SNP must review how projects are funded

THE toxic legacy of Labour’s disastrous private finance initiative (PFI) is clear for all to see.

Under Tony Blair, Labour maxed out the credit card with its populist ‘buy now, pay later’ approach. It hoped that voters would delight in the new schools, hospitals and roads it was building and not notice the costs being saddled on future generations.

These costs are now damaging public finances across the UK. In Scotland last year alone, interest payments relating to these PFI projects soared well above £1billion. When he came to power, Alex Salmond pledged to end the disastrous scheme. With typical gusto on the campaign trail, he said PFI was Labour’s biggest policy disaster and pointed out that the catalogue of projects under way at the time would end up costing taxpayers £5billion more than they should.

It is now clear that the non-profit distributing (NPD) model he ushered in is simply PFI by a different name, and has many of the same flaws. Last year, £271million was spent on ‘unitary charge’ payments on NPD schemes, 43 per cent higher than the previous year. With dozens of similar projects in the pipeline, it won’t be long before the interest payments will come close to matching those of PFI.

Serious problems have also beset some of the public-private projects, such as a children’s hospital which cannot open because of safety concerns, and an Edinburgh school where a wall collapsed in 2016.

It is crucial SNP ministers review the way they manage and fund these projects. It is time to stop turning to the public sector equivalent of a payday loan and leaving future generations to pay the price.