Tag Archives: PFI

Yes, the NHS has PFI debts – but put the blame where it’s due… on the TORIES

Okay, the image is a little out of date, but the message is clear: The blame for the crisis in the NHS lies squarely with the Conservative governments – of Theresa May, certainly, but also of John Major, David Cameron, and now of Boris Johnson.

The legacy of the harm done to the National Health Service by the Conservative governments of Margaret Thatcher and John Major has been brought into sharp focus by a new think tank report.

The IPPR think tank has published research showing that NHS trusts will have to pay out £55 billion to Private Finance Initiative (PFI) investors by 2050, having already paid £25 billion.

PFI was used extensively by the New Labour government of Tony Blair to bring desperately-needed investment into the NHS after the Tories bled the service dry.

Hospitals were found to be in severe disrepair and treatments badly underfunded when the Blair administration came into office in 1997, and PFI was considered the only option to restore the service to full functionality.

In total, £13 billion was invested in the NHS during the New Labour years. This will cost the service an eye-watering £80 billion by the time the contracts end in 2050.

It might have been possible to pay these off without difficulty, if Labour had stayed in power. But, as we know, that did not happen.

The Conservatives slithered back into office in 2010, supported by their nasty little yellow helpers, the Liberal Democrats, and NHS funding began to fall at once.

The introduction of private, profit-making companies into the publicly-funded health provider meant billions of pounds were siphoned off into the bank accounts of shareholders, rather than being used to treat patients.

And a huge amount of money has been used in litigation after certain private companies took to the courts to contest failures to gain contracts.

So, while the Tories have been able to claim that investment has increased, real-terms funding for the health service has fallen.

It is in this context that we see health trusts have been burdened with an obligation to use around one-sixth of their annual budgets paying off PFI debts.

It would be easy to blame New Labour for the fact that NHS trusts have been falling into debt. It would also be wrong.

New Labour did what it had to, in order to ensure continuity of care – and to keep healthcare up to date.

It was the Conservatives who forced New Labour into PFI by starving the NHS to the bone, and it is the Conservatives who are forcing the NHS into debt – once again by starving it of funds.

This is evidenced by the fact that the Department of Health has raided £4.1 billion from the NHS’s capital funding budget – which should repair the service’s buildings, build new facilities and buy new equipment – simply to pay day-to-day running costs.

Make no mistake – PFI was a bad idea when John Major introduced it to government budgeting strategies, and Tony Blair should never have been put in a position where it was the most acceptable choice to fund the NHS.

But if we’re going to blame anyone for the current situation, blame the Conservatives – because they deserve it.

Source: NHS hospital trusts to pay out further £55bn under PFI scheme | Politics | The Guardian

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Is this why the Tories are ditching PFI? Brand-new £24m health centre will NEVER be used by NHS patients

White elephant: Altrincham health and wellbeing centre will now never be used by NHS patients.

Tory Chancellor Philip Hammond gave in to demands from the Labour Party and agreed to stop signing Private Finance Initiative (PFI) deals in his Budget yesterday (October 29). Perhaps this is the reason:

Altrincham Health and Wellbeing Centre was meant to be the major new health hub for south Trafford – but it is to be converted into offices without a single patient ever crossing its threshold.

The building was constructed by local developer Citybranch for investment company Canada Life after a £35m deal.

Now NHS Property Services is leasing the building for an initial annual rent including utility bills for £2.4m, for 30 years, and it seems this cost was to be passed on to organisations renting space in the building.

But they can’t afford it.

St John’s Medical Centre said the move would cost its practice £70,000 a year, while Pennine Community Services said it was looking at £500,000 in extra overheads and Greater Manchester mental health trust £375,000.

At the heart of the matter is the Trafford Clinical Commissioning Group (CCG) – the organisation set up by Andrew Lansley’s Health and Social Care Act 2012 to oversee funding for NHS services in the area.

The building was that organisation’s baby – but it reneged on a promise to service providers about cost neutrality and they said the resulting rent would be too high.

Now the CCG wants to convert the building into commercial office space – costing another £7 million.

This means a piece of the National Health Service will be privatised without ever having been used by the public.

How will the CCG pay for NHS services in the meantime? And who will profit in the end?

This entire affair seems extremely questionable.

