Calls for ‘radical reform’ to end private finance in public contracts
A new report from Audit Scotland has said more clarity is needed from the Scottish Government over the role of private finance in financing public infrastructure projects.
£9 billion worth of assets are currently under various public finance models, including PFI, NPD and hub contracts.
Such contracts cost the public purse around four times the value of the assets.
Analysis commissioned by Scottish Labour showed that having capacity for public sector borrowing would save around one fifth of the overall cost of NPD and hub private finance contracts.
An earlier report by party in 2017 found a series of concerns about how private finance worked in Scotland.
Amongst other areas of concern, the Cuthbert review pointed to a general lack of transparency around the Scottish Futures Trust and “unsustainable” and expensive funding models.
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.”