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MIXED REACTION BY COSLA TO PFI RELAXATIONS

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Recognition of the strength of COSLA's case on the relaxation of private finance initiative controls has been welco...
Recognition of the strength of COSLA's case on the relaxation of private finance initiative controls has been welcomed by Rosemary McKenna.

The COSLA president was commenting after Scottish local government minister George Kynoch's announcement on Friday on PFI relaxation.

'The minister has indicated that consideration will be given to identifying a notional capital charge for PFI projects and that this element would be disregarded for capping purposes. Over the past couple of years COSLA has consistently pointed out that the scoring of PFI costs for capping purposes has been one of the major stumbling blocks in authorities' considerations of potential projects. I welcome the fact that the minister has now recognised the strength of COSLA's case.'

But cllr McKenna expressed reservations on the basis of the Scottish Office's announcements of exemptions to the secretary of state's requirement that councils should apply 25% of the proceeds from the sale of capital assets to reduce outstanding capital debt, the proposal being that this percentage increases to 50% next year.

She said: 'Last November without any consultation the secretary of state announced changes in the rules for the use of capital receipts. Today the minister has announced a relaxation to these rules for PFI projects. Consideration and new office development etc receipts.

'A full and urgent examination is needed to identify wider relaxations to the capital receipts rules to place Scottish authorities on a similar posting to their English & Welsh counterparts where a number of substantial relaxations are already in place.'

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