Question to the Ministry of Justice:

To ask His Majesty's Government what plans they have to pay for works completed on Ministry of Justice projects undertaken by ISG Limited, before it went into administration, to companies in the supply chain working on projects for which project bank accounts (PBAs) were in place; when and why the Ministry of Justice stopped paying the sums due into these PBAs; and whether this cessation of payment took place before the formal announcement of ISG administration.

Answered by Lord Timpson - Minister of State (Ministry of Justice)

Since ISG Construction Limited entered administration on 20 September, the Ministry of Justice (MoJ) has undertaken a range of activity to understand the full impact on the Department and the supply chain in the construction sector. This has included working with EY, the appointed Administrator, to ensure the sums remaining within Project Bank Accounts are correct. The Department is in contact with a large number of subcontractors to ISG to determine what, if any, direct assistance the MoJ is able to provide. The Department remains committed to the timely payment of invoices in line with our obligations to do so.

The MoJ is undertaking a review of all potential payments arising from ISG entering administration, but given the scale and complexity of the task, this work is not yet complete.

Question to the Ministry of Justice:

To ask His Majesty's Government whether certified payments owed to suppliers of ISG Limited for contracts undertaken on behalf of the Ministry of Justice will be paid directly to those suppliers when expected monies have not been deposited into project bank accounts; how many suppliers have not yet received certified payments owed to them by the Ministry of Justice; and what is the estimated amount of these certified payments.

Answered by Lord Timpson - Minister of State (Ministry of Justice)

Since ISG Construction Limited entered administration on 20 September, the Ministry of Justice (MoJ) has undertaken a range of activity to understand the full impact on the Department and the supply chain in the construction sector. This has included working with EY, the appointed Administrator, to ensure the sums remaining within Project Bank Accounts are correct. The Department is in contact with a large number of subcontractors to ISG to determine what, if any, direct assistance the MoJ is able to provide. The Department remains committed to the timely payment of invoices in line with our obligations to do so.

The MoJ is undertaking a review of all potential payments arising from ISG entering administration, but given the scale and complexity of the task, this work is not yet complete.

Question to the Ministry of Justice:

To ask His Majesty's Government whether certified payments will be paid to companies who have worked on projects run by ISG Limited on behalf of the Ministry of Justice where there are no funds in the project bank account (PBA); and whether there is a risk that PBAs will have failed to shield some parts of the supply chain from this insolvency event.

Answered by Lord Timpson - Minister of State (Ministry of Justice)

Since ISG Construction Limited entered administration on 20 September, the Ministry of Justice (MoJ) has undertaken a range of activity to understand the full impact on the Department and the supply chain in the construction sector. This has included working with EY, the appointed Administrator, to ensure the sums remaining within Project Bank Accounts are correct. The Department is in contact with a large number of subcontractors to ISG to determine what, if any, direct assistance the MoJ is able to provide. The Department remains committed to the timely payment of invoices in line with our obligations to do so.

The MoJ is undertaking a review of all potential payments arising from ISG entering administration, but given the scale and complexity of the task, this work is not yet complete.

Question to the Ministry of Justice:

To ask His Majesty's Government what assessment they have made of the value of retention payments which (1) have been withheld, (2) have been released to suppliers, and (3) are still being held in relation to completed projects undertaken by ISG Limited for the Ministry of Justice.

Answered by Lord Timpson - Minister of State (Ministry of Justice)

Since ISG Construction Limited entered administration on 20 September, the Ministry of Justice (MoJ) has undertaken a range of activity to understand the full impact on the Department and the supply chain in the construction sector. This has included working with EY, the appointed Administrator, to ensure the sums remaining within Project Bank Accounts are correct. The Department is in contact with a large number of subcontractors to ISG to determine what, if any, direct assistance the MoJ is able to provide. The Department remains committed to the timely payment of invoices in line with our obligations to do so.

The MoJ is undertaking a review of all potential payments arising from ISG entering administration, but given the scale and complexity of the task, this work is not yet complete.

Question to the Cabinet Office:

To ask His Majesty's Government whether project bank accounts (PBAs) were in place on all public sector projects undertaken by ISG Limited for Government departments, in line with the Government's Construction Playbook which states that PBAs “should be used unless there are compelling reasons not to”; and if not, which such projects did not use PBAs, and why.

Answered by Baroness Twycross - Baroness in Waiting (HM Household) (Whip)

The Construction Playbook sets out key policies and guidance for how public works projects and programmes are assessed, procured and delivered and includes guidance that “Project Bank Accounts are not always suitable, but should be used unless there are compelling reasons not to”. It is for Contracting Authorities to determine how to implement this guidance appropriately for each contract. The Cabinet Office does not hold data on the use of Project Bank Accounts for other departments.

Question to the HM Treasury:

To ask His Majesty's Government whether, in light of their guidance published on 10 October on charging and reclaiming VAT on goods and services related to private school fees, providers offering Level 6 qualifications which are funded through the Dance and Drama Award scheme will be affected by the changes to VAT.

Answered by Lord Livermore - Financial Secretary (HM Treasury)

From 1 January 2025, the 20% standard rate of VAT will apply to all education services, vocational training, and boarding services provided by private schools for a charge. This will apply to any fees charged after 29 July 2024 for terms starting after 1 January 2025.

Higher education taught at schools that are otherwise in scope of the policy (for instance, performing arts schools) are being carved out of the VAT policy, as set out in the Government’s response to the technical consultation.

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