The abolition of PFI in Scotland came one step closer last week, with the release of the Scottish Government's strategic business case. This follows a recent consultation after which key commentators, led by CIPFA, called for more detail on this landmark proposal. But just what is the background? And what might this mean for large public sector investment schemes? Prior to the 2007 Scottish Parliamentary election, the Scottish National Party pledged in their manifesto to abolish PFI and replace it with what they termed, a Scottish Futures Trust, with financing based on the issue of bonds. This was intended to sweep away PFI/PPP and finance Scotland's infrastructure with a scheme made in Scotland and financed by Scotland. This was one of a number of pledges by the SNP which now, as a minority government, are under scrutiny to deliver. Prior to the release of the original consultation document in December 2007, it began to become apparent that the core of the proposal – the reliance on bond issue – was beyond the legal competence of the Parliament. In short? Parliament just doesn't have the power to issue bonds. The result was a consultation paper with a look towards reliance on the non-profit distributing model (NPD). The paper may have been low on detail, but certainly did appear to be high on ambition. Those looking for more detail have now been satisfied, in part, with the latest document – Taking forward the Scottish Futures Trust. The paper is the strategic business case, and gives us more insight into the direction the Scottish Government envisages, a direction which takes a slightly different course from the initial proposal. The broad objective of the SFT is unarguable, a support for improved efficiency and effectiveness in public infrastructure procurement to secure improved value for money. Yet, despite this, early political comment has focused on the reliance on NPD, for some, a mere sub-set of PFI. The proposed issue of bonds remains an ambition but with reliance on the powers of local authorities to issue bonds. The proposal is to separate the SFT into two organisational streams. One public sector organisation to be formed later in 2008, which supports development and delivery, and a separate private sector organisation which secures finance. Many questions still remain. Those who wish to debate whether this is a further form of PFI will no doubt do so. But, with a clearer focus on improved investment planning, development and delivery, what this could mean for the large public sector schemes of the future is a sharper, more efficient infrastructure investment, relying on the best of both the public and private sectors. n Don Peebles is policy manager at CIPFA Scotland
