Oracle Invokes Force Majeure on Major US Project While Sc…

More than £51 billion in Scottish Government payments passed through Oracle Cloud in its first year. The platform now carries HR, payroll, finance and purchasing across central government and 32 public bodies, while John Swinney’s administration plans to extend its use. The data is hosted in the UK — but physical location alone does not place information held by a US-controlled cloud provider beyond the potential reach of US legal process.

Oracle, the American technology company now carrying some of the Scottish Government’s most important internal administrative systems, has issued a force-majeure notice in connection with a vast new data-centre project in New Mexico after potential delays in securing power for the site.

The notice concerns Project Jupiter, a 1,400-acre artificial-intelligence data-centre campus in the United States. It does not concern the Scottish Government’s Oracle Cloud service, which is hosted separately in the UK.

That distinction is important. So is the timing.

Over six years, beginning under Nicola Sturgeon and continuing through Humza Yousaf and John Swinney, the Scottish Government has moved human resources, payroll, finance and purchasing functions away from ageing public-sector systems and onto Oracle Cloud. The platform now serves the Scottish Government itself and another 32 public organisations. During its first year of operation, more than £51 billion of payments passed through it.

Under the plans now being pursued by Swinney’s administration, Oracle’s role is not shrinking. It is being extended.

The Scottish Government’s five-year organisational plan says further Oracle Cloud technology will be enabled for finance, while the government intends to replace its Staff Directory with an Oracle Cloud solution in 2027 and introduce Oracle Cloud Helpdesk self-service tools for HR services. A separate Oracle Enterprise Performance Management system is being developed for planning, budgeting, forecasting, reporting and financial management, including work intended to support the Scottish Budget process.

In March this year, the Scottish Government also awarded IBM UK a contract worth up to £55 million, excluding VAT, for Oracle integration and support. The procurement notice explicitly provides for further stabilisation, optimisation and the potential expansion of the Oracle platform to additional customers and modules.

The significance of the New Mexico development for Scotland is therefore not that the American project and Scotland’s UK cloud environment are technically connected. It is that a company becoming increasingly embedded in the machinery of Scottish government is simultaneously undertaking an exceptional global expansion in cloud and artificial-intelligence infrastructure.

UK-hosted does not mean Scotland’s data sits outside US legal reach

Audit Scotland has established that Scottish Government customer data is held at Oracle’s UK cloud data centres. That provides an important measure of data residency. It does not, by itself, settle the separate question of legal jurisdiction over the company holding the information.

Scotland does not become subject to American law simply because the Scottish Government buys services from Oracle. Oracle, however, is a US-headquartered technology company, and United States law expressly provides for certain legal demands to reach information held outside American territory by covered providers.

The relevant provision is Section 2713 of Title 18 of the United States Code, introduced in 2018 through the Clarifying Lawful Overseas Use of Data Act, generally known as the CLOUD Act.

The law requires a provider of electronic communication or remote computing services, when subject to the applicable obligations under the Stored Communications Act, to preserve, back up or disclose communications and customer records within its possession, custody or control regardless of whether the information is located inside or outside the United States.

The significance is precise. The location of a server in Britain is not, by itself, an absolute jurisdictional barrier against lawful US process.

That does not mean American authorities have unrestricted access to Scottish Government systems. They do not. Applicable legal procedures and statutory requirements remain necessary, and whether particular information falls within a provider’s possession, custody or control is itself legally significant.

Nor does the evidence examined for this article establish that Scottish Government information held by Oracle has been disclosed to US authorities.

What the law establishes is narrower but consequential: “stored in the UK” and “incapable of being reached through US legal process” are not equivalent statements.

The United Kingdom and United States also operate a bilateral Data Access Agreement authorised by the CLOUD Act. The agreement entered into force on 3 October 2022 and provides a mechanism through which qualifying lawful orders for electronic evidence connected with serious crime can be directed across the two jurisdictions, subject to safeguards contained in the agreement.

Physical location, therefore, is only one dimension of data sovereignty. The nationality and legal exposure of the company operating the infrastructure can be another.

For Scotland, that adds a jurisdictional dimension to an existing technological dependency. As more public bodies, financial functions and government processes are placed on Oracle, Scotland is depending not only on the availability and resilience of one platform but on a corporate provider whose legal obligations can arise outside Scotland and outside the United Kingdom.

