The Scottish Futures Trust (SFT) has been tasked with finding fresh approaches to funding major projects as 19 controversial Private Finance Initiatives (PFI) projects run their course.
The Scottish Government’s infrastructure body, based in Edinburgh, has published its corporate five year plan for 2025 until 2030.
SFT will deliver a “needs assessment” to give a long-term vision of Scotland’s infrastructure requirements. This will help guide future investment decisions supporting public bodies in developing sustainable asset strategies.
SFT will be seeking to attract private investment into the energy transition and supporting sustainable places by using commercial skills to help set the market conditions to accelerate investment into heat networks, EV charging and the hydrogen industry.
There will be an emphasis on accelerating the adoption of digitalisation and the use of modern methods of construction.
SFT will also be working to enhance public sector property asset management by maximising the shared use of existing buildings, securing best value from surplus assets, and “providing expertise to the public sector as 19 PFI projects reach the end of their contracts.”
PFI and PPP (public-private partnerships) has been a much-criticised aspect of public sector finance in the last 25 years, several NHS Scotland hospitals, the Skye Toll Bridge PFI, a number of colleges, waste and water management facilities, were delivered by this method, although the use of PPP has allowed Scotland to building a large number of new schools and healthcare assets.
Under PFI, the public sector enters into a long-term deal with a private company to fund a specific project using a mix of debt and equity. The project company is responsible for designing, building and financing the asset as well as operation and maintenance throughout the contract period, which is between 25 to 30 years. To use these facilities during this period, the public sector pays a monthly fee to the Project Co. These payments cover the full cost of procuring the project (including the repayment of borrowed funds with interest), operation and maintenance costs and a return to investors.
Audit Scotland refers to six early PFI contracts in NHS Scotland nearing their end, including facilities such Larkfield, New Craigs Hospital, and Wishaw General, set to expire before 2030. However, there are also PPP health projects such as Dumfries and Galloway Royal Infirmary and the Balfour, Orkney.
Shona Robison, Cabinet Secretary for Finance and Local Government, said: “The Scottish Futures Trust’s Corporate Plan will support delivery of our priorities over the next five years. The 2025-26 Scottish Budget set out over £7bn of capital spending that will contribute to reducing child poverty, grasp the opportunities of net zero, boost economic growth and maintain high-quality public services and infrastructure.”
“SFT will continue to play a key role in our broad infrastructure investment plans through its leadership in infrastructure strategy, finance, delivery, and use.”
Joe Philipsz, chair of the Scottish Futures Trust, said: “The need for future investment in our infrastructure is of paramount importance to the growth of the Scottish economy.
“We will continue to develop and deliver infrastructure strategies that support Scotland’s places and communities, and encourage stronger collaborations to deliver improved services from shared locations.”
Peter Reekie, chief executive of the Scottish Futures Trust, explained: “Our new corporate plan reflects our commitment to creating a sustainable, inclusive and prosperous Scotland. It’s our privilege to act as a centre of expertise, inspiring ambition to push forward innovations in infrastructure strategy, investment, delivery and management.”
He says SFT’s unique multidisciplinary team brokers vital collaborations to create the infrastructure systems needed to transform places, address climate change and support public service reform.
“We are determined to deliver rewarding opportunities for the infrastructure and construction sectors, and achieving best value for our public sector colleagues. These twin aims motivate us as we work closely with our partners to drive forward projects that improve lives, creates jobs and ensure Scotland’s infrastructure meets the evolving needs of communities and businesses today and in the future.”