The people of Trafford need to know why their health service money was squandered on a £24 million white elephant that will never serve their community.

What has happened to their money?

Who has profited from it?

Who will profit from the plan to convert the building into office space?

And what will happen to the plan to modernise their health service?

Source: The brand new £24m health centre that will NEVER be used by NHS patients – and will cost another £7m to turn into offices – Manchester Evening News

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POLL: What do you think of Labour’s plan for employment reform?


John McDonnell has outlined Labour’s proposed employment measures to bolster the strength of unions and transform the gig economy in a speech to the Trades Union Congress.

If you’ve managed to miss the details, here’s a short video about the headlines:

And here‘s The Guardian with some of the finer details:

“A Labour government would ban zero-hours contracts, repeal the Trade Union Act, clamp down on bogus self-employment, end private finance initiatives and set up a department for employment to implement the policies, he said. There would be a particular emphasis on workers in the gig economy.

Workers in jobs with flexible hours and short-term contracts could be given similar rights to those in permanent work, including eligibility for sick pay, parental pay and similar benefits, he said.

Government contracts would only be given to firms that allowed collective bargaining and a Labour government would relaunch employee ownership funds, under which staff at larger companies would receive shares in order to give them a stake in the profits and management of their firms.

McDonnell also repeated a promise that Labour would spend £500bn over a decade to fix Britain’s crumbling infrastructure.

This would include road and rail, digital, research and development and alternative energy sources, he said, adding that the £500bn figure was supported by the Confederation of British Industry (CBI), with whom Labour was working to develop the proposals.”

That’s fine – but are these plans any good?

Let’s have a poll:

Feel free to use the ‘comment’ column to detail the reasons for your response.

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Ashworth: Presumption that government contracts should go to private firms is wrong

[Image: We Own It.]

Carillion’s collapse really has changed political thinking.

Here’s Labour’s Jon Ashworth explaining that outsourcing of government contracts, whether tied to Private Finance Initiative deals or not, leads to firms making their profit by cutting staff wages and conditions – which ultimately leads to a poorer service.

He’s absolutely right. This Writer has been saying for years that poor treatment of workers leads to a poor product.

Therefore it follows that, if private business cuts corners in order to make a profit, the only way to provide a decent service is to eliminate the profit motive and for the government to nationalise its work contracts.

The arguments against this are disproved by the facts. All the privatisation-loving Tories can do with future private contracts is confirm Mr Ashworth’s conclusion.

It will be painful to watch, but necessary – to ensure that everybody gets the message.


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Carillion: Prophetic words from 2004 claimed the UK would be ruined by PFI debt

Allyson Pollock in 2003 [Image from Ian Fraser’s blog site].

Is Allyson Pollock’s prophecy coming true?

Ian Fraser, author of the following words, seems to think so.

He tweeted: “Increasingly obvious was right about PFI/PPP. Even RBS chair Howard Davies admits it’s a fraud. Here’s my interview with her from 2003.”

Of course, Carillion – the engineering firm with no less than 450 government contracts, that went into liquidation last week – is a beneficiary of PFI – that’s what makes these words topical now.

From the Sunday Herald, December 19, 2004:

Widespread use of the private finance initiative (PFI) to fund public sector projects is eroding government accountability and means the UK will lose its status as a first world economy, according to a leading academic.

Allyson Pollock, professor of public health at University College London, believes the funding method leads to the back-door privatisation of state-run services and spells a return to a patchy provision of health and education.

Pollock, due to speak on PFI to the cross-party group on the Scottish economy at the Holyrood parliament this Tuesday, told the Sunday Herald: “As the economy starts to slide, the government and communities will find it increasingly difficult to the pay costs associated with PFI.

“I fear that decay will set in and Britain will struggle to remain a mature economy if private sector asset stripping of public services continues. There is plenty of talk of risk being transferred to the private sector, but when things go wrong the public sector invariably ends up bailing out the private sector.

“The idea that PFI is a partnership between government and business looks a hollow joke, as private finance gets repaid while the public sector carries the extra cost of keeping services going and communities suffer, ” she said.

Read the rest of the article: Dire warning the UK will be ruined by Private Finance Initiative (PFI) debt | Ian Fraser


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Will PFI campaign be derailed by MP’s spat with blogger?

