TWO years after Shetland Islands Council’s headquarters at North Ness was evacuated due to fears the building might collapse, local MSP Tavish Scott is calling on all parties involved to get around the table to resolve the ongoing saga amicably and without the threat of litigation that is now hanging over local building contractor Hunter & Morrisons.
In March this year, the local authority confirmed that following 18 months of surveying and load testing that there was “no fundamental health and safety issue with the main structure” of what is colloquially known as the White House in Lerwick.
As a consequence, some SIC staff moved back into the £7.3 million office block straightaway, and the hope is to have it fully re-occupied again before Christmas.
Yet the legal wrangle over who was at fault when owner of the premises, Shetland Leasing and Property Development Ltd (SLAP), told the SIC to immediately evacuate the building on 20 September 2016 is only commencing.
Shetland Islands Council has now lodged legal proceedings against Hunter & Morrisons at the Court of Session to protect the “local authority’s interests”, a move that not only could potentially cost hundred of thousands of pounds of additional taxpapers’ money but also prevents every councillor from speaking openly about the issue.
Scott said he hoped the lessons from the Bressay Bridge saga had been learned and he added that any development that could lead to a similar set of circumstances should be avoided at all cost.
Back in 2012, and following a lengthy legal process, the SIC was ordered by the Court of Session to pay £4.8 million to Lerwick Port Authority for delays it caused to a dredging contract.
“What we need is a sensible negotiated solution which has the building ready to be fully occupied and all remaining remedial work completed, but all parties need to do that without ending up in the Court of Session,” Scott said.
“I would despair if we got anywhere near a Bressay Bridge style saga. That needs to be avoided at all cost.
“It is pretty clear whoever walks past the building that whatever argument was used for vacating it two years ago hasn’t been proven because otherwise why are people back in it?”
Hunter & Morrisons meanwhile wonder why neither the SIC nor SLAP are seeking remedy from IKM Consulting Ltd, the company that advised to evacuate the North Ness building back in September 2016.
One of the directors said: “We feel aggrieved that IKM’s role in the evacuation is not being highlighted by the council.
“They wrongly recommended the evacuation of the building because there was a safety problem with the floor, and tests have now proved that that’s not the case. The root cause of all this could simply be a consultant’s mistake.”
The Grangemouth-based surveying company was engaged by SLAP in 2015 to assist in assessing “progressive and ongoing” deflection of the suspended floor slabs which the SIC, as tenant, had reported to their landlord SLAP on several occasions between 2013 and 2015.
All parties involved agreed that Stanger, a Glasgow based concrete testing company, would be employed to carry out a non-destructive testing (NDT) survey of the building’s floors.
In an e-mail to SLAP as well as to Hunter & Morrisons, dated 20 September 2016, IKM’s chairman Ian Maclachlan advised the “immediate evacuation of the building” on the basis of the “first batch of results” from those tests.
“We confirm that the main reinforcement bars are not H14, as per approved design, but H10 bar. The reinforcement is therefore some 50 per cent of that required. The building therefore does not meet statutory safety requirements,” Maclachlan wrote in his e-mail.
On the basis of that advice it appears that SLAP had little choice but to order the SIC to vacate the building, and the local authority had no alternative but to do as they were told. At the time no one knew for how long the building would be vacated.
The Stanger report had estimated 10mm bars and recommended breakout to confirm actual sizes, but did not take place until two weeks later.
IKM Consulting were contacted several times by Shetland News during the last two weeks with requests for interview. They chose not to respond.
Chairman of SLAP, local surveyor Michael Thomson, said he could not talk about the issue as he was bound by a non-disclosure agreement with the council.
“No fundamental health and safety issue”
However, following further extensive investigations by SLAP parts of the floors were cut open to find that the correct H14 size and type of steel reinforcement had been used in the construction of the building.
And load testing of the floors, carried out by civil and structural engineering company ACIES on behalf of the SIC found that the floors were actually stronger than expected.
In January, the SIC’s corporate services director Christine Ferguson went on the record saying that there was “no fundamental health and safety issue with the main structure” of the building, and added that it was too early to say who was legally responsible.
In an e-mail to all staff at the time she said: “This should mean that the extent of the works that will be required before we can move back into the building should not be as great as it might have been.”
The council’s capital programme services were the first to move back into the building in March to oversee repair work and planned alterations to the building to be carried out before staff could return.
The SIC has continued paying rent in excess of £500,000 per annum for the empty building and it has incurred additional cost of at least £400,000 since September 2016.
Hunter & Morrisons directors are at a loss as to why it’s they who are now legally pursued by the SIC.
Ian Morrison said the last two years have put a strain on the company, which employs 30 people, and on its directors personally.
“It definitely has had an impact,” he said. “A lot of time has gone into this where we actually should have been concentrating on running the business.
“You wake up at three or four in the morning with your head spinning, and you can’t get back to sleep.”
However, the company directors feel even more aggrieved about the lack of response and compassion from local councillors.
“No help from councillors”
And there is, of course, the widely held suspicion that councillors are not in charge of proceedings and simply rubberstamp what officials put before them in private meetings.
“We had no help from councillors,” director Billy Morrison said. “We had help from [former councillor and political leader] Gary Robinson when he was our councillor, and he was excellent, but the new councillors, when they came in, felt they couldn’t help at all.”
Council convener Malcolm Bell said it was not the case that events surrounding the White House were driven by senior council officials and solicitors and added that councillors had been kept fully informed at all times and had been involved in making key decisions.
He said the SIC had to protect its interests and called on the Shetland public to be patient for a little while longer.
“These decisions are being made in private for good reasons,” Bell said. “We have been elected to represent the Shetland public, and people need to trust us to do just that.”
Political leader Steven Coutts echoed the convener’s comments in very much the same words.
“Councillors have been elected by the public and it is our role to make decisions to protect the council and to ensure that the council can continue to provide services,” he said.
“We have been involved in making decisions on this one and for very good reasons these are not public conversations.”
He added that it was “very much” the SIC’s intention “to release what can be released at the appropriate time”.
Asked if, as a Westside councillor who has all the company directors as his constituents, he felt comfortable with the position he was in, Coutts said he wouldn’t comment, but added: “My role in responsibility lies with the council.”
Tavish Scott said he had implored senior councillors not to go down the litigation route: “Protecting the public interest also means not spending hundreds of thousands of pounds on court when you don’t need to.
“It is not in Shetland’s reputational interest for this to go on any longer, it is in our interest for this matter to be resolved.”
All requests under Freedom of Information legislation to release SIC commissioned reports into the public domain have been turned down due to the potential of litigation.
Built by SLAP, the White House has been leased to the SIC for an annual rent of around £500,000 plus inflation since April 2012. The term of the lease is for 30 years.
The office block is one of around 30 properties owned by SLAP, which generate around £2.3 million in annual income. Last financial year SLAP gift aided £2.1 million to the Shetland Charitable Trust for distribution; a mechanism that means neither body pays any tax on the profits.
The SIC is currently engaged in talks with SLAP with the view to buying the company.