What Oracle has actually done in New Mexico

On Thursday, Reuters reported that Oracle had issued a force-majeure notice to a Blue Owl unit involved in developing Project Jupiter in Doña Ana County, New Mexico, citing potential delays in securing power.

Force majeure is a contractual mechanism used where specified circumstances interfere with performance of a contract. Its effect depends on the contract and the event concerned.

The reported notice does not amount to a declaration that Oracle itself has failed, nor does it apply across Oracle’s worldwide cloud operations.

Reuters reported that securing power for the New Mexico site is Oracle’s responsibility under the contract. Reporting around the notice indicates that Oracle is seeking to preserve its contractual position if the project fails to become operational according to its planned timetable.

Oracle has said Project Jupiter remains on schedule.

The New Mexico development is not the site hosting Scottish Government finance and personnel data.

That geographical separation, however, does not remove the broader relevance of Oracle’s corporate position to Scotland. Scotland is increasingly reliant on services provided by the same company.

How Scotland reached Oracle

Scotland’s dependence on the platform did not begin with John Swinney.

The Shared Services Programme began in 2020, when Nicola Sturgeon was First Minister. Its origins lay in recognition that the Scottish Government’s existing finance and personnel systems had become an increasing organisational risk.

The systems being replaced included the Scottish Government Enterprise Accounting System, known as SEAS, and its electronic human-resources platform, e-HR. Both had been in place for many years and were described by government as no longer fit for purpose.

The programme’s outline business case was approved in 2021 and its original business case followed in April 2022.

A selection exercise concluded that Oracle Fusion Cloud was the best fit commercially and functionally for the Scottish Government.

The original cost range for the programme was £22.4 million to £26 million including VAT, or £18.4 million to £22 million excluding VAT.

The cost subsequently increased substantially.

By September 2023 the programme had been rebaselined at £46 million to £52 million including VAT. Following a further delay in implementation, the March 2024 estimate rose to between £63 million and £66 million.

The Scottish Government’s final programme closure report records a cost of £59.5 million for implementing the Oracle Cloud platform after VAT recovery. A further £4.5 million was attributed to Enterprise Performance Management work, producing a stated total delivery cost of £64 million.

Oracle Cloud went live on 1 October 2024.

The sequence crosses three administrations. The programme began and Oracle was selected during Sturgeon’s premiership. The procurement and implementation continued through Humza Yousaf’s period as First Minister. The system became operational after Swinney took office, and his administration is now pursuing wider use of Oracle Cloud.

Thirty-two public bodies share the platform

Oracle is not simply an accounting program used by officials inside St Andrew’s House.

A Scottish Government freedom-of-information response states that Oracle Cloud was implemented in the Scottish Government and 32 public-sector organisations on 1 October 2024.

They include National Records of Scotland, Revenue Scotland, Social Security Scotland, Transport Scotland, Education Scotland, the Scottish Public Pensions Agency, the Scottish Courts and Tribunals Service, Disclosure Scotland, the Care Inspectorate, the Scottish Parliamentary Corporate Body, the Scottish Fiscal Commission and the Scottish Housing Regulator.

Other organisations include the Crofting Commission, Food Standards Scotland, the Office of the Scottish Charity Regulator, Consumer Scotland, Environmental Standards Scotland, Community Justice Scotland and the Police Investigations and Review Commissioner.

The presence of those organisations on the shared service does not mean that every operational database they hold has been transferred to Oracle.

Social Security Scotland’s use of the platform, for example, does not establish that benefit entitlement calculations or complete claimant records themselves are operated through Oracle. Nor does the evidence establish that Scotland has placed health records, social-care records or every form of citizen information into one Oracle database.

The documented functions are nevertheless fundamental to the operation of government: HR, payroll, finance and purchasing.

The Scottish Government says that during the first year of Oracle Cloud operation the platform recorded almost four million unique logins, more than £51 billion of payments, 12 successful payrolls, 750,000 timesheets, 280,000 changes to personal details, 81,000 requisition lines and 33,000 journal postings.

This is the point at which dependency becomes measurable.

When one organisation buys software from a supplier, there is a procurement relationship. When central government and dozens of public bodies depend on the same platform to administer staff, purchasing and money, there is also a concentration of operational dependency.

These are not peripheral functions. They form part of the machinery through which organisations employ people, authorise spending, process transactions and carry out day-to-day administration.

The Scottish Government’s approach reduces the fragmentation created by multiple ageing systems.

It also reduces separation between organisations that previously depended on different arrangements.

