Public Audit and Post-legislative Scrutiny Committee

Meeting date: Thursday, February 25, 2021

Official Report 612KB pdf

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Major Capital Projects

Agenda item 2 is on major capital projects. I welcome our witnesses to the meeting. From the Scottish Government, we have Alyson Stafford, who is the director general of the Scottish exchequer; Gary Gillespie, who is the chief economist; Rachel Gwyon, who is deputy director of infrastructure and investment; and Alan Morrison, who is deputy director of health infrastructure. From Transport Scotland, we have Bill Reeve, who is the director of rail. From the Scottish Futures Trust, we have Kerry Alexander, who is the director of infrastructure finance and programmes, and Gemma Boggs, who is senior associate director of social infrastructure.

I invite Alyson Stafford to make a brief opening statement.

Thank you, convener, and good morning. I am pleased to assist the committee with its scrutiny of our most recent six-monthly report on major capital projects. The projects have a positive impact on the places where we live, on how we travel and on the way in which many of our vital public services are delivered to communities across Scotland—not to mention the impact on our economy.

I will make a few opening comments. As the convener said, I am joined by a number of subject-matter experts from Transport Scotland, the Scottish Futures Trust and the Scottish Government, including the chief economist and colleagues from the health finance directorate and the infrastructure investment team. Should committee members have questions about projects or issues in those areas of knowledge, my colleagues and I will be very happy to respond. If there are questions about projects or programmes in sectors that are not represented by the panel, we will provide as much information as we can today and, of course, follow up in correspondence with more detailed points from the people who are directly accountable for the projects and programmes.

Today’s session takes place at a key time—a pivotal moment. We are nearing the end of the current 2015 infrastructure investment plan, so there is an opportunity to reflect on a range of investments that have been made. Much has been achieved over the past five years. About 90 per cent of the capital budget supports infrastructure, and net Scottish Government direct capital investment has totalled nearly £23 billion in the period from 2016-17 to the end of the 2020-21 financial year. As has been set out in previous infrastructure investment plan annual reports, that investment is estimated to have supported about 30,000 jobs.

A subset of such investment has, historically, been considered by the committee. The focus has been on major projects and certain programmes. Projects with a capital value of more than £20 million, alongside programmes with a capital value of more than £50 million, have been reported on every six months. Since 2016, 117 major projects, with a total capital value of £7 billion, have been completed. More will be reported as being complete in the next annual report, which is due at the end of this financial year. Our programme pipeline has led to major investment in delivery of superfast broadband, affordable housing, school buildings, expansion of early learning and childcare, and city region deals.

As was shown in the last six-monthly report, four major multiyear projects—the Aberdeen Baird family hospital and the Aberdeen north centre for haematology, oncology and radiotherapy, or ANCHOR, Her Majesty’s Prison Inverness, HMP Glasgow and the Dunfermline learning campus—will continue from this phase into the next parliamentary session, as parts of our new infrastructure investment plan. All four projects are fully funded in the future capital spending review and in the next infrastructure investment plan, which covers the five-year period from 2021-22 to 2025-26. Both were published on 4 February this year.

Similarly, major on-going programmes, including those relating to elective care facilities and to the A9 and A96, were intended to be delivered over a longer period than during the phase up to 2021. They are also set out in the next infrastructure and investment plan and are being funded through the capital spending review, so committee members can be assured of continuity.

All that allows me to draw attention briefly to some on-going improvements that we have sought to make in the information that is available to the committee for scrutiny. For example, since 2016 we have provided an overview of our annual infrastructure investment plan that is reported on each April. That strengthens the strategic information that is available to the committee, provides context for overall capital investment and shares much more information, as has been requested from time to time by members.

The next infrastructure investment plan up to 2025-26 covers all portfolios and synchronises all major investments over the five-year timeframe with a common vision and three key themes. Not only is there a plan for what the Government is choosing to invest in, but that ambition is matched with a funding package to ensure that it happens. That strengthens the strategic intent of the Scottish Government’s capital and infrastructure investment, which started with the national infrastructure mission that was announced in the programme for Government in September 2018.

The next infrastructure investment plan is larger than this one and includes a pipeline of £26 billion of itemised work within more than £33 billion of capital allocations. That is almost 50 per cent larger than was the case for the past five years, which has come through a combination of actions at the Scottish ministers’ hand, including deployment of physical framework powers, revenue-financed agreements, capital grants and financial transaction allocations. It is estimated that that will grow the “jobs supported” number to 45,000 and is a vital part of supporting Scotland through its recovery from the economic shock that has mirrored the public health shock of the coronavirus. Within that, £2 billion of new investment will focus on increasing—

Can I interrupt, please? I do not know how much longer you have left; we usually allow only a couple of minutes at the start. This is very useful, but if you could draw your remarks to a close, that would be super.

