[Closed] NHS PFI

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Thank you Gordon!

Check out the new Edinburgh royal infirmary if you want apoplexy!

http://edinburghnews.scotsman.com/scotland/Exclusive-We39ll-pay-12bn-for.6431088.jp

Not that I work for said large organisation, or having anything to do with finance but, the actual mortgage costs mentioned above is not the only joke.

Theres the layers of bureaucracy built in to PFI, and the 3rd Party companies employed to help 'manage' the buildings (all which had to be signed up to) which tend to be even more incompetent than said large organisation and charge lots of money for passing information from landlords to said large organisation.

What riles me is the way that this kind of thing inevitably gets blamed on "shoddy public sector procurement" - a process dominated under NuLab by seconded management consultants, grasping big gun accountants and other such revolving-door parasites. All a long, long way from overrun emergency departments and understaffed wards.

El Gordo and his off-balance sheet chic has [b]much[/b] to answer for, yes. But it's interesting that he took what was originally a Tory policy, and then went buckwild with it. Certain interests were delighted, of course, as were the Banks (who either own stakes in PFI consortia, or make hay from the refinancing - oooh, those lovely taxpayer-funded revenue streams...).

Before cutting frontline services, I suggest the Gov utilises some form of emergency power to bin such contracts.

Edit: FunkyDunc - indeed. Grimly ironic that NuLab were only able to push thru PFI via some pretty dodgy financial comparators (to make such schemes appear to be better value - as is also the case with MOD).

Madness.

Utter mess, which should also be noted, this PFI is not going to be sorted out by the current privatising loving Government either.

I think we have to accept that PFI was basically a form of Keynesian state support for the management consultancy, accountancy and legal sectors which had the fringe benefit of building some new hospitals. 😐

But then had the govt raised taxes to pay for all the public services that we, the public, demand the media and many people would have thpown their hands in the air. Is this sort of the thing the upshot of people not wishing to pay higher taxes for improved services? As with anything bought on credit it is nice to have stuff now and for nowt but there is always going to be a cost out the back of the purchase. Who'd be a public sector manager right now?

I think we have to accept...

Well put, BD.

If I took your watch, and then proceeded to bill you expensively for the simple act of telling the time, whilst enthusiastically expounding on the benefits of lean-thinking, diverse (& inevitably outsourced) solutions to the linear chronological process, you would probably punch me.

Thing is everyone with half a braincell could see PFI as a off balance sheet con trick. But it suited government to do it that way. Why can't we have an adult discussion on tax and europe. Tell us the pros and cons and try and keep politics out of it.

adult discussion...

...would be welcome - although it's [i]some[/i] achievement as a nation to dither as to whether we are in the Scandinavian or Anglo-Saxon socio-economic sack race - and then end up losing in both. 8)

Whilst I may be on the Borders of where I don't know what I'm on about, PFI seemed like a solution to an artificial problem brought on by Resource Accounting and Budgeting which basically said that the treasury were going to charge departments more for funding capital projects than private finance was, despite this meaning they any large items ( hospitals, bridges, buildings, non-combat ships and aircraft) would have cost levied against them just for existing unless an oustide agency rented them to you. Like buying a car for cash but having to pay someone the interest you would have got if you had bought the car on the never never and put the cash in the bank.
Like that example you will always end up paying more borrowing the money than spending what you have.

as said above it all a dodge so we can try to avoid paying tax and then spending the funds, we get the ****s at the top we deserve in general. I still think that nulab were slightly less bad than the other options we had at the time or indeed the condems we have now, but I suppose only time will tell and its not like there are better options available.

mmmm
the country (*well government [them all]) bought hospitals on storecards and they opted for the grossly overpriced extended warranty.

Wow - I can have it now, I get 2% off my purchase and I only have to pay 33.5% apr over 10 years, WOW that's a bargain, I'm saving 2%.

when you're hating bankers, try looking at politicians, I don't see much difference - not going to loose their own money, reward for failure(they still get salary and pensions - the voting out argument isn't that fair - too many 'safe' seats), personal short term gains (of staying in power).

hahaha- you think THAT'S bad - it's not unkown for a PFI funder to build the project and contract the supply of the project for £xMillion/yr over 20 years, then 5 years in go bankrupt and their only saleable asset (the contract) is sold to a third party (with the same directors)who then tell the NHS that either they stump up an extra £yMillion/yr or their nice new hospital will be flattened to make way for shops/houses/whatever.
And the best part of this? Apparently some muppet thinks we can now renegotiate the deals downwards, in exactly the same way as I can go into my bank, twll them I'm less off than I used to be, wages not matching inflation and everything so I'd like my mortgage revised downward thanks. That won't have them pi55ing themselves laughing or anything

jeez, there's a strong smell of boiling urine round here

It wasn't done to save taxes as there is not cost saving - they are more expensive as the government can borrow money cheaper than a private company. It was done to reduce the PSBR to keep the city / tory papers happy.

Is this sort of the thing the upshot of people not wishing to pay higher taxes for improved services?

In a word, yes.

BigButSlimmerBloke - Member

hahaha- you think THAT'S bad - it's not unkown for a PFI funder to build the project and contract the supply of the project for £xMillion/yr over 20 years, then 5 years in go bankrupt and their only saleable asset (the contract) is sold to a third party (with the same directors)who then tell the NHS that either they stump up an extra £yMillion/yr or their nice new hospital will be flattened to make way for shops/houses/whatever.

PFI was introduced by the Tory government as the last of a number of attempts to get control of government procurement following years of massive overspends compared to budget. They took the view that it was better to pay a premium to the original budget (to pay the private sector a profit) but pass the risk of overspend to them. While not the perfect solution, it initially proved to be more successful than other attempts to reform procurement spending. This was not spelt out publicly at the time because it would be politically unacceptable - so they said it delivered better value because of the efficiencies of the private sector etc.

My perception under Labour is that Gordon Brown saw it as a way of massively increasing capital expenditure without impacting his numbers - the Enron chancellor charge. The use of it was massively ramped up and it was no longer possible to apply the rigour required to do it properly and the actual risk transferred got smaller and smaller without there being a commensurate saving in cost.

As far as the present government is concerned, I have no idea what they are going to do but I would not necessary assume they are going to privatise everything. Afterall, Boris Johnson broke out of the PFI projects for the tube and took them back into public ownership.