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Ministers to outline funding plan Banker heads public funding body
(1 day later)
The Scottish Government is to announce details of its new flagship structure for funding schools, hospitals and other large capital projects. Merchant banker Sir Angus Grossart is to head a new company which will spearhead major public building projects such as schools and hospitals.
Critics of the planned Scottish Futures Trust said the policy was light on detail and claimed new investment had been put on hold. The Scottish Futures Trust aims to cut "excessive" profit made by private companies in PPP/PFI schemes, Finance Secretary John Swinney said.
Ministers have denied that, and will aim to silence the critics in the Scottish Parliament. The trust would access funds under a not-for-profit scheme.
Opposition parties said the trust was a re-branding of existing initiatives. Critics and opposition parties said the plan still lacked detail and branded it PFI under a different name.
The government said the Scottish Futures Trust would release up to £150m each year and would be less costly than PFI/PPP tie-ups with private companies. Mr Swinney told the Scottish Parliament his plans would develop the use of local authority bond issues as a new source of public funding.
It is intended to be a not-for-profit system of accessing funds which, in the long-term, would generate low-interest loans, probably funded by issuing local authority bonds. The Scottish Futures Trust is nothing more than an expensive and poorly-managed re-branding of PPP Andy KerrLabour public services spokesman
But the plan has drawn sharp criticism, including concerns that the bonds would not allow councils to work together to raise cash for a single, large-scale project. "It is quite clear that the PFI approach used in the past has not delivered best value for the taxpayer," he said.
Labour local government spokesman, Andy Kerr, claimed the trust was PPP dressed up with second-hand clothes. "Excessive profits have been made on investments that were thought to carry significant risk. In the event, these risks did not justify the profits made."
He went on: "All that the SNP have managed to do is firstly dither and then reveal a system that is worse than the system that they say they will replace - a system that will be more expensive and worse value for money." The new Scottish Futures Trust company, to be headed by former Royal Bank of Scotland vice chairman Sir Angus Grossart, would be wholly owned by Scottish ministers, but would operate at arms-length from the government to develop expertise in public project investment.
Liberal Democrat finance spokesman, Jeremy Purvis, added: "It's astonishing that Finance Secretary John Swinney has managed to create a situation where his policy for funding schools and hospitals has been attacked both by the unions and the financial sector at the same time." The finance secretary said infrastructure investment planned in Scotland over the next three years would total more than £14bn, adding: "This government is determined to secure the best possible deal for the taxpayers of Scotland in that investment."
The government said work on the trust had been "progressing well". But Scottish council umbrella group Cosla said the futures trust was "light on evidence and detail" and had to be more than a political aspiration.
Better deployment
Cosla vice-president Rob Murray said: "There are key elements to this proposal which require the active co-operation of local government and, to date, we have not had sufficient involvement in their development to ensure that they can work."
Labour public services spokesman Andy Kerr said: "We've established the Scottish Futures Trust is nothing more than an expensive and poorly-managed re-branding of PPP and it is clearly an attempt by this government to hoodwink the Scottish people."
Tory finance spokesman Derek Brownlee said the "jury was still out" on whether it would deliver value to the taxpayer, while the Lib Dems' Jeremy Purvis claimed some councils "didn't have a clue" what the government planned for the Scottish Futures Trust.
Sir Angus said he was aiming for a "better deployment" of public and private sector talent, adding: "If we can be more self-challenging, aspirational and open to change in this field, I believe that with goodwill, we will deliver."