SNP attacked for stopping public project cash coming to Scotland

SCOTTISH Secretary Jim Murphy warned last night that Scotland was missing out on millions of pounds in Treasury help for school and hospital projects because of the attitude of the SNP government.

Yvette Cooper, the Chief Secretary to the Treasury, announced yesterday that UK ministers are to lend up to 13 billion to make sure infrastructure projects get the funding they need.

The money will go to PFI projects that are struggling to get going because normal sources of private finance have dried up.

Hide Ad
Hide Ad

However, because the SNP Government is opposed to the PFI model for building schools and hospitals, there are no projects in Scotland eligible for the money.

Also, because the SNP government's Scottish Futures Trust model – a different form of public-private partnership for capital projects – has not yet got off the ground, there are no eligible SFT projects.

Mr Murphy said: "The UK-wide temporary fund means PFI projects in Scotland can be considered for support on the same terms as UK departments. The Scottish Futures Trust has yet to procure a single project which might be eligible.

"The Scottish Government needs to stop putting its dogmatic position before Scotland's interests when it comes to PFI. We need to get Scotland building again if we are going to get through the recession and it would make sense for Scottish ministers to reconsider their opposition as soon as possible."

Jeremy Purvis, for the Liberal Democrats, added: "This shows very clearly that the SNP has brought to a halt the pipeline of projects vital for Scotland to work through a recession.

"In 2006-7 there were over 1 billion worth of PPP/PFI and NPD contracts awarded in Scotland; now this is down to less than a third of that, with catastrophic timing."

The Nationalists hit back, arguing that the bail-out was "proof positive" that the PFI model was the "economics of the madhouse".

SNP MP Stewart Hosie said: "The cost of propping up Labour's PFI projects will make Sir Fred Goodwin's pension arrangements look like pocket change.

Hide Ad
Hide Ad

"Alistair Darling has absolutely no financial credibility left. PFI is a millstone round the UK's neck and he is set to add more weight to that debt millstone and burden taxpayers with even more taxes to pay for it. Instead of sensible public investment, the Labour government has been ripped off by a credit card style con."

Under the UK government plans, a new unit in the Treasury, run as a private limited company, will make loans at commercial rates, as co-lenders with the banks, to PFI projects that cannot raise sufficient debt finance on "acceptable terms".

Treasury officials indicated that up to 2 billion could be lent in this way in the coming financial year – with the loans structured so that they could be sold on to the markets as they recovered.

There are about 110 PFI projects in the pipeline in England and Wales, though officials do not expect all of them to apply for government credit.

Ms Cooper said that the private sector would continue to bear the risks of cost overruns and delays.

"The government believes it is vital to get these infrastructure projects under way as swiftly as possible – to support jobs and the economy this year as well as delivering important public services," she said.