Campaign news

PFI Swindle to End

27th September 2017

PFI Swindle to End

By Mick Brooks

Labour’s Conference welcomed Shadow Chancellor John McDonnell’s pledge to bring back Private Finance Initiative (PFI) contracts back in-house. No wonder. PFI has been a long-running scandal, sucking taxpayers’ money into subsidising enormous profits for private firms.

PFI was devised by Tory Prime Minister John Major but reached its peak under Tony Blair and Gordon Brown in the New Labour years. Instead of the government borrowing money to build and upkeep hospitals and schools, a private consortium was given the job of raising the money. In return they would receive an annual charge from the government (that’s us) for up to forty years.

In effect it was a hire purchase deal, buying on the never-never. What was the point? The money borrowed doesn’t count as government debt because the consortium borrows the money instead – but it’s still borrowed! So it’s off the government’s balance sheet. This is massaging the figures, a sleight of hand. ‘Now you see it, now you don’t.’

The downside, as we soon discovered, was that private borrowers have to pay a higher rate of interest than the government would. At present the government can borrow at interest rates way below the rate of inflation. It is effectively free money. But the PFI consortium doesn’t mind the higher rate they pay because it just passes the cost off to the taxpayer as part of their fee.

And, boy, have they done well out of PFI! The Centre for Health and Public Interest (CHPI) thinktank has worked out that, over the past six years, PFI projects have milked the NHS of £831m. Half of this, which could have been spent on patient care, went straight out as dividends to PFI shareholders. And get this. Many of these consortia are registered in tax havens, so the money they’ve looted from taxpayers is tax free!

PFI has proven to be a licence to print money. Treasury figures show that the capital value of current projects is £58bn. We owe £232bn to pay for this – four times as much as it cost. The CHPI calculates it’s even worse for the NHS. PFI –acquired assets are £12.4bn but we’ll pay £80bn. This is usury. It really is as choice within the NHS of patient care or paying the PFI pirates.

Margaret Hodge, as former Chair of the Public Accounts Committee, lists some of the rackets PFI operators used. £900 to put up a Christmas tree, £8,154 to fix a blind…the list goes on and on. This is old news. It’s high time we put an end to this. Just a thought – why should we pay a penny in compensation to consortia who’ve taken many times more than they’ve put in and then squirrel their ill-gotten gains away in tax havens?

Background

By Ian Hodson It’s great news that a mainstream political party has recognised the importance of taking positive action to raise pay. Since 2008, politicians from all parties along with many in the media, have pushed the narrative that society will somehow improve by imposing austerity and blaming minority groups for the state of the country’s finances. Sadly, many have fallen for this deception and the ‘look over there’ politics that has rose to prominence since the Conservatives returned to power in 2010. [continue...]

Folkestone United – coming together to support migrants Bridget Chapman, Folkestone United, reports [continue...]

No Witch-Hunts In The GMB, Reinstate Keith Henderson (The Online Petition) Keith Henderson Essex LRC member and former Regional Organiser of the GMB Union was dismissed from the GMB last December, Keith has always believed that the real reason for his dismissal was because of his socialist beliefs and the manifestation of his beliefs. [continue...]

Please see our Labour Briefing Website here: LabourBriefing.org [continue...]

The LRC is supporting a broad alliance of campaign groups and trade unions against the proposals in the Welfare Reform Bill (currently before Parliament) and putting forward our alternative based on social justice and welfare for all. [continue...]

Across the country working people are losing their jobs and their homes. Meanwhile the bankers who plunged us into this crisis have been bailed out with billions of pounds of our money. It’s time to fight back. Their Crisis Not Ours! is the LRC’s campaign to bring together workers, pensioners, the unemployed, students, those facing repossession and all those suffering because of an economic crisis that has been imposed on us. The campaign is supporting the demands of the People’s Charter. [continue...]

Rail bosses are using the recession as an excuse to attack jobs and conditions and cut back on services and essential rail works, and hike rail fares - as LEAP research suggested they would. Thousands of jobs are being threatened or have been lost. At the same time rail fat cats are raking in big profits and bonuses on the back of the most expensive fares in Europe. Make no mistake: as the recession worsens so will the attack on rail workers and rail services. [continue...]

The campaign calling on the Government to abandon its plans for privatisation of Royal Mail. The Government has introduced the Postal Services Bill to part-privatise the Royal Mail. With our affiliate union CWU we are fighting to Keep the Post Public! [continue...]

The campaign to demand the Government funds improvements to all existing council housing, and to start building first class council homes to address housing need. For more information see Defend Council Housing website. [continue...]