SUMMARY

 

Michael Nevin is an economist and qualified accountant.  He graduated from Oxford University with a first class honours degree in Philosophy, Politics and Economics, and his career to date includes working as a Loan Officer with the European Investment Bank in Luxembourg in the early 1980s, as Financial and Economic Manager with the London Docklands Development Corporation in the late 1980s, and as a management consultant with Deloitte & Touche in the 1990s.  While with D&T, Mike served on secondment with the Private Finance Unit of the Scottish Office in 1996/97, and he established Caledonian Economics as a specialist economics consulting practice in 1998.

 

During the ten years when he served as Managing Director of Caledonian Economics, the firm grew to become a major force in the Scottish consulting market.  During the period between 2002 and 2007, the firm’s turnover and profitability more than tripled, and with this growth has come an increasing responsibility for day-to-day practice management and financial control. These administrative responsibilities left less time for the mission which inspired him to set up Caledonian Economics – namely, to provide a personalised, bespoke high-quality advisory service to his clients.

Accordingly, he decided to sell his interest in the firm to the other directors, and this sale was completed on August 1st 2007.  Following completion of the sale, he is working as an independent consultant through Nevin Associates Ltd, providing strategic financial and economic advice to selected clients particularly in the environmental, leisure and educational sectors.

CAREER RESUME

 

NAME                                                Michael Nevin

 

NATIONALITY:                                British

 

YEAR OF BIRTH:                            1955

 

QUALIFICATIONS:

 

BA (First Class Hons), Philosophy, Politics and Economics, Oxford University

MA (Econ), Economics and Econometrics, University of Manchester

Fellow of the Chartered Association of Certified Accountants (FCCA)

 

CAREER SUMMARY

 

2007 - : Principal, Nevin Associates Ltd

1998 - 2007: Managing Director, Caledonian Economics Ltd

1994 - 1997 : Managing Consultant, Deloitte & Touche, Edinburgh

1990 - 1994 : Senior Consultant, Touche Ross Management Consultants, London.

1986 - 1990 : London Docklands Development Corporation : 1988-1990, Financial and Economic Manager;  1986-88 : Financial Analyst.

1982 - 1986 : Loan Officer, European Investment Bank, Luxembourg

1979 - 1982 : Financial Analyst, Commonwealth Development Corporation, London

1977 - 1979 : Economist, Government of St. Lucia, West Indies

 

CAREER EXPERIENCE (in chronological order):

 

After graduating, he was recruited to work as an economist with the Government of St. Lucia in the West Indies through the Overseas Development Institute.  His work in St. Lucia included the preparation of the government’s annual capital budget, the preparation of annual surveys of the island’s economy and the preparation of projects for funding by development banks and aid agencies.  The projects on which he worked included a number of road schemes, the upgrading of the sewerage system of Castries (the island’s capital), a cocoa development project and the establishment of a Land and Water Use Unit to improve agricultural yields and implement irrigation systems.

 

On returning to the UK in 1979, he joined the Commonwealth Development Corporation (CDC) in London.  CDC is a statutory corporation of the British Government which finances and manages projects in Africa, Asia, the Caribbean and Latin America.  He worked as a financial analyst, responsible for the appraisal of projects presented to CDC for financing, and their preparation for consideration by the Corporation’s Board.  Following Board approval, he was responsible for the negotiation of the terms of the loan and equity investments.  His work included missions to:

 

·                    the Solomon Islands, to appraise a hydro electric project in the Lungga Valley;

 

·                    Thailand, to appraise a project for a gas separation plant to process newly discovered gas reserves in the Gulf of Thailand into a range of downstream products including liquefied petroleum gas;

 

·                    Costa Rica, to appraise the Ventanas-Garita hydropower project and a project to grow macadamia nuts for export to the USA;

 

·                    Luxembourg, to attend negotiations with the European Investment Bank for the Monasavu-Wailoa hydro electric scheme in Fiji, co-financed by CDC and the World Bank;

 

·                    Washington DC on a number of occasions to attend loan negotiations at the World Bank and International Finance Corporation.

 

In 1982, he joined the European Investment Bank in Luxembourg to work as a loan officer responsible for the Bank’s lending operations in Africa under the Lomé Convention.  Among the projects he appraised were the following:

 

·                    in Botswana, a loan for the Morupule coal power project promoted by the Botswana Power Corporation and a line of credit to the Botswana Development Corporation to finance loans and equity investments in small and medium sized enterprises;

 

·                    in Burundi, lines of credit to the Banque Nationale de Développement Economique for on-lending to small and medium sized enterprises;

 

·                    in Lesotho, lines of credit to the Lesotho National Development Corporation to finance factory, buildings, and loans and equity investments in small and medium sized enterprises;

 

·                    in Malawi, lines of credit to the Investment and Development Bank of Malawi Ltd to finance loans and equity investments in small and medium sized enterprises;

 

·                    in Malawi, a loan to the Kavuzi Tea Company Ltd (a subsidiary of ADMARC) for a tea plantation and factory;

 

·                    in Malawi, a loan to the Lilongwe Water Board to extend the water supply and sanitation system in Lilongwe city (co-financed by the World Bank);

 

·                    in Malawi, a loan to Escom, the electricity commission, towards the cost of the Nkula Falls hydroelectric project;

 

·                    in Malawi, a loan to the Portland Cement Co for the rehabilitation of the Changalume cement works;

 

·                    in Mozambique, he represented the Bank on the first official EEC mission to the country in 1986 (headed by the EEC’s Director General for Development) and initiated a loan for the rehabilitation of a vegetable cannery and cotton ginnery to Lomaco (Lonrho Mozambique, jointly owned by Lonrho and the Government of Mozambique);

 

·                    in Tanzania, a line of credit to the Tanganyika Development Company Ltd to finance loans and equity investments in small and medium sized enterprises.

