PFI schools legacy ‘still costing councils millions’

The private finance initiative (PFI) funding mechanism which paid for hundreds of new schools during Labour’s years in power at Holyrood will cost local authorities £426.8 million in this financial year alone, new analysis has revealed.

The contracts, which have seen private firms reap guaranteed annual payments including interest, came under the spotlight in 2016 when 17 Edinburgh schools built under PFI were shut after potentially dangerous building faults were discovered.

Official figures published by the Scottish Parliament Information Centre (SPICe) have revealed that the total cost of PFI across all projects topped £1 billion in 2015/16, with this figure continuing to rise.

The SNP scrapped the PFI system upon taking power in 2007, eventually replacing it with a “non profit distributing” (NPD) funding model. NPD allows private consortiums to make profits from interest, rather than dividends, and has paid for around £3.5bn of spending on public projects such as schools, hospitals and roads.

SNP MSP James Dornan, who is convener of Holyrood’s education and skills committee, said the PFI deals are still “robbing money from vital services”.

He said: “The toxic legacy that Labour’s PFI deals has left our schools and local authorities continues to cost them millions of pounds every year – and proves once again that only the SNP can be trusted to deliver on education and local funding.

“While Labour carp from the sidelines about the SNP’s record, it is increasingly clear that we are still paying for the mess that Labour left over a decade ago – with payments in 2017/18 to be as high as £426.8m across all our council areas.

“Labour’s spendthrift and reckless handling of our public finances continues to rob our local authorities of funds which could be put towards delivering better local services. And let’s not forget the potential consequences of Labour’s dodgy deals on jerry-built schools across Edinburgh – forced to close for nearly 500 days because of fundamental safety concerns.

“It’s high time that Labour apologised for this toxic legacy that they’ve left for our schools and councils across the country.”

But Scottish Labour accused the SNP of “utter hypocrisy” for carrying on PFI “under a different name”.

The party said there was now more involvement from the private sector than ever before.

Jackie Baillie, Labour spokesperson for the economy, said: “This is utter hypocrisy from the Nationalists.

“Despite campaigning for years to abolish PFI, the SNP has carried this on under a different name and has made an absolute mess of it. In fact, there is now more involvement from the private sector than ever before.

“Labour has a proud record of building new schools all across Scotland. We invested in education when we were in government to give everybody a fair chance in life, unlike the SNP which only cares about imposing another divisive referendum on the people of Scotland.”