SCOTTISH Borders Council has been forced to deny it has failed to “learn lessons” after a retired journalist penned a hard-hitting report alleging poor financial management.

The National reported recently on how Bill Chisholm, who was awarded the MBE for his services to journalism, used freedom of information laws to force the council to reveal how the authority lost £2.4 million on the aborted Easter Langlee waste transfer system that was never built by New Earth Solutions, which went bust.

In a new report, Chisholm states: “Since the turn of the 21st century there have been at least four other ‘events’ in which Scottish Borders Council (SBC) displayed either incompetence or recklessness in financial management with multi million-pound consequences for taxpayers as a result of questionable decisions.”

The first was a £3.9m overspend on the annual education budget, which prompted an inquiry in 2002 by the Scottish Parliament Education Culture & Sport Committee.

That inquiry concluded: “The committee considers that the events leading to the overspend indicates an inexcusable lack of financial control within SBC.

“The committee recommends that SBC considers providing guidance for current and future elected members on issues of governance and accountability.”

Chisholm details how SBC took out eleven “lender option borrower option” (lobo) loans totalling £43m between 2002 and 2006.

He writes: “These loans are now valued at £71m. The current interest rates on these loans with Belgian, Irish and German banks are all higher than the interest charged by the Public Works Loans Board.

“Taxpayers will continue to fund repayments of the eleven Borders loans until 2065. They vary in length from 45 to 60 years.”

He also writes how the deal to provide new secondary schools at Eyemouth, Duns and Earlston under the Public Private Partnership (PPP) system was concluded in 2006, with repayments to continue until 2038.

The schools, completed in 2008/9, have a combined capital value of £89.6m but by 2038 they will have cost £284.8m.

His report continues: “It emerged that £10m of taxpayers’ cash was trapped in two failed Icelandic banks, and by the time the scandal was resolved SIX years later the council was left licking its wounds with a £320,000 loss…

“The end result could have been considerably worse. Freedom of information requests revealed that between 2006 and 2008, 94 separate deposits of ‘spare cash’ amounting to £172m had been placed on short-term deposit in four Icelandic financial institutions.

“Scottish politicians ignored requests for an inquiry even though SBC and a number of other local authorities had been gambling with other people’s money on an industrial scale.

“Not a single councillor or official was held to account.”

Chisholm told The National the council had failed to “learn lessons”, and added: “SBC will not be alone in having presided over poor handling of fiscal matters.

“No doubt every council in the land will have financial skeletons in their respective cupboards. How much will all of this have cost Scotland’s public purse?

“My conclusion is that Scottish public bodies require much more rigorous scrutiny of their financial/treasury management.”

The council’s current leader, Shona Haslam, and former leader, Councillor David Parker, said in a joint statement: “The suggestion that lessons have not been learnt over the last 17 years is wholly inaccurate.

“The council consistently achieves unqualified accounts with minimal recommendations from its annual audit by external independent auditors.

“In addition, the council has saved around £30m in the last five years due to sound financial management and year-on-year underspending, which has resulted in reinvestment in various council services.

“The New Earth Solutions contract has been scrutinised by various agencies before and after February 2015, all of which have been satisfied with the process followed and the decision taken by the council in February 2015.”