 

In late 1986, he returned to the UK to join the London Docklands Development Corporation as Financial and Economic Analyst with the Surrey Docks Area Team.  In this job, his duties included:

 

·                    the preparation of the Area’s revenue and expenditure budget, and medium term financial projections;

 

·                    financial and economic evaluation of the Area’s regeneration programme, which comprised projects with total expenditure of £15 - £20 million per annum;

 

·                    leadership of projects with an economic/financial emphasis, in particular the Docklands Enterprise Centre;

 

Of the four areas of London’s Docklands (the Isle of Dogs, Wapping and Limehouse, the Royal Docks and the Surrey Docks), the Surrey Docks was the only area which generated a cash surplus of income from land sales over expenditure on regeneration during the late 1980s.  In one part of the Surrey Docks, at Greenland Dock, regeneration was achieved by incorporating a private company to undertake a civil works contract for land reclamation and infrastructural preparation, which was funded by a commercial loan secured against the value of the land and repaid from the receipts of land sales to private developers.  The entire development was not only highly successful in regeneration terms, but also realised a substantial profit for the Corporation, and provided a model for funding urban regeneration through private finance rather than government grants.

 

In 1988, he was promoted to the position of Financial and Economic Manager of the Corporation’s Highways Implementation Team, responsible for building the strategic infrastructure necessary to serve Canary Wharf and the other commercial developments on the Isle of Dogs.

 

In this job, he was responsible for raising finance and setting up systems of financial control for three major programmes:

 

·                    the Limehouse Link, a cut and cover tunnel to link the Isle of Dogs with the City of London, costing an estimated £225 million, and necessitating a major rehousing programme for 500 families who had to be moved to enable construction to proceed, at a cost of £100 million;

 

·                    the Docklands Light Railway Beckton extension, linking Canary Wharf with the residential areas to the east of London and costing an estimated £250 million;

 

·                    the Docklands Strategic Highways Programme, comprising a network of roads within the Isle of Dogs and eastwards to the Royal Docks at an estimated cost of £330 million.

 

He joined Touche Ross in 1990 (the UK firm was renamed as Deloitte & Touche in 1995), and undertook a wide range of assignments in three main areas:

 

·                    environmental and transport economics;

 

·                    privatisation, PFI and institutional development;

 

·                    project appraisal and economic impact assessment.

 

Environmental and transport economics

 

His clients in this field have included:

 

·                    the UK Department of Trade and Industry, for which he prepared a study of the role that technology transfer to developing countries could play in assisting with the reduction of greenhouse gas emissions and adapting to global warming.  Over 1,000 copies of this study, entitled Global Climate Change : The Role of Technology Transfer, were circulated to participants to the United Nations Conference on Environment and Development held in Rio-de-Janiero in 1992, and we understand from participants formed a key document in the conclusion of a convention on global warming;

 

·                    also for the UK Department of Trade and Industry, he helped to prepare a study of the role that technology transfer to developing countries could play in assisting with the conservation of biological diversity.  This study was also extensively circulated to participants at the Earth Summit at Rio de Janiero held in 1992, and formed part of the UK Government’s input to the negotiations leading up to the conclusion of a global convention on the conservation of biodiversity;

 

·                    for Statoil, the Norwegian state-owned oil company, he helped prepare a guide for line managers on how to incorporate environmental projects into their annual budgetary cycle.  This has led to a further assignment to prepare an Environmental Investment Guide which will provide a robust methodology to enable line managers to assign monetary values to the environmental impacts of new projects.  This assignment involved distilling complex high-level theoretical concepts into practical guidelines which managers can use to value environmental effects as part of their standard investment appraisal;

 

·                    for DG XI of the European Commission, a cost-benefit analysis of the proposed Council Directive on the landfill of waste, which involved a detailed evaluation of the Directive’s economic impact on landfill operators and users in the member states of the European Union, and formed a key input to negotiations on the Directive leading to its approval by the Council of Ministers in June 1994;

 

·                    for the UK Environment Agency, he undertook a review in 1996/97 of the appropriate methods of financial provisioning for landfill closure and aftercare, as an input to the debate between the waste industry and the regulator on this issue.  The study concluded that the preferred method of provisioning would be the creation of a dedicated Aftercare Sinking Fund built up annually during the operating lifetime of a landfill site, in which funds would be paid and held in trust for landfill operators, and then used to finance aftercare costs or released back to the operator if no longer required.  This approach was also consistent with the terms of the proposed EC Landfill Directive;

 

·                    he assisted Avon County Council and its successor authorities in devising a waste management strategy to manage waste flows following the decommissioning of an incinerator in Bristol which was no longer compliant with EC regulations;

 

·                    for the European Environment Agency, he assisted in the development of an economic methodology to assess the costs and benefits of abatement measures to reduce air pollution in Europe, including defining an appropriate discount rate for environmental cost-benefit analyses;

 

·                    for the Paper Federation, he advised on the development of the embryonic market in paper recycling in the UK, which included an assessment of the strengths and weaknesses of different approaches such as establishing a dedicated buffer stock to manage and market surplus supplies of waste paper, and developing forward contracts for the sale and purchase of recycled paper;

