[Updated in response to Comment 2 below] As a councillor for Dunoon, Michael Breslin is supportive of the contribution to the provision of outdoor activities, instruction and learning and of the local employment delivered by Actual Reality.
He has therefore been sympathetic to and concerned about what one can only describe as the tortured relationship between Actual Reality and Argyll and Bute Council – a relationship of which the council was the determinant, as the principal and senior partner.
As an elected member, Mr Breslin has been attempting for a considerable time to get information and responses to questions from the council – but has had no responses to some of his emails.
In frustration, he has written a report to For Argyll’s audience, to put in the public domain the nature of the issues woven into the razorwire the council has thrown up to block wider awareness and investigation.
We agree that this council conduct runs counter to democracy and to good governance – whether or not they have anything to hide.
We also support wholeheartedly the drive to have this complex mess forensically and objectively investigated without fear or favour of any kind – in any direction.
It is very much in the public interest that this rat is expertly dissected, the causes and consequences properly identified, conclusions drawn, any necessary actions taken and lessons learned.
We have taken the decision to publish this statement as it is, without commentary, since it is itself an authored narrative. It does, though contain information that we – and no doubt others – will refer to in the continuing pursuit of this matter until it is property investigated, as it must be.
Councillor Breslin: Castle Toward, Actual Reality and Argyll and Bute Council
Part 1
This report is a summary of my involvement since becoming a councillor in May 2012. I had absolutely no idea I would become involved with this, nor did I think I would still be involved at the start of 2014.
I was approached by Peter Wilson of Actual Reality (AR) shortly after the May 12 election because of his board’s concern about the lack of progress in purchasing Ardentinny Outdoor Centre from the council. Actual Reality had been operating at Castle Toward for a number of years but without a lease. The reason they did not have a lease is summarised in Christopher Mason’s words below. The summary of his view is that Argyll & Bute Council welshed on what’s below so that the building could be sold.
‘…….the undertaking that ABC gave in 1996 to support the continuation of outdoor education in Castle Toward, the Council’s agreement with Glasgow and East Renfrewshire to form a Joint Management Committee, the agreement between the three councils that the JMC would be wound up and that Actual Reality would be granted a long lease to enable it to restore and maintain the property as an outdoor education centre, Scottish Ministers’ consent to that arrangement, and ABC’s subsequent refusal to conclude the lease negotiations. The failure of the three-council regime allowed ABC in 2003 to set about the sale of Castle Toward.’
On many occasions I have heard both officials and elected members of the council speak in a derogatory manner about the fact that AR didn’t have a lease and didn’t pay rent. It is currently costing council tax payers of Argyll & Bute around £20k per month in security, heating and maintenance of the property now that AR have left so there is a strong case to be made that by being there AR actually saved this council a pile of money over all the years operating from the castle. But that fact is conveniently ignored by their detractors, of whom there are many.
So why was I concerned about the position AR found themselves in? Quite simply, AR’s business was being very badly affected by their insecurity over where they could operate from. Their business is one based on being able to sell outdoor education breaks to schools and others but for both them and their customers they need to plan all of this well in advance.
If you are unsure about where you can operate from, this has a very negative effect on your ability to plan your business.
Since the council decided to sell Castle Toward many years ago, and with AR not having a lease, their business was always insecure but it became even more so when Seasons Holidays agreed to buy the property. AR say that this increasing insecurity was badly affecting their business and that they had, as a direct result, lost over 20 FTE jobs. No part of Argyll & Bute can afford such a loss of jobs but it’s worse in many ways in this instance because they tended to employ young people, some of them incomers who might then settle here. We have a serious population decline in the area and we could ill afford to lose any of this kind of job.
Instead of being the most business friendly council (as we should have been) we appeared to be, at best, disinterested in AR’s business and possibly worse.
Before my first meeting with AR ( with Christopher Mason and Peter Wilson) I asked council officers for a briefing. This briefing, and other related matters, is referred to in the following list of written questions handed to the council chief executive in August 2012. I have had to remove names from the version you, the public, can now read because there are plenty of people who would like to make a complaint about me to the Commissioner for Ethical Standards in Public Life in Scotland and being publicly critical of officers (no matter what they do) is justification for such a complaint.
