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Update on Contingent Liabilities in respect of the compulsory liquidations of UKCloud Ltd and Virtual Infrastructure Group Ltd

I am pleased to report that, following the compulsory liquidations of UKCloud Ltd and Virtual Infrastructure Group Ltd, His Majesty’s Government have successfully enabled the continuity of public services. On 26 October 2022, I laid a departmental minute to notify the House of two contingent liabilities incurred by the Cabinet Office: to indemnify the Official Receiver for any costs and expenses incurred by him in carrying out the proper performance of his duties as liquidator of UKCloud Ltd, and its parent company, Virtual Infrastructure Group Ltd; and an indemnity for any claims made against him in respect of the same. This was followed by written statements from myself and Baroness Neville-Rolfe in each of our respective Houses.

At the time of the statements, it was not possible to reliably estimate the size or maturity of either contingent liability.

In respect of costs incurred, the Official Receiver now expects the peak funding requirement of the liquidations to be £20 million and the liquidation to conclude in the first half of 2024.

In respect of the claims indemnity provided to the Official Receiver, I would like to assure the House that the Official Receiver has not been notified of any potential claims that may require a call on the indemnity, and that all UKCloud Ltd customers have now successfully migrated their services on to alternative platforms with no unexpected disruptions to public services. As such, it is deemed unlikely any claims on the indemnity will be made post-liquidation. We, therefore, assess that it is unlikely that there will be any cost to the public purse as a result of this contingent liability.