 

·                    for DG III and DG XI of the European Commission, a study of the cost-effectiveness of different measures to reduce pollutant emissions from passenger cars and heavy duty vehicles.  The purpose of the study was to provide policy makers with an objective assessment of possible measures that could be adopted within the road transport sector to achieve higher air quality standards.  Our assessment took the form of a comparison of the cost-effectiveness of four distinct types of measure which have the potential to reduce pollutant emissions from road vehicles, as follows :

 

·      technical measures which can reduce pollutant emissions by improving vehicle technology;

 

·      fuel quality measures which can reduce pollutant emissions by enhancing the quality of fuel used by road vehicles;

 

·      inspection and maintenance programmes to ensure that vehicles in circulation conform with emissions standards;

 

·      non-technical measures which can reduce pollutant emissions by promoting the most economically and environmentally efficient use of road space.

 

The study was commissioned within the framework of the EC’s Auto/Oil programme, the co-operative structure within which the European Commission and the European automotive and oil industries work together to establish the most cost-effective methods by which pollutant emissions could be reduced.  The results of the study fed into new Directives on automotive emissions and fuel quality which will apply throughout the European Union from the year 2000;

 

·                    for LEEL, Lothian Regional Council, Edinburgh District Council and the Edinburgh Chamber of Commerce, he led a team which undertook a comprehensive Environmental Review of Edinburgh, which included the preparation of an inventory of environmental initiatives, actions and policies,  surveys of key stakeholders, and a benchmarking analysis comparing Edinburgh’s environmental management against best practice elsewhere which led to recommendations for areas on which an environmental strategy for Edinburgh should focus.

 

Other clients whom he has advised on transportation and environmental issues have included:

 

·                    Manchester Airport plc, which he advised with respect to its quinquennial review by the Monopolies and Mergers Commission, covering the airport’s tariff levels, operating efficiency, accounting policies, and rate of return on capital employed;

 

·                    Cheval Property Management Limited, for which he examined the proposed transport infrastructure in London’s Docklands to assess its adequacy for a major proposed hotel development.  This included an evaluation of constraining factors and recommendations the developers could take to minimise these.  The study considered Docklands as a whole and the needs of the development in particular, calculating expected traffic demands compared with forecast supply, and identified key issues for developers;

 

·                    the UK Department of Transport, for which he undertook a study of the options for splitting Greater Manchester Buses Ltd.  The options were appraised on the basis of which structure would best ensure the viability, competitiveness and sustainability of public bus services in the Greater Manchester area;

 

·                    investors in Eurostar, the operators of the cross-Channel rail link, for whom he undertook a due diligence review of revenue forecasts for the Paris-London and Brussels-London rail routes in 1994.  The review concluded that the forecasts appeared reasonable with regard to the traffic volumes likely to be achieved, and the major risks related to likely tariff levels.  The cross-channel transport market is characterised by an oligopolistic structure dominated by three major suppliers (ferry, air and rail).  An oligopolistic market is likely to be characterised by bursts of intense competition and price cutting until it settles into an equilibrium which is more or less stable.  The difficulty of predicting the final equilibrium point implied that Eurostar’s tariff forecasts might be vulnerable;

 

·                    BKV, the Budapest Transport Company, which he advised with respect to its transformation from a municipal authority to a corporate entity in 1995/96.  BKV is responsible for operating the metro, tram, trolley bus and conventional bus services in the city of Budapest on an integrated basis.  Our advice covers the appropriate corporate structure for the future BKV, possible divestment of non-core activities and future tariff and management arrangements;

 

·                    Eurotoll, with respect to the administrative and financial implications of introducing an electronic motorway tolling system.  Eurotoll is a consortium comprising Pell Frischmann, Hill Samuel, IBM, GEC-Plessey and Micro Design of Norway (who designed and developed the electronic tolling systems operation in Bergen and Oslo) which is seeking to develop technologies appropriate to UK road conditions;

 

·                    West Yorkshire PTE, whom he advised on the mobilisation of private finance for the proposed Leeds Supertram.  The methodology applied involved defining and categorising the different private sector interests who might be expected to benefit from the Supertram’s development, and devising a marketing strategy to sell the concept to them and secure financial contributions towards part of the capital costs;

 

·                    the Joint Environmental Programme of National Power, Powergen and Eastern Generation, for whom he prepared a report on Environmental Externalities as applied to the Electricity Generating Industry in May 1998.  The report focused particularly on the European Commission’s ExternE Programme, which is developing a standard methodology for evaluating environmental externalities to feed into cost-benefit analyses which underpin new regulations applying to power generation and other polluting activities.  The report recommended a “constructively critical” industry response, with the generation companies seeking to enter the regulatory debate using the same tools as the regulator, and critically examining the assumptions underlying key variables such as the value of life;

 

·        the Scottish Institute for Sustainable Technology (SISTech), based at Tweed Horzions, for which he prepared a four-year business plan to help them achieve their strategic mission of “creating a centre of excellence in Scotland which will promote, through education, business development and research and development, the practical delivery of sustainability by business” on a self-financing basis.

 

Privatisation, PFI and institutional development

 

His clients in this field have included:

 

·                    the UK Department of Energy, for which he worked as part of the team which prepared the Long Form Report on the privatisation of the twelve area electricity boards responsible for the supply and distribution of electricity in England and Wales in 1990.

