Chief executive of the Scottish Futures Trust reflects on 1,000 days in post

When Barry White was appointed to head the Scottish Government’s arm’s-length public infrastructure company in 2009, a big question mark hung over its purpose.

The original intention of its SNP architects appeared to be that, through sheer force of will, the trust would become a fund that would attract bountiful investors and through which major projects would be financed.

Thus the public purse could remain happily untroubled by multi-billion-pound bills – and Labour’s much-loathed private finance initiatives scrapped to boot.

Then reality intervened; without increased borrowing powers, the Scottish Futures Trust (SFT) was in danger of becoming a talking shop. “The initial prospectus was written by others, not by us,” said White in an interview shortly before Christmas. “When I came in, under the chairman Angus Grossart we set out our stall about what we were going to do – which was about efficiency and additionality.” As the SFT says on its website, while it operates at arm’s length from the Government, it works closely with the public sector “to seek and deliver improved value for taxpayers. SFT is committed to saving taxpayers’ money and works with the public sector to deliver the best possible value where money is being spent on bricks and mortar.” The company says it currently leads or supports a portfolio of projects worth £9bn and last year delivered £129m in savings and benefits, which represented a 16 per cent increase on the £111m savings it made during 2009-10.

“The initial prospectus did focus more on additionality, that’s true. But within the accounting rules and the boundaries the Government is bound by, we are still finding innovative ways to finance public infrastructure. You look at when we were set up in September 2008, right in the middle of the financial crisis, we have been able to take a practical rather than ideological approach, look at the market and look at what parts we can bring together to make projects possible.” Opposition criticism of the SFT has bordered on the innumerate; one Labour spokesman said that it was “little more than an expensive quango doing the job that civil servants used to do for nothing.” White said that as well as achieving savings, the SFT has improved the quality of public building and initiated projects in housing, education and health that would not ordinarily have happened in the current economic climate – providing much needed employment as well as vital infrastructure.

When White joined, he thought one of the key areas to improve was in procurement; it was, but he also took the process back a stage by “focusing on needs not wants. I didn’t think that this was going to be such a big area.

But when you analyse it, in times of plenty people in the public sector, much like people did in their private lives, spent on things that were nice not essential to delivering a particular outcome.

“So, one of the areas we developed was the ‘challenge function’, concentrating on needs not wants and making the public pound go further. You do need to apply pressure, and keep applying it, so that behaviour doesn’t revert; it’s a bit like stretching a rubber band.” White did not agree that some of the intangible benefits of public investment were lost in this way: “Needs not wants is a very simple way of expressing what is quite a complex issue.

“If you look at Glasgow College, for example, which we have just started to procure, it has to be attractive as well as just being a functional building. Its presence is a need that you can link to an outcome. Similarly, we are very focused on sustainability; it will be built for the long term, to reduce maintenance and lifecycle costs, with a low-carbon footprint that will contribute to the Government’s targets as well as lead to lower fuel bills.

“Take the £1.25bn schools programme which we manage for the Government. The first thing we did was look at the last 28 schools and find out what had worked and what had not. Generally, people were happy but some key themes emerged to do with heating and ventilation. We looked at schools in Bristol where they had done away with ceiling tiles. Windows could be taller, allowing more natural light and the exposed well-finished underside of the concrete provides passing cooling, acting like a larder, to avoid overheating which was a common issue raised by staff and pupils in existing schools.” White cited another example of toilets where there were cubicles but the handbasin area was communal and open to the corridor; the design was more simple and easy to maintain but it also had the effect of reducing the incidence of bullying: “We try and open people’s minds to doing things differently and to come up with solutions.” Joint projects between local authorities have reduced procurement costs but the aesthetic of the buildings could be tailored to match their locale: “Like VW and Audi, there are common parts but the look and experience is different.” Nonetheless, the challenge function adopted by SFT still comes into play: “If you build a school a certain size, because that’s the way it has always been, but it has more space than is needed for the number of pupils, you need to think about that first. An extra 1000sqm could cost a teacher’s salary to heat and maintain for the next 25 years; what’s more important, bricks or brains?” While the SFT’s education programme is important to the organisation – a new phase is to be announced taking the current number of schools from 55 to 67 – its main contribution has been to efficiency and quality. But in terms of conjuring something from nothing, it’s clear that White is particularly pleased with the formation of the National Housing Trust (NHT).

“We spent a year looking at a new way of delivering housing, a year in the procurement process and now we have signed deals for 600 houses that simply wouldn’t have been built otherwise. That has meant work for the construction industry and jobs at a vital time.

But also, it means new affordable housing is now available with lower rents in homes that are incredibly energy efficient which means lower fuel bills and a reduced carbon footprint.” As the SFT prepares to launch ‘NHT 2’, White is buoyed by the new skills that it has gained: “By bringing in people with private sector investment experience and combining local authority borrowing with a government guarantee we have a way of providing affordable housing which did not exist before.

Those skills and that knowledge do not move on; they remain and we can adapt to changing economic conditions, as we even had to do during NHT 1.” The chief executive also points to the good working relationships it has established: “Because we are arm’s-length from the Government, when we speak to a local authority or a health board we can do so with more freedom to explore possibilities. Not every public sector organisation decides to go ahead, we have to respect their democratic accountability, but with the housing programme, for example, we had eight local authorities in the first round and there are 15 in the next.” The SFT’s role can vary also; in transport projects, such as the Forth Replacement Crossing and the Borders Railway, Transport Scotland takes the lead but the SFT can act as a sounding board at crucial stages, such as during procurement or contract signing.

Other major ongoing initiatives include the so-called hub projects – £1.4bn-worth of new community facilities across regions of Scotland built or being built in a much more planned and co-ordinated way.

White said that this year would also be important for Scotland’s pioneering use of tax incremental financing (TIF); two projects – at Ravenscraig and Edinburgh’s Waterfront – are under way, one – in Glasgow city centre – is being prepared for submission and the SFT is working with four other areas – Fife, Falkirk, Argyll and Bute and Aberdeen City – to develop their business cases. “It represents around £470m of public investment over seven schemes that will unlock four or five times the amount of private sector investment.” As well as the NHT and TIF, a third acronym, NPD, or the ‘non-profit distributing’ model – the Scottish Government’s replacement for PFI, where returns to private investors are capped – will also figure; Glasgow College being the first to benefit.

SFT will also be looking at asset management: “Firstly, we’re working with central government and their agencies; we believe there’s at least 25 per cent of the 7m sq ft of space that could be freed up by better utilisation. Secondly, how local authorities and others plan assets across boundaries. And finally, asset disposal; working with health boards and some areas of government to maximise the value of assets that are no longer needed.” After uncertain beginnings, SFT appears to be hitting its stride and White referred to comments from an industry leader: “Scotland is stealing a march,” Mike Peasland, chief executive of Balfour Beatty Construction Services, told The Scotsman last October.

“Since the SNP took a majority [in the Scottish Parliament] there is a feeling that there is political and financial strength in Scotland and business wants to invest in Scotland.” Peasland said he had changed his opinion of SFT. A former critic, he said: “The SFT had a slow start but it is moving forward pretty well.”