Non-Profit Distribution: The Scottish Approach to Private Finance in Public Services

This article provides an analysis of the Scottish Governmentʹs approach to the use of private finance in public services. It examines the budgetary drivers behind the policy in Scotland and assesses its cost-efficiency. In doing so, it considers first the standard private finance initiative (PFI) model, and then turns to the ʹnon-profit distributingʹ (NPD) model -a variant of PFI developed in Scotland and one that is, at the time of writing, unique to the country. It concludes that, while NPD provides the Government with an important political benefit, in being seen to safeguard the ʹpublic interestʹ while working within UK-wide budgetary constraints, the decision to continue with private finance carries a high economic cost.