Stella Creasy [Image: Nicola Tree/ Getty Images].

This is all a little silly.

Labour MP Stella Creasy has launched a campaign to stop companies that have signed Private Finance Initiative (PFI) deals with the government from benefiting from falls in the rate of Corporation Tax.

Ms Creasy says it is important because, when these deals are signed, the rate of tax companies will pay is directly part of deciding if they represent value for money.

On her Facebook page, she explained: “If I buy a toaster and then its on offer a week later I don’t get the difference back so why should these companies get such a windfall – either they come to the table to renegotiate these contracts and the cost of them to the public sector or we should be willing to legislate. Help us secure support from more MPs for this.”

She linked to a Guardian article which elaborated:

Companies that built and run NHS hospitals under private finance initiative (PFI) contracts will have made about £190m in unexpected windfall profits by 2020 because of George Osborne and Philip Hammond’s cuts to corporation tax, research suggests.

Analysis by the Centre for Health and the Public Interest found that more than 100 PFI operators in the NHS collectively saved an estimated £84m between 2008 and 2015 and are due to gain another £106m between 2016 and 2020 because of the falling corporate tax rate.

The PFI companies are making bonus profits because the corporation tax rate has fallen from 30% when the majority of their contracts were negotiated to 19% now and is due to drop as low as 17% by 2020. Some companies may be deferring their tax liabilities to later in their contracts when the rates will be lower.

She also discusses the matter in a Twitter thread:

For many of us – especially those who never like the idea of PFI in the first place – this is a worthwhile cause. These companies are already making a fortune at the taxpayer’s long-term expense; why should they receive millions more – apparently in breach of their contracts – because of Tory tax changes?

But there’s a snag.

Ms Creasy’s campaign seems to have been overshadowed by her inability to answer a simple question: Whether she thinks it is acceptable for Labour MPs to be friends with – and socialise with – Conservative MPs.

Our fellow leftie blog, the Skwawkbox, raised this issue a couple of days ago after discovering that Ms Creasy had attended a gig with Tory MP Therese Coffey on December 16.

In light of Ms Creasy’s fellow Labour MP Laura Pidcock’s well-publicised belief that Labour MPs should not “hang out with Tory women” who are “no friends of mine” and “an enemy to lots of women”, Skwawkbox blogger Steve Walker asked for Ms Creasy to comment.

In response, he received a torrent of evasion – and, to be honest, abuse. See for yourself, here and here.

Her bizarre attitude has been bolstered by an article in the Huffington Post that supports her attitude of indignation that a blogger should call her out on this matter.

Isn’t this hypocritical of the HuffPost, which was quite happy to quote the Skwawkbox interview with Ms Pidcock, where she first made her comments about Labour MPs fraternising with the Tories? This Writer thinks so.

It seems the aim is to divert attention. Ms Creasy seems so desperate to avoid telling us whether she thinks it’s okay to hang out with her political enemies, she’ll try to point us at anything else.

So she has claimed Skwawkbox was attacking her taste in music, then that the blog is misogynist, and finally that the blog was trying to undermine her PFI campaign.

I’m sorry, but it seems Ms Creasy has managed that, all by herself.

And it seems she has succeeded in hoodwinking people. Look at the following tweet, from another respected blogger, Tom Pride:

The issue isn’t musical taste, Tom.

It’s whether this particular person on the Left actually has any interest in opposing the Tories.

From my point of view, there is a simple way out, of course.

It is for Ms Creasy to swallow her pride, apologise for making a mountain out of a molehill, answer the question she was askedand clarify exactly whose side she’s on.

Then, perhaps we can all get behind her worthwhile campaign.


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PFI schools have fire safety issues: Isn’t this a breach of contract?

According to The Independent, eight schools built under Private Finance Initiative (PFI) contracts have fire safety issues that could affect the health of pupils.

The revelation raises serious questions about the safety of public facilities built by the private sector, according to the newspaper:

PFI supporters say private contractors generally get major projects done quicker, cheaper and to a higher standard than the public sector. However, these claims are increasingly disputed. A report in 2011 by a Treasury Select Committee of MPs comparing PFI with traditionally procured projects said “we have seen reports which found out that building quality was of a lower standard in PFI buildings”.

