With billions spent bailing out the banks, unemployment rising and tax revenues falling, it is expected to reach a mind-boggling £175 billion in the next year — levels of indebtedness never seen outwith times of war.

Such high borrowing is unsustainable in the medium-term and a long period of belt-tightening in public spending will be necessary, with an emerging consensus that the country is facing probably 10 to 15 years of real-terms reductions across many budgets.

As an organisation representing private, public and third sectors, SCDI is helping to kick-start the national debate about how Scotland can work together to meet stretching efficiency targets through creative and innovative solutions to the delivery of public services at local and national levels — including the potential role for the private sector.

But while we know that public services will be under prolonged strain, we are even more concerned that UK capital spending is projected to halve as a result of this recession.

The Scottish Government has accelerated capital spending in the short-term to support the construction industry, and its workforce has actually increased by 1.4 per cent in the past year.

But most of the current tranche of public construction projects (many privately financed) is approaching completion, and SCDI has been pressing for details on new projects.

Such has been the lack of clarity on the Scottish Futures Trust (SFT), the company established by the Scottish Government to pursue value for money in infrastructure investment, that the emphasis on the word trust has seemed to grow stronger every day — we have all simply had to trust that at a point in the future it will deliver investment.

Fortunately the clouds are beginning to clear. The Scottish Government and local authorities announced last week plans to invest an additional £1.25 billion through the SFT to build more than 50 new schools.

There are still questions about why is has taken so long to reach this stage when the first phase will be funded through traditional direct capital investment, and on the timetable for delivery — but the progress is welcome.

News on the councils to benefit from the first funding tranches is expected later this year.

The signs are promising for businesses in the Highlands. The SFT is introducing a hub initiative for the public sector in the north of Scotland to promote local collaboration between the public and private sectors in planning and delivering new community facility developments.

A meeting is being held next week in Inverness to enable potential developers, contractors and supply chain businesses to find out more. Companies are asked to pre-register by visiting www.hubscotland.org.uk.

The SFT has had a troubled birth. But if it can bring together the public and private sectors to deliver infrastructure investment in this age of austerity, it will prove its worth.

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