Due Diligence Framework assessments spend: FOI release

Information requested

1. With the £32m due diligence framework set up, how much has the Scottish government spent on due diligence assessments in each of 2017, 2018, 2019, 2020, 2021 and 2022 and can you supply a breakdown of these costs?

2. Who made the final decision to set up this framework and what was the reasoning behind it?

3. What companies have already been intervened in and where is due diligence currently ongoing?

4. How many companies under the Scottish government umbrella (including quangos) would be viable for due diligence and a list of them?

Response

1. Due diligence assessments are undertaken across the Scottish Government as part of standard procedure. For your awareness, the £32 million Due Diligence Framework came into operation in September 2022 and relates to the Strategic Commercial Assets Division (SCAD).

To avoid exceeding the upper cost limit, we have interpreted “how much has the Scottish government spent on due diligence assessments” as referring to the overall incurred expenses on commercial consultancy under the aforementioned Framework which commenced in September 2022. There was no spend for consultancy costs incurred against the framework from the date it went live, up until the date of the FOI request being received.

If you are enquiring about due diligence work carried out by a specific business area, you may wish to consider submitting a further request with a refined scope.

2. The Strategic Commercial Assets Division in the Scottish Government undertakes due diligence on distressed businesses in Scotland. It was recognised that commercial due diligence will be essential for such cases that may seek Scottish Government intervention when failure they are strategically important to the Scottish economy. Therefore, to meet these requirements Scottish Government officials have in place a specifically tailored procurement framework to establish a timely, efficient, and effective mechanism to access specialist advice to inform decision making.

The then Minister for Business, Trade, Tourism & Enterprise was advised by officials on the framework and its purpose (as explained above) and ultimately approved awarding the framework to the successful short- listed suppliers.

3. We are unable to disclose this information as it is commercially confidential. An exemption under section 30(c) of FOISA (prejudice to effective conduct of public affairs) applies to the information requested here. Disclosure of any information on the financial performance of business that is not in the public domain is commercially confidential and if released could undermine business / investor confidence and lead to commercial losses for the businesses concerned.

This exemption is subject to the ‘public interest test’. Therefore, taking account of all the circumstances of this case, we have considered if the public interest in disclosing the information outweighs the public interest in applying the exemption. We have found that, on balance, the public interest lies in favour of upholding the exemption. We recognise that there is a public interest in disclosing information as part of open, transparent and accountable government. However, there is a greater public interest in protecting the process of due diligence and ensuring that the Scottish Government is able conduct this aspect of its business effectively.

4. I am issuing a formal notice under section 17(1) stating the Scottish Government does not hold the information that falls within scope of your request.

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