Building sector fury over SNP works project cuts

John Swinney plans for construction project spending have been cut. Picture: TSPL
John Swinney plans for construction project spending have been cut. Picture: TSPL
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THE budget for the SNP’s flagship policy to build new schools, roads and hospitals has been slashed to just 6 per cent of its original forecast for this year, Scotland on Sunday can reveal.

Official documents have disclosed that finance secretary John Swinney’s plans for £353 million to be spent on construction projects have been cut to just £20m for 2012-13, despite his insistence that investment in “shovel-ready” public building projects lies at the heart of the government’s plans for economic revival.

The money earmarked for next year has also been reduced dramatically, the figures show. Under the revised budgets, £338m will be spent in 2013-14, less than half the £686m that the government originally planned for projects financed by the SNP’s non-profit distribution (NPD) funding model.

Last night, opposition politicians and building industry representatives expressed 
anger at the revised figures, 
arguing that the beleaguered construction sector needed a cash injection immediately.

In November 2010, Swinney announced plans to stimulate the economy and create jobs by producing a £2.5 billion pipeline of capital projects funded by NPD, the funding mechanism introduced by 
the SNP to replace Labour’s private finance initiative.

In September this year, Swinney once again heralded his £2.5bn NPD pipeline when he unveiled his budget, but he made no mention of the NPD money being cut or ­delayed in his speech to ­parliament.

The revised figures only came to light in documents ­requested by Conservative ­finance spokesman Gavin Brown from the Scottish Parliament Information Centre (SPICe).

The documents disclosed the government’s investment plans for NPD projects under the constraints of the most recent September budget and compared them with the figures that were being worked on for the same period in the 2011 budget.

As well as revealing the hugely reduced predictions for this year and next year, the documents also showed that there had been no investment on NPD projects in 2011-12 – the year after the policy was announced.

NPD projects are overseen by the Scottish Futures Trust (SFT), the quango set up by the SNP government to build schools, hospitals and roads.

On the SFT’s to-do list are a new neuroscience 
department and hospital for children at Edinburgh Royal Infirmary, work on four other hospitals, building three college campuses, work to improve or replace 28 schools, improvements to the M8/M73 and M74 and the Aberdeen Western Peripheral Route, which can now go ahead after a court battle.

Brown said: “This is a deeply embarrassing situation for the Scottish Government – despite regular boasts to the contrary, their flagship NPD capital programme has delivered precious little for the construction industry. To make matters worse, they have failed to be transparent and upfront about their sloth-like performance. Ministers have some serious explaining to do.”

He added: “What the construction industry needs is shovels in the ground. The Scottish Government has been promising shovels in the ground, but little has happened. Now it appears that very little is going to happen for the next two years, which is not what is required at this time of economic crisis.”

The fact that so little money will be coming on stream immediately has frustrated the construction industry. Michael Levack, the chief executive of the Scottish Building Federation, said: “We feel there are a lot of smoke and mirrors. In terms of this pipeline of work, contractors are telling me that the work is just not coming through.”

Yesterday, a Scottish Government spokesman claimed that – taking into account future spending – the overall expenditure had not been reduced, but he added: “It has taken longer than anticipated for some of the NPD projects to reach procurement and construction.”