Ministers claim they have inherited a hidden £65m liability for privately-financed school projects that the previous Labour-LibDem administration failed to budget for in full.
There was an allocation of £100m to cover the revenue spending on the 125 privately-financed school projects in the pipeline, but incoming ministers were warned by civil servants that the actual liability by 2010-11 will be £165m as the true cost of the exponential rise in the value contracts has become clear.
These were only £17m last year but leapt to £48m this year before reaching £137m next year and a total of £165m by the final year of this parliament, all for projects that have already been built, are under construction, or have been approved.
Education Secretary Fiona Hyslop first began expressing concern about the issue when she clashed with Labour when appearing before the Education Committee before the summer recess.
Then, during a recent debate in the chamber she complained of "deals that were approved on the never-never by Hugh Henry, Peter Peacock, Robert Brown and others".
A ministerial aide said last night: "Fiona was appalled to discover the extent of the financial mess left behind by the Labour/LibDem administration. And that's just her department. It's one illustration of commitments entered into by the last government for which they had no proper funding plan, to the tune of £65m, and we have to pick up the tab."
Citing a famous quip by a US president, the aide added: "It's like JFK's joke that the biggest surprise in government is discovering that the previous lot's record is every bit as bad as we said it was."
A major concern for ministers is that if the spending implications of privately-financed schools projects have escalated in this way, there could be similar bad news to come on similar projects in the health sector.
It was an SNP manifesto commitment to create a Scottish Futures Trust, raising money by bond issues, to provide a cheaper alternative for funding new schools and hospitals.
The argument was that the availability of less expensive borrowing would "squeeze out" private finance deals, which were first created by the Conservatives as the Private Finance Initiative before being rebranded the Public-Private Partnership by Labour.
Enterprise Minister Jim Mather recently told a business breakfast that the international financial community was enthusiastic about backing bond issues, but the government has yet to make public details of any proposed scheme and says it has no choice but to honour deals entered into by the previous administration.
The Herald revealed last month that the cost of all PPP deals, covering capital and revenue costs across all sectors, had reached £22bn, the equivalent of £4500 debt for every man, woman and child in the land.
A Labour spokesman said last night: "The reality is that each PPP project goes through a rigorous best-value analysis. The SNP said they would scrap PPP and they haven't. This is yet another SNP broken promise."
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