Start funding major projects now or jobs and expertise will go, SNP told

JOBS and expertise will be lost in Scotland as a result of the SNP government's failure to get its act together over funding major infrastructure projects, ministers have been warned.

There was a furious reaction to John Swinney's announcement in Holyrood yesterday on the Scottish Futures Trust (SFT), which failed to give any timetable about when the new body would be commissioning projects.

The SFT is intended to be the body which funnels through infrastructure projects such as new schools, hospitals, roads and bridges.

But since the SNP came to power the commissioning of projects has ground to a halt, according to one building chief.

Delays have been caused because the original idea of issuing bonds had to be dropped after it was deemed illegal.

The SNP has been trying to develop the not-for-profit version of PFI to make it look different enough to sell to PFI opponents in the party.

Yesterday Mr Swinney announced merchant banker Sir Angus Grossart had been made chairman and the SFT had been registered with Companies' House, but offered no details on timescales and how the organisation would work.

He rejected the charge that not a single new school project had been commissioned since the SNP came to power, despite its promise to match the previous administration's school building programme "brick for brick".

Michael Levack, the chief executive of the Scottish Building Federation, warned that the construction industry had "gone beyond the critical point" in waiting for projects.

He said: "The flow of infrastructure projects has ground to a halt waiting for the SFT.

"If you look at what has happened with the housebuilding industry, that means there are going to be many jobs going over the next year unless (this] starts working."

He continued: "I also understand that the banks in Scotland have now either scaled down their teams which deal with private finance initiatives or got rid of them. It means the great expertise we had is drifting away and being lost."

The Scottish Government has insisted it has put forward new projects, including the Southern General Hospital for Glasgow, and it is building schools.

Mr Swinney said the SFT would benefit Scotland in the long term by finding £150 million of savings in projects and pooling expertise.

Asked about any deadlines on getting the SFT up and running, Sir Angus said: "We've only been going for half a day. We don't need to move too quickly."

But the building industry's concerns were echoed in the financial and legal sectors.

Jenny Stewart, head of public sector for KPMG accountants in Scotland, said: "What the Scottish economy needs now is new projects. NHS community facilities – the so-called Hub projects – have stalled since the election, no progress has been made on waste schemes, while local authorities are still struggling to afford new schools."

Ian McPake, partner and chairman at Tods Murray LLP, added: "The SFT seems to amount to little more than a re-branding of the already established non-profit-distributing model."

Andy Kerr, Labour's local government spokesman, said: "This is nothing more than an expensive and poorly managed re-branding of PPP with a £17 million quango."