Public Values

Bills come due for British privatizations

The great racket called Private Finance Initiatives now robs taxpayer of billions needed for health care and education.

British crusading journalist George Monbiotby George Monbiot, from The Guardian

You've been told that nothing is sacred; that no state spending is safe from being cut or eroded through inflation. You've been misled. As the new public spending data released by the government shows, a £267bn bill has been both ring-fenced and index-linked. This sum, spread over the next 50 years or so, guarantees the welfare not of state pensioners or children or the unemployed, but of a different class of customer. To make way, everything else must be cut, further and faster than it would otherwise have been.

This is the money the state owes to private corporations: the banks, construction and service companies that built infrastructure under the private finance initiative. In September 1997 the Labour government gave companies a legal guarantee that their payments would never be cut. Whenever there was a conflict between the needs of patients or pupils and private finance initiative (PFI) payments, it would thenceforth be resolved in favour of the consortia. The NHS owes private companies £50bn for infrastructure that cost only £11bn to build, plus £15bn for maintenance charges.

PFI contracts typically last for 25 or 30 years; in one case (Norfolk and Norwich University hospitals) for 60 years. In 1997 the British Medical Association warned: "The NHS could find itself with a facility which is obsolete in 10 or 20 years' time, but for which it will still have to pay for 30 years or more." No one's celebrating being proved right.

For the full story, click here.

Posted: November 24, 2010

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