6. To ask the First Minister what impact the breaching of European Union spending rules has had on the funding of infrastructure projects. (S5F-00343)

In 2015, the European Commission suspended three European structural and investment fund programmes. The suspensions prevented the Scottish Government from being reimbursed for money that it had already spent, for the duration of the suspensions, but there was no impact on the projects themselves. All suspensions have now been lifted, with the final one lifted in September this year.

I think that the First Minister has been badly advised on her response, because I am talking about European statistics authority regulations in relation to infrastructure projects. She has perhaps answered a different question.

The First Minister will, I hope, now be aware that at least four major capital projects breach EU rules on funding—the Aberdeen western peripheral route, the Edinburgh sick kids hospital, Dumfries and Galloway royal infirmary and the national blood centre. The total capital required for all four projects will be at least £900 million. According to Audit Scotland, capital was transferred from housing and Scottish Water, and £300 million was borrowed last year to fill part of the gap. What further borrowing will be necessary to finance those and other planned projects? What is the opportunity cost if we still have to find the balance of the £900 million and what projects will be delayed?

The First Minister:

I now understand that Jackie Baillie was talking about the Office for National Statistics reclassification. I am not sure how anybody could have taken that from the wording of the question, but nevertheless I am glad that we now have a meeting of minds on the question that I am answering.

As Jackie Baillie knows, there are a number of issues with the ONS reclassification. We have seen one in recent weeks about housing associations, where the ONS reclassified from private to public. The United Kingdom Government has similar issues to contend with. On the capital projects that she talked about, the Scottish Government has made full provision for those and there will be no interruption in those projects. We continue to ensure that our capital programme is taken forward to deliver the infrastructure that the country needs and deserves.

A report by the Auditor General for Scotland last week tells us that a sum of £14 million has been lost from the Scottish Government’s accounts due to its financial incompetence and inability to comply with EU accounting rules. Which projects have been cut or delayed because of that incompetence?

The First Minister:

I see that Murdo Fraser had the same interpretation of Jackie Baillie’s question as I did, so I should say that my initial answer to Jackie Baillie stands in respect of Murdo Fraser’s question.

The effect of the suspensions, which have all now been lifted, was to temporarily prevent the Scottish Government from being reimbursed for money that we had already paid out to projects. There was no impact whatsoever on the projects concerned. The European Commission regularly and routinely audits projects under those funds, and that also applies to other Governments. We learn lessons and we have applied those lessons in the current rounds of structural funding. Of course, it is the actions of Murdo Fraser’s party that are putting the future of structural funding under so much threat.