What you need to know is that the chief executive has never replied to any of these questions despite many reminders to do so. Readers can draw their own conclusions from this. I cannot comment other than to say it’s totally unacceptable for legitimate questions to be ignored for almost 17 months.
Readers may be interested to know that despite many requests, council officers are still refusing to say what legal impediments there were to offsetting security costs against the purchase price of Ardentinny, see questions below.
Readers may also be interested to know that the original version of the questions below was provided to Audit Scotland while they were investigating the officer to member relationships issue. Presumably since there is no mention of my evidence in their report, Audit Scotland think it’s perfectly acceptable to behave in the manner shown and then not to reply to legitimate questions. This is one of a number of reasons why I think the Audit Scotland report was seriously flawed.
Perhaps of most interest is that on the day I handed the chief executive these questions, 13 August 2012, she told me that the manner in which Actual Reality had been treated was one dictated by the previous administration of the council, ie the one in power before the May 2012 elections. Later that same month, Douglas Hendry told me much the same but added that officers had been told that Actual Reality were untrustworthy and that’s why they were treated as they were. Both of these seemed to me to be an attempts to invoke the Nuremberg Defence, ie we were only doing what we’d been ordered to do. That defence didn’t wash at Nuremberg and it doesn’t wash now.
The questions below end part 1 of this saga, with more to follow over the coming weeks.
My questions
[Ed: Note that the names of council officers in the text that follows have been redacted by Councillor Breslin by replacement with the word BLANK in all cases. It should be on the record that we did not ask nor did the councillor tell us any of the names redacted.]
This paper was written for Sally Loudon, chief executive of the council. It asks questions of the approach taken to date by council officers in their dealings with Actual Reality (AR). The public perception of the council and its dealings with AR are very negative, reinforced the other evening by remarks made at the South Cowal Community Council meeting. In fact, negativity is probably the theme of this paper despite my loathing of it.
I was approached by AR in May this year because they felt that the relationship with the council was very poor and that a number of jobs were at risk. The company has already lost a large number of jobs because of the uncertainty over their future operations due to the council wishing to sell Castle Toward. No part of our area can afford to lose jobs, least of all Cowal, and retention of jobs was my main interest and remains as such. As part of that interest, I took the view that both the council and AR had to treat each other with respect and to be flexible in dealings with each other with a view to retaining AR as a successful business in the area.
I regret to say that my view is that negativity by council staff is all too evident and there are also other traits emerging, eg omitting information in a manner that could mislead others, that greatly concern me. The sole reason for me raising these matters is to ensure we reach a rapid and fair (to both parties) solution to AR’s future operations so bringing up the behaviour and attitude of council staff is incidental to this, but essential if progress is to be made.
BLANK1’s email of 8 August has provoked me to write this. In the last few days, I have rarely seen behaviour of the kind displayed by BLANK1. His ability to leave key information out of what he says amounts to an attempt to mislead. If he is being aided to do this by others then it makes them as culpable as he is. The question is who are these others? There seems to be spin everywhere in what he says and that combined with what to me appears to be an extreme negativity towards AR has produced a situation that is shameful, and I will not be part of that.
Turning now to the email from BLANK1 of 9 August 12 and the draft paper for the next council meeting, plus the events contained within the sorry tale, I have the following questions and comments. I also need to refer to an email that BLANK1 wrote to Roddy on 6 August, containing a draft email BLANK1 suggested Roddy should write to me. That suggested email outrages me. There is no other way to put it.
I’d like answers to all questions in full please but it will be clear some of them merely require a yes or a no.
1: At the meeting with AR on 22 January 2010 in Kilmory, there was, I understand, an offer made by the council officials present to write off the debt that AR owed to the council. I understand that because of their lack of ability to trade while fire prevention work was being done, AR would have had no income to continue paying the £2k per month it was paying to the council but I am told they did NOT ask for the debt to be written off. Is it true that an offer to write off this debt was made, unsolicited, by council officers?
2: If the answer is yes to question 1, then it begs another question. Why did BLANK1 not mention this in his draft e mail for Roddy to be sent to me?
3: If the answer is yes to question 1, why was the offer made and what motivated staff to make it?
