Transport Projects Review (Audit Scotland)

Question Time — Scottish Executive — Finance and Sustainable Growth – in the Scottish Parliament at 2:15 pm on 14 June 2007.

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Photo of Margaret Smith Margaret Smith Liberal Democrat 2:15, 14 June 2007

To ask the Scottish Executive what terms of reference, timescale and resources will be required for Audit Scotland to carry out a full review of the procedures used to forecast the costs of the Edinburgh tram and Edinburgh airport rail link projects; how the reporting date of 20 June 2007 was agreed; to whom Audit Scotland will report at the end of the review; and what the implications of the review are for the independence of Audit Scotland. (S3O-205)

Photo of Stewart Stevenson Stewart Stevenson Scottish National Party

The Auditor General for Scotland has determined the terms of reference, resources and timescale for Audit Scotland's review, in accordance with his statutory powers. Audit Scotland has published the terms of reference on its website at The Auditor General agreed the reporting date of 20 June in discussion with the Cabinet Secretary for Finance and Sustainable Growth on 4 June. The Auditor General will report by presenting the findings of the review to Parliament on 20 June. There are no implications for the independence of Audit Scotland.

Photo of Margaret Smith Margaret Smith Liberal Democrat

Given that the minister has used overruns on other projects to justify reviewing the trams project and EARL, will he explain how the review can look at the process for estimating project costs and management arrangements, but cannot, in the words of Audit Scotland,

"provide assurance on the accuracy of the cost estimates"?

Is that because to do so would compromise the independence of Audit Scotland in the on-going review of major projects?

Will the minister also inform us whether the review's findings will be made public through the whole Parliament or through the Audit Committee, which asked the Auditor General and Audit Scotland to undertake the only review of this kind when the committee was considering the Holyrood building project?

Photo of Stewart Stevenson Stewart Stevenson Scottish National Party

It will be for the Auditor General to publish the results and present them to Parliament. I expect that the results will also be available on the Audit Scotland website.

The member asked how we can address the accuracy of estimates and pointed to overruns on other projects. She is right that we have serious concerns about such overruns and that that gave us the impetus to look at the largest projects in our portfolio. However, the Auditor General brought forward in the schedule work that he had planned to do—it is not in itself new work. We expect that that work will inform decision making on key projects and that it will give us a solid foundation for accepting that good processes and management practices are in place in key projects.

Photo of Malcolm Chisholm Malcolm Chisholm Labour

When the review is completed and, as was agreed last week, a motion is put to the Parliament, will the Scottish Government accept the Parliament's decision?

Photo of Stewart Stevenson Stewart Stevenson Scottish National Party

Well, let us not run ahead of ourselves in relation to what the report will say. We are committed to having a debate and to bringing to Parliament before the summer recess our views on the major projects that we are considering. Rather than expect difficulties, the member should wait for the appropriate steps to be taken and see what outcome we reach.

Photo of Tavish Scott Tavish Scott Liberal Democrat

The minister said "overruns on other projects"—I wrote that down carefully. Will he tell members what those other projects are?

Photo of Stewart Stevenson Stewart Stevenson Scottish National Party

Mr Scott will be aware that the figures that were brought to Parliament for the Stirling-Alloa-Kincardine project were in the range of £65 million to £70 million. We are advised that the expected completion price will be in the order of £83 million. That is a substantial overrun, which causes us to seek assurances that we have adequate management control over even larger projects and that estimates have been derived professionally. It is perfectly natural for us to do that; if we did not, I am sure that we would attract considerable criticism.

Photo of Des McNulty Des McNulty Labour

I am still not clear about how value for money can be addressed by an Audit Scotland inquiry that does not look at the accuracy and reliability of cost estimates. Mr Swinney said in the debate on the matter that he would address value for money. Will the minister tell us how Mr Swinney will address value for money as a separate exercise from the one that Audit Scotland is undertaking? Will the minister confirm that before the recess there will be a debate on the issue, following which members will have the opportunity to vote on whether the trams and EARL projects go ahead?

Photo of Stewart Stevenson Stewart Stevenson Scottish National Party

I am surprised that the member has not twigged that there will be a debate—it has been a theme—before the recess.

I return to the subject of the Auditor General's independence. He has brought forward work so that we as ministers can make our determinations about value for money. He will inform us whether there is a robust process that has been gone through effectively in the calculation of estimates and whether there are management processes to carry the projects forward. That is his role, and he will report to Parliament on those matters. Based on that work and on other considerations, as ministers, we must assess whether certain projects deliver value for money. We will report to Parliament as we have promised.