howard mcsweeney1- Location: Dover
- Registered: 12 Mar 2008
- Posts: 62,352
Guest 716- Registered: 9 Jun 2011
- Posts: 4,010
P.F.I. was the worst mistake of the Labour Government.
We campaigned against it within the Party but lost the vote because it was a quick fix, short term method of building
with out coming up with the finance there and then.
It was obviously a long term dept ridden scheme without ownership at the end ..if ever there is an end .
Before the election Osborne was jumping up and down calling Labour financial idiots and promising to drop the awful idea.
But........Osborne could see it was the easy way out to build and look good....in the short term.....so he has carried on with
the awfull system.
To have made the mistake in the first place was unforgivable......but for a government to know what a disaster it is and to
continue to add to the dept is unbelievabely stupid and irresponsible.
Osborne is making cuts to pay back the deficit but on the other hand adding to the enormous dept of P.F.I.........
.......WHAT A PLONKER.....
howard mcsweeney1- Location: Dover
- Registered: 12 Mar 2008
- Posts: 62,352
started under john major, carried on by tony blair, now by dave.
looks good with the public until the next generation picks up the bill.
Keith Sansum1
- Location: london
- Registered: 25 Aug 2010
- Posts: 23,942
yes, the next generation are not going to thank us for many of our mistakes
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Guest 655- Registered: 13 Mar 2008
- Posts: 10,247
Yes, this has been discussed before.
It was originally conceived and used by the Major government for small scale capital projects.
When in opposition, at a private dinner party, it was revealed by a shadow Labour Treasury Minister, Geoffrey Robinson, that Labour planned to use PFI's as a way to get around their spending pledge by turning revenue spending into off-balance sheet capital spending. Some of his guests were horrified by the potential consequences of this and quite rightly so.
Now we are paying the price. It is that warping and abuse of the concept by Labour that is the big problem here.
Osborne - if he is carrying on with Labour's way of using the PFI, would be wrong and would deserve censure. But if it is used as originally conceived bt the Major government while trying to get the government out from the schemes set up by Labour then fair enough.
Guest 698- Registered: 28 May 2010
- Posts: 8,664
With the pfi hospital contracts, in order to get the debt off the PSBR there was no recourse to the central government.. The ultimate debtor is the NHS trusts. The pfi investors took comfort from the belief that the government could not conceivably allow a trust to go bust. But that is exactly what they must now do in cases where the pfi payments are crippling the trust. Just one test case, to see what the courts make of it, and the pfi providers will be queueing up to renegotiate.
I'm an optimist. But I'm an optimist who takes my raincoat - Harold Wilson
Guest 655- Registered: 13 Mar 2008
- Posts: 10,247
The problem is that under Brown the PFI was broadened and used to capitalise the running costs of government buildings/departments etc. off balance sheet. It is this that is costing us a fortune. Accounting that Enron would be proud of.
howard mcsweeney1- Location: Dover
- Registered: 12 Mar 2008
- Posts: 62,352
brown is the past osborne is the present, has he the ability to put pressure on and renegotiate the payments?
i agree about trusts going bust as a way of doing this.
Guest 655- Registered: 13 Mar 2008
- Posts: 10,247
But that would not be an 'out' for government departments. It would not only be a matter of a trust going bust either... what about the cancelled operations, the cancelled cancer treatments and so on?
Guest 698- Registered: 28 May 2010
- Posts: 8,664
Oh Barry, you aren't that naive, I'm sure you have heard of pre-pack administration. Bigger companies than an NHS trust have successfully done it. The business doesn't miss a beat, and the creditors are stuffed. Normally I consider that process immoral but in this case.............no.
I'm an optimist. But I'm an optimist who takes my raincoat - Harold Wilson
howard mcsweeney1- Location: Dover
- Registered: 12 Mar 2008
- Posts: 62,352
been done to me and many others, just a different name over the door.
Guest 655- Registered: 13 Mar 2008
- Posts: 10,247
Peter, I understand that but I do not see how that can work with the NHS, what with the dishonest political flack with the way some foolishly treat it like some kind of deity.
Keith Sansum1- Location: london
- Registered: 25 Aug 2010
- Posts: 23,942
we all see the trusts running up billion pounds of debt
the pfi contracts have not helped
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Guest 696- Registered: 31 Mar 2010
- Posts: 8,115
To be quite honest, I can't see future generations ever repaying these and other national debts, all the more considering that the sovereign debt is set to rise by a great deal.
That said, is the pfi part of the sovereign debt?
Keith Sansum1- Location: london
- Registered: 25 Aug 2010
- Posts: 23,942
Here is another area the country suffers in
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Guest 698- Registered: 28 May 2010
- Posts: 8,664
14, the strict definition of sovereign debt is that part of a country's national debt which is (from an external perspective) subject to sovereign risk, i.e.:
a) owed by the public sector and
b) expressed in a foreign currency and
c) owed to a foreign entity.
It expresses the risk that a country might in future have neither the political will nor the foreign currency reserves to settle its international obligations.
Therefore sovereign debt strictly forms only a small part of the UK's national debt. However the media are often so sloppy with terminology that many journalists report on matters financial without knowing what they are talking about. Even Robert Peston admitted recently that he would not have known what Libor was if it had bitten him on the bum.
So in answer to your question, no, pfi obligations are not part of the UK's sovereign debt. But they are part of the national debt according to a strict definition (like that of the rating agencies), but not part of the official ONS figures because they are off-balance sheet items therefore treated as contingent liabilities.
Any clearer?
I'm an optimist. But I'm an optimist who takes my raincoat - Harold Wilson
Keith Sansum1- Location: london
- Registered: 25 Aug 2010
- Posts: 23,942
Peter
but still doesnt get away from the fact we are in the ship, and whilst we climb out many people are/will suffer
while others continue a lifestyle unknown to many
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Guest 698- Registered: 28 May 2010
- Posts: 8,664
15, 17, O Keith, you do talk in riddles, try making them rhyme like Tom!
I'm an optimist. But I'm an optimist who takes my raincoat - Harold Wilson
Keith Sansum1- Location: london
- Registered: 25 Aug 2010
- Posts: 23,942
PETER;
You are an intelligent guy(im sure) and understand fully
but hey life goes on,,,,,,, i suppose
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Guest 698- Registered: 28 May 2010
- Posts: 8,664
Yes it does; but as BarryW points out, misunderstandings can arise from lack of knowledge. For example some don't seem to understand the difference between 'debt' and 'deficit'. That's scary.
I'm an optimist. But I'm an optimist who takes my raincoat - Harold Wilson