Scottish Environmental Services Association

Scottish Futures Trust

The Scottish Government has issued a consultation on proposals to establish a Scottish Futures Trust (SFT) as an alternative finance model to Private Finance Initiative (PFI).

Through public sector guarantees, SFT would borrow at lower rates than the private sector. The Scottish Government suggests that SFT could also provide project planning and delivery advice and support to public bodies, and at the same time conduct due diligence on local authorities’ waste strategies so as to ensure that projects are ready to be released to the market.

The Scottish Government has proposed that the SFT would be established as a limited company but that it would not retain any profits for shareholders, as a company listed on the stock exchange would, but would instead reinvest any financial surpluses in new public infrastructure. The proposals also state that, over and above the cost of repayment, SFT would only charge local authorities the amount required to cover the costs of operating the scheme. The proposals suggest SFT could sublet contracts to private sector partners for the construction and operation/maintenance of a facility but ownership would remain vested in SFT. This would not allow the potential opportunity for private investors to gain significant returns from developing new infrastructure in the way that a PFI project might.

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