AN extra £1 billion is to be invested in the Scottish Government's scheme which funds major projects such as new hospitals, schools, roads and railways.

Finance Secretary John Swinney announced the expansion in capital spending through his preferred private finance model, in addition to saying how he would spend the £67 million windfall from the UK Budget announcements by George Osborne.

The Scottish Government inherited Public Finance Initiatives and successor Public Private Partnership schemes which ministers argue have been ruinous for the public finances, with long-term overspends on hospitals and prisons.

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But Holyrood ministers claim they have refined the model to deny the private sector bloated returns, to the point where the Non Profit Distributing system championed by the SNP is about to be hiked by a further £1bn.

Mr Swinney said: "This investment will build on the successes of the current programme, delivering colleges, schools, roads, hospitals and community health facilities across Scotland.

"It will provide the construction sector with the long-term certainty of a future pipeline of work. It is affordable within the headroom of our 5% limit, which we chose to put in place to make sure we can deliver now for the economy without over-constraining future budget choices."

Mr Swinney also outlined how he would spend £67m extra related to the recent UK Budget announced by George Osborne.

He spoke of an extra £31m capital funding over the next two years for local government to further develop infrastructure needed to increase early learning and childcare provision.

This will bring the total capital investment to £91m .

There was an extra £12m for local government in 2015-16 for the provision of free school meals for P1 - P3 pupils, with proportionate extra funding in 2014-15 for the implementation of the commitment from January 2015.

There was also an extra £10m of support for Help to Buy (Scotland) in 2014-15, bringing the overall investment to £235m over three years.

There was £12m more this year to tackle youth employment, and £2m over two years to give more support for people affected by the UK Government's welfare reforms.

Labour finance spokesman Iain Gray said Mr Swinney had previously been adamant that he had fully funded those commitments but the extra cash was "a straightforward admission that the commitments made in January were never fully funded".

Tories and Liberal Democrats also pressed Mr Swinney on the cash for childcare, demanding to see the detail behind the announcement.