I will. Those are the areas of the next infrastructure investment plan and we will be reporting on those to the committee’s successor in the future. There are more changes that we are looking to make in order to help the committee, one of which is provision of greater granularity in what we report. I can say more about that later, if it would be helpful. I am always keen to consider any insights and reflections that the committee wishes to offer as we prepare to report on new projects and programmes in the next session of Parliament.

My colleagues and I are happy to answer your questions. I will pause for a moment before we start, if I may, to allow any of my colleagues to indicate whether they have any interests to be declared.

Do witnesses have any interests to declare?

I think that Kerry Alexander wants to come in.

I am sorry—I cannot see everyone.

I note that I am a public interest director at the Inverness College non-profit distributing company.

Thank you very much. Before we move to questions, I point out that we have received apologies from Gail Ross.

I would like to explore project delays and the Covid-19 shutdown of some construction sites. Delays are anticipated in a number of projects. What attempts have been made to recover the time that has been lost through shutting down of construction sites?

Could you direct your question to a particular witness, please, Colin, given that we have such a large panel this morning? Would you like the Scottish Government, Transport Scotland or the Scottish Futures Trust to respond? That would help us a bit.

I think that the question is for Kerry Alexander.

I am happy to offer some thoughts on that. Gary Gillespie might have something to say, too.

Sites were able to reopen in June, which followed a massive collaborative effort across industry, the Government and stakeholders more widely. Sector-specific site-operating guidance was developed and deployed through the leadership forum, which was repurposed for Covid recovery and has been chaired by the Minister for Local Government, Housing and Planning. The construction forum moved on from guidance to getting an industry recovery plan together. That plan was published in consultation form in September and was finalised in October. Five joint sub-groups are pursuing a range of actions from that plan.

The action apart from the industry recovery plan involves ensuring the transparency of pipeline project opportunities, with the IIP and the capital spending review having been published in draft in September and in final form earlier this month. That is a major step in the setting out of specific announcements.

From the Scottish Futures Trust perspective, we could talk more about the announcement regarding the 27 projects in the second phase of the learning estate investment programme—LEIP—as an additional pipeline example. Gary Gillespie might be able to offer a broader perspective on where the sector is.

In response to Mr Beattie, it is worth saying a little bit about where aggregate construction output is. His question relates to recovery of the sector in terms of projects and sites.

At the aggregate level, construction was essentially impacted by the first major national lockdown. Over the period from 23 March to the end of April 2020, construction activity in Scotland contracted by 53 per cent, which was a significant impact. The impact was much more significant in the consumer-facing sectors of the economy, at that time. Since then, construction sector activity has come back. Growth returned in May, and non-essential construction came back in June. There was growth in construction activity during the period through to November.

Now, the sector is at 9.4 per cent below its pre-pandemic level. It contracted in December for the first time since April. The overall position is that total Scottish output is about 7.2 per cent below that level, so construction activity has been impacted.

On the scale of the impact from the first national lockdown, there was a 50 per cent contraction over those two months last year. The sector’s being able to trade and having continued to trade, even at level 4, has meant that it has been able to regain much of the lost output.

I will stop there, although I am happy to say a bit more if you want more input on the resilience of the sector or on how it is performing more generally.

I think that Alyson Stafford wants to come in, but I will first add to my question. There are substantial delays in some projects, but it seems to be anticipated that that will have a very limited impact on costs, which I find surprising. Could you comment on that?

You are right that there will be areas in which the lost time and some elements of cost will have on-going impacts—not least because public health safeguards, including physical distancing and hygiene requirements on site, will still be necessary.

There have been higher staff absence rates this year from infection, sadly, and from the need for isolation. There has also been an impact on the supply chain among firms that have had to reduce or suspend production during the pandemic.

09:15  

Colleagues can comment more specifically on delays to projects that are already in our programme. Bill Reeve from Transport Scotland and Alan Morrison from the health directorate can speak about those projects and say how far they can be quantified at the moment. Pre-Covid programmes have inevitably been affected by the restrictions. It would be unreasonable to expect otherwise.

This is a broad group. I am happy for questions to be put to me, initially. I can then bring in colleagues who have the necessary knowledge, which will save members having to guess who might have the best answer.

Colin, do you want to hear from the witnesses whom Alyson Stafford suggested, or would you like to move on?

