Hornet - what’s going on?

First sighting for me this spring of Hornet in Normanby Park this morning - I have no idea what’s going on here so if any does know please leave a comment.  I thought Hornet’s made a large paper nest like Wasps but then why is this Hornet excavating this hole in the ground?

Hornet in North Lincolnshire

Two weeks ago I "bumped into" a Hornet at the bottom of the garden catching Hover flies feeding on the ivy.  As we only have very rare sightings of Hornets up here in North Lincs I rushed back to the house to get my camera but as usual in these cases by the time I returned it had flown off!  However as luck would have it my brother down in Kent has just posted some fabulous shots on his blog of a Queen Hornet mating in his garden so I have "borrowed" one of his shots but to see the really good ones click on the link below - As I understand we are at the very edge of its northerly limit. 

.http://theshadoxhurstgarden.blogspot.com/2009/09/garden-nuptial-hornets.html