Auditors query affordability of Scots capital projects

21 Jun 13
The Scottish Government must show it can afford all the costs of its planned capital projects, which could reach £7.5bn over the next 30 years, Audit Scotland has said.

By Richard Johnstone | 21 June 2013

The Scottish Government must show it can afford all the costs of its planned capital projects, which could reach £7.5bn over the next 30 years, Audit Scotland has said.

The auditors examined five large capital projects, including the proposed new Forth road bridge and improvements to the rail line between Glasgow and Edinburgh. They found that the combined construction cost of the schemes, which also include a planned bypass in Aberdeen, a rail line from Edinburgh to Tweedbank in the Borders and improvements to motorways, would be around £3.8bn.

However, this would rise to £7.5bn over 30 years, the auditors' report found, once maintenance and financing costs were taken into account. These include payments to Network Rail, which is meeting the up-front costs for rail improvements.

The report, Scotland’s key transport infrastructure projects, said the Scottish Government considered this total commitment to be affordable in the long-term, but had not yet ‘fully demonstrated’ this.

Ministers must therefore improve their public reporting on the range of schemes, which should be completed between September 2015 and March 2019, the auditors said.

Government agency Transport Scotland expected to deliver the projects within their published budgets, but should also do more to demonstrate its progress to the Scottish Parliament and the public.

Auditor general Caroline Gardner said: ‘Transport Scotland and the Scottish Government need to improve their reporting on major projects to the public and to the Scottish Parliament. The estimated full public spending commitment for these five projects has not been reported until now, and the forecast building costs for some have been incompletely or inconsistently reported.

‘These projects will cost an estimated £3.8bn to build and will to tie up about £7.5bn of public money over 30 years. It is important for the Scottish Government to demonstrate that this spending is affordable.’

Responding to the report, transport minister Keith Brown said: ‘No government since devolution has embarked on such an ambitious programme of investment to transform our transport infrastructure.'

He added: ‘We very much welcome this report which confirms that all five of the major projects under way in Scotland are being well managed with sound governance structures in place to manage the risks involved in what are technically challenging and complex projects.

‘While Audit Scotland acknowledge in the report that four out of five of these projects are still in procurement and therefore much of this information is commercially sensitive and cannot be disclosed on a project-by-project basis at this stage, we are committed to improving the presentation of cost estimates.’

The Scottish Government had set out plans to ring-fence part of spending on capital funding in its future budgets, and Audit Scotland acknowledged the projects were affordable within this limit, he added.

‘We rely on a mixture of funding mechanisms to deliver the largest ever investment in transport infrastructure and without the Non-Profit Distributing Model to counter cuts by the UK government, many of these projects wouldn’t be proceeding.’


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