A compensation scheme for construction workers launched by eight of the 30 companies involved in blacklisting was introduced in an “act of bad faith”, according to the Scottish Affairs Committee.

In its final blacklisting report, the Holyrood committee said today that it is difficult to conclude other than that the publicity around the launch of The Construction Workers Compensation Scheme (TCWCS) was a deliberate attempt to mislead, and that the implication that the trade unions were in agreement with the scheme is both “callous and manipulative”.

The committee said a voluntary code of conduct to eradicate the practice of blacklisting in the future is insufficient, and a statutory code of practice is required.

Although the committee was highly critical of the scheme and cast doubt over the motivations behind it, it did acknowledge that it is only those eight companies who set up the scheme - out of the 30 known to have used the services of The Consulting Agency (TCA) that ran the blacklisting service - who have taken any steps at all to remedy the sins of the past.

A series of flaws in the scheme were identified including the low levels of compensation being offered and the fact it was launched without the agreement of the trade unions (and its launch attempted to mask that fact).

The committee also criticised the fact that those participating in the High Court litigation are not eligible to access the scheme and its failure to incorporate any type of positive action measures to upskill and re-employ the victims of blacklisting.

Ian Davidson MP, who chaired the committee, said: “The unilateral introduction of a compensation scheme was an act of bad faith by those involved, likely to be motivated by a desire to minimise financial and reputational damage rather than being a genuine attempt to address the crimes of the past.

“To mislead MPs is a serious issue but to mislead blacklisted workers and their families by implying that the trade unions were in agreement with the scheme is both callous and manipulative.

“While we are highly critical of the scheme and the way it was introduced, at least those eight companies have made even this effort. We do not accept the excuses made from the other companies for their non-participation and interpret this as evidence of their unwillingness to self-cleanse.

“Despite the grave flaws in the scheme, our main concern is that the victims of blacklisting receive at least some measure of compensation. The ICO should redouble its efforts to find and contact as many of the individuals whose names who were on the original TCA list as possible–including the families of those blacklisted workers who may have passed away.

“Given the denial and duplicitous practices we have encountered on the part of many of the companies who were complicit in blacklisting, we have no confidence in the sector to either self-cleanse on a voluntary basis nor to take sufficiently robust steps to eradicate the practice of blacklisting in the future. A voluntary code of conduct for pre-employment vetting in the construction company will not be sufficient. We must have a statutory with those firms who have refused to self-cleanse being banned from all contracts funded, in whole or in part, by public money code of practice.

“Despite the progress and positive steps which have been taken during the course of our inquiry, in this final report we have identified that many questions in relation to the practice of blacklisting remain unanswered, including the recent allegations in relation to police and security service involvement in blacklisting in the construction and other sectors.

“We are specifically concerned as to whether the extent and breadth of the practice is fully known, and whether this odious practice is ongoing within the construction industry. We are convinced that the only way to fully answer these questions is through a full Public Inquiry and we recommend that the government take immediate steps to launch one.”

The eight construction companies that set up the scheme have apologised for “any ambiguity” but deny subterfuge in the compensation scheme that they have set up.

TCWCS said that it has so far paid out compensation to 149 people but has not disclosed how much. Potential awards under the scheme range from £4,000 for those on whom very basic information was held, up to £100,000 where there is proof of significant loss of earnings.

The eight companies that have developed and are funding The Construction Workers Compensation Scheme are Balfour Beatty, Carillion, Costain, Kier, Laing O’Rourke, Sir Robert McAlpine, Skanska UK and Vinci.

Responding to the Scottish Affairs Committee report, TCWS issued the following statement: “The eight construction companies that developed, launched and are funding The Construction Workers Compensation Scheme (TCWCS) welcome the report’s recognition that they are the only companies in the industry that have taken any steps to apologise for their historic involvement with The Consulting Association (TCA) and to establish a route for affected workers to access compensation. While many other construction companies were also users of TCA, we regretted the impact it may have had and wanted to do the right thing for those impacted.

“The scheme, which opened in July 2014, offers straightforward and easy access to compensation for anyone who has been affected by the existence of TCA records. It is a faster and less stressful process than a court case and since launch has received hundreds of eligible applications. Awards start at £4,000 for those on whom very basic information was held, rising to £100,000 where there is proof of significant loss of earnings. The lowest level of compensation through the scheme is intended to reflect a basic award for breach of data protection where there is no evidence of financial loss. In addition, we are paying for legal advice for anyone applying to the scheme to ensure they make the right decision for their circumstances; and refresher training, to update skills, experience and certification, is available to anyone entering the scheme to ensure this is not an impediment to future employment.

“ We were disappointed that that the launch of TCWCS was not supported by the unions; we note that the final report references our engagement with the unions prior to the launch and recognises key changes were made to the scheme as a result of these conversations. We strongly refute any suggestion that we had attempted to mislead any of our audiences or conceal the outcome of our discussions with the unions. That said, we wrote to MPs in July 2014 apologising for any ambiguity our original letter may have created.

“We remain fully committed to the scheme which, as of Friday 20 March 2015, had received more than 480 enquiries, 233 eligible applications and had compensated 149 people. We continue to look for ways in which we can reach those whose names were held on TCA records and we welcome the Committee’s encouragement for the unions to facilitate, rather than obstruct, that process.

“Each of the eight companies involved in TCWCS is determined to ensure this issue stays in the past and would comply fully with any code of conduct – either statutory or voluntary – that may be introduced to this end.”

The Unite union said the “damning” report’s recommendation echoes its own calls for a public inquiry into construction industry ‘blacklisting’.

Unite assistant general secretary Gail Cartmail said: “The report by the Scottish Affairs Committee is a damning indictment of the underhand and cruel tactics that the construction industry employed against decent workers prepared to stand up and be counted on such issues as health and safety.

“The recommendations cover all the key points that Unite has raised with the committee. We welcome, in particular, the employment of ‘blacklisted’ workers. This is the only ‘proof positive’ that these major contractors are on the road to cleaning up their past dodgy employment practices.

“However, it is clear from the report that many companies are dragging their feet on the issue of compensation to remedy what the committee calls ‘the sins of the past’.

“Whoever is in government after May’s general election must respond to the repeated call for a full public inquiry into the long-running issue of ‘blacklisting’.

“The Scottish Affairs Committee, as a whole, and its chair Ian Davidson have shone a light on this murky world of blacklisting. We are indebted to them for their work and dedication in seeking out truth and justice.”