Finance threat to £2bn Scottish hub deals

Construction work on schemes planned under the £2bn Scottish Hub programme could be delayed following changes to accounting rules.

The Scottish Government has been forced to reclassify the £745m Aberdeen Bypass from a private to public sector project.

The move follows an Office for National Statistics review after a tightening of EU rules around publicly-funded building programmes.

The bypass is funded under the non-profit distribution (NPD) scheme which is an alternative to the PFI model

Deputy First Minister John Swinney said the bypass would not be delayed by the change.

But the decision could have an impact on building plans under the Hub programme which is run by the Scottish Futures Trust under a similar NPD model.

Swinney said: “In light of today’s opinion on an NPD project I am considering whether further changes are required to the Hub model.

“There is likely to be some further impact on the delivery timetable for Hub projects that are in the current pipeline.

“The Scottish Futures Trust will engage closely with project partners to discuss the implications for them.”

The ONS is also reviewing two other NPD projects signed since September 2014 – the Dumfries and Galloway Royal Infirmary and the Edinburgh Royal Hospital for Sick Children.

Swinney said:  “This is a statistical accounting classification and has no impact on the cost or delivery timetable of the AWPR or the two NHS projects that the ONS has also indicated it will review.

“We fully expect these projects to be completed on time and on budget – as they are currently on track to do.”

O Galliford Try’s Morrison Construction business has achieved financial close on the £55.75 million hub North Scotland contract for the Shetland Islands Council to build the new Anderson High School.

Morrison Construction will carry out the construction of the new four-storey high school for up to 1,180 pupils and the three-storey 100-bed residential block and associated infrastructure works, providing a replacement for the existing high school on the Clickimin site in Lerwick, Shetland.

In addition Galliford Try Investments will invest £1.7m in the funding for the project.

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