Publication - Corporate report

Highlands and Islands Enterprise: financial management review of Cairngorm Mountain

Published: 18 Jun 2020

A review of Highlands and Islands Enterprise’s handling of its engagement with Natural Retreats in relation to activity on Cairngorm Mountain.

19 page PDF

683.0 kB

19 page PDF

683.0 kB

Contents
Highlands and Islands Enterprise: financial management review of Cairngorm Mountain
Annex A. Scope of Work

19 page PDF

683.0 kB

Annex A. Scope of Work

Scope of investigation

A number of issues have been raised in the media and in parliament and the scope of our review will seek to address these, including:

Section 1

  • Original tender process
    • Consideration paid to HIE for CML
    • Evidence of access to finance provided by Natural Retreats
    • Structure of original transaction, and HIE due diligence
    • Clarify bidder company relationships

Section 2

  • Monitoring oversight by HIE for the operational contract
    • Process in place
    • Action taken by officials at key decision points
    • Accountability of HIE Accountable Officer/Board

Section 2

  • Investment in infrastructure
    • HIE announced in 2014 that £6m was to be invested by Natural Retreats. Of this £6m, £4m was a loan from HIE to Natural Retreats which was not taken up.
    • HIE's additional investment over the contract period is reported to be £3.4m. What was the rationale for this in light of the anticipated private sector investment?

Section 2

  • Operational contract
    • Management fees and other intercompany charges (e.g. administration fees) – how did HIE assure itself that these were reasonable on signing the contract?
    • Clarification of which nature of fees paid by HIE throughout
    • In 2016 a new business plan for NAIL was approved – what due diligence was undertaken by HIE at this point?

Section 3

  • Administration in 2018
  • HIE's conduct of the transaction to take the Cairngorm services back in house. HIE were sole bidder and paid £462k. What due diligence was undertaken to ensure reasonable?
  • Status of company and personal guarantees in favour of HIE and whether they provide any mitigation
  • Contingent liabilities/budgetary pressures emerging from transaction.

Contact

Email: enterprisesponsorship@gov.scot