Scottish PPP proposal may be illegal

Officials are reviewing the Scottish Government’s controversial proposal to fund public sector projects amid fears the plan could be illegal.

Officials at the Scotland Office are reviewing plans for a Scottish Futures Trust, touted as a cheaper alternative to public private partnerships (PPP).

Their concerns centre around the legality of plans for a municipal bond to raise finance guaranteed by the collective assets and revenue streams of Scottish councils.

A Whitehall source told the Scotsman: “It is almost certainly illegal that money raised from a bond with one council could pay for a project in another area.”

But a Scottish government spokesman stood by the scheme and said the legalities had been checked.

The new finance plan has come under heavy fire, with opponents suggesting the plan may not be attractive enough for private investors and was merely PPP-lite.