Green light for £330m of capital projects following ONS review

Around £330 million of investment in health and education facilities has been given the go-ahead following an Office for National Statistics (ONS) review of proposals developed by the Scottish Futures Trust (SFT).

Plans for the ten new schools and two new health projects, within the pipeline of revenue-financed projects to be delivered through the Scottish Government’s Hub programme, were put on hold earlier this year while advice was sought from the ONS about the impact of revisions to European accounting guidance on the classification and budgeting for public infrastructure projects.

However changes being to the Hub model brought the ONS to confirm that the government’s contribution can come from its long-term resource budget.

Welcoming the announcement, deputy first minister John Swinney told the Scottish Parliament that the developments which have an estimated capital value of around £330m can now proceed to financial close as soon as possible.

Mr Swinney said: “The Scottish Government has always prioritised public infrastructure projects as a critical tool for growing our economic recovery.

“In light of the continuing constraint being applied to public finances – including capital budgets – we will continue to take forward programmes supporting additional investment in our economy and our asset base, creating jobs and enhancing services.

“As I have advised Parliament on a number of occasions over the last year, in response to updated EU accounting guidelines the Scottish Futures Trust submitted proposals to the ONS aimed at ensuring that the balance of public and private sector control and risk and reward in Scotland’s hub funding model reflects the updated guidance.

“While that process has been underway, twelve projects in the pipeline have been unable to progress as planned. I have today advised Parliament that these projects can now proceed to financial close as soon as possible.

“From Elgin to Kelso, these twelve projects – worth around £330m – will make an enormous difference in their communities, not just in the jobs that their construction will bring but in the health and education benefits they will provide to local people.”

The deputy first minister also updated Parliament on the Scottish Government’s position on the Not for Profit Distribution element of its revenue-financed infrastructure programme – including a repeated reassurance that there will be no impact on the delivery of the Aberdeen Western Peripheral Route (AWPR).

Mr Swinney said: “More widely in the NPD programme, it has become clear that a rapid reversal of the ONS’s public classification of the Aberdeen Western Peripheral Route project under the revised Eurostat rules will not be possible.

“I have asked SFT to continue to review options for the potential amendment of the AWPR project and potentially other NPD projects in the light of ONS’s welcome decision on the revised hub model.

“The Scottish Government also continues to discuss with the Treasury the budgeting implications, including for our capital spending plans, and I intend to reflect the outcomes of these discussions in the Budget in December. This will have no impact on the delivery of the project itself.”

The twelve project affected by the classification review were: