Site Assessment Department Minute
It is normal practice when a Government department proposes to undertake a contingent liability in excess of £300,000 and outside the normal course of business, for the Minister concerned to present a Departmental Minute to Parliament giving particulars of the liability created, explaining the circumstances and to refrain from incurring the liability until fourteen parliamentary sitting days after the issue of the statement, except in cases of special urgency.
This is an update to a previous indemnity which has been notified to parliament via Written Ministerial Statement and Departmental Minute in October 2016. Work on site assessments has been ongoing since that point and are contributing to Government’s understanding of the scale and complexity of the site. An updated indemnity is required to recommence work on site that is profiled for this financial year. There are ten parliamentary sitting days until summer recess and we would not want to delay activity on site until parliament returns in September. We apologise that this does not give parliament the full fourteen days to consider. For this reason, I consider there a special urgency to bring this indemnity into effect after ten days of parliamentary scrutiny.
On 12 October a Written Ministerial Statement and Minute were laid before Parliament, which set out that DCLG would be providing an indemnity to the Official Receiver of the former SSI steel works and would be giving the same indemnity to the South Tees Site Company (STSC) once it was established. The STSC is a wholly owned BEIS company that came into being on 1 November and was setup in order to keep the former SSI site safe and secure. The indemnities are to facilitate the undertaking of site assessments at the former SSI site in order to understand its scale and complexity.
Following no objections the indemnity was given to the OR on 20 October 2016. On 26 January the DCLG Permanent Secretary wrote to the Public Accounts Committee and DCLG Select Committee setting out that the indemnity was being given to STSC.
The original indemnities set out that the site assessments would be commissioned by the Homes and Communities Agency (HCA) and this phase of the work will shortly conclude. From hereon, the site assessments will be commissioned directly by STSC in order to ensure greater efficiency and to give STSC greater control. The changing of the lead body taking forward the site assessments does not change the risk profile to HMG; it simply changes lead body and the way the assessments will be procured.
While the next phase of site assessments are put in place the current indemnity will continue, however, will be withdrawn following the completion of the HCA phase of work.
Therefore Government will be reissuing updated indemnities to the OR and STSC to continue to indemnify both bodies against all liabilities, costs, expenses, damages and losses suffered or incurred by them that are arising out of the site assessments.
It is not possible at this stage to accurately quantify the value of such indemnity. HMG has considered the risks of this indemnity and I believe the likelihood of such indemnities being called upon is low. The indemnity is limited to liabilities arising as a consequence of the site assessments. If the liability is called upon, provision for any payment will be sought through the normal Supply procedure.
The Treasury has approved the proposal in principle.
If, during the period of ten Parliamentary sitting days beginning on the date on which this Minute was laid before parliament, a member signifies an objection by giving notice of a Parliamentary Question or by otherwise raising the matter in Parliament, final approval to proceed with incurring the liability will be withheld pending an examination of the objection.