CRIPPLING repayments of contracts struck with the private sector in the previous decade are costing councils around £500 million a year, sparking calls for the deals to be renegotiated or bought out.
Warning of a further 30,000 job losses in Scottish local government in the next two years, trade union leaders have called on "politicians at all levels and of all colours" to find fast and practical measures to mitigate against oncoming cuts.
They have pointed to several cases in England where health boards and councils have either bought out or restructured their Private Finance Initiative (PFI) contracts, tapping into cheaper loans and delivering millions in savings.
Unison's general secretary in Scotland, Mike Kirby, said a move to reduce the impact of PFI repayments on local government was one of several avenues the union wanted to pursue with ministers.
It is understood several Scots councils have been undertaking low-level work on the merits of going back to their PFI contracts, while the Chartered Institute for Public Finance and Accountancy (CIPFA) have also explored the matter.
Recent figures from spending watchdogs show that since 1999 councils have financed around £4 billion of capital projects using PFI and Non-Profit Distributing (NPD) contracts, mostly for new and refurbished schools.
But under these contracts councils are committed to paying back nearly £17bn and still have a remaining £13.4bn to pay between 2014/15 and 2041/42.
Repayments totalled £488m in 2013/14 and are predicted to peak at around £600m a year between 2024 and 2028.
Mr Kirby said Unison's current primary aim was to highlight the impact on public services, the economy, jobs and wages by the austerity agenda and to make the case for our alternative strategy.
He added: "While campaigning, we also need to explore practical ways to mitigate against these cuts.
"We will challenge Scottish Government and politicians at all levels and of all colours to work with trade unions on measures we can take to reduce the number of job losses and damage to vital public services, we want to examine a number of possible initiatives to achieve this aim and would look to work with Scottish Government and public service agencies."
Last year Northumbria NHS Trust freed up around £67m over 19 years by buying out its PFI contract following a loan from the local council, while London's Southwark Council bought itself out its contract for four care homes, saving £1m a year over the next 12 years.
In the run-up to a recent conference on the issue CIPFA, which runs a service for public bodies wishing to renegotiate their PFI contracts, said: "Recent evidence has begun to emerge where review of some historic PFI schemes has resulted in significant financial savings for public bodies. This entitles us to question whether it is now possible that the initial innovative but historic manner of PFI schemes can now be reconsidered."
Green MSP John Finnie, who yesterday quizzed the Scottish Government on the impact of PFI on schools, described the legacy of the contracts as "having a disproportionate impact on the public sector" and called for a review of the implications of the debt.
Minister for Learning, Dr Alasdair Allan, said: "The Scottish Government has made clear that the PPP/PFI approach used in the past has not delivered best value for the taxpayer in Scotland. As a result, since May 2007 no new PPP/PFI projects have been initiated by the Scottish Government.
"The Scottish Futures Trust has undertaken a review of a number of operational PPP/PFI contracts across Scotland to identify where, with further focused work, significant savings could be achieved."
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