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Swinney to defend funding plans Warning over future funding plans
(about 18 hours later)
Finance Secretary John Swinney is to be questioned by MSPs over his new approach to funding the building of schools, hospitals and railways. Projects such as the new Forth Road Bridge could stall under the Scottish Futures Trust, Labour has claimed.
Mr Swinney said his Scottish Futures Trust would end the "excessive" profits generated by private finance models of funding public building projects. Finance Secretary John Swinney was questioned by MSPs on the operation of the new flagship policy.
But his proposals were heavily criticised when he unveiled them at an industry conference last week. Mr Swinney refused to confirm to Holyrood's Finance Committee the trust would build the new Forth crossing.
Mr Swinney will defend the scheme at Holyrood later. But he said the policy was an improvement on current PFI/PPP schemes, where projects such as schools and hospitals had "horrendous" repayments.
The trust is intended to be a not-for-profit system of accessing funds which in the long term is intended to generate low interest loans, probably funded by issuing local authority bonds. The trust is intended to be a not-for-profit system of accessing funds which in the long term is intended to generate low-interest loans, probably funded by issuing local authority bonds.
The Scottish Government said the trust scheme would release up to £150m each year and cost less than the current PPP/PFI tie-ups with private companies.The Scottish Government said the trust scheme would release up to £150m each year and cost less than the current PPP/PFI tie-ups with private companies.
However, both the British Medical Association and the Unison trade union condemned the approach as having exactly the same practical shortcomings as PFI/PPP. 'Save millions'
Labour dismissed the system as "PPP with a lick of paint" while the Lib Dems said it was an admission that what the SNP manifesto had promised was not possible. Mr Swinney told MSPs the bill for such schemes facing the government between now and 2011 would rise to £787m - just for already built projects.
The Tories said the new system would still see private cash put into public infrastructure projects. Labour and Lib Dem members of the committee argued the PPP approach had led to stiff competition between contractors, squeezing costs.
The finance secretary dismissed the claim, adding that the Highland schools PPP had just one bidder.
Former Labour finance minister Tom McCabe said the Scottish Government's plans, which aim to radically cut risk-driven profit, argued the approach might work on smaller projects.
He added: "You've mentioned yourself the Forth crossing, conceding that could in fact be a project that could be carried out using the Scottish Futures Trust."
Mr Swinney declined to confirm the trust would build that crossing - but insisted the new approach would work and save the taxpayer millions.
Meanwhile, it emerged that UK Treasury Chief Secretary Yvette Cooper turned down an invitation to give evidence because MSPs were studying devolved issues which were not a matter for the Treasury.
Joe Fitzpatrick, an SNP member of the committee, said the minister had shown a complete lack of respect and accused the Treasury of double standards.