 

·                    the UK Department of Energy in relation to the privatisation of British Coal on a wide range of topics including industry viability, industry structure, competition, regulation, coal ownership options, taxation of economic rent, treatment of liabilities and accounting issues.

 

·                    the Government of Pakistan, for which he worked as part of a team helping to prepare the Pakistan Water and Power Development Authority (WAPDA) for privatisation, in an Asian Development Bank funded assignment.  WAPDA is the country’s largest civil employer, and Touche Ross examined options to split it into successor companies to help develop from a centrally planned monopoly structure into a competitive market in power.  The study has placed particular emphasis on setting efficient tariffs and the impact of future trends in the economy;

 

·                    the European Commission, for which he prepared a technical assistance programme in 1992 for the privatisation of state-owned enterprises in the CIS Republic of Kyrgyzstan in central Asia under the EC’s TACIS programme;

 

·                    NATO’s Central Europe Operating Agency (CEOA), for which he undertook a study of the future concept, structure and operation of the Central Europe Pipeline System (CEPS) used to supply fuel to NATO forces in the west Europe theatre.  Military fuel requirements have declined since the end of the Cold War and the collapse of communism, and the purpose of the study is to assess the strategic options for the CEPS in the post-Cold War era.

 

·                    the African Development Bank, for whom he undertook a feasibility study of a potential African Finance Corporation set up to assist the development of private enterprise in Africa.  Phase 1 of the study encompassed an assessment of private enterprise requirements for private finance in 12 African states, a synthesis of the facilities currently provided by commercial banks and development finance institutions in the region, and an analysis of the gap between the two which might be filled by a new African Finance Corporation.  Phase 2 of the study involved recommending an appropriate organisation and financial structure for the AFC and preparing 10-year financial forecasts for the new institution.  The study was carried out in association with Baring Brothers;

 

·                    the Government of Zambia, whom he advised with respect to the liquidation of the Zambian Industrial and Mining Corporation (ZIMCO), which held shares on behalf of the State in companies which between them produced an estimated for 80 per cent of the nation’s GDP.  The assignment  involved making recommendations regarding the structure and staffing of a new Directorate of State Enterprises which would take over ZIMCO’s supervisory responsibilities until the companies were transferred into private ownership;

 

·                    the Scottish Office, whom he advised on the future options for the Upper Clyde ferry service between Gourock and Dunoon.  This involved the development of a cost model to assess the incremental effects of different options for service delivery, including a PFI option, compared to the current arrangements.

 

He was seconded to the Scottish Office Private Finance Unit (PFU) between January 1996 and February 1997.  This was a critical period during which the policy framework relating to the PFI in Scotland was developed.  The structure put in place at that time secured broad bipartisan support and has remained the basis for the PFI and public/private partnerships in Scotland.  His advice to the PFU and Scottish local authorities covered a number of pathfinder projects, such as:

 

·        The extension of Inverness Airport, the first airport scheme to be procured under the PFI.  Final outcome: a PFI contract for the airport has been concluded with Canmore as the concessionaire.

 

·        City of Edinburgh Rapid Transit (CERT), a guided busway between Edinburgh Airport and the city centre which is being implemented as part of an integrated transport strategy within the capital to encourage a modal shift of passengers to public transport.  Current position: under implementation.

 

Project appraisal and economic impact assessment

 

His clients in this field have included:

 

·                    the UK Monopolies and Mergers Commission (MMC), to which he was seconded for three months as the economist on the MMC’s merger inquiry team to undertake the market analysis for a proposed merger of ICI’s fertiliser interests with the Finnish Kemira Oy group;

 

·                    Trafalgar House Plc, for which he prepared an analysis of the impact of two alternative proposals for expanding Green Park underground station on the local economy.  The analysis was used in evidence before a Parliamentary Select Committee inquiry into the extension of the station, before which he appeared as an expert witness.  The inquiry found in favour of the Trafalgar House option, which the study had indicated would have a lesser adverse impact on the local economy than the proposed London Underground Ltd scheme;

 

·                    the UK Department of Employment, who were at the time of the study the sponsoring body for UK tourism, and for which he completed a major EC National Tourism Survey in 1992, which provided a comprehensive analysis of national tourism policies in the 12 member states of the European Community, including the structure and funding of the national tourism organisations in each of the member states, government funding for tourism, and techniques for monitoring and measuring the impact of policy.  The study also identified key success factors in the tourism policies of the member states, and the policy characteristics which distinguished the three most successful nations - France, Ireland and Portugal - from the others;

 

·                    Bath City Council, for which he prepared an economic and financial analysis of the options for restoring the Bath Spa.  This analysis involved developing a computerised cost-benefit model showing the probable impact of the spa’s restoration on the city’s economy under different scenarios;

 

·                    York City Council, whom he advised with respect to the economic impact of alternative options for their tourism development strategy;

 

·                    the British Tourist Authority’s VAT Working Group, whom he advised on the economic impact of lower VAT rates on British tourism.  This research drew on case studies of Ireland and other northern European countries, surveys of industry operators and consumers, and an econometric analysis of price elasticity of tourism demand, in order to estimate the direct and indirect fiscal effects of lower VAT rates through a comprehensive fiscal model developed for the BTA;

 

·                    the Council for Travel and Tourism, whom he advised on the economic impact of Air Passenger Duty, which involved elaborating the fiscal model developed for the BTA VAT study;

 

·                    the Bailiwick of Guernsey, for whom he undertook a study of the economic impact of the Island’s accommodation sector and subsequently in separate assignments of the exported goods and services sector and the non-accommodation tourism sector.  All these assignments involved the development of the economic impact model originally applied in the Bath Spa study to assess the amount of expenditure, income and employment generated by the sector under review for the Guernsey economy;

