Link to this page: https://www.socialistparty.org.uk/issue/570/7036
Scrap PFI Now!
The Socialist Party's 'Grim Reaper' joins the Keep Our NHS Public 'Defend our health service' protest outside the Department of Health on the 60th anniversary of the founding of the health service, photo Paul Mattsson
In yet another humiliating blow to its pro-big business economic policy the New Labour government is providing state 'loans' of up to £2 billion to prop up the Private Finance Initiative (PFI).
Adrian O'Malley, Unison health service group executive Yorkshire and Humberside (personal capacity)
The £2 billion announced by treasury minister Yvette Cooper is an admission that the private sector is incapable of delivering much needed new infrastructure projects. It puts the government in the ludicrous position of being a lender of the money that it is borrowing!
Having opposed PFI while in opposition, New Labour enthusiastically implemented PFI throughout the public sector once elected. PFI was invented by the last Tory government to keep public infrastructure projects off the public spending figures and allegedly transfer the risks from the government to the private sector.
Under PFI, hospitals, schools, roads etc have been built by private consortia. These are often made up of banks who financed the schemes, and building firms who built, maintained and managed the projects. The projects are then leased back to the government at hugely inflated rates for anything up to 35 years.
The 'PFI industry' became extremely profitable for the capitalists involved as their income was guaranteed and their so-called risks were low. The costs to the NHS are expected to increase from £470 million in yearly repayments in 2007 to £2.3 billion a year by 2014! These so-called investors get a six-fold return on the cash they put up.
Even this is not enough for the banks, who have now stopped the flow of new money. Hence an £8 billion-gap in funding for new projects in waste, education and transport.
The PFI scheme at my Trust, Mid Yorkshire Hospitals, is a £300 million deal with Consort Healthcare which is funded by the Royal Bank of Scotland. The RBS has been virtually nationalised during the credit crunch, yet we are still facing hundreds of job losses in the coming months as the Trust attempts to meet the exorbitant repayment charges.
Dave Prentis, general secretary of the public sector workers' union Unison, has said the loans are "throwing good money after bad" and it is "time to make a clean break with PFI". This is correct, but Unison should not just be calling for no new PFI deals to be signed, but for the nationalisation under democratic control of every existing PFI. The union leadership should be outlining a strategy to fight for this.
My Unison branch has publicly called for the nationalisation of the Private Finance Initiative and the return of all privatised staff employed within it to the public sector. This demand is popular with our members. The local media picked it up and asked why the government is borrowing money from itself at higher rates than it would pay if it funded the hospital itself.
We have sent motions to Unison's health and national delegate conferences calling for a national campaign for nationalisation and for Unison to use its resources to campaign against PFI.
In The Socialist 11 March 2009:
War and terrorism
Socialist Party campaigns
Socialist Party feature
Socialist Party workplace news