Chamber and committees

We are currently awaiting the output from the recent UK Government public consultation on retention payments in the construction industry and will consider the way forward once that work is complete.

The Statutory processes are set out in Section 22 of the Public Finance and Accountability (Scotland) Act 2000 which requires Scottish Ministers to lay a copy of the accounts and the auditor's report before the Parliament and to publish the accounts and auditor's report by no later than 31 December - in this instance 31 December 2017.

For financial year 2016-17 the letters and reports from the Auditor General for Scotland for SE and HIE were received on 11 July and 19 September respectively and their Annual Reports and Accounts were laid and published within the statutory timeline.

The Scottish Government will continue to work with all relevant stakeholders on the many aspects of construction procurement including contract management.

The Scottish Government’s document, “Implementing Project Bank Accounts in Construction Contracts”, states the thresholds of £4.1 million for building projects and £10 million for civil engineering projects will be reviewed in the light of prevailing practice.

a) The Scottish Government has no contracts with Carillion, therefore the government’s workforce has not been affected.

b) The Scottish Children’s Reporter Administration has one contract for Facilities Management Services that commenced 6 January 2014 and is due to expire
5 September 2018. Highlands and Islands Enterprise have two contacts for Facilities Management, one which commenced on 2 May 2016 and is sue to expire
1 May 2019 and other which commenced 22 March 2017 and is due to expire
6 March 2020. Contingency measures have been put into place to ensure continuation of service delivery and therefore there should be no effect to either Scottish Children’s Reporter Administration or Highlands and Islands Enterprise.

c) The Registers of Scotland Administration has one contract for Facilities Management Services that commenced 1 October 2013 and is due to expire
30 September 2018. Contingency measures have been put into place to ensure continuation of service delivery and therefore there should be no effect to the Registers of Scotland.

Where existing contracts were in place with Carillion and as part of on-going Contract Management of all its major contracts the Scottish Government monitors the financial health of its contractors. Due to the varying size and complexity of the contracts involved the type and level of assessment is undertaken on a contract by contract basis and is proportionate and relevant.

In relation to (a) on Aberdeen Western Peripheral Route, the Scottish Government has continued to work closely with the Joint Venture partners (Balfour Beatty and Galliford Try) and have sought assurances from Carillion’s partners that they would be able to continue the contract.

In relation to (b) the Scottish Government contacted Scottish public bodies that had facilities management contracts with Carillion with advice and support on contingency planning.

The information is provided in the following table:

* Please note as this is subject to commercial negotiations it would be inappropriate to name Carillion’s sub-contractor

In situations such as this our first thoughts are always with those Carillion employees who will be concerned for their jobs.

Carillion forms a one third part of the Aberdeen Roads Limited (ARL) consortium and its construction joint venture together with Balfour Beatty and Galliford Try. The construction partners of ARL are joint and severally liable for the completion of the works.

We understand that Balfour Beatty and Galliford Try will now take the necessary steps to jointly deliver the remainder of this project. We will continue to work closely with ARL to assess and mitigate any impacts that may arise as a consequence of this announcement, particularly in respect of those people employed by Carillion..

The Public Bodies (Joint Working) (Scotland) Act 2014 makes clear that it is the responsibility of Integration Authorities to commission and plan services and supports to meet the needs of their local population. It is expected that when commissioning services and supports that Integration Authorities extensively engage with their local communities to ensure that they best meet local need.

Additionally the Scottish Muscle Network, funded by NHS Scotland National Services Division, brings together a wide range of stakeholders across health and social care, to drive forward improvement in services and support for young disabled adults with muscular dystrophy and other neuromuscular conditions.

We are continuing an extensive exercise to gather as much information as possible with respect to public and private contracts where Carillion have been involved.

Through making using of the Public Contract Scotland system where Contract Award Notices are published, Carillion are involved in following live joint ventures - Aberdeen Western Peripheral Route and Shotts Electrification scheme.

Carillion’s partners in the Aberdeen Western Peripheral Route Joint Venture are Balfour Beatty and Galliford Try who are taking over all works previously undertaken by Carillion.

The Shotts Electrification scheme is a joint venture between Carillion and SPL. In the event of one party becoming insolvent, the other will assume responsibility for delivering the work. Network Rail have received an assurance from Carillion’s Joint Venture SPL, that they will continue with the works and that they will secure the necessary resource in order to do so.