I will move on to something that I have heard from market participants. They talk about shortages of materials impacting on projects. That seems to be happening partly because of Covid and partly because of Brexit. A surprising amount of our building material comes from Europe. There is also a shortage of skilled workers, which they expect will be hugely exacerbated because projects down in England, such as the high speed 2 rail project, will suck in highly paid workers. Do we have any projections on how that will impact on projects here in Scotland?

Gary Gillespie can speak about the broader sector and Bill Reeve can talk specifically about transport, where such issues might be prevalent.

The combination of Brexit and Covid is affecting supply of building materials in the housing sector and for home refurbishments. The pipelines of projects in construction and, particularly, in manufacturing have been affected by restrictions in workplaces.

The construction workforce is very mobile; people work throughout the United Kingdom. It has always been important to ensure that we have a pipeline of projects to attract workers to Scotland. That will continue to be an issue following our exit from the European Union, because EU workers are important to the construction sector in Scotland and across the UK.

I recognise the concerns that Colin Beattie has raised. I have learned today from my contacts in rail freight that there has been a surge this week in movement of construction materials. That reflects other factors; for example, the recent severe weather had an impact on construction activity, on top of the other impediments of the past year.

Our best defence against HS2 causing a shortage of skilled staff is what we are doing already. We are making the pipeline of planned projects as visible as possible, so that the supply base can plan for that. That also builds confidence in the supply base; people know that we will come good on the projects. It is important to keep that rolling programme of investment going. It is sufficient to cause the construction industry to allocate resources to what it finds to be an attractive and dependable Scottish construction market.

We are in lockdown at the moment and the pandemic continues. Eleven projects anticipate delays of four months or less and six projects anticipate delays of six to 10 months. Is the lockdown likely to cause further delays to project completion?

I will start and then bring in Bill Reeve and Alan Morrison, who might have something to add from their perspective.

It depends on the impact of on-going guidance and restrictions. The safe operating guidance will affect different sites in different ways. A large civil engineering groundworks site, where the operations involve individuals working largely in machine cabs or outdoors, might not be significantly affected at all. However, the programme for larger building sites, particularly those at the internal fit-out stage, may have required multiple trades to be working in close proximity and such projects may still be experiencing a necessary productivity reduction in order to maintain public health and stick to current guidelines, which is resulting in a delay. The distinction may well be borne out by Bill Reeve’s experience in his area and also in a slightly different way in Alan Morrison’s area.

Alyson Stafford is right. We are seeing delays in health projects as a result of Covid. Over the weekend, members may have seen that refurbishment of one of the children’s cancer wards in Glasgow was shut down because some of the tradespeople working on the site contracted Covid. That is an internal project in a relatively small space, with poor ventilation. The challenges of working in such environments are recognised.

When a project is behind schedule, the typical approach would be to put more people on site, but that option is not open to us given the requirements on social distancing. I would not be surprised if timelines on the major health projects were pushed back yet again because of Covid restrictions.

Those of us who are restricted to working at home should pay tribute to those who continue to deliver essential projects for Scotland—it is sobering to reflect on that. Their safety and the safety of those with whom they interact remains a priority. It would be imprudent and implausible to give the assurance that there will be no further impact of Covid on programmes or costs on a project by project basis. What we can say is that an awful lot of work and best practice is being applied to mitigate those impacts.

As the Rural Economy and Connectivity Committee knows, it was necessary to suspend construction at the Ferguson’s yard in January because of the high infection rates in Inverclyde. That is just one illustration of the risks that continue to occur. However, we hope that they will reduce as we move out of the current restrictions in the course of the year.

I will ask about the social housing plans and the budget. In her original budget statement to Parliament for next year, the Cabinet Secretary for Finance appeared to cut the social housing budget by about £270 million, although she then reinstated around £125 million. What is the state of the social housing budget and how do plans for the next five years compare to the spend over the previous five years?

Thank you for your question. I ask Rachel Gwyon to respond.

Can you hear me?

We can hear you, but I cannot see you.

Over the past five years, the affordable housing programme has totalled about £3.5 billion. As Mr Neil might know, we have not yet received the consequentials in relation to housing that we would expect from the UK Government, so we are half a billion shy of what is normally expected. The Scottish ministers have sought to protect capital grant funding for housing. A combination of what was announced in the Budget (Scotland) (No 5) Bill at introduction and what has subsequently been made available would restore the affordable housing programme to the level of the past five years.

