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Written Statements

Tuesday 22 March 2016


Type 26 Global Combat Ship Demonstration Phase

The Minister for Defence Procurement (Mr Philip Dunne): Today I am providing an update on our plans for the next stage of the Type 26 Global Combat Ship (T26 GCS) programme.

The 2015 Strategic Defence and Security Review (SDSR15) set out the Government’s clear commitment to build eight Anti-Submarine Type 26 Global Combat Ships, preceded by two additional offshore patrol vessels (OPVs), and to launch a concept study and then design and build a new class of lighter, flexible general purpose frigates.

Alongside work on the national shipbuilding strategy, we are working with industry to develop an optimised schedule for the Type 26 and OPV programmes. As part of this, we have agreed a contract with BAE Systems valued at £472 million to extend the T26 demonstration phase to June 2017.

This will enable us to mature further the detailed ship design, ahead of the start of manufacture, including investing in shore testing facilities, and extend our investment in the wider supply chain in parallel with the re-baselining work which is continuing.

The investment in shore-based testing facilities will test key parts of the ships’ power and propulsion system and the combat system to de-risk their future integration into the class.

Investment in the wider supply chain will cover further key equipment purchases for the first three Type 26 Global Combat Ships including the diesel generators, sonar domes, helicopter handling equipment, mission bay side doors and the stabiliser and steering gear systems, and demonstrates our ongoing commitment to invest in the UK’s ability to design, develop and deliver complex warships to meet the Royal Navy’s future capability needs.



Inverness and Highland City Region Deal

The Secretary of State for Scotland (David Mundell): In March 2015, the Government announced their intention to negotiate an Inverness and Highland city region deal. As well as deals across England, this followed the successful agreement of a city deal in Glasgow and Clyde Valley. An Aberdeen city deal was announced on 28 January 2016.

I can today inform the House that the Government have reached agreement with the Scottish Government, the Highland Council and other partners on a heads of terms city region deal for Inverness.

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This heads of terms city region deal agreement provides a transformative opportunity to position the area as a region of digital opportunity and strength, thereby enabling the highlands to be the best digitally connected rural region in Europe.

Central to this will be a significant funding package which invests up to £315 million of public money into the regional economy. As part of this funding package, the UK Government will commit up to £53.1 million, the Highland Council along with regional partners will commit up to £127 million and the Scottish Government will commit up to £135 million. This funding package will be provided over a 10-year period subject to detailed business cases, statutory processes and implementation plans.

The UK Government’s contribution to the fund will support a set of proposals from the region intended to enable the highland area to be the most digitally connected rural region in Europe by investing into extended digital coverage, including superfast broadband and mobile 4G connectivity.

It will also support a package of new innovation measures that builds on existing academic and industry expertise in Inverness, as well as business support networks across the highlands. This will include exploring ways to support a multi-disciplinary centre focused on the commercialisation of new medical products and technologies, and a northern Scotland innovation hub.



HS2 Phase One: Financial Indemnity for Affinity Water

The Minister of State, Department for Transport (Mr Robert Goodwill): I have today laid before Parliament a departmental minute from the Department for Transport describing the contingent liability arising from an indemnity that will be provided to Affinity Water Ltd, protecting them from financial loss as a result of any construction damage to at-risk water resources from the construction of the Phase One, London to West Midlands HS2 rail line.

HS2 construction in the Colne Valley has the potential to cause damage to the chalk aquifer from which Affinity Water sources its water supply. An appropriate mitigation strategy will be developed during detailed design of the construction works, using information from ground investigation surveys. With the mitigation strategy in place, it is considered that the risks to the aquifer will be low. However, the risk of potential damage will exist despite the mitigation measures which will be applied. Should the aquifer or the company’s abstraction points be damaged, Affinity Water is likely to face a consequential financial loss. There is no existing protection for Affinity Water in respect of this loss and they would be unlikely to make a successful claim under common law. Under standard compensation arrangements, the basis for compensation would link to the loss in value or damage

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to a claimant’s property, which for Affinity Water could include pipes or pumps. However, the water in an aquifer is not a property of Affinity Water and so they have no protection if the project causes damage to the resources on which they are dependent. Therefore, Affinity Water require the Department for Transport to carry the liability for any financial loss arising from any impact of the Phase One construction works on their abstraction points.

The worst-case scenario with respect to the liability would include the cost of replacing three abstraction boreholes, each one is estimated to cost £20 million, and also the cost of providing temporary replacement water supplies during the period for which water abstraction is interrupted. The indemnity will not be limited, however. Under the worst-case scenario, the projected cost of the indemnity is expected to be approximately £77 million. The duration of the liability is scheduled to last for four years from 2017 to 2021, which represents the period of the construction works which might cause the potential damage. The worst-case scenario, in which HS2 must replace more than one borehole, is considered to be remote.

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If the liability is called, provision for any payment will be managed through normal supply procedure. The Department will be noting this contingent liability in its accounts.

Attachments can be viewed online at:



Work and Pensions

Office for Nuclear Regulation

The Parliamentary Under-Secretary of State for Disabled People (Justin Tomlinson): Later today I will lay a copy of the Unnumbered Act Paper, the Office for Nuclear Regulation’s strategic plan for 2016-20 before this House. The strategic plan will also be published on the ONR’s website.

I can confirm, in accordance with schedule 7, section 25(3) to the Energy Act 2013, that there have been no exclusions to the published document on the grounds of national security.