Oracle is responsible for recovery on its side

Audit Scotland examined the controls surrounding Oracle following implementation.

Its 2024/25 audit states that Oracle is responsible on its side for service continuity and disaster recovery, software maintenance, customer support, backups and the recovery and recreation of Scottish Government Oracle data following a cyber incident.

The auditors examined a SOC 2 service-auditor report covering the Oracle environment from implementation through the end of the financial year.

Audit Scotland concluded that sufficient assurance had been obtained that controls designed to protect Scottish Government customer data at Oracle’s UK cloud data centres were operating effectively within the scope of the work examined.

Database and configuration backups were also being carried out and tested according to schedules specified by the Scottish Government.

There was an important limit to that assurance.

Audit Scotland recorded that the SOC 2 work did not test the operating effectiveness of full-stack disaster-recovery controls. It was told that a separate assessment of Oracle’s business-continuity and disaster-recovery arrangements was conducted annually.

That is not evidence that disaster recovery would fail. It defines the boundary of what that particular audit established.

As more government functions are moved onto a common platform, the effectiveness of continuity and recovery arrangements becomes correspondingly more important.

Scotland has already seen what concentration can mean

The move to Oracle has not been free of operational problems.

Audit Scotland found that the decision to proceed with the October 2024 launch was reasonable, but some pre-implementation criteria had not been met.

Management had also not anticipated the volume of support tickets generated after implementation.

When auditors surveyed Oracle Cloud user bodies, 19 reported difficulties involving delayed reporting functionality and resulting manual work. Fourteen raised issues involving HR and payroll functionality. Thirteen reported difficulties with purchase-to-pay functionality which prevented some organisations from raising purchase orders or making payments to certain suppliers during October and November 2024.

Those problems were associated with implementation and operation of the new system. They were not evidence of a failure of Oracle’s underlying UK cloud data centres.

They did, however, demonstrate the consequence of using a common platform. A difficulty in one shared system can be experienced simultaneously across multiple public organisations.

The Scottish Government’s own March 2026 closure report says technical problems in Oracle’s Time and Labour module had proved difficult to diagnose and resolve and were still being worked on with Oracle in January 2026.

Shared infrastructure therefore has two characteristics at the same time. It can consolidate expertise, controls and systems that were previously fragmented. It can also concentrate the effect of technical or operational problems.

The next phase is expansion

The Scottish Government is continuing further into Oracle rather than moving away from it.

Its 2026–31 organisational plan says that by 2027 it will enable additional Oracle Cloud technology for finance.

The same plan says the existing Staff Directory will be replaced with an Oracle Cloud solution in 2027 and Oracle Cloud Helpdesk self-service tools will be introduced for HR queries.

The Enterprise Performance Management project extends the platform further into financial administration.

The Scottish Government describes Oracle EPM as a suite of cloud software and processes intended to support planning, budgeting, forecasting, reporting and financial and operational performance.

Its programme closure report states that the technology is intended to support the Scottish Budget process.

Oracle EPM was still being developed after the main platform went live, with further functionality scheduled during 2026.

Meanwhile, the March 2026 contract award for Oracle systems-integration and support services explicitly provides for the “potential expansion” of the Oracle platform to additional customers and modules.

The direction is therefore documented.

More functions are being built around Oracle. More integration is planned. And provision exists for more organisations or modules to be added.

Every additional function placed on the platform increases the range of processes dependent on it. Every additional organisation expands the number of public bodies sharing that dependency.

Replacing a deeply integrated enterprise platform is also fundamentally different from cancelling an ordinary software subscription. Processes, staff structures, financial controls, data models, integrations, training and support arrangements become built around it.

The deeper that integration becomes, the greater the practical cost and complexity of changing supplier.

Oracle itself is expanding at extraordinary scale

Scotland’s move further into Oracle is taking place while Oracle itself is undergoing a major transformation driven by artificial-intelligence infrastructure.

The company’s latest filing with the US Securities and Exchange Commission shows capital expenditure of $28.5 billion in the three months to 31 August 2026.

In the equivalent period a year earlier the figure was $8.5 billion.

Oracle says the increase was primarily caused by the expansion of its data centres.

During the quarter, the company generated $23.1 billion of operating cash flow. After $28.5 billion of capital expenditure, Oracle reported negative free cash flow of approximately $5.4 billion.

It held approximately $36.4 billion in cash and cash equivalents at the end of August.

The scale of spending needs equally careful context.

