AN SNP-run council has become the first in Scotland to fully pay off its PFI debt 25 years after a previous Labour administration took out contracts.
Private Finance Initiatives (PFIs) or Public Private Partnerships (PPPs) were a method of funding public projects where private businesses built public infrastructure like schools, hospitals and roads, while the public paid the bill over time – at a far higher rate than the original cost.
The scheme was used to build several schools in Falkirk including Bo’ness Academy, Braes High, Graeme High and Larbert High.
While full details of costs are set to emerge next week, early reports suggest the initial value of the assets was around £65m, with the total cost of the contracts to the taxpayer expected to be £316.4m - almost five times the original value.
Paying off this bill will save the public purse up to £3 million a year, the SNP has said.
Falkirk MSP Michael Matheson has welcomed this progress but warned the UK Labour Government is set to reintroduce similar initiatives elsewhere.
He said: “Thanks to SNP leadership, Falkirk Council is now PPP free after over 25 years of Labour mismanagement. “The schemes introduced under Labour were akin buying a house using a credit card with an extortionate interest rate. They have cost councils such as Falkirk millions which could have been spent on local services. "Year after year this poor deal put in place by Labour has seen cash that could have gone to improving education being lost to private profit. When the SNP formed the Scottish Government we put a stop to the use of Labour's PPP contracts, and here in Falkirk the SNP have now brought that expensive Labour legacy to an end."
Earlier this year it was revealed that PFI/PPP deals will cost Scottish council taxpayers £544 million this year with the total cost to Scotland's public sector estimated to be over £1 billion in 2025-26.
The National reported on Thursday how the Department of Health and Social Care has allegedly sounded out private investors to build health centres in England, which could see a return to the PFI scheme.
The Financial Times reported that Wes Streeting’s department is looking to secure investment for up to 200 neighbourhood health centres.
Long-term contracts to design, build and manage local NHS centres, with the aim to have one in every community by 2025, were reportedly set out in documents seen by the newspaper.
PFIs were initially brought in under John Major’s Tory government in the early 1990s, but became more prominent under Labour’s Tony Blair.
