Developments in the public‐private partnership funding of Scottish schools

Abstract

PurposeThe purpose of this paper is to explore the development of the public finance initiative (PFI) in a £2 billion investment to build new schools in Scotland in order to understand how the PFI negotiation process is evolving as the public and private sectors' experiences of PFI grows.Design/methodology/approachSemi‐structured interviews were conducted with officials from three different Scottish councils. Further insight was gained from attendance at a Scottish conference where presentations were made on the PFI process in building schools.FindingsCouncil officials' handling of PFI processes has improved over time with more assistance being available to aid project organisers. However, the process continues to be very lengthy with significant sums being spent on professional advice. The balance sheet treatment of PFI transactions remains a crucial consideration.Originality/valueThis paper assesses recent developments in PFI schools' building projects in Scotland and provides some insight into areas where previously reported difficulties have been resolved and where problems continue to exist.