SCOTTISH councils will have to pay over half a billion pounds this year due to controversial decades-old infrastructure deals.
PFI (Private Finance Initiative) and PPP (Public Private Partnerships) schemes were brought in by the Tories in the 1990s and expanded on by Tony Blair’s Labour Government.
It involves a long-term contract that runs for about 25 to 30 years between a private party and a government entity where the private sector designs, builds, finances and operates a public asset, such as a hospital or a school.
The asset is then handed back to the public sector at the end of the contractual period.
The idea was popular at the time but failed to take into account that the cost of the build and maintenance was often five or 10 times what the capital cost – with the taxpayer paying through the nose in the decades to come.
The scheme was then replaced with non-profit disturbing (NPD) by the SNP Government to curb private profits at 5%.
But new analysis – first reported in The Herald – has found that the cost of repaying the PFI deals this year will cost the Scottish taxpayer around £1.1bn, and £13bn still to be paid in the years to come.
Meanwhile, Scottish councils will have to pay more than £544m this year.
For example, Glasgow City Council faces a £70.1m and Edinburgh is staring at a £51m bill.
SNP MSP Kenneth Gibson said: “PFI and PPP is impacting every council tax paying household – costing local authorities £544.66m in 2025/26.
“That is why the SNP scrapped PFI after coming to power – but these contracts are still in place – pushing council tax bills up across Scotland.
“To make matters worse, rumours are circulating that UK Chancellor Rachel Reeves could be set to reintroduce PFI across the UK.
“We know that public finances are stretched as it is, with council tax rates set to rise this year, not least due to the PFI scandal – don't let Labour make it even worse.”
