Ministers have been accused of covering up the true cost of buying Prestwick Airport as auditors reveal that nearly £40 million of taxpayer-funded loans is expected to be handed over to the Ayrshire base by 2021.

 

Opposition parties demanded to know why the sum, estimated in the Scottish Government's revised business plan, was not disclosed to parliament.

The details emerged in an Audit Scotland report published today, which though generally favourable highlights an estimated £39.6m spend on loans by the 2021/22 financial year.

Prestwick Airport was facing closure in 2013 after owners Infratil failed to find a commercial buyer. The Scottish Government stepped in and bought it for £1.

The most recent update on costs came in October last year, when Finance Secretary John Swinney announced a £10m cash injection for the airport, on top of the £15m of public money paid to support running costs and refurbishments since the takeover.

The Scottish Government has repeatedly stated that it expects to recoup the investment plus interest once the airport returned to profitability.

LidDem MSP Jim Hume said: "The cost of investing in Prestwick Airport to the taxpayer more than doubled but the SNP government kept that a secret. Meanwhile the forecast annual passenger growth rate has been nearly halved.

"Transparency from ministers over the business case is crucial to provide assurances about the airport's long term future. People will want to know why this long term cost to the taxpayer of £40m was covered up."

It comes after criticism of the Scottish Government's decision not to publish a £100,000 report, paid for by taxpayers, on the airport's long-term viability to protect "commercially sensitive" data.

The findings were used to a 'Strategic Vision' document which pinned hopes of the airport's recovery on scrapping air passenger duty and becoming the UK's first spaceport.

Scottish Labour Infrastructure Spokesperson Mary Fee added: "The SNP's handling of Prestwick Airport has been a farce since day one. As the Minister in charge Nicola Sturgeon was repeatedly unable to answer the most basic financial questions about the airport and its future.

"Now we learn that the projected investment needed is nearly £40 million, but the SNP have never bothered to tell the Scottish Parliament or the Scottish people."

The revised business plan predicts that no further taxpayer loans will be required from 2022, when the airport is forecast to be generating enough revenue to cover its capital expenditure and to begin repaying its loan.

Although Audit Scotland concludes that ministers "acted reasonably" in buying the airport and "identified the risks", the report is also critical that they ignored the potential danger of Ryanair pulling its flights and maintenance base - even though they considered the airport "not viable" without the airline.

Ryanair is Prestwick Airport's only passenger carrier and sparked fears for the airport's long-term viability when it cut flights and opened at third Scottish base at Glasgow Airport last summer, although boss Michael O'Leary insists it has no plans to leave.

Caroline Gardner, Auditor General for Scotland, said: "Our report recognises that the purchase of Glasgow Prestwick Airport was carried out to a tight deadline and in uncommon circumstances.

"The Scottish Government and Glasgow Prestwick Airport should now ensure that a clear strategy is put in place, which takes into account future development potential, and includes robust business and financial plans, full evaluation of potential risks, and a well-defined, regularly reviewed exit strategy."

A spokesman for Transport Scotland stressed the £39.6m figure represented what "may be required", but was "subject to revision" depending on commercial activity.

He added: "Ministers have made it clear throughout this process that additional loan funding, beyond the £25m already set out, may be required for Glasgow Prestwick Airport. Ministers have committed to updating Parliament as and when this is confirmed."