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Update on NPD and Hub programme

Published: 9 Sep 2015 15:50

ONS seek Eurostat clarification on NPD.

Deputy First Minister John Swinney has advised that the EU's statisticians – Eurostat – have been asked by the Office of National Statistics to look at a number of issues raised by the classification of the AWPR project, as he updated parliament on the latest position.

In answer to Parliamentary Questions today (Wednesday), Mr Swinney said:

"I provided updates to Parliament on 2 February and 31 July regarding the Office of National Statistics (ONS) review of the Aberdeen Western Peripheral Route (AWPR).

"ONS concluded that the AWPR should be classified to the public sector under the new Eurostat rules and guidance which took effect in September last year. I instructed the Scottish Futures Trust (SFT) to engage with ONS to clarify the interpretation of the rules that underpinned their decision and consider the scope for making contractual changes to the project which could secure ONS' agreement that reclassification to the private sector would be appropriate.

"I am grateful to ONS for prioritising this work. They have now advised that, as a result of SFT's further engagement on the substance of their July decision, there are a number of points that they wish to refer to Eurostat for further consideration. This reflects the complexity of the issues with which we are dealing.

"It will not therefore be possible for SFT to submit proposals for revisions to the AWPR contract until Eurostat have had the opportunity to respond to the points of clarification that are being raised with them, which may take several weeks.

"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."

Mr Swinney continued:

"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."

Notes to editors

The classification decision comes after ONS reviewed the status of the AWPR in response to a new standard and associated technical guidance on National Statistical Accounts (the European System of Accounts, or ESA 10), produced by Eurostat and taking effect across the European Union from September 2014, some 18 months after the OJEU (Official Journal of the European Union) notice for the AWPR was issued.

The guidance relates to the factors that are taken into account when considering whether a body or asset is controlled more by the public sector than the private sector and therefore whether it should be classified to the public sector. Factors can include the relative degree of public and private sector control over the governance of a project and the balance of risk and reward shared between public and private sector partners.

ONS has also confirmed that it will review two other NPD projects signed since September 2014 – the Dumfries and Galloway Royal Infirmary (DGRI) and the Edinburgh Royal Hospital for Sick Children – with a view to providing a classification opinion on these projects during 2015. We fully expect these projects to be completed on time and on budget – as they are currently on track to do.

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