Thanks I did have auto arrange turned off.#
Turned on and indeed it works as you showed on your screen view.
One downside is the system now groups my other icons/shortcuts where it decides, the left hand side in a column, even though I have turned off align to a grid, although that does nothing anyway that I can see.
I suppose gaining one thing I have to put up with another, but at least it makes me create new fences groups etc.
Thanks for the help here