Date lodged: 15 December 2016
To ask the Scottish Government who was responsible for the error in interpreting EU rules relating to the accounting procedures for the non-profit distribution model of financing public projects; when it was alerted about this error and by whom, and what the implications of the error are for (a) investment in public services and (b) the (i) number and (ii) value of projects that can be completed.
Answered by: Derek Mackay 9 January 2017
The Scottish Government has always been very clear about the impact of classification on the NPD programme, which arose as a result of changes that were made in September 2014 to relevant Eurostat guidance, 18 months after the contract for the Aberdeen Western Peripheral Route (AWPR) project was published in the OJEU in January 2013 and after the winning bidder was announced on 11 June 2014.
The Scottish Futures Trust became aware in November 2014 that the Office of National Statistics (ONS) had considered the revised guidance and had identified potential issues in relation to the classification of privately financed projects within the UK. The ONS classified the AWPR to the public sector in July 2015.
As set out in successive Scottish budgets, provision has been made in capital budgets to reflect the classification of the AWPR and three other NPD projects that had been in advanced procurement at the time of the changes to the Eurostat guidance. The capital provision that has been made amounts to £398 million in 2016-17 and £234 million in 2017-18 and the expected cost of future revenue payments has been reduced accordingly.
The Scottish Government’s approach has ensured that classification has had no impact on the delivery timetable or cost of these projects.