Aberdeen bypass brought into public sector

The construction of the Aberdeen bypass has been reclassified from a private to a public sector project.

It follows an Office for National Statistics (ONS) review after a tightening of EU rules around publicly-funded building programmes.

The bypass is being funded though the "non-profit distribution" model, set up as an alternative to PFI.

Deputy First Minister John Swinney said the project would not be delayed as a result of the change.

Mr Swinney described the change as a "statistical accounting classification" and said the Aberdeen Western Peripheral Route would be "completed on time and on budget" by winter 2017.

The Aberdeen bypass was first given the green light by Scottish ministers in 2009 but was delayed by legal action. The reclassification means the £745m road will now be on the Scottish government's balance sheet.

The ONS will now look at whether two other projects - Dumfries and Galloway Royal Infirmary and the Edinburgh Royal Hospital for Sick Children - also need to be reclassified.

All the projects under the review are currently being funded under the non-profit distribution (NPD) scheme, which uses private finance but caps the profit that firms can make.

The Scottish government said it also expected the hospitals to be built within the existing timetable and budget.

But Mr Swinney said he was considering if changes needed to be made to the "Hub" model, which delivers some NPD projects.

"There is likely to be some further impact on the delivery timetable for Hub projects that are in the current pipeline. The Scottish Futures Trust will engage closely with project partners to discuss the implications for them," he said.

Scottish Labour's shadow finance secretary Jackie Baillie called the decision a "hammer blow" to the Scottish government's entire investment strategy.

"The fact that this flagship project doesn't meet EU requirements has huge implications for how we finance the building of roads, schools and hospitals," she said.

"On the one hand John Swinney says this has no impact on the budget or timetable for the Aberdeen bypass project, yet on the other hand he says there will need to be a renegotiation of the contract. It doesn't add up."

Ms Baillie called on Audit Scotland to carry out an "urgent review" into the ONS ruling.

Mr Swinney has pledged to report to MSPs on the issue after Holyrood gets back to business following its summer recess.