21st April 2018
Established 1872. Online since 1996.

Officials refuse to say if SIC has agreed to pay for White House repairs

Officials have declined to confirm claims that the SIC has agreed liability for the cost of repairs to its troubled headquarters, nearly six months after the flagship building was evacuated over fears of a “sudden collapse” of the building’s floors.

Two separate sources with knowledge of the situation told this newspaper that the council has agreed in principle that it may pay for the repairs.

SIC political leader Gary Robinson said yesterday he had no knowledge of this and that any decision to spend money would be a political one made by councillors. The last update for councillors had been made in December.

The SIC and the building’s owners Shetland Leasing and Property (Slap) have kept official response to a minimum after being furnished with a list of questions by The Shetland Times.

Director of the SIC corporate services department Christine Ferguson, who has been negotiating with Slap, said the council was “working very closely with Slap with a view to getting back into the building as quickly as possible”.

A statement released by Slap’s PR firm Platform Shetland said that Slap was “working with its tenant, Shetland Islands Council, to resolve outstanding issues with the building, to ensure that council staff can return to the HQ as soon as practicable.”

It was also claimed that the council is continuing to pay rent, which amounted to £467,000 per annum when the council took occupancy in April 2012. The rental has been reviewed since then, and upwards adjustments in line with inflation are built into the lease terms. It is not known if the rental charge has already been increased but based on the £467,000 figure, altogether the council will pay Slap £14.01m over the 30-year lease, plus any inflationary increases.

The council is liable for most routine repairs and maintenance of the £7.3m building, which was completed by Hunter & Morrison “on budget and in time” in 2012.

It is also understood that investigations into the extent and causes of the damage to the White House are continuing and that the parties are still some way from agreeing a schedule for making the repairs.

Slap is a property development and investment company wholly-owned by Shetland Charitable Trust.

A “strictly confidential” report prepared by Slap directors for charitable trustees in September estimated repairs would take six months from the time of plans being drawn up and would cost £600,000. But this cost estimate is said to have increased and there are now doubts the building will be back in use this year.

One source said that both parties were keen for the dispute to be kept out of the courts, and anxious that nothing should be said to derail a non-litigious solution.

Ms Ferguson said that the questions asked by this newspaper were already answered in the public domain or were the subject of contractual or legal issues. She declined to comment on whether the council had agreed its liability with Slap. The Shetland Times has subsequently put the questions to the council as a freedom of information request.

According to the paper prepared for the charitable trust in October: “It is likely that the floors will continue to deflect and at worst, a shear failure could potentially lead to a sudden collapse.”

Problems became apparent with the building, known as the White House, not long after council staff moved in, according to the Slap paper. These included sticking doors and glass panels and drywalls coming loose and falling out as a result of the floor deflection. There was also cracking of the underside of the structural slabs.

The report says that the results of the break-out testing that followed non-destructive testing led to estimates of the building being 30 per cent under-reinforced. Much of the problem appears to lie with concrete floor panels supplied by Hanson Building Products which allegedly did not meet their design specifications. Results of testing show showed that “the reinforcement present in some of the floor was missing and the design spacing was extremely variable.”

According to the report, Hanson, which is now known as Forterra, said that all drawings for the “Omnicore slabs” used in the North Ness building had been lost in a flood in their offices and the company was no longer manufacturing that type of slab, having “removed all traces of the system and product from the internet”.

The Shetland Times contacted Forterra for comment but no response was forthcoming.

Ian Morrison, of Hunter & Morrison, said the reason he had been given for the evacuation in September was that a Ferroscan survey had shown there was an assumption that all reinforcement bars in the large span slabs were 10mm instead of 14mm.

“Subsequently, after a breaking out sample, it was discovered they were in fact 14mm bars”

“Subsequent discussions on design have been carried out between our structural engineers and Slap and the council engineers, and these are ongoing.”

After Slap was notified of problems in 2013 it drew up a four item “snagging list” intended to tackle excessive deflection in the suspended floor slabs, the performance of the heating and ventilation system, the building’s lighting and water ingress.

By September last year none of these had “yet been progressed to a successful conclusion”, the report states.

