Meeting of the Parliament

Meeting date: Tuesday, January 9, 2024

Official Report 907KB pdf

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Urgent Question

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Stewart Milne Group Ltd (Administration)

To ask the Scottish Government what discussions it has had with the administrators of Stewart Milne Group following the news that the firm, which employs over 200 people, has been placed into administration.

I thank Douglas Lumsden for securing this important question. I know that there is considerable interest from colleagues in the north-east and across Scotland in this matter.

I was very sorry to hear that Stewart Milne Group had ceased trading after 49 years. Our thoughts are with the affected employees and their families at this very difficult time. This morning, I met representatives of the administrator, Teneo, and made it clear to them that I want every possible support to be offered to affected staff, contractors, suppliers and home buyers. The people who are affected by the announcement are, of course, our immediate priority. The Scottish Government is providing support through partnership action for continuing employment—PACE—which is our initiative for responding to redundancy situations. By providing skills development and employment support, PACE aims to minimise the time for which individuals who are affected by redundancy are out of work. The administrators have confirmed that they are working closely with PACE to provide people who are being made redundant with the relevant information.

I am pleased to hear that the Scottish Government is taking the matter so seriously. This is dreadful news for the 217 direct employees of Stewart Milne Group, but there will also be serious concerns for all those connected with the supply chain, including contractors and self-employed tradespeople. Will the cabinet secretary confirm whether help will also be made available to people who are not directly employed by Stewart Milne Group but who now face the prospect of losing their livelihoods due to its collapse?

We understand that approaches have already been received from potential recruiters for employees who have lost their jobs or who are at risk of losing doing so. Moreover, PACE has asked the administrators to distribute opportunity information to the affected employees.

Douglas Lumsden will be aware that the redundancy payments process is a matter for the redundancy payments service and the Insolvency Service. Douglas Lumsden raised a clear point about the announcement’s impact on self-employed subcontractors. I will write to Kevin Hollinrake, the responsible United Kingdom Government minister, asking him to look as sympathetically as possible at their position. I understand that the process will be difficult for them, and I will ask the UK Government to look at their situation favourably.

I would like to highlight another group of people who will be concerned by the development, who are the customers of Stewart Milne Group, including buyers who have placed deposits and are awaiting their keys, and home owners who have moved in and might have remedial work outstanding. Some owners will also have concerns that paths and roads that were due for adoption by local authorities have not yet been completed, and they will be unsure of where that burden might fall. I presume that the administrator, Teneo, will be the first point of contact. However, what further advice can the cabinet secretary offer to people who are living in what might be described as building sites, and to those who have saved up for deposits and are now seeing their life savings being put at risk?

I raised those issues in my conversations with Teneo this morning. Douglas Lumsden will understand that we are coming at the situation within 24 hours of its happening—as is Teneo—so the picture is still moving. In that regard, I will be happy to ensure that, as the situation develops, I provide as much information as I can and that colleagues across the chamber, who I understand will be interested in the matter, will be as well briefed as possible.

My understanding is that Teneo is in discussions with the National House-Building Council and others on ensuring that the point that Mr Lumsden fairly makes about the difficult position in which people find themselves—in some cases, in limbo—can be resolved. That will be a challenge, depending on the circumstances. However, as soon as I, and the administrators, have more information, I will do everything that I can to ensure that colleagues are kept up to date.

Stewart Milne Group has been a significant employer and house builder in Aberdeen and the north-east for nearly 50 years, and its loss will have a significant impact on the communities that I and other members represent.

I am pleased to hear from the cabinet secretary that he has already been in touch with the administrators. Other Scottish National Party parliamentary colleagues and I have already written to them, too. I am pleased to hear that some moves have been made to garner the facts about what will happen not only to the company’s employees but to people who have invested in homes. I would appreciate receiving continued updates on that. Will the cabinet secretary seek to ensure that NHBC guarantees stand for people who are currently in Stewart Milne homes? Will extra effort be made to find jobs for any apprentices who currently work with Stewart Milne Group?

I thank Kevin Stewart and other members for their interest in the matter and the correspondence that they sent to me last night. Stewart Milne Group was based in Aberdeen but, given the company’s interests, the repercussions will be felt across Scotland.

Kevin Stewart raises two very important issues, one of which is NHBC guarantees. My understanding is that Teneo is in discussions with the NHBC on the practicalities and how those can be further communicated. As soon as I have further information on that, I will make sure that Kevin Stewart and other colleagues are kept up to date. Secondly, Kevin Stewart makes a very fair point on employment prospects for the staff in general, but in particular for apprentices. I imagine that their skills will be in high demand, regardless of where they are in the country. We will continue to do all that we can through PACE to ensure that employment opportunities are furthered as quickly as possible.

Since 2007, Scotland’s average annual rate of housing completion has been almost 5,000 lower than it was in the previous decade. It has been reassuring to hear the answers about the tragic loss of jobs following the closure, but we must also raise concerns about housing capacity overall. How many uncompleted planning consents does Stewart Milne hold? How many houses are currently mid-construction and remain uncompleted? Given that the factors behind the closure are not unique, what dialogue and actions is the Scottish Government undertaking to ensure that we support other house builders who may be facing financial issues?

As I outlined in my answer to Douglas Lumsden, we are still within 24 hours of Teneo taking on the administration of Stewart Milne Group and we—and Teneo—are trying to get the full facts of the situation as quickly as possible. I hope that Daniel Johnson will forgive me, but we will need some time to get the answers to some of his questions.

Those are questions that we have asked, and we are looking to get further information on those areas. Those issues will be of particular interest to the administration process, because they will be part of the marketing of any assets that might be available. I hope that there will be interest in ensuring that work on some of those sites can be taken forward by other parties. However, that is a matter for the administration process. As I did for Douglas Lumsden and Kevin Stewart, I offer Daniel Johnson further briefings as information becomes available.

The combination of the Liz Truss budget and the massive cuts to the social housing programme is partly responsible for what we have seen in relation to Stewart Milne. That situation is a symptom of a housing sector that is in crisis. Last month, the Government rejected the plea for it to declare a housing emergency. Does the situation with Stewart Milne not indicate that the Government was wrong last month and should now change its mind?

With all due respect to Willie Rennie, I am really sorry that he chose to politicise the matter at this stage, not least because Stewart Milne, as it went through the sale process, said that the issue was to do with the wider UK housing market.

Of course we will do all that we can to ensure that we continue to invest in house building in Scotland, understanding the critical role that it plays not just for the economy but for our social infrastructure. In the face of a declining capital budget from the UK Government, we will do all that we can to ensure that we respond as best and most effectively as possible.

I regret that I am unable to take further questions from members as we must protect time for forthcoming items.