SCOTLAND is “leading the way” when it comes to funding crucial public sector building projects and providing a lifeline to scores of hard-pressed construction firms, legal experts have said.
The SNP government set up the Scottish Futures Trust (SFT) in 2008 as an arms-length body to oversee major infrastructure projects such as schools, colleges and hospitals. It operates through a number of regional joint venture “hubs” and also uses a “non-profit distributing” (NPD) method of financing.
While it has supplanted the controversial private finance initiative (PFI) north of the Border, SFT came in for criticism earlier this year for delays in some projects. Chief executive Barry White admitted that the quango faced “challenging times”.
However, lawyers say that the initiatives are now delivering results and the flow of projects is likely to build.
Figures disclosed by law firm Harper Macleod show that its new Edinburgh-based infrastructure and projects team has hit the ground running. Since being set up in January, the team has concluded a string of deals with headline values totalling £300 million.
About a third of that relates to Scotland but the bulk of the practice’s pipeline of work originates from north of the Border. In total, project values for the whole of 2013 are predicted to top £1 billion.
Euan Pirie, one of two partners who joined the firm from rival McClure Naismith at the start of 2013, said the first part of the year had been an “incredibly busy period” for the infrastructure team.
“We are seeing a build-up of good projects and it should be a sustainable pipeline,” Pirie said.
“Infrastructure spending has been identified as a key aspect of stimulating the economy and the Scottish Government is delivering. The construction industry is still having a difficult time and major projects are vital to its recovery.”
Pirie, who joined Harper Macleod with Euan Mitchell, said the team was working closely with colleagues in other disciplines such as property and banking.
Among the major projects concluded recently is the £60m Inverness College campus development – the first NPD scheme to close in Scotland for four years and the first NPD college deal. It is being delivered by the Miller Equitix consortium.
Harper’s infrastructure and projects team acts for SFT’s north Scotland hub – one of five hubs around the country with the total programme worth more than £2bn over ten years.
Pirie believes Holyrood is ahead of Westminster when it comes to pushing through major projects and describes the Scottish Government’s alternatives to PFI as “lean and mean”.
He said: “The new NPD model is very streamlined. The costs have been significantly reduced and it is definitely the way forward for this type of project.”
Referring to the Inverness campus, Pirie added: “Achieving financial close after only 17 months proves we can do it and it proves that the system is robust and can deliver.”
He said the infrastructure team was likely to expand its headcount as the project pipeline built up. Harper Macleod recently posted a 9.5 per cent rise in turnover to a record £21m.