Committee
Public Audit and Post-legislative Scrutiny Committee 24 January 2019
24 Jan 2019 · S5 · Public Audit and Post-legislative Scrutiny Committee
Item of business
Major Capital Projects (Progress Update)
Item 3 is on major capital projects. I welcome our witnesses to the meeting. I have just counted—there are seven of you and seven of us, so that is a good match. From the Scottish Government, we have Alyson Stafford, who is the director general of the Scottish exchequer; Rachel Gwyon who is the deputy director of infrastructure and investment; and Alan Morrison, who is the capital accounting and policy manager in health, finance and infrastructure. From Transport Scotland, we have Bill Reeve, who is the director of rail, and Michelle Rennie, who is the director of major transport infrastructure projects. From the Scottish Futures Trust, we have Peter Reekie, who is the chief executive, and Kerry Alexander, who is the investment programmes director. I understand that Alyson Stafford will make a brief opening statement.
In the same item of business
The Convener
Lab
Item 3 is on major capital projects. I welcome our witnesses to the meeting. I have just counted—there are seven of you and seven of us, so that is a good ma...
Alyson Stafford (Scottish Government)
Yes—thank you very much, convener. Good morning, and thank you for inviting me to attend to assist the committee’s scrutiny of the latest report on the Scott...
Peter Reekie (Scottish Futures Trust)
I am the chief executive of the Scottish Futures Trust. I need to declare a non-financial interest as a director of Aberdeen Roads Ltd, the NPD company that ...
Kerry Alexander (Scottish Futures Trust)
I, too, have a non-financial interest to declare in relation to Galliford Try Equitix Inverness Ltd, which is the special purpose vehicle that runs the Inver...
The Convener
Lab
Thank you. I ask Colin Beattie to open the questioning for the committee.
Colin Beattie
SNP
Obviously, the main objective of such projects is to maximise the value of our infrastructure to the economy. Can the panel comment on the overall affordabil...
Alyson Stafford
On affordability, the infrastructure investment plan sets the context for all investment that takes place following the decisions that are made, ultimately, ...
Colin Beattie
SNP
It is important to maintain a certain level of infrastructure investment. What will be the impact of the NPD model being—I presume—discontinued?
Alyson Stafford
You are right. Again because of classification changes, the NPD model no longer gives us additionality. It was extremely useful, particularly in response to ...
Colin Beattie
SNP
It would be interesting to hear what we are looking at.
Peter Reekie
As Alyson Stafford said, the forms of private financing of infrastructure—or any sort of financing of infrastructure that we can use to deliver additionality...
Colin Beattie
SNP
I will come at the issue from a slightly different angle. I have been looking at the weighted average cost to capital and the internal rate of return, and I ...
Peter Reekie
There are quite a lot of different ways of measuring the cost of capital on individual projects, and we have used the weighted average cost of capital and an...
Colin Beattie
SNP
But is it not more accurate? 10:00
Peter Reekie
I am not able to run a discussion with you just now about a modified internal rate of return versus an internal rate of return. The factors that we have used...
Alex Neil
SNP
On that last point, there is the debate being led on one side by the Cuthberts and on the other by the SFT is about how one measures the effectiveness of NPD...
Alyson Stafford
Eurostat produces the “Manual on Government Debt and Deficit”, which sets out the rules that create our context. However, it does not invent the context for ...
Peter Reekie
What Alyson Stafford has said is exactly right. We need to have a set of rules and, as Ms Stafford has outlined, those rules have an international hierarchy....
Alex Neil
SNP
Alyson Stafford has explained the issue to the committee before and I was aware of the situation that she has described, but I just want to check whether the...
Peter Reekie
The UN—or something at that level—sets a series of principles that are worked through in detail by the different statistical authorities. You are right to sa...
Alex Neil
SNP
Okay. I do not want to dwell on this too much.
Alyson Stafford
As a final point, it is fair to say that the system relies on experts in the various statistical authorities, whether at European or UK level, taking what co...
Alex Neil
SNP
Moving to a wider subject, I am obviously interested in how we achieve the national infrastructure mission, and you have provided an answer to that in genera...
Alyson Stafford
I will start, and I will bring in Rachel Gwyon and Peter Reekie as necessary. Early this year, a bill will be introduced to establish and set the financial ...
Peter Reekie
To build on Alyson Stafford’s comments, I point out that the Scottish Futures Trust does not operate as a provider of finance. Instead, it operates with publ...
Alyson Stafford
There is definitely no overlap, but there are great synergies with regard to how the areas will complement each other.
Rachel Gwyon (Scottish Government)
The thrust of your question was about where the arrangements fit within the national infrastructure mission and how that is financed. The legislation that wi...
Alex Neil
SNP
Last year, our leading industrialist, Jim McColl, told the Economy, Energy and Fair Work Committee that he is very supportive of the national investment bank...
Alyson Stafford
The best thing for me to do is to reflect those points back to the programme board. The Scottish national investment bank has a programme for its delivery, a...
Alex Neil
SNP
Great. Thank you.