Council to join public-private venture to access funding

Shetland Islands Council is to be the last local authority in Scotland to join a public-private partnership venture called a hubco which helps get new schools and other large projects built.

The decision to sign up to the North Territory Hub follows indications from the Scottish government that up to £18 million in funding may become available for a slimmed-down £30 million Anderson High School.

The hub has been created by the government’s Scottish Futures Trust in partnership with the private sector company Alba Community Partnerships and about 18 public sector organisations in the north of Scotland, including all the other local councils, the police and NHS.

Alba is made up of Miller Corporate Holdings – which is a subsidiary of the UK’s biggest housing and construction group Miller Group – and international private finance initiative specialists Cyril Sweett Investments.

The hub is intended to deliver community projects like council houses, care centres and schools to the value of £435 million over 10 years, taking advantage of private sector expertise and efficiency.

Public organisations which sign up to the body can turn to Alba and the Scottish Futures Trust for free support and professional consultancy services.

Alba will own 60 per cent of the hubco and control its day-to-day decisions while profiting from its exclusive access to many public sector building contracts.

Similar hubcos are being established to cover four other parts of Scotland.

Unlike other public bodies, the SIC has not needed to borrow money to build the projects it wants because it uses its reserves. But the cost of the new school has led it to seek assistance.

At today’s executive committee meeting the council’s capital programme executive manager Robert Sinclair came in for a bit of stick from councillor Cecil Smith for the council not having joined the hubco previously. He was annoyed that Shetland might have lost out before.

But Mr Sinclair said there had been a lack of obvious benefits, particularly given that Miller was a large mainland-based construction company and many council projects were quite small. Other public bodies with no funds of their own had little option but to join the government-approved system, he said.

Chief executive Alistair Buchan said there had also been problems getting answers from the hubco people before putting a proposal to councillors. “We think the time is right,” he said.

Councillor Betty Fullerton was keen to sign up. She said: “We will get more for our money if we join this.”

Councillor Allan Wishart sought an assurance that Shetland-based contractors would not be ignored when building contracts were dealt with under the hubco process. According to an information report on the hubco concept, at least 80 per cent of the value of sub-contracts is supposed to be made available to local companies through tenders.

NHS Shetland has reported problems with its membership of hubco because many of its projects are below the minimum £750,000 threshold that health boards can apply for assistance with. But no such restrictions apply to local authorities.