Delays continue on Scottish hub deals

Grant Prior 10 years ago
Share

Contractors are facing continuing delays reaching financial close on schemes planned under the £2bn Scottish Hub programme following changes to accounting rules.

The Scottish Government has been forced to reclassify the £745m Aberdeen Bypass from a private to public sector project.

The move follows an Office for National Statistics review after a tightening of EU rules around publicly-funded building programmes.

The bypass is funded under the non-profit distribution (NPD) scheme which is an alternative to the PFI model.

Fine points of the bypass decision have been referred back to the EU for reclassification which is having a knock-on effect on the Hub programme.

Building plans under the Hub programme run by the Scottish Futures Trust operate under a similar NPD model.

Deputy First Minister John Swinney said: “I have previously advised Parliament that, while ONS was undertaking its review, there would be some delays in reaching financial close on a number of projects within the Hub programme, because of the need to reflect on ONS’ findings.

“In April, I authorised SFT to take forward initial changes to the hub model aimed at reinforcing a private sector classification, while recognising that further changes might be needed after ONS had reported. This work is proceeding well.

“SFT has submitted proposals to ONS and it is likely that they will be in a position to respond by late October or November.

“I have given careful consideration to whether, in the interim, Hub projects that are currently in the pipeline should be advised that they can reach financial close in advance of the ONS responding. In doing so, I recognise and share the concerns of project partners and other stakeholders.

“The Government remains committed to the Hub programme. However, I must also take into account the risks that could arise as a result of taking projects to financial close in advance of ONS reaching a conclusion.

“As a result, I do not expect it to be possible for these projects to reach financial close over the coming weeks. SFT will engage closely with project partners to consider the implications for them and I will of course keep the position under close review.”

The ONS is also reviewing two other NPD projects signed since September 2014 – the Dumfries and Galloway Royal Infirmary and the Edinburgh Royal Hospital for Sick Children.

Swinney added: “I reiterate to Parliament that the Office for National Statistics’ conclusions will have no impact on the timetable or cost of the AWPR project itself.”

Latest news

Redundancies loom at M&E giant Dalkia

Consultation starts at Southern region
36 minutes ago

Land deal unlocks East London £750m health hub plan

Queen Mary University secures site to build Whitechapel life sciences complex
36 minutes ago

Aureos bags £45m Howden Relief Road job

Former Keltbray infrastructure business to start construction next month
13 minutes ago

Four injured after partially built floor collapses

Court hears how steel beams were cut at the same time Acrow props removed
22 minutes ago

Careys directors sacked after £4m job-loss showdown

Pair win unfair dismissal case after being accused of "tickling each other’s bollocks"
3 days ago

Danny Sullivan Group hits back over HS2 allegations

Labour supply giant confident it is "fully compliant with all tax obligations"
3 days ago

Bid race takes off for £500m MAG airport small works deal

Nine-lot framework to cover civils, building and M&E jobs up to £5m
3 days ago

Mace director joins Wates as Chief Commercial Officer

Pat Fitzgerald to lead commercial strategy at Wates
3 days ago

Rob Perrins steps up as executive chair in Berkeley shake-up

Long-serving chief steps up to lead housebuilder’s next growth phase
3 days ago

Competition watchdog turns attention to civil engineering

Competition and Markets Authority launches study into road and rail delivery
4 days ago

Timber imports rise for first time in four years

Softwood volumes and prices lead rebound as housing outlook improves
3 days ago

10-Year Infrastructure Strategy published

Full details as Government pledges £725bn of funding over the next decade
4 days ago

Korean firm buys part built Hackney job from failed Elements Europe

Work can now restart on 21-storey hotel and office development
4 days ago

Mark Wild radical reset plan to rescue HS2

Senior manager bonuses scrapped and non-permanent labour cutback
4 days ago

HS2 supply chain fraud claims spark ministerial probe

Transport secretary pledges one-year reset for HS2 to end 'litany of failures'
5 days ago

Lords launch inquiry into Building Safety Regulator delays

Industry asked for evidence of how system is failing: Have your say
4 days ago

Willmott Dixon director becomes co-owner of local contractor BSN

Nick Gibb targets £100m turnover at Dudley based national contractor
5 days ago

Dry lining boss sentenced after mystery account moves

Court hears of £500,000 in unexplained transfers before contractor went under
4 days ago

Barhale bags £16m shaft tank for Severn Trent Water

"Final piece in the puzzle" of Etruria Vale upgrade
4 days ago

Keltbray strikes £30m funding deal for growth

Three-year funding deal to support push into higher-margin work
5 days ago

Take That brother buys steelwork giant William Hare

Entrepreneur Simon Orange seals deal for £350m turnover contractor
6 days ago

Civils contractor LF Solutions files administration notice

£20m-turnover specialist has labour supply arm and own plant fleet
5 days ago

Joseph Gallagher lands £50m green energy deal

Major trenchless construction contract for HyNet North West project
5 days ago

New boss drives NG Bailey to record revenue

Fresh strategy lifts M&E group's order book to £1.6bn
5 days ago

Costain wins vast underground hydrogen storage design job

Firms lands FEED contract for Cheshire salt caverns conversion
5 days ago

Graham gets green light for £70m Glasgow student tower

Construction due to start this year on 25-storey Anderston scheme
5 days ago

New £16bn National Housing Bank to drive 500k new builds

Homes England given new powers to finance stalled and complex schemes
5 days ago

Morgan Sindall upgrades profits forecast for this year

Overbury fitout and construction operations exceed trading expectations
6 days ago

Major project bidders to face ‘British jobs’ test

Contractors to face tougher jobs pledge scrutiny under new procurement shake-up
7 days ago

Green light for £32m Wythenshawe Culture Hub

Construction to start this year on first phase of £500m town centre revamp
6 days ago

Contractor services