Common Weal has been at the forefront of scrutinising the way that Scotland builds is public infrastructure, best known as the Private Finance Initiative or PFI. We have been very critical of a system that almost everyone knows has made big business and financiers a lot of money by greatly overcharging the public for new buildings like schools and hospitals. We’ve shown how it is a recipe for letting big business make excessive profits at the public expense and why it keeps failing, shows how the way we finance public infrastructure is a dangerous risk and why reforms of the system have actually made it worse.
But there is a better way to do it which we set out in our report Building Scotland’s Future Now. At the moment we build new infrastructure using variations of letting private sector consortia design and build it and then the public rents it back over many years – at a premium. But because the consortia are driven by money it is in their interests to design what is cheap to build rather than what Scotland or a community needs, and there is no incentive to build it to last as there is when the public sector builds and owns infrastructure itself. This is all to enable complex finance packages which are supposed to ‘transfer the risk’ to the private sector but which have been shown repeatedly to do no such thing. There is no need for this. The Common Weal plan is to create a Scottish National Infrastructure Company which is focussed not on how new infrastructure is financed but rather be a ‘centre of excellence’ on how to design and build the best public infrastructure possible, designed to last and serve many generations. Financing is easy – public bodies should work with the Scottish National Investment Bank to agree long-term financing packages and simply own the infrastructure themselves. By using this approach Scotland can build better infrastructure for less.