One for the Price of Three

Derek Mackay
Finance Secretary
Scottish Government

Dear Derek,

One for the Price of Three: Public Building Procurement at Edinburgh’s Sick Kids, Glasgow’s Queen Elizabeth Hospital, the Edinburgh Schools and elsewhere.

You will be as pained as me at the ongoing revelations regarding the vast costs and shoddy delivery of Scotland’s key infrastructure projects. I see the Government has launched a Public Enquiry and plead with you to give it a bold remit, to save us from more Carillionisation.

It may be scant consolation, but in the long litany of failure that is Scotland’s attempts to build the schools and hospitals we badly need, no political party that has been close to power can throw the first stone. All are culpable in embracing a Privatisation orthodoxy that has led to a wall collapsing in one Edinburgh School and many other Schools revealed to have the most basic and life-threatening defects, patients dying in Glasgow’s huge new hospital due, we are led to believe, to pigeon droppings in the ventilation, and Edinburgh’s new Sick Kids sitting defect-ridden and empty, while the bankers who own it charge us for the privilege.

Everyone in the construction industry knows that these Private processes produce shoddy buildings and are ruinously-expensive – my Economist friends Jim and Margaret Cuthbert use the phrase “One for the Price of Two”, though in the case of the Sick Kids it’s more like “One for the Price of Three”.

This is what’s gone wrong, and what we should do now:

On cost: as you know, it costs less for Governments to borrow than it does the Private Sector. And these Private Processes are vastly complicated, designed by lawyers and accountants whose first interest is to make them complex, and so hugely lucrative for themselves. The riches spent on the tangled threads of ownership and bureaucracy inevitably lead down to London (thus letting London boast about what an economic powerhouse it is, in sweating the extra from us for its benefit) then offshore.

On shoddiness: as I’ve said, these are processes owned by the Bankers. All the creativity, craft and artistry goes into the financial wizardry used to maximise shareholder value; and the simple craft of making a decent building, where the walls stand up, the ventilation works and the drainage drains, is of secondary importance. We have lost the joy of, and focus on, doing simple things well, smothered by private enrichment and financial entrapment. And, as with the Banking de-regulation that led to the financial crash, we have de-regulated the building industry – dis-empowered the architects, clerks-of-work and public standards inspectors that brought their professionalism to bear – and, instead, allowed our Banking masters to police and sign-off their own work.

The answer was clear when, in 2007, I resigned from the Scottish Government’s Built Environment Advisor over these issues, and it is all the clearer and more urgent now my worst fears have been realised.

So: replace these Private processes with Public ones, where money is prudentially-borrowed and the interests of the public are put first. Make sure these interests include the simple things, like drainage, sound construction and fresh air, and put professionals in place to enforce them. And also put, in the foreground, essentials of wellbeing that our current technocratic obsessions fail to value: like how sunlight, an opening window and a view of, and walks out into, trees and gardens, aids recovery in Hospitals, and young people’s learning in Schools.

I’m concerned that you might be doubling-down on these discredited Private routes, with reports you are examining the similar “Mutual Investment Model”. But the great advantage you have is your Government’s determination to create a National Investment Bank and Infrastructure Company. I applaud you for these actions as we now have the institutions falling into place to lead this renaissance. I understand there is a fight needed with Westminster, to declare Schools and Hospitals to be “investment“. But here, in such a task, is the primary purpose we must embrace, to put the public interest at the heart of Scotland’s public buildings.

I look forward to your response,

Malcolm Fraser