LABOUR'S £27 BILLION DEBT LEGACY TO SCOTLAND - MATHER

Following a member's question back in March 2010 to John Swinney, MSP, the Scottish Finance Minister, Jim Mather, MSP for Argyll & Bute commented on the estimated costs associated with the use of the Private Finance Initiative (PFI) by the previous LibDem Labour administration. The Finance Minister estimates that this method of funding for the contracts in operation will cost the Scottish people a total of £27.7 billion up to year 2042 when the last contract is completed.

Jim Mather said,

"This is a devastating expose of the true cost of Labour's favourite funding process for the building of schools, hospitals homes and for the delivery of essential public services. In spite of continual warnings about the future problems that such funding would entail, Labour with their LibDem partners contracted huge sums of future debt by their application of PFI and PPP contracts.

It has been revealed that for the lifetime of those contracts the Scottish people will be paying a total of £27.7 billion in the period up to 2041- a figure close to the total of Scotland's annual budget under present arrangements.

The irony here is that in the current recessionary scenario with the UK government imposing restrictions on the annual settlement, the Scottish government is also facing increasing repayments to pay off the folly of PFI. This will total £820 million in the current year, will peak at £1,097 million in 2024 and will not finish until 2042.

To illustrate this in local terms the sum for annual PFI/PPP unitary repayment for Argyll & Bute is £20.1 million in the current year and £20.3 million in the following year. That level of debt is a huge burden and will only increase.

These figures might give a useful perspective on the next occasion when Alan Reid, MP, is being critical of cut backs in social work, local services, reviews of the schools estate or the imposition of increased costs for the elderly and the vulnerable and remind him of the part played by his colleagues when these debts were being contracted. There is no record of the local MP expressing any concerns at that time about the effect that PFI and PPP would have on future budgets."