The Scottish Government is to scrap the private finance initiative (PFI), claiming that an alternative which caps companies’ profits will help release £150M extra annually for public infrastructure.

The SNP administration charged Sir Angus Grossart, chairman of the newly established Scottish Futures Trust with extending the non-profit distributing (NPD) model to transport projects.

Investment under the NPD, trialled in the building of schools in Falkirk, and Argyll and Bute, had ‘shown that the private sector is interested,’ a Scottish Government spokesman said.

NPD eliminates the high gains seen in the standard PFI model, according to a business case. The £150M annual saving would also be secured by the trust impleminting improvements in infrastructure delivery, preventing ‘late, over-budget or expensive to maintain schemes’.