Government’s infrastructure scheme short-changes taxpayer, says Unison

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THERE is “something seriously wrong” with a government scheme that hands taxpayers’ cash to private firms to build schools and hospitals, according to a public sector union.

• Unison criticises The Scottish Futures Trust for accepting award for promoting Public Private Partnerships

• SFT’s remit is to secure best value for tax payer, not to promote PPP

• An old model of PPP, Private Finance Initiative (PFI), was ‘taken advantage of’ by private sector companies

Unison has attacked The Scottish Futures Trust (SFT), the government body which commissions public infrastructure projects, for accepting an industry award for promoting PPP (Public Private Partnerships).

The union said SFT was not set up to promote PPP, but to secure best value for the taxpayer.

PPP gained a bad reputation in some quarters after another funding model, PFI (Private Finance Initiative), left some public bodies with mounting debts while private companies reaped large profits.

SFT uses a different model called NPD (non-profit distributing), designed to limit private profits and prevent taxpayer bills mounting.

An SFT spokesman defended its promotion of PPP, saying its NPD model does provide best value.

But Unison said NPD is just PFI under a different name, and still represents a bad deal for the taxpayer.

Dave Watson, Unison head of bargaining and campaigns, said: “SFT is proud that it ‘swept the board’ at these PPP/PFI industry awards.

“But the public will want to know whether the Cabinet Secretary (Alex Neil) is proud that the SFT has been identified as the ‘best central/regional government PPP promoter’ and its chief executive as making the best individual contribution?

“That surely is not what was intended in setting up the Scottish Futures Trust. It should be about securing best value for the public sector.

“Everyone knows that PPP/PFI is more expensive than conventional funding of schools and hospitals. One of the reasons that PFI has such a bad name is because it was seen as ‘the only game in town’ and the private sector took full advantage of that.

“In fact, PPP is still the only game in town for many projects. The Scottish Government should be creating a level playing field as a minimum. Instead it is actively promoting PPP through the SFT.

“When the chief exec of the body that the Scottish Government said would put an end to PFI is winning awards for promoting it, there is something seriously wrong.”

The SFT spokesman said NPD is more expensive than direct funding, but limited government funds mean they have to spread the cost of paying for vital schools and hospitals.

This incurs extra fees similar to the additional cost of taking out a mortgage rather than buying a house outright.

A Scottish Government spokeswoman said: “This government has ended PFI, replacing it with the superior better-value-for-money NPD model, which removes the excessive profits made by private companies associated with past PFI projects.

“It also ensures any surplus money from the project can be directed in favour of the public sector - crucial when UK Government cuts make every penny vital.

SFT won Best Central Regional Government PPP Promoter, Best Individual Contribution and Best Alternative Deal Structure at the annual Partnerships Awards, a PPP awards ceremony, last week.