Fingers in the PFI
Twenty years on from the introduction of the private finance initiative (PFI), Dexter Whitfield examines the effect it has had - and how it's set to get worse under new Tory plans
"...The volume of European infrastructure projects reaching financial close in the first half of 2012 was the lowest recorded in the past decade. The capital cost and number of signed contracts in the UK in 2012 is forecast to fall back to its 2009 level, a third of the pre-crisis rate.
Despite this decline, the Treasury still identified 39 UK PFI projects in schools, hospitals, highways and waste management with capital costs of £5.4 billion (and total costs of about £21.5 billion) in procurement at March 2012. And while new-build project deals have slowed down, speculative trading of shares in public‑private partnership (PPP) projects have mushroomed and offshore infrastructure funds had little problem raising equity for the activity. .."
"...In the health service, meanwhile, in early 2012, the government agreed to a £1.5 billion bailout to seven NHS trusts that had severe difficulties meeting their PFI commitments - paying off the private debt and interest used for new facilities. Twenty-two NHS trusts were reported to be confronting the same problems. .."
"...The coalition has refused point blank to stop profiteering, despite the PFI review recognising that windfall gains and excessive profits have occurred. The private sector will not be required to share profits on the sale of equity in more than 700 existing PFI projects. .."
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Labour's lack of response
The silence of the Labour leadership over PF2 is deafening. New Labour's legacy of embedding PFI in the public sector is a heavy burden to bear, but it makes a principled response to PF2 more critical. Instead, Labour appears to have sought cover behind the timely launch of its own infrastructure review at the 2012 Labour conference, which is not due to report until September 2013. Headed by Sir John Armitt, previously chair of the Olympics Delivery Authority, Sir David Rowlands, chair of Gatwick Airport, and Rachel Lomax, former deputy governor of the Bank of England, the advisory panel also includes Lord Adonis, previously Tony Blair's head of the No 10 Policy Unit, promoter of academies and chair of Progress, the Labour Party pressure group, plus the chair of Barclays Infrastructure Funds Management and Engineering UK and the deputy chair of KPMG.
The Armitt review is designed to determine whether a new institutional structure should be established to improve long‑term infrastructure planning and to forge political consensus. Armitt already favours yet another quango, independent of the political process. 'Business as usual' recommendations appear inevitable. .."
http://www.redpepper.org.uk/fingers-in-the-pfi/ Ignorance is bliss, bliss is happiness, I am happy...to draw your attention to the possible connectivity in the foregoing.