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Site Assessment Indemnity

Volume 626: debated on Wednesday 5 July 2017

On 12 October 2016, a written ministerial statement and minute were laid before Parliament, which set out that DCLG would be providing an indemnity to the official receiver (OR) 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 indemnities are to facilitate the undertaking of site assessments at the former SSI site. These site assessments will help inform: costs to decommission the site, costs to regenerate the site and provide the necessary due diligence to enable the mayoral development corporation to take forward the regeneration of the area.

Following no objections the indemnity was given to the OR on 20 October 2016. The STSC is a wholly owned BEIS company that came into being on 1 November 2016 and was set up in order to keep the former SSI site safe and secure. On 26 January 2017 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). From here on, 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 the lead body and the way the assessments will be procured. While the next phase of site assessments are put in place the current indemnities will continue, however, they will be withdrawn following the completion of the HCA phase of work.

Therefore the 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.

As a matter of record a departmental minute for both Houses explaining the procedure followed and containing a description of the liabilities undertaken can be found as an online attachment. I can also confirm that I have made and laid an order to establish a mayoral development corporation, the South Tees Development Corporation.

The attachment can be viewed online at:

http://www.parliament.uk/business/publications/written-questions-answers-statements/written-statement/Commons/2017-07-05/HCWS28/

[HCWS28]