Isn’t the issue more that the private contractor – Balfour Beatty – is in breach of contract, having built schools that are unsafe?

PFI has been an enormous waste of public money, with nobody profiting from the contracts apart from the privateers who dictated them.

The contracts were originally employed by John Major’s Conservative government.

When Labour came to office in 1997 and found very little money available for the massive job of rebuilding both the health and education services after nearly two decades of Tory neglect, there was little choice but to take up PFI to achieve these goals.

With safety now an issue, public authorities up and down the country should be demanding checks and consulting their contracts for exit strategies that may provide a way out of the PFI nightmare…

… Or did nobody bother to think of that, back when these things were originally negotiated?

Source: Eight PFI schools built by one of UK’s biggest private contractors have fire safety issues – Home News – UK – The Independent

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Will NHS England kill patients while trying to protect its budgets?

141019ToryNHSrecord

Here’s an illuminating story.

An elderly person in Bristol attended hospital early last week, complaining of severe pain that suggested a hernia. A doctor examined this person and said that, in fact, a double-hernia was in evidence – but the hospital could not provide any form of treatment because the patient’s GP practice had not referred them.

The hospital was unwilling to treat the patient if the GP practice was unwilling to pay for it, you see.

The patient had to go home and phone their doctor. The practice agreed to a home visit on Tuesday. The patient dutifully waited for this visit to take place but nobody turned up. Calling the practice later, they were told that this was because they were booked to attend the surgery on Friday – and had to respond that, firstly, they would not have attended because nobody had told them of this change and, secondly, that Friday was too late in view of the patient’s condition and much more urgent action was necessary.

Is this the bright, bold and above all efficient new NHS that David Cameron, Andrew Lansley, Jeremy Hunt and all their little neoliberal minions have been promoting so avidly since 2010?

It clearly poses nothing less than a clear and terrifying threat to public health.

What if the patient had been diagnosed with a life-threatening condition? Would the hospital have left them to die while administrators there and at the GP practice haggled over the cost?

The answer, it seems, is a clear yes.

That is the cost of the wholesale commercialisation that the Conservative Party has brought to the NHS in England – along with the losses listed in the image above. The Tories think it is a price worth paying, if it means they can squeeze money out of sick proles.

Here’s the solution:

141019BurnhamNHS

“The market is not the answer to 21st century healthcare.” Those were the words of Andy Burnham, Shadow Health Secretary, this morning (Sunday).

He followed it up on Twitter, after being asked if that meant Labour policy was to reverse the marketisation of the NHS, with a one-word answer: “Yes.”

Some of you may well have doubts. Labour does not have the best record on the NHS – look at PFI, care of the elderly, and the extent to which the last Labour government allowed the private sector into the health service… and then look at this:

141019burnhamNHS2012

The first step towards improving a situation is to admit the mistakes that have been made. Labour has done this. In fact – look at the date on the image – Labour did it more than two years ago.

Looking at PFI – the Private Finance Initiative – this was in fact first used by the Conservative Government in 1992. It proliferated under Labour after Treasury civil servants advised that its benefits outweighed the risks at the time. In terms of healthcare, Labour had inherited a service that had been run into the ground by nearly 20 years of Tory neglect and needed a fast injection of cash before the UK’s hospitals started falling down around their users.

In those circumstances, PFI seemed like a good idea. It wasn’t – but it would be wrong for opportunists to suggest that PFI was dreamed up by Labour or that Labour should be deemed untrustworthy because of it. It was a stop-gap solution and those contracts must now be bought out before they can damage the nation’s finances any further.

What, you think we can’t afford it? George Osborne has spent more money in four and a half years than every Labour Chancellor since Labour first formed a government and you think we can’t afford this? Think again.

It won’t happen under a Conservative government – they’ll just make matters worse. The Liberal Democrats and WhoKIP won’t help either – they’re just Tory enablers at the end of the day.

If you live in England, and you need just one reason to vote Labour next May, it’s the National Health Service.

Does somebody have to die first?

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Taxpayers are being misled into funding the private firms that are raiding our NHS

NHSRIP

It seems more than half of the UK’s voting public would be willing to pay more income tax in order to fund the National Health Service.

Pollsters ComRes told The Guardian that 49 per cent of people would accept a tax hike if the money went directly to the NHS, compared with 33 per cent who would not and 18 per cent who didn’t know what they would do.

