By Keith Aitken in Edinburgh
8 April 201
Scottish Finance Secretary John Swinney has angrily defended his party’s non-profit method of funding capital projects following Labour’s pledge to scrap the flagship Scottish Futures Trust.
Swinney said that turning back the clock to Private Finance Initiative-type models would provide less benefit for more cost and throw away hard-won public sector expertise in negotiating contracts.
His comments come amid increasingly heated election exchanges over capital project finance, especially between the Scottish National Party – which believes that the Scottish Futures Trust it established has now developed a workable non-profit distributing model of funding – and Labour, which has said it will scrap the trust.
‘We are now getting five schools for the price of four,’ Swinney claimed. ‘There was a time under the previous administration when PFI deals delivered one school or one hospital for the price of two.’
Briefing SNP candidates, he lambasted Labour’s commitment to scrap the SFT, saying that it would delay capital projects across the country and cost the public sector tens of millions of pounds in lost savings.
‘Instead of each new project having to reinvent the wheel, we now have a team with growing expertise who are more than a match for anyone in negotiations about future funding.’
Yet the SNP formula remains deeply suspect in the eyes of
its opponents. There was much scepticism last week when First Minister Alex
Salmond announced a plan to use notional savings on the contract to build a new Forth Bridge to
create a Scottish Futures Fund.
The preferred bid to design and build a new Forth road bridge between Edinburgh and Fife, decided last month, came in at £1.54bn – well below the £1.87bn the Scottish Government had set aside in its original estimate for the project.
Salmond has now cashed in the difference between the two figures to found a £250m fund for projects to enhance Scottish life. The first of five £50m funding streams is a Sure Start Fund, boosting pre-school education. Later initiatives will focus on digital technology, young Scots, warm homes and transport.
The first minister described the new fund as ‘a jobs-boosting and society-improving initiative made possible by good government’.
George Lyon, campaign co-ordinator of the Scottish Liberal Democrats, accused the SNP of having ‘totally over-inflated’ the anticipated cost of the bridge, while Patrick Harvie, co-convener of the Scottish Greens, said Salmond was trying to manufacture an election giveaway.
Harvie said: ‘The SNP want to squander £1.6bn on a bridge we don’t need without even trying to fix the one we have, and somehow this frees up millions of pounds in a budget of cuts. The price-tag may have been massaged down, but that doesn’t magically make money pop into existence from nowhere.’
