“80%” of Scottish PFI schools “owned by offshore firms”

Over two hundred Scottish schools that have been constructed under PFI (private finance initiative) are in some way owned by investment funds located offshore. This means that 80 per cent that could be at least partly located outside of the UK.

PFI schemes have come under criticism recently as schools, hospitals and other large public sector build projects are locked into huge payments over a number of years, that can typically range up to 30.

Many public institutions are struggling to pay back the costs of the original construction costs and are struggling to provide and maintain everyday services.

There have also been various reports of construction problems in some of these newly built educational establishments, which also raises concerns about the quality standards of the original build and potential for further costs to maintain the schools alongside the PFI payments.

The BBC has found that these costly PFI schemes are owned by offshore funds. The data doesn’t indicate the exact amount of schools owned offshore, however the figures show that it is a vast majority of them.

Taxpayers’ are likely to be unhappy that public funds are paying these huge sums to companies who may well be avoiding paying their full UK tax requirement, compared to if they had kept all of their assets in Britain.

Stakes in PFI building projects are allowed to be sold, which can then be traded on the secondary market to become parts of larger investment funds and pensions. They investment funds are sure of a guaranteed payment for the initiative over a number of years, probably an attractive proposition to these funds.

Dexter Whitfield, from the European Services Strategy Unit, told a BBC Scotland investigation the Edinburgh PPP1 scheme was now owned by four different companies.

Whitfield said: “Those four different companies are located offshore in Guernsey and Jersey, and they are basically controlled by shareholders.”

BBC Scotland Investigates: How Safe is My School? is on BBC One Scotland at 19:00 on Monday 22 August.

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