due until October, 2018.

The state & scale of Scottish Borders Council’s financial investments and subsequent huge losses in Iceland have only become clearer after an investigation by retired Scotsman reporter William Chisholm, who was well deservedly awarded an MBE for his services to journalism.

During Mr Chisholm’s investigation of the way in which Scottish Borders Council invested in the Icelandic Banks, it became apparent its Treasury Advisers, Butlers, had been involved in widespread losses of hundreds of millions of pounds by Councils all across the UK.

Butlers Treasury advisers are run by the Conservative Party’s Treasurer, Michael Spencer, who was the subject of a report in the Independent newspaper, where, following a two month investigation, journalist Martin Hickman alleged that "councils who paid [a firm run by Mr Spencer] for strategic advice were almost twice as likely to have lost money in the three main Icelandic banks as those advised by other companies. The Conservative Party’s own website continues to list Mr Spencer as its current Treasurer.

The Independent’s investigation of Butlers and its connections to local authorities in the UK, continued : "Of the 116 local authorities who lost money, 51 received advice from Butlers. Their losses totalled £470m, more than half the total amount of council funds frozen in the banks."

Mr Chisholm’s investigation into Scottish Borders Council’s Icelandic investments follows :

WHO IS RESPONSIBLE FOR SCOTTISH BORDERS COUNCIL’S LOST MILLIONS?

Between May and August 2008 Scottish Borders Council (SBC) sanctioned the investment of some £10 million of council taxpayers’ money in two Icelandic banks despite several previous warnings from credit agencies as to the future stability of Iceland’s financial sector.

£2 million of the money invested has already been written off; £1.8 million has been recovered; and according to the council’s latest published accounts it could take until 2018 for some of the cash to be paid back into SBC coffers. Further write-offs may be necessary.

In a bid to find out who was responsible for the £10 million gamble which failed, I lodged a Freedom of Information (FOI) request with SBC on 20th August 2010. The questions asked and the council’s response can be found in their FOI archive (No. 3154) and quoted again at the end of this report. To me the most striking revelation in the response was: “There was no committee involvement in the specific investment decisions”, indicating that elected councillors were unaware that £10 million was about to be deposited in banks which were already being “abandoned” by other local authorities. More evidence to substantiate that fact later.

The council also told me: “The primary source of credit worthiness comes from credit rating agencies. For both banks, on the day the deposits were made, the short term ratings were F1” – the highest credit quality. But in fact both Moody’s and Fitch, two of the world’s leading agencies, had expressed doubts and issued warnings about the Icelandic banking sector, More on this later too. My FOI request also asked: “Has anyone been held accountable for the appalling losses?” I was told the council’s internal auditor carried out a review of all short-term lending following the collapse of the Icelandic banks and concluded there had been full compliance with the Council’s Treasury Management policy.

Because I was not satisfied with SBC’s response I requested a review of my FOI request. I asked for copies of any documentation relating to the catastrophic investment decision including written advice given to the council’s Treasury managers by external Treasury Management advisers. On October 4th correspondence to me from SBC (following consideration of my review request by the council’s FOI Advice Group) included a copy of the internal auditor’s 2008 report on short term cash deposits. But the letter added: “The information related to the advice received by the Council from its contracted treasury advisers, Butlers, was considered to be exempt under Section 36(1) of the Freedom of Information (Scotland) Act 2002, in that if the information was disclosed it would, or be likely, that the council would need to claim confidentiality of these communications.”

So this crucial information will not be placed in the public domain. Just what does the council have to hide? Therefore there must be a strong case for an independent inquiry into this entire sorry affair. SBC will soon be deciding to cut services to save £2.4m – almost equivalent to the sum already lost. A considerable number of those threatened services would have had a better chance of survival had there been an extra £10 million in the kitty. Other assets or resources have already been sacrificed to plug the financial gap left by the £2 million written off. In my view the saga requires urgent investigation, and those responsible must be held to account.

THE EVIDENCE FOR AN INQUIRY

It seems clear in the first instance that Scottish Borders Council – and many other local councils for that matter – did not learn a lesson in the wake of the spectacular crash of Bank of Credit and Commerce International (BCCI) in 1991. In that particular scandal some 35 councils across the UK lost almost £90m by gambling on the money markets. Western Isles Council was the prime “victim” when £23m – equivalent to 50% of the council’s entire budget – simply disappeared.

