John Swinney yesterday conceded that his plans to reform funding of schools, hospitals, roads and the new Forth bridge are part of the same financing system that has been extensively criticised by the SNP for years.

John Swinney yesterday conceded that his plans to reform funding of schools, hospitals, roads and the new Forth bridge are part of the same financing system that has been extensively criticised by the SNP for years.

The Finance Secretary told Holyrood's Finance Committee that the Non-Profit Distributing (NPD) model of raising money for capital projects is "part of the family of Public-Private Partnerships".

He said it removed excessive profits under the Private Finance Initiative, which was used by Conservative ministers before 1997, but said the proposed model would otherwise be similar.

Mr Swinney was giving evidence to the Finance Committee a week after publishing his plan to set up a Scottish Futures Trust (SFT).

This is partly to contract with private-sector builders, banks and facilities management companies to build public service facilities such as schools. It is also intended to broker deals between councils to use their power - which the Scottish Parliament does not have - to issue bonds to raise capital finance.

Its third role is to provide a centre of expertise. Mr Swinney said yesterday that the public sector lacks the experience of the market and has a poor record of assessing financial risk to negotiate value-for-money deals.

Mr Swinney warned the cost of servicing past private finance deals will rise by 14%, 16% and 17% over the next three years, while the total finance available will barely increase. He said the past government's commitments "are delivering a squeeze in public spending available for other projects".

Yet the committee heard that the cost of the SNP government's new arrangements will simply add to that fast-rising bill.

Facing questions about Scottish Government encouragement of local authorities to issue bonds to finance new schools, Mr Swinney said there would be no national projects under the plan, which effectively rules out use of bonds to finance the new Forth crossing.

In addition, the committee has heard that the NPD model of financing only works with relatively low-risk projects, and the Forth bridge is seen, in financing terms, as exceptionally high risk. Mr Swinney is yet to announce how he intends to finance the crossing.

The committee's inquiry into financing capital projects has twice been snubbed by UK Treasury Minister Yvette Cooper, who said in a letter to its convener last week that its work only involves devolved issues.

The SNP hit back, with MSP Joe FitzPatrick attacking the Treasury for off-the-record briefings against the SFT and refusing to explain a major change in its public sector accounting rules.

"If the Treasury are not willing to come to the Scottish Parliament and present their thinking on issues that have a huge impact on the power of the Scottish Government to develop good quality infrastructure for Scotland, they should not be interfering in the media," said the Dundee West MSP and finance committee member.

Mr Swinney argued that a sign the former system of Public Private Partnerships was not working well was that so few companies were bidding for it. But Labour MSP Tom McCabe suggested the private sector is not bidding because the profit margins are not attractive, which would undermine the Finance Secretary's case for replacing the existing funding model.