 

·                    the Tweed Foundation , for whom he prepared an estimate of the economic impact of salmon fishing on the Tweed, applying his economic impact model;

 

·                    Conrad Ritblat, for whom he prepared a calculation of the turnover and likely profitability of the Chevalier casino in Nottingham as part of a rent review.  The study included a cross-sectional and top-down analysis of casino turnover per table in the Midlands and Wales during the period relevant for the review.  He subsequently presented this evidence as an expert witness at an arbitration hearing in London;

 

·                    the Scottish Tourist Board, whom he advised with respect to their five-year strategic plan for the development of tourism in Scotland.  This entailed looking at best practice within the EU and other relevant countries such as Ireland to examine the ’success factors’ which are most relevant to the Scottish context;

 

·                    Scottish Enterprise National, whom he advised on the impact and cost-effectiveness of four of the programmes undertaken by their Development Funding and Environment Division, with a view to refining these as appropriate.  The study also considered alternative, innovative approaches to address the key  issues and opportunities highlighted, and provided inputs to the overall business development strategy of the Division and prioritisation within its new budget plan;

 

·                    Bulgaria Posts and Telecommunications (BPT), for which he undertook an analysis of the future economic prospects for Bulgaria and their implications for telecommunications demand as part of a financial and tariff review funded by the European Investment Bank in preparation for a major investment programme co-financed between EIB, EBRD and the World Bank;

 

·                    Lithuania Telekomas, for which he undertook an analysis of the future economic prospects for Lithuania and their implications for telecommunications demand as part of a financial and tariff review funded by the European Bank for Reconstruction and Development (EBRD);

 

·                    Ameritech, for which he undertook an analysis of the future economic prospects for Hungary and their implications for telecommunications demand as part of a competitive bidding process to establish a fair price for a consortium comprising Ameritech, Cable & Wireless of the UK, and Deutsche Telekom to buy shares in Matav, the state-owned telecoms operator.  The consortium was successful and won the Hungarian telecoms licence, taking a 30% equity stake in Matav in 1994/95.  It has since taken majority control of Matav;

 

·                    he undertook  further study for Ameritech of the future economic prospects for the Czech Republic and their implications for telecommunications demand as part of a competitive bidding process for SPT, the Czech telecoms operator;

 

·                    IEEC, for whom he assessed the social and economic impact on the Jiu Valley in Romania of commercialising RAH, a Romanian coal mining company.  RAH accounts for approximately three-quarters of all employment in the Jiu Valley, so a key issue addressed in the study was the methods by which new jobs could be created to absorb workers made redundant as a result of efficiency improvements within RAH;

 

·                    the State Property Fund of Romania (SPF), for whom he ran a one-week training workshop in May, 1995, at Sinaia, Romania, on “The State as Shareholder”. The workshop was funded by the British Know-How Fund and attended by 50 senior managers of the SPF.  The topics included the duties and responsibilities of company directors nominated by the State, and the role of regulation;

 

·                    for the British Tourist Authority, he completed an econometric analysis of The Price Sensitivity of British International Tourism, published in 2001, which for the first time provided robust estimates of the sensitivity of inbound UK tourism to fluctuations in Sterling’s exchange rate and income growth in major visitor markets;

 

·                    also for the BTA, he recently completed a detailed comparison of tourism prices and taxation levels in five major European cities, London, Paris, Madrid, Rome and Berlin.    

 

Sports Finance

 

Clients in this field include:

 

·                    the Scottish Rugby Union (SRU), whom he advised on the impact of professionalism on Scottish rugby.  This study was commissioned in the context of the debate between the SRU and the clubs as to whether clubs or districts should represent Scotland in European competitions.  It concluded that the minimum budget for a rugby union club in the professional era was £1.5 million, and the level of turnover of the sport in Scotland was sufficient to support only four fully professional clubs;

 

·                    the Edinburgh & District Rugby Union (EDRU), which he assisted in developing a medium term Business Plan in 1998, aimed at strengthening district rugby in the professional era;

 

·                    the Scottish Premier Division clubs, for whom he acted as project manager for a major strategic review of football in Scotland, examining how its commercial value and competitive strength could be maximised.  The review led to a decision by the Premier Division clubs to establish their own league, owned by the ten clubs separate from the Scottish Football League.

 

Caledonian Economics Ltd.

 

In April 1998, Michael left Deloitte & Touche to found Caledonian Economics, which has a corporate mission of “Mobilising markets to serve society.”  In particular, Caledonian Economics s developed a specialist niche as the leading adviser to Scottish local authorities on PFI / PPP procurements outside the Big Five accounting firms.  Among the PFI and PPP assignments that Michael led as Managing Director of the company are:

 

Schools Partnerships

·                    Aberdeen City Council (~£80M).  Caledonian Economics worked with the Council to assist in the preparation of an OBC for the large scale regeneration of its schools estate, which was submitted to The Scottish Executive in support of a funding application in December 2002.  In October 2003 we were appointed to work with the Council to Financial Close, which was achieved in December 2007.

 

·                    Angus Council (~£50M).  Caledonian Economics worked with Angus Council to assist in the preparation of an Outline Business Case for the regeneration of its schools estate, which was submitted to The Scottish Executive in support of a funding application in December 2002.  In December 2003 the firm was appointed to work with the Council to Financial Close, which was achieved in October 2006.

