SCOTLAND is setting the pace in innovative infrastructure investment which squeezes more out of public spending, veteran banker Sir Angus Grossart has declared.
The chairman of Scottish Futures Trust (SFT), the body set up to improve public infrastructure investment across Scotland, said its operational independence from the Scottish Government has enabled it to innovate and give a lead to the UK and Europe.
SFT says it has secured £640 million of benefits to the economy in its first five years in the delivery of schools, hospitals and roads, and £4 billion of "additional investment" which supported growth and employment in communities across Scotland.
Unveiling its second five-year plan, Sir Angus said: "It has given us the ability to be more proactive and also engage in activities where we can make the greatest impact.
"We are putting a new lens on infrastructure spending, it is not just visibility or local popularity or what happens to be a temporary political agenda, it has got to earn its corn and it is a very good discipline."
Sir Angus said further devolution, bringing closer links between Scottish spending and borrowing, and the appetite of a growing number of financial institutions for infrastructure investment, spelt "positive opportunities on two fronts" for the SFT model.
He said it was "two years ahead" of anywhere else in the UK in its use of tax incremental financing (TIF), where councils can spend future rates income, to kick-start projects such as the Buchanan Galleries extension in Glasgow. SFT says the UK's first TIF programme will see £350 million of public investment unlock a further £1.3 billion from the private sector.
Chief executive Barry White said the European Investment Bank was currently attracted to Scotland by a "well-structured pipeline of projects", and was earmarking £600 million for projects including the M8 and Aberdeen western peripheral route. "A large proportion of their western European team are working in Scotland, there are more here than in the rest of the UK," Mr White said.
"The three things we do are innovation, collaboration, and additionallyadditionally, investing more is pretty important, because we can all see very clearly that the spending period across all of the UK is going to be a challenging time."
He added: "We will take bold action in collaboration with our partners across Scotland to challenge the status quo, creating and driving forward new and ambitious ways of doing things
SFT's new corporate plan will see it implement a new "growth accelerator model", following the deployment of a "regeneration accelerator model" for Edinburgh's St James quarter. It will also use creative financing to stimulate the supply of affordable rent housing, invest in digital demonstrator projects and manage the extra £1bn of NPD (non-profit distributing) funding granted by finance secretary John Swinney.
Sir Angus said the existing £2.5 billion NPD programme was allowing construction of the long-awaited Aberdeen road "to happen much sooner than would otherwise have been possible previously, thereby bringing forward £6 billion of additional local economic benefit that will result when the road is in use".
Oil service industry offices and headquarters were now under construction in business parks due to the road's accelerated timing, he said. In Edinburgh, he added, the council had invested £61 million in the St James Quarter, unlocking further investment, with St James Centre owners TH Real Estate announcing plans to tender £400m of construction contracts.
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