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Roadmap to a better way of public finance

So, those pesky slow-downs on the A8 between Baillieston and Newhouse will soon be a thing of the past.

Well, soon-ish anyway. Transport Minister Keith Brown's announcement that a motorway upgrade scheme in central Scotland can start work without delay is good news for motorists.

Along with upgrades to the M73 and M74 and major improvements to the Raith Interchange, this work on the A8 will ease the flow of traffic and shave up to 20 minutes off journey times between Scotland's two biggest cities.

There are, as always, concerns about the environmental impact of this road building, and legitimately so. Campaigners point out that improving roads simply encourages ever more of us to drive on them and that point is incontrovertible - within a few months of the M74 extension opening in summer 2011, traffic levels on approaching motorways had grown.

However, it also seems clear that without this upgrade, congestion on the A8 would get so bad that cars would start using alternative routes closer to people's homes, clogging up those byways too. The work has obvious economic benefits, providing jobs not only during construction but holding out the promise of some permanent jobs linked to maintenance of the improved roads. Locals can expect to find work on the project, as happened with the completion of the M74, and this is an area that could certainly use the help. The upgrade will be welcomed by local businesses and, crucially, will improve safety.

Costs on the long-standing project are said to have been slashed by £105 million through the use of the dismally named but rather promising Non Profit Distributing (NPD) model, the SNP's better value-for-money alternative to the Private Finance Initiative (PFI) and its near-equivalent the Public Private Partnership (PPP). This is, in fact, the largest NPD scheme to have reached this stage.

Realising those savings will of course depend on the scheme progressing as it should - there are few concrete certainties when it comes to the costs of large-scale public infrastructure projects, especially at this stage - but it appears that this pioneering model is preferable to the expensive public-private finance schemes of the past.

Many public bodies are still counting the huge cost of PFI projects, which saddled them with a generation of debt and tied them in to relationships with contractors that often became fractious.

More than 10 years after Edinburgh Royal Infirmary hospital was opened, that PFI contract is still highly controversial and has been criticised by MSPs as recently as this month.

If the NPD model can bring to an end the phenomenon of health boards, councils and other public bodies being left in hock to contractors for decades, then that will be a great improvement.

The Scottish Futures Trust, which was set up by the SNP to deliver public infrastructure investment efficiently, has been criticised for delays in delivering projects, though it was responsible for £132m in savings in 2012/13. It remains to be seen how this motorways project will develop. If it goes well, it will prove that large-scale public projects need not turn into a private-sector feeding frenzy.

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Finance

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