We have experienced a fall of just over two thirds in financial transactions funding, which is the type of money that has always been useful to the housing programme. By using the extended power to draw down from the Scotland reserve in the next two financial years only, because of the impact of Covid, the Scottish ministers have put into the housing programme £100 million of financial transactions on top of what was already in the Scottish budget plans.

I take the point about the cut in financial transactions money and the fact that we are awaiting more information about additional consequentials from the UK budget at the end of next week but, as things stand, compared to the £3.5 billion over the past five years, what are we looking at for the next five years?

We are line with that figure of £3.5 billion. We were at £3.3 billion at the introduction of the budget bill and extra funding has been put in since then.

Would you say that at the moment we are more or less even-stevens?

Yes.

If there are further consequentials from the UK budget, is there a policy to give priority to more funding for social housing? Apart from anything else, inflation in the construction sector has traditionally been higher than overall inflation, so we will not get the same output from a £3.5 billion input—we need to put more money in to get the same outcome. Is social housing a priority for any additional consequentials for capital spending coming out of the UK budget?

The Scottish ministers and Ms Forbes are paying close attention to all needs, including housing. Ms Forbes has written to the chancellor to seek clarity on the funding proposals from the UK Government on housing, because large amounts of housing funding were announced and we have not yet seen that flow to Scotland. The first priority is to understand how the funding is coming and, if any arrives on 3 March, I am sure that Ms Forbes will be looking at all the needs in the round, including those of social housing.

Just to be clear, I understand that the additional consequentials that we are already due that arise from increased spending on housing south of the border still need to be clarified, but if and when we get that money or are told how much it will be, will that money also be allocated to additional social housing in Scotland?

When the money comes in, the Scottish ministers will look at the funding across the piece. They have already put a large amount of money into housing. The first thing is to get clarity whether and what extra money is coming here and then to take a view in the round of all the priorities, including housing.

As things stand, over the past five years, we have had a housing programme of 50,000 houses, 35,000 of which were new-build social housing. What are the comparable figures for the next five years?

As you are probably aware, the Minister for Local Government, Housing and Planning, together with stakeholders, is looking at the forward strategy, and I am sure that some news will come forward in due course.

Does “in due course” mean before 25 March?

I think that questions on the housing portfolio plans would be better answered by those working in that portfolio, but I am aware that work is under way and is progressing well with the stakeholders.

09:30  

Could you find out and write to us to let us know, please? Given the huge demand for and pressures on social housing in Scotland due to the substantially increased population, the reduction in the size of households and waiting lists, it has to be a top priority in the next five years. I would appreciate it if you could get your equivalent officials in the housing section to update us on those figures and where they are at. Would that be okay?

Yes, that is totally fine.

Thank you.

If Alyson Stafford is happy for Bill Reeve to answer the question, I will ask him about transport. I declare an interest—a number of years ago, as the Cabinet Secretary for Infrastructure and Capital Investment, I introduced the commitment to dual the A9 between Perth and Inverness by 2025, and to dual the A96 between Aberdeen and Inverness by 2030. When both those projects are complete, it will mean that every city in Scotland is linked up either by motorway or by dual carriageway. I am perplexed, because I cannot get an answer to the question of what is the estimated completion date for the dualling of the A9 between Inverness and Perth, and the dualling of the A96 between Aberdeen and Inverness. Can Bill Reeve tell us, please?

It is good to see you again. If memory serves, I think that we last met on the platform at Shotts.

We did indeed.

As you would expect me to say, I agree about the importance of connecting our seven cities with good road and rail links. With regard to the A9, you will be aware that the first section of the upgrade between Kincraig and Dalraddy is already open. The Luncarty to Birnam section is in construction and I am pleased to say that that work has restarted, albeit with the necessary Covid restrictions.

The remaining sections of the A9 are still in the necessary statutory procedures process to determine the alignment. That work is being pressed forward as fast as possible. We are engaged with the necessary processes around matters such as the compulsory purchase of land, of which we need to take full account. At the moment, eight out of the nine remaining sections of the A9 are going through that statutory procedures process, which will then allow us to undertake the market consultation on the best procurement method. Work is pressing ahead on those aspects.

For the A96, the statutory consents process is under way. On the Inverness to Nairn section, the reporters have now submitted to ministers their report from the public local inquiry, which is being considered. I cannot give you a date, but I am cautiously optimistic that the conclusions from that will emerge before too long.

There has been good progress with the development and assessments for the Hardmuir to Fochabers section. In relation to the east of Huntly to Aberdeen section, a virtual exhibition on the preferred option opened in December last year. The level of interest in it has been such that the virtual exhibition has been extended to 8 March. To give you a sense of the scale of that activity, so far we have had about 18,000 virtual visits to the various plans on the A96.

