10% of NHS budget spent on financing PFI building initiatives

[soloman]

Labour may well have provided us with many new hospitals with its spend regardless campaign over the last 13 years

Now, as expected the problem has come home to roost with all NHS trusts averaging a 10% contribution being spent on financing those initiatives.

The total sum involved is £65 billion! How are we going to deal with that; clearly we cannot afford to pay off the balance immediately even though on credit we will end up paying 6 times the original capital cost for the hospital buildings?

BBC News - Fears over £65bn 'NHS mortgage'

[manrow]

Labour may well have provided us with many new hospitals with its spend regardless campaign over the last 13 years

Now, as expected the problem has come home to roost with all NHS trusts averaging a 10% contribution being spent on financing those initiatives.

The total sum involved is £65 billion! How are we going to deal with that; clearly we cannot afford to pay off the balance immediately even though on credit we will end up paying 6 times the original capital cost for the hospital buildings?

BBC News - Fears over £65bn 'NHS mortgage'

I am astounded that no one has responded to this thread.
Are you all content with the extravagant over-spending by the last administration just because it was on a sensitive subject of health?
This was irresponsible and we should all condemn it.

[ryoden]

A lot of people including myself warned that this would be the result, but as usual Labour went ahead and now the financial difficulties have finally come to pass, no surprise there really. As usual the private companies will clean up and the taxpayer will be left footing the bill. Still our hospital hasn't quite started redundancies yet, we are still in the lets stop recruitment and see if that makes any difference lala land, but I expect they will start soon.

[crazylilting]

I am astounded that no one has responded to this thread.
Are you all content with the extravagant over-spending by the last administration just because it was on a sensitive subject of health?
This was irresponsible and we should all condemn it.

I remember hearing about this on the radio last year, but it was portrayed as a good deal for taxpayers, because we didn't have the money to build Hospitals ourselves. Well Nothing like paying some private firm 6 times the amount for something to save money in the short run. Who's brain child was that?

[manrow]

I remember hearing about this on the radio last year, but it was portrayed as a good deal for taxpayers, because we didn't have the money to build Hospitals ourselves. Well Nothing like paying some private firm 6 times the amount for something to save money in the short run. Who's brain child was that?

I cannot currently find the link but I believe the Tories initiated the PFI scheme.
But that doesn't change the feelings I have that Labour were determined to show their electorate 'that they were looking after them' when in reality they were shackling them with a regime of austerity as we try to climb out of our perilous financial predicament.

[manrow]

I cannot currently find the link but I believe the Tories initiated the PFI scheme.
But that doesn't change the feelings I have that Labour were determined to show their electorate 'that they were looking after them' when in reality they were shackling them with a regime of austerity as we try to climb out of our perilous financial predicament.

I have found some great quotes on Wikipedia suggesting where PFI was born:-

The private finance initiative (PFI) was invented in Australia in the late 1980s, and was originally applied to toll road and railway projects.[1] In 1992 PFI was implemented for the first time in the UK by the Conservative government of John Major. It immediately proved controversial, and was attacked by the Labour Partywhile in opposition. Labour critics such as the future Secretary of State for Health, Patricia Hewitt considered that PFI was really a back-door form of privatisation, (House of Commons, December 7, 1993), and the future Chancellor of the Exchequer, Alistair Darling warned that "apparent savings now could be countered by the formidable commitment on revenue expenditure in years to come".[2] Nonetheless, the Treasury considered the scheme advantageous and pushed Labour to adopt it after the 1997 General Election. Two months after the party took office, the Health Secretary, Alan Milburn, announced that "when there is a limited amount of public-sector capital available, as there is, it's PFI or bust".[2] Since then PFI has continued and, indeed, expanded under Labour, resulting in criticism from many trade unions, elements of the Labour Party, the Scottish National Party (SNP), and the Green Party[3], as well as independent commentators such as George Monbiot and academics such as Prof. Allyson Pollock, Prof. Jean Shaoul and Dr Adrian Bell.

Even more choice is the quote:-

An even more significant figure who did not care to engage in a serious discussion of the issues was the Chancellor of the Exchequer, Gordon Brown [subsequently Prime Minister of the United Kingdom]. In 2002 I asked him if he could explain the rationale behind the use of private finance for public investment, given that private borrowing was more expensive, and the risks were not in practice transferred to the private sector. His response was simply to declare repeatedly that the public sector is bad at management, and that only the private sector is efficient and can manage services well.[5]

Private finance initiative - Wikipedia, the free encyclopedia

[Midas]

I cannot currently find the link but I believe the Tories initiated the PFI scheme.
But that doesn't change the feelings I have that Labour were determined to show their electorate 'that they were looking after them' when in reality they were shackling them with a regime of austerity as we try to climb out of our perilous financial predicament.

It's true that the PFI was introduced by the Tories, however it was at a time when the UK budget deficit was heading down towards zero, interest rates had been dropping sharply and the construction industry was in full employment. There was every reason to be positive that it was a financially efficient way of providing capital assets for the NHS. It was only after Labour came into power that the deficit soared again and the economy started to suffer to the point we're at today, changing the whole set of conditions on which the PFI was based.

Never a truer word, or ironic a word, been spoken by Gordon Brown than "His response was simply to declare repeatedly that the public sector is bad at management, and that only the private sector is efficient and can manage services well"! If only he'd taken note of his own words when he was in charge!

Said without having seen any of the PFI contracts negotiated by the last government, but if there's any blame to be laid over this debt I'd lay odds that it's far more likely to be with the type of agreements negotiated by the financially inept Labour government, who either didn't fully understand the implications of what they were agreeing to or perhaps did realise but knew they'd no longer be in power when the financial chickens came home to roost, than with the Tories for initiating what can be very good value for money schemes if implemented correctly.