Trade unions and campaigners heap pressure on Nicola Sturgeon to expand PPP inquiry

17/08/2016
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Investigation into Scotland’s PPP construction contracts began after 17 Edinburgh schools were closed over fears of structural faults early in 2016

TRADE UNIONS, campaigners and a think tank have written to First Minister Nicola Sturgeon calling on her to launch the “longer term” inquiry into public private partnership (PPP) schemes she proposed at the height of the 2016 Scottish election campaign.

PPP contracts were at the centre of a scandal in March when 17 Edinburgh schools had to be temporarily closed due to fears over structural faults.

During the scandal, Sturgeon said that an inquiry should take place into the entire PPP system in Scotland, which used private firms to construct public buildings which were then leased back to the government. The scheme was deployed by successive Scottish Labour governments in the early years of the Scottish Parliament.

The letter to Sturgeon calls for a far reaching and nationwide inquiry, and is signed by the Scottish Trades Union Congress (STUC), the general secretary of the EIS teachers union, the NASUWT teachers union, the public sector union Unison and Unite, the country’s largest union.

The letter is also supported by the Common Weal think tank, the campaign group People vs PFI, the anti-poverty campaign group Jubilee Scotland and the National Union of Students.

Robin McAlpine, director of the Common Weal think tank, said: “Sometimes it really does seem like people are determined not to learn any lessons from the disaster which was the PFI experiment. This has been a tale of overcharging of the public, rampant profiteering at their expense by financiers and buildings which are not fit for purpose. It really is time there was a proper inquiry.”

So far only a more limited inquiry, focused on the schools scandal in Edinburgh, has been established.

The campaigner’s letter urges the Scottish Government to undertake an inquiry “not isolated to the capital” and “wider in scope” that can consider whether PPP contracts in their current form are any longer feasible or in the public interest.

Nicola Sturgeon calls for inquiry into all PPP and PFI projects

Joel Benjamin, campaigner for the UK-wide campaign group People vs PFI, said: “Scotland has 40 per cent of UK PFI schools, with just 8.5 per cent of the UK population. In March we found many of those schools were dangerously built, placing students and staff in grave personal danger.

“PFI is a national scandal, the faults identified in Edinburgh can be found in schools, fire unsafe hospitals and other public infrastructure throughout England and Wales.

“PFI is a failed model, it’s time for a national inquiry to lift the lid on these secretive contracts.”

The prevalence of PPP contracts in Scotland is related to the indebtedness of many Scottish councils, meaning that local authorities frequently lack the capital to build necessary local services, encouraging them to deploy schemes such as PPP and similar private finance initiative (PFI).

Unite Scottish secretary Pat Rafferty said: "Scotland's public services are struggling in a sea of spending cuts with a legacy of debt hanging around their necks. Since 2010 some 40,000 of our members in Scottish local councils have lost their jobs as a result of spending cuts, and the services that we all rely on – from refuse collection to social care – are suffering as a result.

"Unite Scotland's Drop the Debt campaign is calling for a debt amnesty on money owed by Scottish councils to the UK Treasury from the period before devolution. That will ease some of the pressure, but it doesn’t fully deal with the money being gouged out of our public services every year through PFI.

Background read: Campaigner raises concerns over 44% of Scots council tax revenues spent on loan interest

"We need the Scottish Parliament to take action on this now. We need our MSPs to seriously consider the option of cancelling or re-negotiating unfair and extortionate PFI contracts, and we need to make sure that the private finance alternatives put forward by the Scottish Government will really deliver value for money."

The full letter to the First Minister can be read below.

DEAR First Minister,

We are writing to stress the importance of the Scottish Government following through on your position, prior to the election, for a wider and “longer term inquiry” into PPP contracts in Scotland.

Since the election, the scandal of PFI/PPP built schools being constructed without essential wall ties has grown from 17 schools in Edinburgh to identical problems identified in Glasgow and South Lanarkshire. We therefore believe that while the Edinburgh City Council inquiry is essential, a wider inquiry across the whole of Scotland is needed as this problem is clearly not isolated to the capital.

That wider inquiry must also be wider in scope, taking into account:

  • Whether the ‘self-certification’ model of PPP building regulation should be amended or replaced.
  • The lack of transparency over PPP contracts and whether open access should be the default setting in future.
  • The high cost of debt repayments on PPP contracts, and analysis of whether debt cancellation or contract re-negotiation is a viable option.
  • The current ‘Non-Profit Distribution’ and ‘Hub’ models of public-private partnerships being pursued by the Scottish Government and whether that approach is in the public interest in terms of cost and quality of delivery, and whether an alternative approach should be considered.

This would constitute a root-and-branch assessment of PPP in Scotland, which we think is necessary given the severity of the crisis provoked by the schools scandal and risks to public health and safety.

We also believe that it is vital the inquiry is led not simply by those in the construction industry, but also independent public finance experts, trade unions and parents, who are just some of the direct stakeholders in this issue.

Signed:

Common Weal

Unison Scotland

NASUWT

Larry Flanagan –  EIS General Secretary

People Vs PFI campaign

Unite the Union

STUC

Jubilee Scotland

Picture courtesy of Common Weal

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