It is always frustrating when we cannot give firm dates for the next stage of the programme, but we cannot do that until we have gone through the necessary statutory process. You will permit me to observe that, in the meantime, we have improved the railway between Aberdeen and Inverness, at least in the first phase. We are continuing with that balanced programme of investment.

That is very helpful, but I have two outstanding questions. First, the decision to dual the two roads was taken by the Cabinet in 2011-12. Why has it taken 10 years? The completion target date for the A9 is 2025, but we are still doing statutory orders. Surely to God that should all have been done long before now.

Secondly, is it still the Government’s policy to finish the dualling of the A9 between Perth and Inverness by 2025 or thereabouts and to complete the dualling of the A96 between Aberdeen and Inverness by 2030 or thereabouts, or are the projects being quietly shoved into the long grass?

They are absolutely not. If my roads colleagues were here with me, they would be able to reassure you about the sheer scale of activity that is under way on both axes. We are engaging with stakeholders along the route and the construction industry.

I am sorry—I should answer your question. Yes, it remains the policy to dual the A9 all the way to Inverness. There will necessarily be some reflection on the feedback that we get from the construction industry over this year. There will doubtless be updates when we get that feedback, but we remain absolutely committed to the delivery of the work on the A9 and the A96 as soon as is practically possible.

I look forward to an official invitation to the official opening of both roads. I hope that I live long enough, Bill.

I look forward to seeing you there, Mr Neil.

There are a couple of supplementary questions about roads. You said that eight out of nine sections of the A9 are undergoing the statutory process. Which one is not?

I am afraid that I do not have that information. You will forgive me—that is the perils of having the rail director speaking about a road project—but I will find out and write to you.

Can you please write to me to tell me which section is not undergoing the statutory process and why that is the case? That would be very helpful.

I will indeed.

Thank you. Graham Simpson also has a question on this topic.

I was as perplexed as Alex Neil was when I read the reports. I read a report in The Scotsman that said that the A96 project could be “delayed indefinitely”. Are you saying that the A96 will be completed at some stage?

I do not know the source of that report about the project being “delayed indefinitely”, but that is not a programme plan that I recognise.

Are you saying that the A96 will be completed at some point?

It remains our policy to complete the dualling of the A96.

It will be completed.

Yes. That absolutely remains our policy.

Right.

We have heard that the A9 was due to be fully dualled by 2025, but there now appears to be a quite inexplicable delay. The work could be completed by 2030. Could it be any later than 2030?

We have already talked about some of the factors that have contributed to the delays, particularly in the past year and particularly on the Luncarty to Birnam section, which is under construction. Of course, the development of other sections requires site visits in order to carry out ground investigation and so on, and there have been delays to that.

It is my expectation that later this year, after some of the market engagements that I have talked about, it will be possible to confirm whether the current targets remain deliverable or alterations will be needed. We are continuing to work to recover programmes, where possible, where they have slipped, and to press on with the development work that I have outlined.

Is the current target 2025 or 2030?

As I have it, it is 2025 for the A9 and 2030 for the A96.

So, you are still working to 2025—

Those are the targets that the teams are pressing on to deliver.

Can you come back to the committee and say whether we will hit 2025 on the A9 and 2030 on the A96?

I think that the next meaningful assessment of that—taking account of the impact of Covid and of feedback from the engagement with the stakeholders and the market engagement with the construction industry—is unlikely to be before summer this year. Then we might have that revised assessment.

That strikes me as ludicrous, given the amount of time that we have been looking at both projects.

I go back to Rachel Gwyon. You were asked about affordable housing, and I want to be clear on what your position is. You seemed to say that you are waiting for half a billion in consequentials and that that would boost the affordable housing budget. However, then you said that any money that comes in consequentials would go into an overall pot and might not necessarily be spent on affordable housing. Am I correct?

There might have been a slight lack of clarity on that. The Scottish budget had to be laid before there was full clarity on the UK figures. Therefore, the allocations to housing in Scotland were made on the assumption that the money from the UK would arrive as usual. It is more that the Exchequer has not yet received the money to pay for the funds that are being passed on. That is the balancing act that we are looking to do.

Ms Forbes has already protected the housing budget as though she had received that funding from the UK to the largest extent that she could, albeit the financial transactions were not able to be similarly protected, because they were so much reduced. That is why, because that capital grant has already been paid out to housing—in advance, as it were, of us getting clarity from the UK Government on whether we will receive funding from it—that funding has already been paid over in Scotland.