Mr Robinson said that as far as he was concerned responsibility for remedial action lay with Slap who held the warranties for the building.

He said: “The council fulfilled its duty in that it told the holder of the warranty there were issues. So the length of time taken was no reflection on the council”.

Mr Robinson could not confirm speculation that engineers employed by the council had come up with a solution for the building and that the hold up was now down to who was going to pay for the work. He said the last engineers’ report made available to the council had been in December.

He added: “I am hopeful that the council will be back in the building this year but beyond that I cannot say if it will be weeks or months. Work is ongoing and progress has been made.”

Mr Robinson also said that he was among a handful of councillors who had been opposed to providing council offices on these terms.

“The situation is not ideal in any circumstances. Going back to the start, Jonathan Wills, Rick Nickerson and myself questioned whether this was the best way to provide council accommodation. We questioned the cost and whether it was the best value for the council. Jonathan and I voted against it.”

He said that any official recommendations on a solution would still be subject to agreement by councillors.

Slap director Michael Thompson declined to comment owing to the ongoing legal issues.

The White House (officially 8 North Ness) was constructed under a design and build contract and hailed at the time for the speed and efficiency of its construction. Slap was the employer under the contract, with Hunter & Morrison the contractor, Mott Macdonald the Construction (Design and Management) (CDM) co-ordinator and the SIC was project manager and clerk of works as well as the tenant.

The SIC has said the building has no completion certificate, but that is not “uncommon” in this type of construction.

The decision to build the White House was taken under the last council when Sandy Cluness was SIC convener and Josie Simpson the political leader.

It had originally been intended as offices for social work staff, but those plans changed under the then council chief executive, Alistair Buchan, to make it more of a council HQ with other departments posted there instead. Two-hundred workers from eight SIC offices moved into the 3,000 square metre development.

At the time of its opening Mr Buchan said the building offered a “once in a generation” opportunity to centralise the SIC’s services and to create a more efficient and dynamic authority.

In 2012 while reflecting on his time as chief executive Mr Buchan singled out the building of the White House as a vital development. It had been set out in such a way as to “set a limit, effectively, on how many jobs will be in Lerwick”.

He said: “There’s still great scope to bring more people into this building and have greater efficiency – so I think time will show that’ll be a huge asset.

“Nobody likes spending money on office accommodation but, you know, we live in the modern era and you’ve got to provide your staff with proper, fit-for-purpose office accommodation that allows them to work efficiently.”

12 comments

  1. Christopher Johnston

    What a convoluted mess.
    SIC muddled the contractual arrangement by sitting at the table as the tenant as well as sitting on the employer’s (SLAP/SCT) side of the table as project manager and clerk of the works. One cannot faithfully serve two masters.
    Unless the contractor Hunter & Morrison is found to be the sole cause of the problem, the Shetland taxpayer will be paying for all repairs plus the cost of moving SIC from the buildings, housing them elsewhere for months, and then moving them back into the buildings.
    It seems to me that SIC should not be in the construction business as they have a history of poor performance – the runway expansion at Sumburgh being a recent example. And if SIC’s legal counsel did not warn them of the potential problems of the White House contractual arrangement, then legal counsel should be held accountable.

    Reply
  2. John N Hunter

    Hanson may have removed all their references to Omnicore but there are still brochures for it out there on the web.

    https://www.scribd.com/document/208875117/Hanson-Omnia-Brochure-FLOORING-system

    Reply
  3. ian tinkler

    ( Christopher Johnston, March 4th, 2017 16:39, as above) “What a convoluted mess.
    SIC muddled the contractual arrangement by sitting at the table as the tenant as well as sitting on the employer’s (SLAP/SCT) side of the table as project manager and clerk of the works.”
    Why the lack of transparency? Just who is being protected whom here? The Shetland Swamp at work again, have we yet more stones to look under?

    Reply
  4. John Tulloch

    Incestuous commercial arrangements such as this, doubtless, “seem like a good idea at the time” but in fact, they are a very bad idea.

    This is a disaster. Buildings collapsing is what we hear about in the Third World. And it’s starting to look like taxpayers will foot the bill and nobody will be held accountable.

