Unison calls on Scottish Government to back public private contract buyouts

The trade union, which represents public sector workers, has called on all political parties to support councils to buy back the contracts, which are currently being paid off over 25 or 30 years, using historically low interest rates to refinance borrowing.

None of the parties have backed the call but the SNP and Labour have committed to reviewing some or all of the schemes.

The proposal comes amid the ongoing closure of privately-financed schools in Edinburgh due to safety fears which raised fresh questions about the suitability of the schemes.

According to The Herald, taxpayers face repayments amounting to around £35bn for schools, hospitals, roads, prisons, waste disposal facilities and other projects built under PFI, PPP and two new variants developed by the SNP government: NPD and the Hub initiative.

The bulk of that, about £31bn, relates to the earlier PFI and PPP contracts, though the £4bn owed as a result of newer schemes is set to grow as the Scottish Futures Trust, the government body that negotiates public-private deals, delivers more projects.

In its manifesto for local government, Unison said: “The recent scandal round PFI schools in Edinburgh shows one weakness of the PFI model of funding and building infrastructure. We believe PFI is an inefficient method of delivering infrastructure projects.

“The inquiry into the failings in Edinburgh should be widened to include all projects built using this method, including considering how to make the costs more transparent.”

It cites the example of a hospital in Northumberland, where a PFI contract was bought out by the local council last year, as evidence the Scottish Government could save billions of pounds.

Mark Ferguson of Unison Scotland said: “Local government has been starved of cash and the price for that has been paid by staff and service users alike.

“We need the Scottish Government using all of its powers to get more money into local government.

“As part of that we should be looking at all of the PFI/PPP deals that have been signed by councils and the Scottish Government should be looking at how we can buy these back.”

Unison argues that councils and new joint health and care boards could also raise the cash to buy out all the country’s public-private schemes by borrowing at cheaper public sector rates.

The SNP manifesto says the Scottish Futures Trust will “continue to review existing PFI/PPP contracts” with a view to cutting costs, “including ending contracts where possible and appropriate”.

Labour has promised a review of all public-private contracts, including those under the SNP’s NPD or Hub models.