What if any role should public sector capital play in the financing of the construction or operational phase of public assets and services?  How and when might public sector capital be best used to improve investor/lender appetite and pricing without adversely affecting risk transfer and performance incentives?  What constraints should apply to the quantum of public sector capital grants? 

See Section 14 for a discussion of a wholly public capital financing structure. 

SFT considers that up to 50% of the financing requirement can be met by public capital whilst maintaining the diligence and performance incentives that a "payment for asset availability" structure places on the private sector delivery partner and financiers. Generally this financing should be applied at construction completion, or clear milestones of partial completion in order to clearly transfer construction risk. Public capital injection is a feature of SFT's model for the delivery of schools through the hub model, where local Authorities are considered likely to want to want to make a capital injection for their (<50%) share of the cost of the asset under the funding arrangements agreed with Scottish Government.