    This affair underlines the need for the charitable trust to be completely independent of the council and indeed, for its trustees to be democratically elected so that there is proper public accountability for the actions of those engaged to administer its diverse charitable functions and business.

    Reply
    • Christopher Johnston

      John, I suggest that no SIC councilor could be an SCT trustee while on Council and for a period of years afterward. A similar restriction should apply to SCT trustees. These provisions should prevent the same persons serving on both SIC and SCT, and eliminate a “revolving door” arrangement in which a councilor leaves SIC and shortly becomes an SCT trustee, and vice versa.
      I watched this arrangement for 41 years in a small mill town (population similar to Shetland). There was a group of “our sort of people” (bankers, industrialists, lawyers and barristers, merchants, etc.) who belonged to the same clubs and organizations and ran the town and government like a plantation. Old members died, new members moved in or moved up, but it was always the same group. Sometimes it worked well, and sometimes it did not. And the times it did not work well were kept very quiet because the news would not reflect well on the group. And all the members of the group did very well financially by their membership. Orkney seems to follow this model. In my opinion, Shetland should not follow this model.

      Reply
      • John Tulloch

        Thanks for that, Christopher.

        I’m unsure Shetland is exempt from your small town, cosy scenario – SIC, LHT, NHS Shetland, SCT/Slap/Sheap/VIking Energy – and I think placing restrictions on membership of SIC and SCT would be a good place to start.

  5. ian tinkler

    The cosy scenario – SIC, LHT, NHS Shetland, SCT/Slap/Sheap/VIking Energy; and never a conflict of interest any ware at all!!! That would be the Shetland Equivalent of, Donald Trumps , “Swamp” ready to be drained! or at least thoroughly investigated with all interests, incomes, fees and expenses in the public domain!!!

    Reply
  6. Ann Thomson

    I have NOT read the previous comments but want to comment :- This story baffles me. SIC = the tenant, SLAP = the owner of the building so why is the tenant paying for whatever remedial work is required on the building owned by someone else. This is our money at the end of the day ! We should be on da Street protesting.

    Reply
    • Debra Nicolson

      What we need is more openness and less secrecy; where there is no legal reason for it. All officials of the council work for the community and all councillors are elected by the community so they should be more accountable. When I worked for the council rumours were constantly flying around and the lack of communication or lack of willingness to communicate led to continued uncertainty and worry for both employees and the community.

      Reply
  7. Gary Robinson

    I’m sorry to say that this was symptomatic of the behaviour of the last council when it was led by Sandy Cluness and this wasn’t an isolated incident.

    http://www.shetland.gov.uk/coins/viewSelectedDocument.asp?c=e%97%9Db%93p%7D%88

    While some have criticised the deal reached to finance and build the new Anderson High School, it could easily have been much worse as this shows…

    http://www.shetland.gov.uk/coins/viewSelectedDocument.asp?c=e%97%9Db%93p%7B%8E

    It was to Bill Manson’s credit that, despite being the chair of the Shetland Charitable Trust, he pointed out that this option would cost the council much more and opposed the deal on that basis.

    Reply
  8. Ian Tinkler

    “I’m sorry to say that this was symptomatic of the behaviour of the last council when it was led by Sandy Cluness and this wasn’t an isolated incident”. Forgive me for mentioning it Gary Robinson, but were you not a member of the last Council, when this arrangement happened? Why did you say nothing then?
    Now as our Political Leader, Gary Robinson, could you please explain why so silent regarding “Officials refuse to say if SIC has agreed to pay for White House repairs?” Now use your position and find a few answers and make them public, change the habit of a lifetime and show some metal and speak out.
    !

    Reply
  9. Alan Skinner

    Mr Robinson’s letter is fascinating. It demonstrates, very clearly, the very dangerous traditional Shetland combination of breathtaking arrogance with total incompetence, which can be seen in so many fiascos over the last decade or so. The current council, and probably Mr Robinson in particular, should be congratulated on bringing prudent financial control in the last five years. They have not got everything right – school closure “consultations” and the naming of the AHS residence are notable examples – but they leave office with SIC in a much better place than when they started in 2012.

    Reply

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