PFI row after figures reveal financial impact on Midlothian Council

A row has broken out over PFI contracts still impacting on Midlothian Council’s ability to pay for and deliver services.

Monday, 29th November 2021, 5:00 am
Midlothian North and Musselburgh MSP Colin Beattie. Photo: Andrew Cowan/Scottish Parliament

Research from the Scottish Parliament Information Centre (SPICe) revealed the cost to Midlothian Council on PFI contracts, £11 million, is 12 per cent of its education funding, meaning millions is wasted on the contracts.

Midlothian North MSP Colin Beattie hit out at the Conservatives and Labour.

He said: “The rotten PFI contracts were introduced by the Tories but supercharged by the Labour-led Scottish Government and unnecessarily cost councils across Scotland, including in Midlothian.

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Midlothian South councillor Jim Muirhead (Labour)

“It is incredible that the lasting legacy of Labour governments continues to be felt as schools’ budgets are eaten up significantly by these wretched contracts.

“The SNP scrapped PFI contracts, meaning that money can be spent on Scotland’s young people and not on absurdly expensive contracts.

“This demonstrates how we still cannot trust Labour with the public purse in Scotland.”

In response, Scottish Conservative Lothian List MSP Jeremy Balfour said: “Yet again, the local SNP MSP is trying to deflect from his own party’s shocking performance in Government.

“Despite claims of increased spending in education, our local schools are simply not seeing the results coming through. It is time for the SNP MSP to own this issue, rather than simply trying to pass the buck.”

A Midlothian Council spokesman said the council is confident the PFI contracts provide best value for money, adding: “The figures quoted are the annual costs to the council of 12 schools funded under these arrangements with a substantial part of this spent on running costs such as janitorial, cleaning, grass cutting as well as the maintenance of the bricks and mortar of the buildings themselves – costs that would have to be paid whatever the contractual arrangement.

"The remainder of the expenditure works just like a mortgage payment for these assets, which are now valued at just short of £150 million.”

Depute council leader Jim Muirhead (Lab) said: “When you consider the cost of the SNP’s private finance deals, one could be forgiven for suggesting that this is gross double standards on the part of Mr Beattie.”

He added: "Perhaps Mr Beattie should reflect on the contracts entered into under the SNP’s supposed alternative, the Scottish Futures Trust, which are PFI contracts by another name.

“A 2018 report showed that for 28 of these projects, 84 per cent of the profits generated will go to companies based outside Scotland, including to some with shareholders who have corporate relationships with tax havens, such as the Caymen Islands, Jersey and the British Virgin Islands.

“I would also draw his attention specifically to Edinburgh Sick Children’s PFI project. The hospital was expected to cost about £150m to build, but the price that will be paid, over the next 25 years, will be £432m, including £28m payments made before the hospital was even able to be used.

“It seems like a press release similar to this one is issued by either Colin Beattie or Christine Grahame on an almost annual basis. I looked back as far as 2018 and found one from Ms Grahame which is almost exactly the same as this one.

“This is done as we approach the point at which we learn what funds will be allocate to Midlothian by Scottish Government. It is done in attempt to detract from the failure of the SNP Government to adequately fund local councils over many years, particularly Midlothian, and the failure of our SNP MSPs to support the council’s efforts to address this.”