Margo MacDonald wants councils to renegotiate PFI contracts

COUNCILS and health boards should be told to renegotiate PFI contracts in a bid to save money and avoid even bigger spending cuts, Margo MacDonald has told MSPs.

The independent Lothians MSP used the debate on next year's Scottish Government budget to highlight a potential area of saving she said had so far been ignored.

MSPs approved the SNP's 30 billion spending package for the next financial year by 66 votes to 45, with 14 abstentions.

The Conservatives, Greens and Ms MacDonald voted with the SNP while Labour voted against and the Liberal Democrats abstained.

Finance secretary John Swinney agreed to Ms MacDonald's call for funding for apprenticeship places to train young people in the skills of stonecraft to help restore Edinburgh's crumbling heritage.

He also announced a series of concessions to the opposition parties, including 10 million for a non-means-tested home insulation scheme demanded by the Greens, a 2m boiler scrappage scheme called for by Labour, 20m for college places which the Lib Dems campaigned for and an independent budget review panel proposed by the Tories to examine future spending.

Ms MacDonald thanked Mr Swinney for extending the apprenticeship scheme to stonemasons. But she went on to warn that with total government debt in the UK heading towards 1 trillion, councils faced even heavier cuts in their budgets than the 270m already in the pipeline.

She said: "One area of expenditure which could be looked at for cuts, which to date has been ignored, is the enormous sums councils and health boards dish out to the PFI owners of what look like, but are not, public assets – schools and hospitals, to start with."

She said commercial organisations faced with big debts would renegotiate contracts to get their costs down.

She said between 2010/12, PFI repayments would reach 85.6m in Edinburgh, 21.3m in Midlothian and 25.3m in West Lothian.

"We are in the ridiculous situation that RBS and the Bank of Scotland – government-owned on our behalf – are extracting money from local authorities and other public bodies while causing misery for thousands.

"These councils could be forced into sacking people whose taxes saved the banks in the first place."

City finance convener Phil Wheeler welcomed the Government's pledge on stonecraft apprentices as a "sensible" move. He said: "We have a lot of old buildings in the city which need the tender care of stonemasons."

And he indicated he would be willing to look at the potential for renegotiating the council's PFI contracts.

"We have not entered into any new deals of that sort and I appreciate there are concerns about the commitment involved in PFI and whether there are other ways of paying for public projects. I've no objection to having another look at it."

Labour voted against the budget because the SNP refused to reinstate the Glasgow Airport Rail Link. The Lib Dems said they abstained because although they had won major concessions, the Government had not gone far enough on cutting top public sector pay.

SNP CONCESSIONS

Independent Budget Review panel set up to advise on future options.

• All items of public spending over 25,000 to be published.

• 10m for area-based, universal home insulation scheme.

• 2m for a boiler scrappage scheme.

• Cash for training in skills for repair of traditional buildings.

• 20m support for students in higher education.

• 10m to help firms access finance.

• 1m to support post office diversification.