PFI (Private Finance Initiative) was a scheme to use private investors’ money to build and run new hospital facilities. It was a disaster and still costs the NHS, according to the Times, around £2 billion a year in repayments, with some hospitals reporting that they’ve had to cut services in order to meet the repayments.
Today, the Times also announced that NHS boss Simon Stevens has been talking to ‘hedge funds‘ about a £10 billion loan for ‘infrastructure’ – essentially to stop buildings and systems falling apart:
Private cash for buildings and other infrastructure – no doubt it will be named something different, but to all intents and purposes this plan is PFI 2.0.
This is being presented as something that is “likely to cause palpitations in Whitehall”, as if the government has been blindsided by the plan – but the Times admits that
Ministers have accepted the need for some private cash after an official review concluded that £10 billion was required to boost an “insufficient” NHS infrastructure budget
‘Accepted the need’. Right.
Research in 2015 showed that almost half of all donations to the Tory party come from hedge fund managers. Hedge fund managers who are now being invited to participate in a huge relaunch of PFI.
‘Palpitations’? More like:
The Times speculates about interest rates of 1.1%, but in 2011 CPAC (Commons Public Accounts Committee) analysed PFI deals and found the average effective rate to be 14%. Even with a headline rate of 1.1%, finance companies are experts at building in ways to increase their profit margins.
CPAC’s report also pointed out that hardly any of the income earned on these deals resulted in any tax paid into the British economy, as the vast majority of beneficiaries are registered offshore.
So we’re looking at a situation in which the government admits ten billion pounds are needed for essential NHS infrastructure and won’t provide it – and are forcing NHS management to borrow from private finance firms who just happen to be the most important donors to Tory party funds.
This is what Tory ‘economic competence’ looks like. While we, the British public pay for it – without even getting anything back in taxes – a huge tranche of our NHS infrastructure effectively becomes privately owned, all done by ‘borrowing via the back door’.
The Tories – one hand washing the other, mutual back-scratching, they’re all in it together. Call it what you will, they simply cannot be trusted with the NHS – and we need to raise the stink this venal move deserves.
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