A change to the way major public building schemes are paid for in Scotland is unlikely to deliver any extra savings, according to a group of academics.
The Scottish Government hopes to drive down costs through its non-profit distribution (NPD) model of financing projects like schools and hospitals.
But a group from Edinburgh University said that NPD provides “similar rates of return” to the system it intends to replace - the private finance initiative (PFI).
It explained that both models involve private firms paying to build and maintain public buildings, with returns being around 15% to 18% a year for each.
Report author Mark Hellowell, of the university’s Centre for International Public Health Policy, said: “Evidence so far suggests that rates of return to investors on NPD schemes are similar to those we have seen on PFI schemes.
“This is not surprising - the former model is a relatively minor variation on the latter, despite political rhetoric which suggests there has been more substantive change.”
Phasing out PFI was a flagship policy of the SNP at the last election. Finance secretary John Swinney said the new financing mechanism, to be run through the Scottish Future’s Trust, will end the ‘exorbitant’ costs associated with ‘excess’ profits from public contracts.
