Audit Committee, 06 Mar 2001

Meeting date: Tuesday, March 6, 2001

Official Report 93KB pdf

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Trunk Road Network (Contracts)

We move to agenda item 6. I welcome the representatives of Audit Scotland and I ask the Auditor General to address the committee on his examination of the contract for the maintenance and management of the Scottish trunk road network.

Early in February, the Minister for Transport invited me to consider undertaking an examination of the arrangements for and issues raised by the award of contracts for the maintenance of trunk roads in Scotland, which commence on 1 April 2001. Having studied the background to the issue, I decided quickly that I should undertake such an examination.

I welcome the opportunity to advise the committee of the terms on which the examination will be conducted. Broadly speaking, I will cover three issues. The first is the objectives that the Scottish Executive established for the procurement of future management and maintenance of the Scottish trunk road network, consistent with achieving value for money. The second is whether the Executive ran the competition to award the new contracts fairly, regularly and in accordance with good procurement practice, to achieve its objectives and secure value for money. The third is whether the Executive has established robust and clear arrangements for managing the contracts when the contract period begins. The committee has a note that goes into a little more detail and which provides an outline plan for the examination. I am happy to answer questions on that.

I am sure that the committee is interested in the time scale that I envisage. I aim to present a report to Parliament during the first half of June. Meeting that deadline will be a challenge, given the complexity of the issues and the importance that is attached—rightly—to the concerns about the awarding of the contracts. My colleagues in Audit Scotland and I will do our best to meet that deadline, in the light of public concern. However, as always with such major work, much depends on what the examination reveals. The timetable might have to be extended. I am sure that the committee will agree that it continues to be important to ensure that everyone who has had an interest in or involvement with the exercise has the opportunity to be heard fairly and to have their contribution considered before I make my report. However, my target is to complete the report before the summer recess.

Would the committee like me to go into more detail about the study, or did that description suffice? I am happy to answer questions.

The timetable is tight. I am a member for a region that covers the Tayside Contracts area, so the issue has been a major one in my constituency. Having joined the committee only recently, I am not fully aware of the way in which the Auditor General will proceed. I presume that you will take written evidence from bodies such as Perth and Kinross Council, Dundee City Council, Angus Council and Tayside Contracts, and that you will follow that by visiting those organisations or meeting their representatives. How will you proceed? The process is potentially lengthy.

The examination concerns how the Scottish Executive has set about achieving its objectives in awarding the contracts. It will not address directly issues about the bids that were submitted by consortiums—including consortiums of which local authorities are members—nor will it be concerned with private sector bids.

During the study process, there was provision to ask questions of all bidders—unsuccessful and successful—about the extent to which they were satisfied with the process that they had undergone. It might be that we will follow up matters that are of concern to some of the bidders, which may or may not be the local authority led consortiums. The focus is primarily on the role of the Scottish Executive and how it achieved its statutory objectives in relation to trunk road maintenance.

I appreciate that, but I am glad that you clarified it. It was my fault for not being clearer.

Having met local authority representatives, including councillors, I know about the concern about the way in which the contracts were proceeded with. That is my concern—it is not about the alternative bids.

Scott, did you want some clarification?

No, the Auditor General clarified the point that I was wondering about. I want, however, to return to the point that Keith Raffan raised. It is important that the inquiry is about the process and about how we got to this stage. While we proceed with it, other things will come into play. The foci should be on the process from the start, on how we got through it and on whether things were clear or got changed along the way. That is what is being suggested.

This might be Keith Raffan's first taste of Audit Scotland's approach. The committee is appreciative of and used to the thorough and searching work programme of Audit Scotland. I note that the time scale combines the wish for expediency with a sensible level of flexibility, depending on the evidence that is received. That approach is much appreciated by, and useful to, the committee.

Will the Auditor General's work fit into the work that will be undertaken by the Transport and the Environment Committee? I understand that that committee will address the issues that Keith Raffan raised. Evidence might come through from that committee that the Auditor General might have to consider in his report.

I understand that the Transport and the Environment Committee is considering at its meeting tomorrow whether to proceed with an inquiry during a period that would overlap with that of my examination. Needless to say, my colleagues and I have had conversations with the chief executive and clerks of the Parliament about the matter. We will be working hard to ensure that we take a consistent and coherent approach to the matter.

I am not yet aware of the terms according to which the Transport and the Environment Committee will conduct its investigation. I believe that it will not take a formal decision until tomorrow. I hope that we can, through the office of the clerk, continue to ensure that the two activities complement each other as we move forward.

I will offer one final thought on that point, if I may. I imagine that the results of the examination and of the final report will be of interest and concern primarily to this committee, but parts of the content might be relevant to the Transport and the Environment Committee's wider deliberations. Therefore, it might be appropriate for my report to be considered also by that committee, after the Audit Committee has considered it.

It is important to avoid any overlap or duplication. We are anxious for committees to be complementary in their work, and for the Audit Committee to have a particular focus. We do not touch policy.

The Transport and the Environment Committee, however, would be concerned about policy. I think that it is important that the two committees work together in harness, and that we do not have any duplication or overlap. I am sure that sensible co-operation will take place.

This might be a rather obvious question, but I am concerned about the tendering process. I presume that it will continue to affect the potential costs to local authorities—if there are any—when the new system comes in and when the new contracts come into effect on 1 April. For example, in Crieff the contractors will clear the main road, but Tayside Contracts will still be responsible for the side roads. All that impacts on the questions of whether value for money is being obtained and whether the new system has added an extra cost to local authorities.

We seem to be entering into the minutiae of the situation. Although I am sure that the Auditor General can respond, we should be discussing the process in general. We have received a detailed synopsis and an excellent programme of work, but I do not think that we should get too much into the detail.

I want merely to be assured that, when value for money is being addressed, those matters will be examined. It is a straightforward point.

Certain aspects of the costs that are associated with the process will definitely be covered. For example, as members will see from the brief, we will certainly examine the extent to which the contracts contain conditions that require that the costs of former local authority employees who are transferring be met. Determining whether employee transfer rights apply in this case is quite a complex agenda.

We will examine certain issues, but I cannot at this stage give an undertaking that we will examine the cost to local authorities. That is a somewhat separate matter, although I do not rule it out. We are at an early stage of the examination.

If there are no other questions or comments, I thank the Auditor General for this trailer of forthcoming attractions.

The final item on the agenda is the notification of the date of the committee's next meeting, which will be on 20 March.

I thank the committee for the efficient despatch of its business and I thank Audit Scotland for its participation.

Meeting closed at 14:31.