Page last updated at 17:42 GMT, Tuesday, 27 May 2008 18:42 UK

Warning over future funding plans

Artist impression of the new Forth crossing
Mr Swinney did not say if the trust would build the new forth crossing

Projects such as the new Forth Road Bridge could stall under the Scottish Futures Trust, Labour has claimed.

Finance Secretary John Swinney was questioned by MSPs on the operation of the new flagship policy.

Mr Swinney refused to confirm to Holyrood's Finance Committee the trust would build the new Forth crossing.

But he said the policy was an improvement on current PFI/PPP schemes, where projects such as schools and hospitals had "horrendous" repayments.

The trust is intended to be a not-for-profit system of accessing funds which in the long term is intended to generate low-interest loans, probably funded by issuing local authority bonds.

The Scottish Government said the trust scheme would release up to 150m each year and cost less than the current PPP/PFI tie-ups with private companies.

'Save millions'

Mr Swinney told MSPs the bill for such schemes facing the government between now and 2011 would rise to 787m - just for already built projects.

Labour and Lib Dem members of the committee argued the PPP approach had led to stiff competition between contractors, squeezing costs.

The finance secretary dismissed the claim, adding that the Highland schools PPP had just one bidder.

Former Labour finance minister Tom McCabe said the Scottish Government's plans, which aim to radically cut risk-driven profit, argued the approach might work on smaller projects.

He added: "You've mentioned yourself the Forth crossing, conceding that could in fact be a project that could be carried out using the Scottish Futures Trust."

Mr Swinney declined to confirm the trust would build that crossing - but insisted the new approach would work and save the taxpayer millions.

Meanwhile, it emerged that UK Treasury Chief Secretary Yvette Cooper turned down an invitation to give evidence because MSPs were studying devolved issues which were not a matter for the Treasury.

Joe Fitzpatrick, an SNP member of the committee, said the minister had shown a complete lack of respect and accused the Treasury of double standards.


SEE ALSO
New public funding plan unveiled
20 May 08 |  Scotland
Decades to fix school buildings
20 Mar 08 |  Scotland
New school buildings 'priority'
22 Feb 08 |  Edinburgh, East and Fife
A third of schools in poor state
12 Jul 07 |  Scotland
Parties do battle over schools
29 Jan 07 |  Scotland
More schools get private finance
01 Jun 04 |  Scotland

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