Scottish Futures Trust announces savings of £500m on Scottish infrastructure projects

This year's independently validated annual 'benefit statement' (28-page / 1.5MB PDF) by the Scottish Futures Trust (SFT) set out savings worth £132 million, or more than £525,000 each working day, it said.

"SFT has made remarkable progress in the relatively short period in which it has been operational, with the clear objective of delivering increased value on public sector infrastructure for Scotland," said Sir Angus Grossart, chairman of the SFT.

"Central to SFT's progress is that we have worked hard to establish strong strategic alliances with local authorities, health boards and other public bodies in Scotland. Those alliances allow SFT to bring additional investment and a strong professional ethos to help deliver public sector construction projects," he said.

The report showed that the SFT met its target of attaining savings worth between £100m and £150m for further investment in infrastructure for the fourth year in a row. It also met a commitment to deliver a minimum of £7 of benefits for every £1 spent on the organisation for the fourth year in a row.

The statement breaks down the financial benefits attained by the SFT into three parts: avoided costs, such as preventing the need for the use of external consultants; efficiency savings on infrastructure as a result of its intervention; and additional investment generated over and above capital budget allocations through the use of structures or techniques developed by the SFT. It also sets out a number of "non-financial" benefits, including sustaining jobs in the Scottish construction sector and its support for environmentally sustainable construction and reduced carbon emissions.

Successful projects highlighted by the SFT included the construction of two identical schools 55 miles apart under a collaborative arrangement between East Renfrewshire and Midlothian Councils; resulting in savings of £4m. Another 20 local authorities are now using similar arrangements to procure their new school projects, the SFT said.

It is also leading on the Non-Profit Distributing (NPD) programme, which allows investment to be made in large-scale construction projects before capital becomes available, and "innovative" funding programmes such as the use of tax incremental financing (TIF) on two projects in Falkirk and Glasgow. The NPD pipeline is currently worth £2.58 billion, with £1.7bn of contracts at various stages of procurement. Work on many of those projects is due to begin this year, it said.

"The savings SFT achieved last year, in collaboration with a wide range of public sector bodies, allow us to deliver more houses and schools and more health and community projects," said Nicola Sturgeon, Deputy First Minister and Cabinet Secretary for Infrastructure.

"The benefits of these savings to the economy are significant – every additional £100m of investment supports 1,400 jobs in the Scottish economy," she said.