Scottish councils were warned after BCCI’s collapse: “The higher the interest rate the higher the risk.” Yet that stark warning appears to have been completely ignored by senior council staff at SBC, and by their so-called Treasury Management consultants when the struggling Icelandic banks upped their interest rates to attract multi-million investments. And elected councillors, said to be the guardians of the local public purse, simply abdicated their responsibility by neglect. From research carried out to date these are the events which led to millions of pounds of Borders taxpayers’ money disappearing down an Icelandic drain.

According to the Local Government Association, local authority deposits in Icelandic banks halved Between January 2008 and October 2008 from £2 billion to £953 million. The number of new deposits fell and declined sharply after April 2008. Only six councils and one pension authority in the entire United Kingdom deposited money after significant downgrades by credit agencies. So it is important to remember when SBC lodged our money with Landsbanki and its parent bank Heritable.

According to SBC’s accounts for 2009/10 the deposits were made as follows:

15th May 2008 - £3m Landsbanki;

25th July 2008 - £2m Landsbanki;

25th July 2008 £1m Heritable Bank;

22nd August 2008 - £4m Heritable Bank.

In other words these deposits were made long after the alarm bells started ringing.

For example on 30th January 2008 Moody’s credit agency placed Landsbanki on review for possible downgrade. Then on 28/2/2008 Moody’s downgraded Landsbanki from A2 to Aa3, reflecting concerns over asset quality. On 5th April 2008 Moody’s cut its outlook on Iceland’s sovereign debt from stable to negative. On 1st April credit agency Fitch downgraded Icelandic banks and placed Landsbanki on “negative watch”. Did no-one spot the actions of these credit agencies in the weeks and months before the £10 million was deposited? It would appear not.

Instead SBC seems to have relied solely on advice it was getting from its contracted treasury advisers Butlers. A total of 51 local authorities received advice from Butlers. Their combined losses in the Icelandic debacle were £470m. A subsequent investigation showed councils who paid Butlers for advice were almost twice as likely to have lost money in the three Icelandic banks than those advised by other companies. Butlers only warned councils about the desperate situation of these banks on 30th September 2008, the same day the Icelandic Government took control of the country’s third largest bank.

Mr Chisholm concluded his investigation saying “It seems to me that members of Scottish Borders Council were negligent by not keeping a very close eye on the authority’s money, and officials were reckless by choosing to make deposits in these unstable banks so late in the day. In total seven Scottish local authorities had over £45m of public money lodged in Icelandic banks on the day that they imploded. It seems 25 councils had more sense, steering clear of Iceland altogether.”

Mr Chisholm’s Freedom of Information request to Scottish Borders asked :

I would like to make a Freedom of Information request on my own behalf for information contained in any discussions or documents relating to the council's ill-fated £10 million investments in the collapsed Heritable and Landbanski Icelandic banks. Specifically:
(1) where did the £10 million come from to fund the investment?
(2) On whose advice was the investment made?
(3) according to SBC accounts the money was deposited only weeks before the 2008 collapse of these banks. What checks were made on the financial in/stability of the two banks?
(4) Please make available all committee and full council minutes relating to the investment.
(5) Has anyone been held accountable for the appalling losses exceeding £3 million? As a council tax payer contributing £246 per month I was extremely concerned to learn vast sums of public money had been lost in such a venture so:
(6) How much money does the council have invested elsewhere?

Scottish Borders Council’s response stated :

1 I can confirm that the funds were short term cash deposits made under the Council's Treasury Management Policy.
2 Investments were undertaken by Treasury Management staff in accordance with the Council's Treasury Management Policy and with advice from the Council's external Treasury Management Advisers.
3 The primary source of credit worthiness comes from credit rating agencies. For both banks, on the day the deposits were made, the short term ratings were "F1 - highest credit quality, indicates the strongest capacity for timely payment of financial commitments".
4 There was no Committee involvement in the specific investment decisions. The subsequent position has been reported in the Council's accounts and via Committee reports which are available on the Council's website.
5 The Council's Internal Auditor carried out a review of all short-term lending following the collapse of the Icelandic banks and concluded that there had been full compliance with the Council's Treasury Management policy.
6 At 31 March 2010 the Council had £3.5m on short term deposit with Barclays.

Borders MSP John Lamont was asked by one of our reporters for his reaction to the revelations of Scottish Borders Council’s gigantic losses of taxpayers money. He said : “I have written to the Accounts Commission to ask if they are able to investigate this further. I have not yet had a response.”

Audit Scotland were asked for their reaction to the claims of widescale losses at SBC. A spokesperson said : “We have received correspondence about this issue,asking for an inquiry. We are considering the correspondence and will respond in due course, in line with our usual procedures for correspondence."

No one at Scottish Borders Council was available for comment this evening.