Page last updated at 14:57 GMT, Tuesday, 16 December 2008

Scottish Futures Trust dealt blow

Artist impression of new Forth Bridge crossing

The Scottish Government's plan for funding major public building projects has been heavily criticised by MSPs.

Holyrood's Finance Committee said the Scottish Futures Trust had yet to prove it was a better alternative to PPP/PFI tie-ups with the private sector.

It said a "broad range" of methods for funding projects like schools and hospitals should be available.

Labour said the findings showed the trust lacked credibility, but ministers defended their plan.

Finance Secretary John Swinney told BBC Scotland that PFI costs meant a bill of almost 1bn a year until 2024 by the end of the current parliament.

Members of the cross-party committee recommended there should be no further delay in building programmes.

The SNP members still have faith in the trust and its non-profit distributing model, but the majority of MSPs said each building project should be judged separately and the method of finance should be chosen on what offers best value to the taxpayer.

Conservatives believe that all options, including PPP, should be on the table
Derek Brownlee
Scottish Conservatives

The Scottish Government said the trust would also release up to 150m each year, but Labour deputy finance spokesman David Whitton said: "The SNP thought this inquiry would back up their claims that public infrastructure projects built using the PPP/PFI funding model were all over budget and making excessive profits for the private sector.

"Instead, the evidence revealed that many projects funded through PPP/PFI were delivered on time and on budget and were good value for money."

'Maximum value'

Conservative finance spokesman, Derek Brownlee, added: "Unlike the SNP, Conservatives believe that all options, including PPP, should be on the table and the public sector should pick the one best suited to delivering the project in question."

Mr Swinney said the Scottish Futures Trust would do exactly what the committee had asked it to do - namely delivering value for money in the government's capital investment programme.

"That's that task we've set it and that's the task that we'll expect to be delivered," he said.

The Liberal Democrats' Jeremy Purvis, said: "Significantly, although committee members unanimously agreed that no projects should be delayed, while the government tinkers with the Scottish Futures Trust, we found no evidence to judge the effectiveness of this new funding mechanism."

Mr Swinney urged caution over the call for a range of funding methods, adding: "What we've got to watch is that were securing value for money for all our public investment.

"What concerns me is that we've got a rising bill coming from PFI - by the end of this parliament we'll be paying nearly 1bn a year until 2024 in PFI repayments and I'm not satisfied that represents the best value for money for the taxpayer."

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