Chamber and committees

We could talk about housing all day, but Lorna Slater needs to ask her questions.

On a point of order, Presiding Officer.

To ask the Scottish Government what impact trade barriers have on the Scottish economy. (S6O-04334)

Recent analysis suggests that Scottish exports could be approximately 7 per cent lower than they would have been if we had continued to hold European Union membership, which equates to a loss of about £3 billion for sectors such as chemicals and pharmaceuticals, with output down by 9 per cent, computer and electronics equipment, with output down by nearly 8 per cent, and agrifood, with output down by 5 per cent. What representations has the Scottish Government made to the United Kingdom Government about forging closer co-operation with the EU to mitigate those impacts and reduce the trade barriers that are in place?

I thank Kenneth Gibson for lodging the motion so that we could have this important debate on the on-going cost to the public sector of using the private finance initiative.

PFI was first used in 1993 by the Tory chancellor Kenneth Clarke. In 1997, it was adopted by Tony Blair’s Labour Government. We should remember that Labour’s reason for doing so was as stated by the then Chancellor of the Exchequer, Gordon Brown, who struggled to provide a rationale for PFI other than that

“the public sector is bad at management, and ... only the private sector is efficient and can manage services well.”

What is the reality of PFI construction projects here in Edinburgh, and in particular for my Edinburgh Pentlands constituents? The new Edinburgh royal infirmary, which was completed in 2003, is one of the most prominent PFI projects in Scotland. It was built at a cost of £184 million, but the total cost to taxpayers over the contract’s lifespan is significantly higher, with estimates suggesting that payments could exceed £1.1 billion by the time of the contract’s conclusion in 2027.

How has that contract performed? In 2022, NHS Lothian said that it was in dispute over the nature and delivery of maintenance and upgrades required for the hospital. The issue has been placed on NHS Lothian’s risk register, where it warns that there is

“a risk that facilities in the RIE are not fit for purpose because of a failure to carry out required life cycle works and maintenance of the estate.”

The risk register lists heating, ventilation, water and window maintenance as some of the life-cycle works that could present a problem. The health board also warned that it could, if necessary, retain some of the PFI payments to Consort Healthcare if the issues were not satisfactorily resolved. However, the complicated deal for the hospital means that, in 2027, NHS Lothian will enter a secondary contract period that could last until 2053, during which time it will still pay a management charge to Consort.

Then there is the Edinburgh schools debacle. In the late 1990s, the Labour-run City of Edinburgh Council embarked on a massive school rebuilding and refurbishment programme under PFI. The total capital cost for the project was around £140 million. The PFI deal was structured over a 30-year period, with the total cost over the life of the contract projected to be much higher, with estimates at well over £500 million once maintenance, operation and finance charges had been factored in.

During a storm in January 2016, nine tonnes of masonry fell when a gable end collapsed at Oxgangs primary school in my constituency. Fortunately, no pupils or teachers were injured. That resulted in 10 primary schools, five secondary schools and two additional support needs schools being closed because of concerns over the standard of construction across the city, impacting the education of around 7,600 pupils. The impact of those PFI projects in Edinburgh has been criticised for their inflated costs to the public sector, which are often much higher than if the project had been constructed using public borrowing and public procuring.

It is reported that Rachel Reeves may again be considering PFI. She should consider the words of a former chairman of the Royal Bank of Scotland, Sir Howard Davies, who, in 2018, made an admission on BBC One’s “Question Time” when he stated that PFI had been a “fraud on the people”.

I was instrumental in setting up a quarterly meeting with the Edinburgh Chamber of Commerce to better understand the challenges that businesses face. What is the relationship between the FSB and the chambers of commerce? Would you support a roll-out across the country of quarterly meetings of chambers of commerce with back-bench MSPs, so that they fully understand the challenges of business?

Colin Borland touched on business confidence and said that it is absolutely on the floor. I read that, in the fourth quarter of 2024, business confidence was at its lowest level since the fourth quarter of 2020. Why is that?

Okay. Thanks, Colin. Sara, I noticed that you were nodding away there.

Yes, absolutely.

Rose, do you want to come in again?