Is Kate Forbes working on the assumption that she will be getting the money, and are the figures that she has already announced based on that assumption?

She set out her assumptions for the capital spending review in September 2020, in the framework. Because, at that stage, we did not have the UK figures, the Scottish budget has had to be based on forecasts and the sort of estimates that are set out in documents such as the medium-term financial strategy.

The value of having a Scottish budget that can choose the priorities for Scotland is that housing has already been selected as a priority within the total amount of funding that we would have expected to receive and that was set out with the financial planning assumptions last September and set out in the budget in January.

The big difference that faced that budget was that no part of forecasting had thought it was realistic to assume a two-thirds reduction in financial transactions in one year. That assumption had never been part of the economists’ forecasting.

I am a little bit confused by all that, if you will excuse me. Will it make any difference to the affordable housing budget that has already been announced by Kate Forbes if there are consequentials flowing from the UK budget, or have those consequentials already been factored in?

09:45  

If extra money arrives from the UK budget on 3 March, decisions will need to be taken at that point.

So there is no guarantee that extra money will go to affordable housing?

There is no guarantee that we will receive any funds, and a range of interests have been expressed to Kate Forbes—including from parliamentary parties and others—on the use of any funds that arrive in Scotland. Therefore, I am sure that she will consider the whole situation.

Okay. Convener, I have other questions but it is up to you whether I carry on.

Bill Bowman has a question, so if you do not mind I will go to him first and come back to you.

Good morning. I will follow in the same direction that Colin Beattie was taking, but will ask about something more specific.

Alyson Stafford mentioned HMP Glasgow in her introduction. Some details about that are given on page 3 of the major capital project update document.

The committee’s report on the 2018-19 audit of the Scottish Prison Service raised issues about delays with HMP Glasgow and the impact on the existing estate. At that point, the chief executive of the Scottish Prison Service estimated that the new Barlinnie would be ready in 2024-25. However, the project update now says that the operational start will be September 2026. What specifics have caused that delay, how realistic is that timescale, and what does that mean for the existing estate, given that Barlinnie is a huge site, where people work and are housed in less than ideal conditions.

There was quite a lot of detail in your question. Rachel Gwyon will respond to the extent that she is able. However, to give you the fullest response, we might need to follow up in writing. I am happy to organise that.

Based on the work that the committee has done during the past few years, we consider that to be one of the key infrastructure projects at the moment. Therefore, we would welcome as much detail as possible.

The site acquisition of Barlinnie is now complete, and I understand that construction work is currently scheduled to commence during the summer of 2023.

Barlinnie is part of a programme of work to modernise the prison estate. There are significant plans for the female estate, for example, and significant funding for that was made available in 2015-16. At that time, ministers wished to ensure that they had the right vision for the female custodial estate, and they revised the plans in a way that received cross-party and stakeholder support.

That is important for the other parts of the programme because all of the parts need to be sequenced. The priority is concluding the female estate, and the next stage is proceeding at pace with HMP Highland and HMP Barlinnie.

A site has been chosen for HMP Highland. That will come on stream slightly earlier than Barlinnie, which will follow. Information on that was shared with the committee in the last update and just now.

The full funding that goes alongside those plans throughout those five years will be seen in the capital spending review. That will give multiyear certainty to SPS as it looks to deliver those establishments.

Is that it? Are you saying that all we know is that it is going to take more than two further years before they even start because somebody has not put together a vision and sequencing? I do not follow that.

The project is urgent. We were told that it was important to get it going. The site has been acquired, so what is stopping you from getting on with it—is it admin?

The information that I have is that the acquisition of the site is the start, then the planning permission and design need to follow on from that, and then it heads into the final business case, procurement and construction. All those things are now under way. The site and the planning and design are a major part of being able to start well and finish on time and on budget.

What put it back a further two years from the last time that we heard about it?

I hold the portfolio of information that is shared with me, and we update the committee. If further detail is required, we would need to go back to the justice portfolio.

That is a bit disappointing. The issue was sufficiently important to be mentioned in the quite lengthy introduction, but we do not seem to have the detail. Can anybody tell us what the delay means for the existing estate?

Do you mean in terms of managing the prison population?

We are having to run a site for at least an extra two years that was already way beyond its sell-by date. Does that not have some consequence?

Improvement works are under way at the existing site, in order to make it operationally the best environment that it can be just now. There are upgrades to the prisoner reception area and to healthcare facilities. A contractor has been appointed, and construction work is starting later this spring on those. They are fully funded.

What is the additional cost for that?

