Moving Forward With The Scottish Futures Trust
Monday, September 15, 2008
The Scottish Government has taken the next step in the development of the Scottish Futures Trust (SFT) with the appointment of Sir Angus Grossart as Chairman of the new body. The SFT is a limited company charged with delivering new public infrastructure such as schools, hospitals and transport projects. It is intended that the SFT will deliver better value for money than existing PPP/PFI projects by developing public sector expertise and new investment models.
Finance Secretary, John Swinney believes that “the establishment of the SFT and the appointment of Sir Angus as Chairman is a significant step forward for Scotland. SFT will bring together a wide range of partners, expertise and resources to provide the high quality schools, hospitals and transport infrastructure that Scotland needs, in a far more cost efficient way than PFI has done in the past”.
Mr Swinney believes that there are three key elements of the SFT which distinguishes it from existing PPP schemes:
- the use of the non-profit distributing (NPD) procurement model;
- the development and retention of public sector expertise within a central body; and
- the ability to bring together a number of public bodies to secure aggregated funding.
Critics of the SFT say that it is little more than a re-branding of PPP.
One of the key strands of the SFT is the inclusion of the NPD model which provides the private sector with a capped return rather than the ability to make “equity” profits, which are seen by some critics of PPP as excessive.
Martin Gallaher, a partner in Biggart Baillie’s Infrastructure, Environment and Transport team, welcomes the use of NPD and points to Argyll and Bute Council’s Schools NPDO project as a good example of this model. Martin believes that “Argyll & Bute Council’s successful non-profit distributing schools project demonstrates what NPD can deliver. The SFT can build on the lessons learned from this, and subsequent non-profit distributing projects, to ensure that future investments provide improved value for the public purse.”
The Scottish Government has committed £35billion over the next ten years to deliver new schools, hospitals and roads. There is, however, no indication of when the SFT will start to deliver. Given the current economic climate and the need to improve aging infrastructure, industry insiders and local authorities are keen to ensure that projects start coming into the market sooner rather than later. Martin's view is that “Now the SFT has been established it is essential that the procuring authorities are given details of how it will work and when the procurement phase will start. This will give the authorities and contractors the confidence that SFT can deliver.”
To find out more, please contact Martin Gallaher on 0141 228 8000 or email mgallaher@biggartbaillie.co.uk.