Question to the Ministry of Justice:

To ask the Secretary of State for Justice, what contractual safeguards are in place against cost overruns and delays in the construction of the new prison in Lancashire.

The contracts for the construction of all new prisons in the New Prisons Programme use the NEC4 Engineering and Construction Contract Option A, which is a priced contract with an activity schedule. This provides a high degree of cost certainty, with the contractor responsible for delivering the agreed scope for a fixed price and payments only made when defined activities are completed. The contract includes a range of commercial safeguards, including retention on payments, a parent company guarantee, independent cost assurance, project bank account arrangements, and the transfer of normal inflation risk to the contractor. Any exceptional risks retained by the Ministry of Justice are clearly defined within the contract and subject to established contractual controls.

To protect against delays the contract includes delay damages linked to both sectional and overall completion milestones, with financial deductions applying where agreed completion dates are missed. The project is also subject to independent programme monitoring and risk assurance, with risk actively managed through governance arrangements and regular oversight. Together, these measures are intended to incentivise timely delivery, provide strong commercial control, and protect the taxpayer from the impact of avoidable cost overruns and programme delays.