It is in the small number of millions but I do not have that figure off the top of my head.

To me, there is no “small number” of millions. Convener, perhaps we have to ask for some more detail from people who know about this.

I agree. When we took evidence on this from the previous Auditor General, she was very concerned. Barlinnie, according to her—about 18 months ago, I think—was 50 per cent over capacity and there did not seem to be a contingency plan for the prison population in there if something went wrong. After all this time, we are really not getting much more information about how the new building has progressed. Alyson Stafford, can you add to that and tell us why that is, please?

I think that the best thing that we can do is to follow up your specific questions with justice colleagues and get back to you as soon as possible.

It is really concerning, because we have seven witnesses this morning, it is a key project and we cannot get those answers.

That is why we will write—so that you get the best information.

Mr Bowman, do you have any further questions?

I do not think that I should take up time in asking questions to which nobody knows the answers.

Let us see whether we can do any better on ferries. Possibly Bill Reeve will answer this. At the moment, two ferries are sitting in the Ferguson shipyard. They are not finished. You mentioned earlier that there has been a delay due to Covid. I accept that. However, it is not the entire reason for the delay; there is a whole host of reasons. The whole thing has been a shambles. Do we know when those two ferries will be finished?

The last target dates that I have available—they were the ones that Parliament was advised of in summer of last year, I think—were April to June 2022 for vessel 801 and December 2022 to February 2023 for vessel 802. As I think I have mentioned, we know that as well as the normal—if that is the right word—disruption of construction activity in the yard last year, there has been a further suspension of construction activity, regrettably, because of the high infection rates in Inverclyde in January of this year. I know that Parliament has been advised of that already.

Tim Hair, who is the turnaround director of Ferguson Marine, has been commissioned to review the programme. I understand that he will be producing an update later this year, and it would be appropriate to assess any impact on the programme at that point. That exercise is under way.

Right; I understand. I think that Mr Hair is—

The main impact is the Covid impact that we have talked about—that is what has changed since the last update.

That has just added to the years of delay.

Indeed.

Has Transport Scotland done any analysis of how many new ferries Scotland will need in the next five and 10 years? Has it figured out how we will get those ferries? Will that be by—heaven forbid—procuring new ferries or by leasing existing ones?

Yes, is the simple answer to your first question. In the current budget under consideration, £580 million is set aside for ferries over the next five years in the round, which builds on the £291 million that we have invested since 2007 and the investment that goes into harbours.

In relation to the current discussions that we have had in Transport Scotland on major projects, we have been looking at an additional—a new—vessel for the Islay ferries service. We are looking to replace up to eight of the small loch class vessels and the extent to which we can move to procurement for those during next year. We will, of course, be seeking to standardise the designs and move towards lower-emission ferries, wherever possible. That very often brings the need to invest in the infrastructure, such as for electric power supplies. We have work under way looking at the right solution for Ardrossan, improving the infrastructure on the Skye triangle of services and considering further the needs of the Gourock to Dunoon and Kilcreggan services. All those aspects are under consideration.

Is there any document that you could send us about those proposals?

Forgive me, but there are lots of documents. I would be happy to provide a summary of what I have just set out, if that would be helpful.

That would be useful.

I am looking at the project table that you helpfully provided to us. Can you remind the committee how much public money has been ploughed into Ferguson Marine?

Do you mean for the procurement of the vessels, or separately for the investment in the yard?

The investment in the yard.

I am afraid that I am better able to talk about the former than the latter, because the former is a transport issue. The latter is a matter of industrial policy.

Okay.

I think that we are looking at, in the round, the costs for the two vessels being about a couple of hundred million pounds. Clearly, the final figure remains to be determined and that, in part, depends on the work that Tim Hair is doing at the moment.

Okay. On that project, the table says that the Scottish Government is

“identifying options for a sustainable future for the yard going forward.”

Of course, Ferguson Marine is publicly owned, at the taxpayers’ expense. It continues:

“This will include ensuring the yard has the potential to operate in such a way as to allow it secure public and private work.”

The two ferries will be completed, I hope, in the next couple of years. Do you know of any other contracts that the yard has secured?

Forgive me, but although I can tell you about our plans for the procurement of ferries, I am not the best person to answer questions about the business of Ferguson’s as a yard—that relates to industrial policy, rather than transport policy. The investment in new ferries that the Scottish Government wishes to make will give rise to a set of procurements and Ferguson’s would have the opportunity to bid for those. I imagine that it would benefit from looking more widely than just Scottish Government shipping contracts.