This must be very gratifying for David Cameron, whose creeping privatisation of the NHS is at least partly to blame for the increasing deficit faced by the UK’s flagship public service. The Private Finance Initiative, introduced by the Conservatives in the early 1990s, must also take much of the flak, along with a reduced funding commitment from the Coalition government.

(We can’t be sure about the government’s funding commitment. Back in 2010, then-NHS chief exec Sir David Nicholson said it would have to make £20 billion of efficiency savings within four years – but the Coalition Agreement of 2010 promised “We will guarantee that health spending increases in real terms in each year of the Parliament”. However – again – by late 2012 the figures showed a real-terms cut in expenditure which meant the government was not taking its commitment seriously.)

Professor Chris Ham, chief executive of health thinktank The King’s Fund, reckons people want to help the NHS because they have been led to believe that it is starting to struggle financially and clinically, and because they value it very highly.

This indicates that the public has been misled.

Look at the Private Finance Initiative. According to Private Eye (issue 1,369, p34), buying its way out of a PFI contract for Hexham General Hospital will cost Northumbria NHS Foundation Trust no less than £114.2 million. That’s exorbitant enough, but consider this: the buy-out will save around £3.5 million a year on PFI costs over the 19 years the contract would otherwise have had to run.

How badly are PFI contracts crippling the NHS? Well, according to The Guardian, PFI repayments were costing the service £1.76 billion – that’s almost two per cent of the £100+billion budget.

That pales into insignificance next to the amount spent on contracts for private companies to carry out NHS work – £6 billion. Some of that, admittedly, will go into healthcare – but a large proportion will be hived off as profit.

And then there are the real-terms expenditure cuts that appear to be part of government policy. Spending has not risen in real terms since the Coalition government came into office in 2010.

No wonder the NHS is in trouble.

So thank goodness for all the kind-hearted earners who are happy to pay an extra penny from every pound they earn, for the NHS. But that won’t cover the projected £30 billion gap in its finances by 2020.

Taking average earnings to be £26,000 per year (as the government does), then every earner would have to pay an extra 4p in the pound. Tax paid on £26k per annum is 20p in the pound, so that’s a tax increase of nearly 17 per cent or one-sixth.

Earners would be £1,040 per year worse-off. That could put many of them in financial difficulty.

And they would be paying debts accrued by big businesses who wanted to profit from healthcare.

Happily.

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Why NHS charging is a zombie policy

http://youtu.be/e6ci9ROmTO8

Several political organisations (including, to Yr Obdt Srvt’s regret, Labour) have been talking up the possibility of imposing charges on the public for NHS services. Possibilities under discussion have included direct charging at the point of use or a new ‘NHS tax’. Nobody wants to mention that this means paying for the NHS twice (we already fund it with our taxes/NI contributions).

BBC Radio 4 recently ran a debate on NHS charging, on which one of the speakers was Dr Clive Peedell. This gentleman is a stalwart of the National Health Action Party, the political group founded to end the Coalition’s privatisation of healthcare by defeating the Conservatives and Liberal Democrats at election time.

He made many solid points – information that the public needed to hear. We know this because the presenter tried to shout him down while he was in full flow, and in the Tory-dominated BBC this is always a sure sign that a speaker is on the right track.

The YouTube clip (above) whittles down the debate to cover only Dr Peedell’s words, in which he states that:

  • It is a myth that charges can reduce demand for healthcare; this is a zombie policy.
  • If people start paying they expect more from the service, so you get people with wants, rather than needs.
  • The NHS has been chronically under-funded for decades – by £267 billion over 25 years.
  • It is become a fantastically efficient system and all the evidence suggests that progressive taxation is the fairest way to pay for healthcare.
  • Even so, there are efficiencies that can be made – the market system costs £10 billion per year in administration costs, and 10 per cent of the budget pays off venture capitalists who invested in costly PFI schemes.
  • Austerity increases demand on the healthcare system and reduces supply.
  • And healthcare spending stimulates economic growth so we should increase healthcare expenditure with money reclaimed from tax avoiders.

The clip is well worth playing.

After all, it isn’t often you hear anybody talking sensibly about the health service for nearly six minutes!

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