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After two years of trust, think tank wants shake-up- Scotsman

Scotsman, 22 December 2009

 

The Scottish Futures Trust was established by the Scottish Government in September last year with the aim of improving public infrastructure investment and with a target of saving between £100 million and £150m each year once it is fully operational. The government-owned company is led by a board of five non-executive directors, chaired by Sir Angus Grossart, the leading Scottish financier.

According to the company, the Scottish Futures Trust will "improve the efficiency and effectiveness of infrastructure investment in Scotland" by working with public bodies and industry to obtain better value for money and ultimately delivering high quality public services and infrastructure for the people of Scotland.

But only two months ago an independent think tank, Reform Scotland, called for a new way of managing and financing public projects in Scotland, such as schools and roads.

The think tank urged the establishment of a body called Scottish Capital Partnerships to replace the flawed Private Finance Initiative (PFI) and to shake up the Scottish Futures Trust.

Under the partnership scheme, proposed by Reform Scotland, projects would continue to be financed jointly by the public and private sectors.

The bulk of the money would come from public borrowing at government interest rates.

But independent management companies would be invited to submit bids to build and run projects as well as put up equity risk capital.

Ben Thomson, the chairman of Reform Scotland, said SFT had yet to build or fund any projects and there was confusion about its role.

He said: "We desperately need a new vehicle to get momentum back into public sector infrastructure projects and, after two years of achieving nothing under the Scottish Futures Trust, our proposals provide that vital mechanism.

"It is vital that we move quickly to enable infrastructure projects to proceed because we need to ensure that Scotland is investing in its future if we are to create the environment for sustainable competitive growth."

But former Scottish transport minister Lewis Macdonald is sceptical of the funding mechanism.

"It is only a good deal for the taxpayer if you have a private funder lined up who will buy into it – and the worry is that nobody will," he said.