10:00  

Absolutely. The yard will have to do that to ensure that there is value for money for the taxpayer. Alyson Stafford, given that the yard is being subsidised by the taxpayer, do you have any knowledge of its future business plan?

As Bill Reeve said, that is a question for those who work more specifically on economic development. We can follow up on that if that would be helpful to the committee.

That would be really helpful. Graham, do you have any further questions?

I am happy for you to move on, convener.

I have a question for Bill Reeve. I am sorry that we seem to be focusing a lot on your area today, Bill, but you will be glad to hear that this question is specific to rail.

You are interested in the important matter of transport, convener.

My question is about the tragic accident outside Stonehaven where the line collapsed and there was loss of life. Can you give the committee an update? We know that rail infrastructure in Scotland is partly the responsibility of Network Rail and partly the responsibility of Transport Scotland and the Scottish Government. What improvements are being made to that line to ensure that such an accident never happens again?

Yes, that was a sobering incident. First, for clarity, the Scottish Government is responsible for the specification and funding of Network Rail in Scotland, but Network Rail is a wholly owned subsidiary of the UK Government—as I am sure that you are aware. We work closely with our delivery partners in Network Rail and the wider rail industry.

Stonehaven was a sobering demonstration of the reality of climate change and its impact. In the high level output specification that the Scottish Government gave Network Rail for the current five-year regulatory control period, we included a requirement that it should address the impact of climate change in its maintenance and infrastructure renewal plans and there has been a substantial increase in the budget for such works in the overall five-year settlement.

At Stonehaven, the tragic accident was caused by a landslip in a cutting on an approach to a bridge and the train was knocked sideways off the track when it hit the abutment at the bridge. However, that bridge was already the subject of climate mitigation works. Something that helped access to the site immediately after the accident was that access had already been improved because there were scour protection works underway. Those works are intended to prevent higher levels of rainfall in the stream underneath from scouring the foundations of the bridge.

I do not know how much detail you want me to go into, convener, but that is an illustration of the fact that the need to adapt our transport infrastructure—road and rail—to the reality of climate change is well understood and the fact that work was already under way before the Stonehaven accident.

Are you confident that work is being done quickly enough on the climate change mitigation programme and other works to ensure the safety of our railways?

The safety of the railways is the responsibility of the Office of Rail and Road but I can provide assurance that work to address the risks was already well under way and is being taken extremely seriously.

Network Rail has commissioned independent reviews of its practice in earthworks management and of best practice in meteorology. I have not seen those reports but I understand that they will be made available soon. I can assure the committee that best practice is being applied wherever possible and that operational procedures have been reviewed and changed to reflect the lessons learned.

It is sobering that we are seeing steady growth in the number of incidents of high-intensity, localised rainfall. That is the pattern across Great Britain, but we know that it is accelerating faster in Scotland than it is further south; that is a meteorological fact. We could talk about that at length, but I can assure the committee that our Network Rail delivery partners are treating that with the utmost seriousness. The funding that the Scottish Government has made available includes increased funding to enable the delivery of the necessary works.

Witnesses have already promised to come back to the committee with more information about a number of today’s topics. A breakdown of the critical climate mitigation projects that you are dealing on the railways might be useful. It would be helpful to know how they are progressing and to have timescales for them.

The committee might be interested in an update on the progress already made, the lessons learned and the next steps. There is wide interest in that. I can undertake to provide the latest state of our progress with Network Rail.

That would be extremely helpful; thank you.

I would like a quick overview of the situation with women’s prison facilities. One facility is due to be built in Dundee. It has been delayed for a long time. I have visited the site. The latest update to the committee says that the facility will be finished in May 2022. Can we expect it to open next May?

That 2022 date is the latest that I have.

Do you expect it to open next May?

The information that I have is that it is scheduled to be delivered then.

Will there be additional costs?

The latest cost information would have been included in the September update report. Another update is due around the end of this financial year and will give any information about progress on the projects and their costs.

The September cost is the same as was in the March report: £72.6 million. Is that correct?

I am looking for that project on my list, which is the same as our published document.

That figure is for both projects, is it not? Perhaps you could come back and clarify that. That would be useful.

No worries.

That concludes our questions for the team from the Scottish Government. I will not run through everything that the witnesses will come back to us on. The clerks will have made a note and will liaise with Alyson Stafford.

Alyson, thank you for your opening statement. This has not been the easiest session, as there are so many of us. I appreciate everyone’s patience and forbearance. Thank you for your evidence. We will suspend briefly to allow for a changeover of witnesses.

10:09 Meeting suspended.  

10:14 On resuming—