 

·                    Argyll & Bute Council (~£80M). He advised Argyll & Bute Council on the feasibility of options to use PPP/PFI to develop the schools estate in their area. This project involved collecting baseline data on the existing schools estate and developing, in conjunction with Officers and Members, a framework to consider the issues surrounding the packaging of schools in a development programme, the likely cost and service charge implications, and the funding options.  The options considered included the innovative concept of using a Non-Profit Making Organisation (NPDO), similar to a housing association, rather than a company run for profit, as the vehicle to mobilise private loan finance to achieve the regeneration programme.  The Outline Business Case for the procurement of the required investment programme was completed in March 2001, and the project proceeded as the first NPDO to be delivered in Scotland.

 

·                    Dumfries & Galloway Council (~£100M)- Schools Partnership.  He advised Dumfries & Galloway Council on the potential to use PFI to rejuvenate the educational estate in the area. This involved collecting baseline data on the existing schools estate and developing, in conjunction with Officers and Members, a framework to consider the issues surrounding the packaging of schools in a development programme, the likely cost and service charge implications, and the funding options.  The OBC for the procurement of the required investment programme, currently estimated to cost approximately £60 million was completed in October 2000.  The OBC preparation included a detailed Best Practice Review of all schools PPP/PFI projects currently under procurement in the UK.  The survey covered 60 separate schools procurements in England & Wales, and 12 in Scotland.  Following acceptance of the OBC, the firm advised on the full procurement, which reached financial close in January 2008.

 

·                    East Ayrshire Council (~£80M).  He assisted East Ayrshire Council in the preparation of an Outline Business Case for the regeneration of its schools estate, which was submitted to The Scottish Executive in support of a funding application in December 2001.

 

·                    East Dunbartonshire Council (~£80M).  He assisted East Dunbartonshire Council with the preparation of an Outline Business Case for the regeneration of its schools estate, which was submitted to The Scottish Executive in October 2002. 

 

·                    Falkirk Council.  He advised Falkirk Council on the preparation of an Outline Business Case for their schools’ partnership, which was submitted in December 2002.  This built upon the Council’s experience with their Class 98 pathfinder PPP, addressing issues in the remainder of the schools estate.  Significantly, the Council intends that should this project receive Scottish Executive approval, it will be the first to issue an ITN using a non-profit distributing model as the Core Reference bid, without including a conventional SPV as a best value test.

 

·                    The Highland Council (~£100M)- Schools Partnership.  He worked with The Highland Council on their second schools public/private partnership, which achieved financial close in March 2006.

 

·                    Orkney Council (~£40M).  He advised the Council on its Outline Business Case which successfully secured funding support from The Scottish Government in 2007, on the basis of a project implemented through an Arms Length Council Company (ALCCo).

 

·                    West Dunbartonshire Council.  He worked as the financial adviser to West Dunbartonshire Council on its Schools Partnership, which reached financial close in December 2007.  The scope of his advice included:

o       preparation of the Outline Business Case;

o       the development of a financial model to assess the likely costs and affordability of the project;

o       financial input to the Invitation to Negotiate documents;

o       the evaluation of bids received leading to a recommendation on the Preferred Bidder; 

o       assessment of the Value for Money offered by each bid; and

o       detailed advice throughout the negotiation process on the payment mechanism, financing terms and financial conditions within the Project Agreement leading to final contract signature.

 

Waste Management Partnerships

·                    Argyll & Bute Waste Management Project.  He advised Argyll & Bute Council on the preparation of their OBC for a waste management partnership in support of a submission for level playing field support in June 1998.  The submission was successful in securing LPF support of £1.29 million p.a.

 

·                    City of Edinburgh Council – Waste PPP Project. The Council retained Caledonian Economics to advise on the feasibility and affordability of using a PPP mechanism to develop new waste treatment and disposal facilities for the city.  The Outline Business Case for the project was completed in April 2001.

 

·                    Dumfries & Galloway Waste Management Project. Mike was retained as the Council’s financial adviser on the full procurement of waste management services under the PFI, which was awarded to the Shanks Group plc and reached financial close in November 2004.  Earlier, he assisted the Council in preparing the Outline Business Case for their waste management public / private partnership submitted to the Scottish Office in June 1998.  The OBC was successful in securing level playing field support for £1.27 million p.a.  His services included the development of the Council’s financial model for the project, the development of the payment mechanism, assessment of the value for money offered by the three tenders submitted, and preparation of a Full Business Case to secure central government funding support towards the costs of the service payments.

 

·                    Highland Council – Waste Management OBC and Output Specification.  With waste management specialists Aspinwall & Co Ltd, and incineration specialists Electrowatt, we prepared an OBC and Output Specification for the Highland Council waste management project.

 

·                    Midlothian Council – Waste Management Joint Venture. Mike worked with Midlothian Council to prepare an OBC looking at the feasibility and costs of a waste management partnership to enable the Council to achieve its landfill diversion targets.

 

·                    Perth and Kinross Council.  He worked with the Council to assess the financial implications of different options to treat their waste stream, and the optimal method of procuring new waste treatment infrastructure.

 

·                    West Lothian Council.  He worked with the Council to assess the financial impact of a proposed anaerobic digestion plant to be located at Caputhall near Livingston, and to assess options for its procurement, including direct Council procurement, procurement via a PPP contract, and procurement under a Plant Operating Contract.