Oracle reported record quarterly revenue of $19.3 billion, up 30 per cent year on year. Cloud revenue reached $11.6 billion and cloud-infrastructure revenue rose 121 per cent to $7.4 billion.

The company reported remaining performance obligations of $664 billion.

Oracle has stated in its SEC filing that it believes its cash, operating cash generation and available financing will be sufficient to meet working-capital requirements, committed capital expenditure and contractual obligations for at least the next 12 months, and that it expects its sources of liquidity and access to additional financing to remain sufficient thereafter.

The evidence therefore does not establish that Oracle cannot meet its obligations.

It does establish the scale and speed of a capital programme substantially larger than the one the company was running only a year earlier.

Project Jupiter shows the scale of that expansion

Project Jupiter is part of that build-out.

The proposed New Mexico campus covers approximately 1,400 acres and is intended to provide enormous computing capacity for artificial-intelligence workloads.

The project has faced difficulties surrounding the infrastructure required to power it.

Reuters reported earlier this month that approximately $18 billion of debt associated with Project Jupiter was trading below par amid investor concern about the project, Oracle’s growing debt burden and regulatory obstacles affecting the development.

On 24 September, Reuters reported that Oracle had issued the force-majeure notice citing potential delays in securing power.

The notice relates to that project.

For Scotland, its importance lies not in a direct technical connection to Edinburgh, but in what it reveals about the scale of the commitments being undertaken by the company on which Scotland is increasingly relying.

Scotland is no longer simply buying software

The Scottish Government’s relationship with Oracle has moved beyond the purchase of a single software product.

A growing part of the administrative state is now operating through the Oracle environment.

The platform supports HR, payroll, finance and purchasing across the Scottish Government and 32 public bodies. Tens of billions of pounds have passed through it. Suppliers interact with the system. Additional functions are being developed. Further expansion is contemplated.

That creates several forms of dependency at once.

There is technological dependency: essential administrative functions depend on the continued operation of the platform.

There is operational dependency: multiple bodies share common systems, support structures and recovery arrangements.

There is commercial dependency: the greater the degree of integration, the more complex and costly substitution becomes.

And there is jurisdictional dependency: Scotland can determine where it requires data to be hosted, but it cannot determine the laws that apply to the company providing the service.

The CLOUD Act makes the last of those particularly clear.

A UK data centre is a physical location. It is not, by itself, an absolute legal boundary around information held within the possession, custody or control of a provider subject to applicable US law.

There is no evidence presented here that Scottish Government Oracle data has been obtained by US authorities.

The point is structural rather than accusatory.

By moving more administration onto a US-controlled platform, Scotland is accepting that part of the infrastructure on which government depends exists within a corporate and legal environment Scotland does not itself control.

A decision made over several governments

The origins of the programme explain why a simple political attribution would be misleading.

The ageing systems needed replacement. That problem was identified and the new programme developed under Sturgeon.

Oracle was selected during that period.

The programme then continued through Yousaf’s administration before going live during Swinney’s.

The current government has inherited a functioning Oracle platform but has also made a documented choice to expand its use rather than hold it at its original scope.

The result is not an Oracle dependency attributable to one First Minister.

It is an infrastructure direction developed over successive Scottish administrations and now moving into a further stage under Swinney.

Why this matters now

The Scottish Government had a genuine problem to solve. Its old finance and human-resources systems were ageing, increasingly risky and no longer fit for the organisation they were expected to support.

A modern shared cloud platform offers substantial advantages: common processes, integrated systems, regular updates, consistent controls, specialised security, central support and disaster-recovery arrangements.

Those advantages do not remove the consequences of concentration.

The more government functions are consolidated onto one platform, the more the resilience of government becomes tied to the resilience of that platform.

The more public bodies use it, the broader the impact of a common problem can become.

The more business processes are designed around it, the harder the platform becomes to replace.

And where the supplier is controlled from another jurisdiction, the laws of that jurisdiction can remain relevant even when the data itself is physically stored in Britain.

None of this establishes an immediate Scottish systems emergency arising from Project Jupiter.

It establishes something longer-term and more important.

Oracle has become part of Scotland’s administrative infrastructure.

Scotland is continuing to deepen that relationship.

And the country’s exposure is no longer confined to whether a particular piece of software works on a particular day. It now extends to the technical resilience, commercial position, corporate decisions and legal jurisdiction surrounding the company on which that infrastructure increasingly depends.