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Scottish Govt unveils plan to ditch PFIs

Finance secretary John Swinney will today set out the Scottish Government's plans to ditch Private Finance Initiatives.

He will make a statement to Parliament this afternoon on the SNP administration's plans for a Scottish Future's Trust as a funding mechanism to build public buildings like schools and hospitals.

The plan was central to the Nationalists' election manifesto last year amid concern over the cost to the taxpayer of PFIs now and in future years.

But the proposals met with a frosty reaction when they came under the spotlight at Holyrood's finance committee yesterday.

Executive director of financial services at Glasgow City Council Lynn Brown said the SFT business case set out in May was "vague".

She also questioned who would be responsible for ensuring projects are delivered on budget and on time after being approved.

Ms Brown said: "I think we could be accused of a democratic deficit at the moment in terms of who is responsible for the signing off that's done and how it's actually done."

Lib Dem MSP Jeremy Purvis said the set up costs alone for SFT over the next five years are nearly £2 million - and the overall cost is £17 million.

He said: "It seems a very good way of some people earning a lot more money - rather than actually anything new being added to the advice that's going to be available to local bodies."

The business case unveiled in May proposed a Futures Trust development and delivery will sit in the public arena, while the finance and investment arm will be a private firm but is likely to be a joint venture between public and private investors.

The Scottish Government is not allowed to issue municipal bonds under the terms of the Scotland Act but a "Scottish bond" is to be issued as part of SFT with councils working in partnership across the country to issue local authority bonds.