 

Social Housing Partnerships

·                    East Lothian Social Housing Partnership. With Deloitte & Touche and social housing specialists Arneil Johnston, we advised East Lothian Council on the procurement of 500 new homes for affordable rent through a social housing partnership.  Although the council’s Housing Revenue Account is separate from other local authority services, the intention is to procure new social housing along broadly similar lines as a PFI project, with a distinction between the Council as client and a privately-owned social housing development company responsible for service provision against a contractual Output Specification.  The financial projections for the proposal, which was approved by the Scottish Executive, show that the private social housing company will be able to raise £1 in private finance to match each £1 of public money put into the scheme: a higher ratio than in traditional social housing projects, enabling the Council to build more homes for affordable rent with any given budget.

 

·                    Fife Council: Stock Transfer Assessment. With social housing specialists Arneil Johnston, we advised Fife Council on options for the transfer of all or part of their social housing stock to a private social housing landlord.  The new landlord will be able to mobilise private financing for the modernisation and upgrading of the properties.  Fife Council owns a total of 40,000 social housing units, making it one of the biggest social housing landlords in Scotland outside Edinburgh and Glasgow.  This assignment is ongoing.  The financial and affordability analysis will be finalised on receipt of the detailed results of a stock condition survey.

 

·                    North Ayrshire Social Housing Project: Irvine multi-storeys.  With social housing specialists Arneil Johnston, we developed a financial model and funding proposals for the modernisation of 272 social housing units in five multi-storey blocks in Irvine, North Ayrshire.  The aim is to leverage in private finance to realise a more substantial social housing investment programme than could be achieved with public grant aid alone.  The survey of funders undertaken as part of the assignment indicated that the multi-storeys were not bankable as a stand-alone project.  However, the project could be funded if it was integrated in a larger package with low-rise social housing.  North Ayrshire Council is currently considering different transfer options in the light of these findings, including transfer to a local housing association or a new registered social landlord with a portfolio of more than 1,000 properties, including the multi-storeys.

 

·                    Dumfries & Galloway Stock Transfer. With Arneil Johnston, we are advising on the large scale voluntary stock transfer (LSVT) of the council housing stock to a newly created Dumfries & Galloway Housing partnership.

 

·                    Scottish Borders Council. With housing specialist Arneil Johnston, we are advising Scottish Borders Council on the large scale voluntary stock transfer (LSVT) of the Council housing stock to a new Scottish Borders Housing Association.  The LSVT proposal, which covers more than 7,0000 housing units, gained a substantial positive vote from tenants in December 20001, and will be the first LSVT completed in Scotland.

 

Other PPP assignments

·                    Central Scotland Joint Police Board – Police Station PPP.  He advised the CSJPB on the replacement of three police stations in Central Scotland, including the Area Command headquarters at Falkirk.  The OBC submitted to the Scottish Office in June 1998 was not successful in securing LPF support, but the Scottish Executive has made conventional Section 94 funding available to help fund the project.

 

·                    Midlothian Council – A701: Penicuik - Edinburgh City Bypass (with Deloitte &Touche).  The A701 developed the concept of PFI road projects into a wider integrated transport scheme.  Our involvement entailed assisting with the preparation of the Outline Business Case for the road, which was successful in securing approval from the Scottish Office for Challenge Fund support. 

 

·                    Scottish Executive – Secondment to the Scottish Office’s Private Finance Unit.  Michael was seconded to the Scottish Office Private Finance Unit (PFU) between January 1996 and February 1997.  This was a critical period during which the policy framework relating to the PFI in Scotland was developed.  The structure put in place at that time secured broad bipartisan support and has remained the basis for the PFI and public/private partnerships in Scotland.  Michael’s advice to the PFU and Scottish local authorities covered a number of pathfinder projects, such as the Baldovie Waste to Energy Incineration project, the extension of Inverness Airport and the City of Edinburgh Rapid Transit project.

 

 

·                     The Highland Council.  Michael prepared an Outline Business Case with The Highland Council for the replacement of its office accommodation in Inverness, Dingwall, Golspie and Wick, involving the consolidation of over 20 Council offices into a small number of purpose-built facilities, partly funded by the release of surplus estate.

 

 

Also worthy of note is Michael’s work for the Department for International Development (DFID), in 1998/99 on the concept of Development Resources Trusts (DRTs), working with Adam Smith International.  DRTs would be a vehicle through which UK investors could invest in shares in companies operating in the world’s poorest countries, with the value of the investments being tax deductible in the UK up to an agreed maximum each year.

 

Tourism

 

• The British Tourist Authority.  He prepared a report was prepared on The Price Sensitivity of British International Tourism, which provided robust econometric estimates of the sensitivity of UK tourism demand to changes in the external value of the £ and the growth of real incomes.  Also in a separate study for BTA, Caledonian Economics analysed comparative tourism taxation rates in five European cities.

 

• Alnwick Garden – The Lovaine Trust, the charitable trust of the Duke of Northumberland, for which he completed a detailed economic impact assessment of the proposed development of the Alnwick Garden, which formed the basis for funding submissions to ERDF and other sponsors for the second phase of the Garden’s development.  He also worked with The Garden to prepare its five-year Corporate Plan in 2004, mobilising a further £15 million for the third phase, involving the construction of a Pavilion as the centrepiece of Alnwick,.

 

·        The Northumberland Strategic Partnership (NSP), for which we prepared a detailed economic impact assessment of the proposed development of three sites in the central region of Hadrian’s Wall.  This assessment forms the basis for funding submissions to ERDF and other sponsors, with the Hadrian’s Wall project forming a joint package with Alnwick Garden to achieve a step improvement in Northumberland’s tourism infrastructure.