4: AR say that they were told at the time that the question of the debt possibly being written off would be decided by elected members. Is this true?
5: If it’s not true, when was the decision made to rescind the offer, who was involved, when and was there a minute taken of any meeting to discuss this?
6: Can I have a copy of the minutes of this meeting if they exist?
7: If there is no minute, can you explain what happened to change minds between the offer of writing the debt off and the decision to suspend the debt?
8: BLANK1 makes clear that the matter of writing off debt “of this nature” (in this case c£60k) is a matter delegated to officers. This raises a number of questions:
- Is there a delegated limit below which officers can write off debts?
- If yes, what is that delegated limit?
- If yes, can I see the paper that approved this delegated limit?
- If there is no delegated limit, is Audit Scotland aware of this?
- If there is a delegated limit, are decisions within this limit notified to anyone formally?
- If yes, to whom?
- If a decision is made not to write off a debt, is this notified to anyone other than those involved?
9: Are you able to explain the logic that allows officials to write off a debt of £60,000 yet elected members on area committees have to deal with grants to 3rd sector organisations of less than £100?
10: There was a subsequent decision not to waive the debt. If the offer was made by officials present at the meeting with AR, which officials and/or elected members were involved in the decision not to waive it and what were the reasons for not waiving it?
11: Why was AR not told when repayments were to restart?
12: Was the debt still showing on the council accounts?
13: What was the finance department’s role in this?
14: What instructions were given to the finance department on how to handle this suspended debt?
15: Can I have a copy of these instructions please?
16: Was interest still being applied to the debt during the period of suspension?
17: If yes to 16, did anyone tell AR and confirm the rate being applied? If not, why not?
18: Was there any communication to AR after they were told the debt would be suspended?
19: Why did it take a letter in July this year from AR to remind the council of the debt that was owing?
20: Did the council forget about the debt until AR’s letter and if so what systems failed?
21: If systems did fail, has this systems failure been reported to the council’s audit committee or will this be done?
22: Why is there no mention in paragraph 3.6 of the draft council paper about the fact that council staff have done nothing about reinstating the debt repayments from AR in favour of the council?
23: Why, in BLANK1’s suggested email to me from Roddy did he say that: This exchange of e-mails is not specifically referred to by Dr Mason in his most recent e-mails which is surprising as it clearly states the Council’s position then. This seems to imply that Dr Mason is concealing from the council the fact that the debt wasn’t written off. However, the council had done nothing about this debt until Dr Mason wrote to the council in July this year. Is BLANK1 implying Dr Mason is dishonest? If not, what does he mean?
24: In the same suggested email that BLANK1 wrote for Roddy, he states: I think that Dr Mason and Actual Reality have now in fact asked that the Council again consider to write off the sum due My clear understanding is that AR did not make such a request at all in the first place but your reply to question 1 is awaited. Why use the word “again” if the answer to question 1 is yes? Is BLANK1 merely ill-informed and if so why is he doing what he is doing? Or, is he trying to get the council leader to put his name to something that is wrong in fact?
If the answer to the preceding question is yes, this is a matter of the utmost gravity.
I am advised that AR does not wish to have the matter of the debt connected with the sale of Ardentinny. I am also advised that AR is willing to pay off this debt if the council is minded not to waive it at the next council meeting, AR will discuss the way in which this is repaid with council officials.
25: If the answer to question 1 is yes, why does the draft council paper make no mention of the fact that the original suggestion to write off the debt came from council officials?
26: AR left Castle Toward to go to Ardentinny. Why did nobody speak to AR to ask if they would be willing to remain at Castle Toward to avoid these costs, offsetting the saved costs against the DV’s valuation for Ardentinny?
This suggestion appeared to me to be a blindingly obvious one when I met with AR for the first time on 18 June 12. In a prolonged telephone conversation with BLANK1 before that meeting, in an attempt to see if there was a way to unblock what looked like impasse, I started to understand why there was impasse. BLANK1’s whole attitude was negative in the extreme. Every suggestion I made was replied to in the negative and further problems were deemed to arise at every turn.
In particular, I made the suggestion of AR remaining in Castle Toward to negate the need for security costs, a suggestion that was rejected. I was dismayed at the apparent unwillingness on his part to seek a solution, especially when there were local jobs on the line.
