Dundee West Labour
29 January 2020
A new report from Audit Scotland has called for more clarity from the SNP government over the role of private finance in financing public infrastructure projects.
The report states that assets worth £9 billion are currently under PFI, NPD and hub contracts.
Due to this, the Scottish public sector will make payments worth over four times the capital value of the assets built (over £40 billion) with £27 billion to be paid between now and 2047/48.
Analysis commissioned by Scottish Labour has shown that having capacity for public sector borrowing would save around one fifth of the overall cost of NPD and hub private finance contracts.
In October 2017 the Cuthbert report, commissioned by Scottish Labour, raised concerns over the SNP government’s infrastructure quango, the Scottish Futures Trust, and revealed:
• Doubts as to whether SFT is working as intended
• A secrecy and lack of transparency around how the SFT operates
• Unsustainable and expensive funding models
• Increased ownership and control of infrastructure projects in the hands of the private sector
Despite Scottish Labour’s call for an independent root and branch review of the Scottish Futures Trust, the SNP government continued to allow the Scottish Futures Trust to operate without scrutiny or reform.
Commenting, Scottish Labour Infrastructure Spokesperson, Colin Smyth MSP, said:
“ There is an urgent need for reform of the Scottish Futures Trust and an end to the current approach which is shrouded in mystery and benefits only private investors.
“The SNP has accepted that the use of private finance in infrastructure projects is costly but continues to use the system, creating more and more debt for future generations.
“The current system is creating unsustainable levels of debt and is forcing our hard-pressed local authorities into using costly private finance models for investment.
“The SNP must realise that deferring payment for these costly projects does not make the payment go away but in fact burdens future governments and exacerbates austerity.
“It is time for real and radical reform of the Scottish Futures Trust. Scottish Labour calls on the SNP to end the current approach that works only for private financiers and implement a new funding model that prioritises public investment in public services.”
A new report from Audit Scotland has called for more clarity from the SNP government over the role of private finance in financing public infrastructure projects.
The report states that assets worth £9 billion are currently under PFI, NPD and hub contracts.
Due to this, the Scottish public sector will make payments worth over four times the capital value of the assets built (over £40 billion) with £27 billion to be paid between now and 2047/48.
Analysis commissioned by Scottish Labour has shown that having capacity for public sector borrowing would save around one fifth of the overall cost of NPD and hub private finance contracts.
In October 2017 the Cuthbert report, commissioned by Scottish Labour, raised concerns over the SNP government’s infrastructure quango, the Scottish Futures Trust, and revealed:
• Doubts as to whether SFT is working as intended
• A secrecy and lack of transparency around how the SFT operates
• Unsustainable and expensive funding models
• Increased ownership and control of infrastructure projects in the hands of the private sector
Despite Scottish Labour’s call for an independent root and branch review of the Scottish Futures Trust, the SNP government continued to allow the Scottish Futures Trust to operate without scrutiny or reform.
Commenting, Scottish Labour Infrastructure Spokesperson, Colin Smyth MSP, said:
“ There is an urgent need for reform of the Scottish Futures Trust and an end to the current approach which is shrouded in mystery and benefits only private investors.
“The SNP has accepted that the use of private finance in infrastructure projects is costly but continues to use the system, creating more and more debt for future generations.
“The current system is creating unsustainable levels of debt and is forcing our hard-pressed local authorities into using costly private finance models for investment.
“The SNP must realise that deferring payment for these costly projects does not make the payment go away but in fact burdens future governments and exacerbates austerity.
“It is time for real and radical reform of the Scottish Futures Trust. Scottish Labour calls on the SNP to end the current approach that works only for private financiers and implement a new funding model that prioritises public investment in public services.”