 

·        Teesdale Marketing, for which we have been asked to assist in the preparation of a commercial feasibility study into the viability and bankability of the proposed Teesdale rope suspension bridge.  The bridge will represent a unique visitor experience, strengthening Teesdale’s tourism offer and attracting additional visitors into the area. 

 

·        The British Tourist Authority, for which we have advised on the employment effects of tourism expenditure nationwide.  The output from this research was an updated estimate of the level of turnover per full-time job in tourism, differentiating between the accommodation, restaurant and visitor attraction sectors.  As part of this research, we collated the most recently filed accounts of more than 200 visitor attractions, hotels and restaurants nationwide.  The financial information derived from these accounts will assist in preparing financial forecasts for the study.

 

·        He undertook a major econometric study of the price sensitivity of British international tourism for the BTA, which was published in the autumn of 2001. Following the price sensitivity study, we have just completed an econometric study to evaluate the impact of the ‘Only in Britain’ campaign promoted in 2002 to support the recovery of the UK tourism following September 11^th .

 

 

• The Royal Museum of Scotland, for which he prepared A Cost-Benefit Analysis of Development Proposals for the Royal Museum of Scotland in June 2005 to support funding bids by the National Museums of Scotland for an ambitious £44.5 million development of the Royal Museum in central Edinburgh. The project gained Stage One approval for a £16.8 million grant from the Heritage Lottery Fund in July 2005, and, following further analysis of its positive economic impact by Mike in 2006/07, mobilised the balance of the funding for a project.

 

• The Great North Museum in Newcastle, for which he prepared an Economic Impact Assessment in 2005 for the Great North Museum Partnership. The Partnership is proposing an ambitious project to create a new Great North Museum through the redevelopment of the existing Hancock Museum and the integration of the existing Hatton Gallery. The Museum will become a major magnet for visitors to the city of Newcastle, and form a key element within the Newcastle Cultural Quarter.

 

• Woodhorn, for which he prepared a business plan for an Exhibition Centre in 2006;

 

• Raby Castle in County Durham, for which he prepared a Business Plan in 2007, to develop the Castle’s markets and enhance its financial position.

 

• The Kielder Water and Forest Park, for which he is currently working on a range of projects to develop the Park as a major visitor destination, with the aim of increasing the number of visitors to Kielder from 220,000 currently to more than 350,000.

 

• The British Association of Leisure Parks, Piers and Attractions, for which he completed an analysis in 2008 of the potential positive impact of lower VAT rates on the UK’s hotels and visitor attractions sector.

 

• The Hadrian’s Wall Partnership, which he advised on the potential economic impact and financial viability of the proposed development of a Roman archaeological site at Maryport in Cumbria in 2008.

 

The Duke’s Theatre in Lancaster, which he assisted with regard to a turnaround strategy to secure the Theatre’s financial position and increase its self-generated revenues following a cut in its Arts Council grant in late 2007.

 

PUBLICATIONS :

 

Books and business reports:

 

The Age of Illusions : the Political Economy of Britain, 1968 - 1982, London, Victor Gollancz, 1983.

 

Privatisation and Investment Opportunities in Eastern Europe and the CIS, Business Monitor International Ltd, 1997

 

Global vehicle emissions: Commercial opportunities from emissions regulation for vehicle manufacturers and component suppliers (with Mark Barrett).  An FT Management Report, Financial Times Business Ltd, 1999

 

Articles and research papers:

 

Over 50 articles and papers, including:

 

1.    “Tourism policies in the European Community Member States” (with Gary Akehurst and Nigel Bland), International Journal of Hospitality Management, Vol 12, No 1, February 1993. 

 

2.    “Success Factors in European Tourism Policy”, Insights, September 1993.

 

3.    “Bypassing obstacles in road pricing”, Public Finance and Accountancy, July 16^th 1993.

 

4.    “What price roads?  Practical issues in applying road congestion charges in Britain’s historic cities” (with Les Abbie), Journal of Transport Policy, September 1993.

 

5.    “The European Investment Bank and African Development Finance Companies”, in J. Round (ed.), The European Economy in Perspective, University of Wales Press, 1994.

 

6.    “A Case Study in Policy Success : The Development of Irish Tourism since 1985″, Journal of Vacation Marketing, Vol 1, No 4, September 1995.

 

7.    “Beyond Compliance : Measuring the Environmental Challenge for the Oil Industry”, Petroleum Accounting and Financial Management Journal, Texas, USA, Vol 14, No 2, Summer 1995.

 

8.    “Green light for waste management”, Private Finance Initiative Journal, Volume 1, Issue 4, August 1996.

 

9.    “Least-cost strategies to cut road transport emissions: the European experience”, Presentation to the World Congress on Air Pollution in Developing Countries, San Jose, Costa Rica, October 1996.

 

10.“Particulates pose worldwide challenge and opportunity,” Financial Times Automotive Environment Analyst, Issue 24, January 1997.

 

11.Auto/Oil II moves into gear, Financial Times Automotive Environment Analyst, Issue 24, January 1997.

 

12.“Are high taxes damaging British tourism?” Journal of Vacation Marketing, Vol 5, No 1, January 1999.

 

13.“PFI Stripped Bare: FRS5 and the accounting treatment of PFI projects”, Accounting and Business, March 1999

 

14.“Lifting the lid on public/private partnerships”, Wastes Management, March 2000

 

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