27: AR has already indicated that they would be willing to continue to operate until June 2013 but has anyone asked them if they would extend that until the end of 2013 in order to completely negate the security costs?
28: If the answer is no to 27, why not?
29: I am advised that at a public meeting in Innellan in, I think, early 2010, the then leader of the council stated that Castle Toward would never be allowed to stand empty. I also understand that BLANK2 was with Dick Walsh when this was said. In view of this, why is BLANK1 not actively seeking to ensure that Castle Toward does not lie empty by seeking AR’s agreement to extend their stay until end 2013 rather than spend funds on security costs?
30: The offsetting of the council’s security costs against the DV’s valuation is described in the draft paper for the next council meeting as an “in kind arrangement”. (Page 3) The paper further states that the council will “likely realise no real financial benefit from that”. This is astonishing on 2 counts. One is the description of this as “in kind” when what is being proposed will save the council real amounts of money, money that the paper elsewhere states will be “set off” against the eventual capital receipt from Seasons Holidays. So, the same security costs on one hand are “ in kind” and on the other will be “set off” . Why is there a difference between the two, other than, perhaps, to make one look less attractive than the other?
31: Why does the draft paper omit any mention of what the AR draft offer describes as “overage provision”, which would provide additional funds to the council in the event AR sold off the 2 houses on the Ardentinny site, the value of which is why AR disagrees with the DV’s valuation. This overage provision seems to me to be material to the AR offer so is this omission not misleading the council?
32: The paper makes a number of references to the council agreeing to a sale at less than “best consideration”. Taking into account the real financial savings that would be made in security costs, off set against the DV’s valuation, plus the potential for overage provision if the 2 houses at Ardentinny are ever sold, it seems to me that any mention of less than best consideration is profoundly misleading. In total, the 3 elements of the offer from AR seem to me to significantly more than best consideration. Is my arithmetic incorrect or is there something I am missing?
33: There is also no mention in the draft paper on why AR disagree with the DV’s valuation and therefore why they have included an overage provision. Why are these 2 material issues missing?
34: The draft paper makes reference to the issues of water quality at Castle Toward. However, the paper makes no mention of the fact that AR does not use the water supply for cooking or drinking water, thereby significantly reducing any potential risk there may be. I am told AR spend £2k per month on bottled water. Why is there no mention of this in the paper?
35: The draft paper also makes mention of legionella risk. The view from AR is that they maintain a very strict regime to ensure minimal risk to users from legionella. The question to be asked is this: have the measures identified in the paper been discussed with AR and if not, why not?
36: In the draft email that BLANK1 wrote for the leader of the council to send to me he stated the following:
‘Clearly Dr Mason and Actual Reality want the Council to consider issues that arise from Castle Toward to be considered in regard to the sale of Ardentinny when it appears this is to their benefit and to exclude issues at Castle Toward when it appears it doesn’t benefit them. That isn’t consistent or fair.’
Given than Dr Mason wrote to the council in July about the debt that may or may not have been forgotten about, this appears to be an attack on the integrity of Dr Mason, it leads to 2 questions:
- Is this what BLANK1 intended to do?
- Does he have evidence to support this attack on Dr Mason?
- Is BLANK1 being consistent and fair?
- More generally, which other officers of the council saw and/or advised BLANK1 on this e mail’s content before it was sent?
37: I understand that a comprehensive dossier of information on the way AR believe themselves to have been treated by the council over many years was provided to you in 2009. Can I see a copy of that dossier please because I am advised that some of what is in this suggests that not only has the council been behaving badly, it may have been acting illegally.
38: Lastly, the draft paper to the council has the names of BLANK2 and BLANK3 at the foot of it. I have to assume that they take full responsibility for this paper. However, I also assume that BLANK1 was involved in drafting it given that some of the same language is in other papers he has written on this subject. Can you confirm that these 3 officers take full responsibility for this draft paper?
There are many more questions that could legitimately be asked about the saga over Castle Toward, Ardentinny and Actual Reality but the above will suffice at this point.
Michael Breslin
Councillor, Ward 7, Dunoon
12 August 2012
