Our Report for change – Rethinking Private Financing of Scottish Public Projects

In the midst of a windy day on the 29th of January 2016, the side of Oxgangs School in Edinburgh collapsed. A large section of the gable wall came crashing down with nine tonnes of bricks falling across the path below. An independent report concluded that it was “a matter of timing and luck” that no children were killed or injured at the site.

The problem with PPP

At Jubilee Scotland we campaign for the cancellation of unjust debt worldwide. This year we have been focusing at one of the main causes of rising debt here at home and abroad, one that has long been criticised yet little has been done about. Public Private Partnerships (PPPs) are long-term contracts where the private sector designs, builds, finances and operates an infrastructure project.  This scheme in its various forms over the years has left local authorities across Scotland paying much more than needed for public projects and in some cases putting people at risk. Long contracts with high interest rates and poor building standards have left Scotland with flawed or unfinished buildings, the taxpayers sometimes paying double what they’re actually worth. It has created unjust debt problems and added unnecessary financial pressure on local services across the public sector.

The Oxgangs School catastrophe put PPPs on the map for a lot of people in Scotland. After the wall collapse 17 schools across Edinburgh that were built under the same PPP, ‘Edinburgh Schools Partnership’ were forced to close and undergo inspection and repairs. 2 years later, after the partnership told the council that all problems had been fixed, it was found that there was still issues with many of the buildings, forcing the council to undertake emergency repairs of their own. Because of the nature of these PPPs, the parties responsible are usually protected through corporate confidentiality contracts, but it’s the council that take all the blame for schools they were promised were built properly.

Private Profit over public safety

Recently two of the countries biggest hospitals have been in dispute with their own faulty PPPs. NHS Lothian is paying out £1.4m every month for the new unfinished Sick Kids Hospital with little oversight of how much of that money is going back into the public purse. The hospital hasn’t opened because of design flaws that make it uninhabitable, yet there’s nobody to take to task, nobody to answer questions why these mistakes have happened. NHS Greater Glasgow and Clyde have decided to take legal action against the contractor of both hospitals. Brookfield Multiplex were responsible for the construction of Queen Elizabeth University Hospital which opened in 2015 with many severe issues, leading to deaths in the children’s ward due to contaminated water. 

PPPs like these have led to a loss of accountability in our public services, because local councils and the government are rarely given any power to renegotiate when things take a turn. The country has a ballooning amount of debt that we have no control over as the contracts in a PPP are not usually transparent, last for decades and almost always favour the private contractor. Scotland has had issues with them, but has still has been involved in exporting PPPs to countries abroad through the UK’s Department For International Development. On an international level these Partnerships have led to corruption, environmental issues and inequality. It’s an unacceptable move for a country that committed to the Sustainable Development Goals to export schemes that undermine progress on them.

Finding a way forward

We need an alternative solution for Scotland’s problems with funding. On the 29th of January 2020, the fourth anniversary of the Oxgangs School collapse, we will debut our report at the Scottish Government. It examines Scotland’s relationship with PPPs, highlighting all the issues with the current system of private financing while presenting solutions to how we can fund infrastructure here in Scotland that the public have control of. By taking on an approach that serves the needs of local communities, we will be able to make their projects work for us instead of being being held ransom by private companies to access of our own public services.

Click here to download our report, Rethinking Private Financing of Scottish Public Projects

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