Scottish Labour to unveil infrasturcture projects finance report

An independent report examining how the Scottish Government finances infrastructure projects is to be published by Scottish Labour today.

The party commissioned economists Jim and Margaret Cuthbert to look into the transparency and value for money offered by the Scottish Futures Trust (SFT).

The agency was set up by the SNP administration to replace the public private partnership (PPP) system of capital investment for infrastructure such as roads, schools and hospitals.

The non-profit distribution programme established by the SFT aimed to allow private companies to build and maintain public infrastructure with debt finance which is then paid off by the taxpayer, but without the “most extreme” profits seen under previous arrangements.

However, it has been criticised for the extent to which private finance is now being used in public projects, and for a lack of transparency.

Labour's economy spokeswoman Jackie Baillie said: “The activities of the quango the Nationalists have set up to finance major projects has remained shrouded in secrecy for too long.

“We know there are increasing levels of private finance in flagship infrastructure projects and that Scotland's public spending watchdogs are investigating the operations of the Scottish Futures Trust.

“This expert report will offer the first serious examination of the methods the SNP use to finance major infrastructure projects.”

Ms Cuthbert has already expressed concerns over difficulties in scrutinising projects built or managed under the SFT's schemes.

Writing on procurement for the Common Weal think-tank earlier this year, the economist said the SFT now had a major role in Scotland's public sector build, maintenance and servicing of projects.

She said: “Its presence in the procurement chain has resulted in the public finding it difficult, if not impossible, to scrutinise the decision-making process on the facility being built, the process of handing out contracts, the financial aspects of the contract, the effect that the project will have on the local community including on jobs, and on local businesses, and importantly the long-term effect this is having on Scotland's financial well-being and the ownership of what was once regarded as essential public goods”.

The SNP hit back at Labour, saying its “toxic PFI legacy is still impacting on Scotland's public services more than a decade after they left office”.

Ms Baillie was part of the Labour-led executive which used the private finance initiative (PFI) model to fund projects, SNP MSP Ivan McKee added.

He said the £1 billion cost to the public purse for this was “robbing a significant sum of money from our budget that could be used to pay for vital frontline services and to grow our economy”.

Mr McKee continued: “Unless Jackie Baillie is willing to make a full apology today for the dreadful mess that Labour made of the public finances with their disastrous PFI contracts, no-one will listen to a word they say.''

He said the SNP had been “proud” to end this system, adding: “In the relatively short time since SFT was established it has achieved a cumulative total of almost £1 billion in of independently-verified savings and benefits."