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From The Socialist newspaper, 28 September 2011

PFI schemes - a national scandal

Stop the health service cutbacks!

March to save the NHS 17 May 2011, photo Paul Mattsson

March to save the NHS 17 May 2011, photo Paul Mattsson   (Click to enlarge)

Tory health secretary, Andrew Lansley, has said that 60 hospitals in 22 National Health Service (NHS) Trusts are facing severe financial difficulties and are making cutbacks because of rip-off payments owed under Private Finance Initiative (PFI) contracts. Dave Nellist, Socialist Party councillor in Coventry, explains why the Socialist Party opposes PFI.

PFI was begun in the early 1990s by the then Tory government. It was attacked by Labour when in opposition, but then massively accelerated under Tony Blair and Gordon Brown's governments. Today there are hundreds of PFI projects covering hospitals, schools, roads, bridges, police stations and prisons.

Instead of a public body building a new facility using public money, albeit through a contract with a private builder or developer, PFI involves a private sector developer or consortium doing the whole job. It borrows the money (often at higher rates of interest than the government would), builds the project and then charges a fee for 25 to 40 years for maintaining the buildings and usually also providing various services.

Labour spokespersons such as Patricia Hewitt and Alan Milburn condemned such PFI projects as 'backdoor privatisation' when in opposition. In government, however, as health secretaries, they claimed it was the 'only game in town'. And curiously, after government, they (and many other Labour ex-ministers) got lucrative private sector jobs and consultancies, many in the same areas where they had been ministers.

The Financial Times estimated in 2007 that, after ten years of New Labour, the total capital value of PFI contracts across the UK was 68 billion - but that the total which would be given to the private companies involved in those contracts, by the time they were finished, would be 215 billion!

Three years later, in November 2010, the total payment obligation for PFI contracts in the UK had rocketed to 267 billion. And in the first year of the Tory/Lib Dem coalition a further 61 PFI schemes, with a capital value of 7 billion were approved. PFI has become a 'milch cow' for big business in the public sector.

Walsgrave Hospital

One of the projects said to be at risk is Walsgrave Hospital in Coventry. 20 years ago Coventry had two main hospitals, which would have cost 30 million each to refurbish to modern European standards. But the Tories' friends in the construction industry couldn't make as much profit from refurbishment, as they are doing from PFI.

Supported by both Tory and Labour politicians, our two hospitals were demolished and a new PFI one, on the outside edge of the city, was designed for 174 million. But by the time it opened, six years ago, the capital cost had shot up to almost 400 million. The same pattern was followed in many other PFI projects.

The British Medical Association doctors' organisation had already warned that PFI debts were "distorting clinical priorities" and impacting on the treatment given to patients, well before Andrew Lansley. They used Walsgrave Hospital as a prime example.

Four years ago the BBC reported how the then chair of the BMA consultants' committee had explained, even before Coventry's PFI hospital had actually opened, that the NHS Trust had had to borrow money to make the first year's 54 million payment, and then had to take further action mothballing services, closing wards and not using all the new hospital's operating theatres.

Since then, the annual payments to the PFI consortium for Walsgrave Hospital have risen to 64 million, and there's decades still to go. The eventual cost of this hospital is reckoned to be over 3 billion!

PFI is a national scandal. And while PFI is in existence, the payments to the private contractors are legally the first draw on an NHS Trust's budget; that means there will inevitably be cuts in hospital spending so that the PFI shareholders can continue to make their profits.

PFI should be ended, and all the projects brought back into the public sector, under democratic and accountable public control. If not, our children will still have the responsibility of paying profits to the children of PFI shareholders for decades to come.

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Coronavirus crisis - Finance appeal

The coronavirus crisis has laid bare the class character of society in numerous ways. It is making clear to many that it is the working class that keeps society running, not the CEOs of major corporations.

The results of austerity have been graphically demonstrated as public services strain to cope with the crisis.

The government has now ripped up its 'austerity' mantra and turned to policies that not long ago were denounced as socialist. But after the corona crisis, it will try to make the working class pay for it, by trying to claw back what has been given.

  • The Socialist Party's material is more vital than ever, so we can continue to report from workers who are fighting for better health and safety measures, against layoffs, for adequate staffing levels, etc.
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In The Socialist 28 September 2011:


Building for 30 November strike

Mass strikes can kick out Con-Dems


Jarrow march for jobs

Marching for a future

Join the Jarrow marchers on their 330 mile journey!

Why are you marching?

Why are you supporting the march?

Jarrow march - council puts high price on right to protest


The Socialist's editorials

World economy in meltdown - we won't pay for capitalist crisis

Pro-business Labour offers crumbs and promises cuts


Socialist history

1911 - Bermondsey women's uprising


Socialist Party youth and students

6,000 uni fees? An offer we can refuse!

Fight fees and cuts - join Socialist Students!

Youth demand a future in Tottenham

What I spent my EMA on


Socialist Party news and analysis

As Murdochgate scandal goes on - release Tommy Sheridan!

Scotland: SNP do the Con-Dems' dirty work

Dale Farm - call off the evictions of residents

Metal thefts - The hidden crime of capitalism

Socialism 2011: A weekend of discussion and debate

News in brief


International socialist news and analysis

As debt crisis deepens... Greek workers and youth in revolt


Socialist Party workplace news

Construction workers strike to defend agreements

Greenwich Unite takes fight to cuts councillors

Workplace news in brief


Socialist Party reports and campaigns

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Salford says: Save Lancaster House!

Stop coastguard cuts!

Stroud demo against private sharks killing the NHS


Socialist Party review

Film review: Tinker tailor soldier spy


Readers' comments

My impressions of the Work Programme

More whacko ideas from Tories

Standing up for our pension rights


 

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