NHS (and other public sector)- PFI's
22 September 2011, 07:57 PM
#1
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NHS (and other public sector)- PFI's
Private Finance Initiatives - more disasters from the last Labour government coming to fruition. We as the taxpayer are liable to a staggering amount of money, and for some reason it does not get included in the yearly deficit!
What I cannot understand is why effectively borrow from the private sector to get projects paid for, when the government can borrow cheaper by selling bonds?
Even assuming that the private sector got things done cheaper (which is a very dubious assumption), this is looking a stupidly expensive way of doing business, but it is of course 'off the books' so looks good.
http://www.telegraph.co.uk/health/he...-go-wrong.html
http://blogs.telegraph.co.uk/news/da...-more-of-them/
What I cannot understand is why effectively borrow from the private sector to get projects paid for, when the government can borrow cheaper by selling bonds?
Even assuming that the private sector got things done cheaper (which is a very dubious assumption), this is looking a stupidly expensive way of doing business, but it is of course 'off the books' so looks good.
http://www.telegraph.co.uk/health/he...-go-wrong.html
http://blogs.telegraph.co.uk/news/da...-more-of-them/
The price tag for repaying PFI firms will reach £8.6 billion next year alone, with the taxpayer owing a total of £121.4 billion on public projects which are worth only £52.9 billion.
Many PFI deals tie local authorities into expensive catering, cleaning and maintenance contracts, meaning the total bill to the taxpayer is £229 billion.
A hospital in Bromley, south London, which will cost the NHS £1.2billion, more than 10 times what it is worth.
An almost unknown City company, Innisfree, with only 14 staff, is the largest single player in the PFI market, owning or co-owning 269 PFI schools and 28 hospitals.
According to accounts filed at Companies House, Innisfree’s profit margin was 53 per cent last year. A successful FTSE 100 company makes margins of around 6 per cent. David Metter, the founder and chief executive of Innisfree, owns almost three-quarters of the company and collected pay and dividends of £8.6 million last year.
According to accounts filed at Companies House, Innisfree’s profit margin was 53 per cent last year. A successful FTSE 100 company makes margins of around 6 per cent. David Metter, the founder and chief executive of Innisfree, owns almost three-quarters of the company and collected pay and dividends of £8.6 million last year.
22 September 2011, 08:08 PM
#2
Last time the figures were released the planned marginal increase was 2.8% in costs for a PFI.........good news was that hospitals were built, and built on time. Downside is the contracts that tie in the costs. For example our car park made a shortfall one year of £70,000 and the NHS had to stump up the difference, and then the phones, TV etc. Ludicrous 
Shaun
Shaun
22 September 2011, 08:11 PM
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Last time the figures were released the planned marginal increase was 2.8% in costs for a PFI.........good news was that hospitals were built, and built on time. Downside is the contracts that tie in the costs. For example our car park made a shortfall one year of £70,000 and the NHS had to stump up the difference, and then the phones, TV etc. Ludicrous
Shaun
Shaun
How are the PFI's taking on debt or issuing equity so cheap?
22 September 2011, 08:40 PM
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Private Finance Initiatives - more disasters from the last Labour government coming to fruition. [/URL]
http://blogs.telegraph.co.uk/news/da...-more-of-them/
http://blogs.telegraph.co.uk/news/da...-more-of-them/
22 September 2011, 08:55 PM
#6
Bit of a fudge really.
22 September 2011, 09:38 PM
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Giving the cost over a 20-25 year period is a great Daily Mail headline but a tiny proportion of total NHS spend over the same period.
If you want to have a go at wastage I would start with MoD.
And I would say chop planned white elephants like Trident and the get-to-Birmingham-20-mins-quicker rail link (but they're other issues).
dl
If you want to have a go at wastage I would start with MoD.
And I would say chop planned white elephants like Trident and the get-to-Birmingham-20-mins-quicker rail link (but they're other issues).
dl
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22 September 2011, 09:46 PM
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23 September 2011, 07:20 AM
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Invented, of course, by the last Tory government, of John Major. You'll notice that the Tories are happy to criticise individual schemes, and for exactly the reasons the Major government was told they were a bad idea, but they won't say that they will never set up any more. The appearance of something for nothing is just too good for politicians to resist.
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