Public Audit Committee

Meeting date: Wednesday, February 29, 2012

Official Report 397KB pdf

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Public Audit Committee Report

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“Major Capital Projects”

Item 3 is the permanent secretary’s six-monthly update on the Scottish Government’s progress towards delivering the committee’s recommendations in its “Major Capital Projects” report from 2009. Members have the correspondence and I invite comments or questions.

I am very happy to see the comment on page 2 of the letter about post-project evaluation. A big issue for the committee in the previous session was to ask the public services to examine performance after a particular piece of work has concluded and to build that in as standard process in developing plans for future work. It is particularly encouraging that the “Scottish Public Finance Manual” has been updated to make that a mandatory requirement, because the greatest opportunity for performance improvement is to look at how we have performed, to learn lessons from that and to build those into future planning.

I have a brief point. The table notes at the end of annex A mention the hub initiative. Is it relevant to ask for some detail about that in future? The hubcos amalgamate many different parcels of construction work in different parts of Scotland into sizeable chunks of work. That is not detailed in the correspondence. It would be helpful for the committee to understand what is going on there, so that we can pursue any issues. We are all being pretty heavily lobbied at the moment in some regard on how the hub initiative works in achieving value for money for the taxpayer. I wonder whether it is possible to tease that out a bit in the future.

11:00

What is the appropriate way for that to be reported, given that this is a rolling, biannual report?

Indeed. Perhaps every six months the Scottish Futures Trust or Peter Housden, the permanent secretary, could detail the workstream of each of the six hubcos in global terms. I would not ask for that to be detailed down to the pence and pounds of particular projects, but it could be broken down into what the total projected spend in each hubco is for the period, which would allow us to see the scale of the expenditure going through these mechanisms for delivering public projects in Scotland.

It was announced in 2008 that there would be a new prison in Inverness and that the budget for that was £40 million. I appreciate that there have been problems in getting the land for that, but we welcomed the announcement that there would be a new prison, because Inverness is the smallest and most overcrowded prison in Scotland, yet it seems to have fallen off the agenda. In future updates, could we have information on whether the Government still intends to build a prison in Inverness? Is it still on the agenda? I would just like to know what is happening with it, because it is not mentioned anywhere in this update.

I am not sure whether you would have any more information on this than I do, but is the cost for that project more than £50 million?

The cost was £40 million when the project was announced, so it should be more than £50 million now. When something like that has been announced, it is good to know where it is for future planning.

It struck me that there has been quite a lot of discussion recently about a particular aspect of performance in major capital projects: the proportion of contracts that are delivered locally and—connected to that—what projects deliver not only in outcomes but in creating training opportunities and so on. That is an aspect of performance in the delivery of a project, because the Scottish Government has objectives in those areas just as it has objectives for delivery of the infrastructure, value for money and delivery on time. I wonder whether future reports could give us an indication about those kinds of impacts. It might be difficult to do that because we would be looking at quite a large scale, but it might be worth asking whether that is possible.

If the committee is agreed, we will ask about three things. We would like progress reports on individual hubcos and their workstreams; we would like information on projects that are in the infrastructure plan but do not appear in the report, presumably because they have not begun; and we would like to know whether it is possible to have reports on performance with regard to locally delivered contracts and impacts on areas such as the creation of training opportunities.

I understand what you are saying, but those sound more like finance and procurement issues that might be of greater interest to our sister committee. Historically, those issues came to us when performance issues arose on delivery—that is, on completion. That is why tables on such issues are attached to the kind of report that is in front of us—to give some visibility on what is going on out there. However, I do not think that there is a specific locus for us in the procurement and financing aspects, as I recall from previous committees.

I think, though, that it would be reasonable to ask what is going on in the hubco model, because it is pretty significant in terms of the whole capital programme.

My view is that there are aspects of the delivery of the infrastructure programme that are to do with the impact on the local economy. The Government has delivery objectives on budgets and timescales, but it also has objectives to do with the impact on areas such as creating opportunities. I take your point, but I think that it is reasonable for us to ask questions about that. The Government may agree with you and may feel that there is not a way of sensibly reporting on such matters, but I would quite like to ask it those questions.

I think that those are reasonable questions to ask, but I do not think that they are questions for us to ask. I think that they stray into issues to do with procurement, European legislation and so on, which probably lie in the domain of other committees rather than ours.

Can we agree to ask them and see what the Government says? Its answer might well point us in that direction.

Members indicated agreement.

As members have no other points to raise under that item, we will move on.