Tories call PFI a "complete lunacy"

[Pax]

I somehow missed this back in late October, but the uk Conservative party's Health spokesman, Andrew Lansley, launched a stinging attack on Labour's use of the Private Finance Initiative (PFI) (practically identical to our PPPs) with particular reference to the hospital building programme.

FI hospitals are “lunacy”, says Conservative Party

...In a statement headed Lunacy as Labour wastes £45 billion on NHS hospital projects [1], he called “for a fundamental review after it emerged that the National Health Service will have to pay private sector contractors an incredible £53 billion for hospitals worth only £8 billion”.

The statement continued:
“Describing the cost of the Private Finance Initiative deals as ‘complete lunacy’, the Shadow Health Secretary said: ‘For all too many hospitals, PFI has turned into a straightjacket. It is time for a fundamental review of how the NHS accesses capital for future investment.’”....

....PFI is first and foremost a form of public borrowing, which, like conventional public borrowing, has to be paid back with interest by the state. In fact, PFI is an expensive form of public borrowing, more expensive that the conventional method. It is more expensive because the state can always borrow money more cheaply than the private sector (because, whereas a private corporation may go bust and default on its debts, the state will not). The essence of PFI is that the state employs a private agent to borrow on its behalf. As such, PFI wastes taxpayers’ money and a prudent Chancellor would ban its use for public projects, rather than insist on its use, as Gordon Brown has done.....

....This is a direct result of the public body taking out a contract for a service delivery for a period so long that service needs cannot possibly be predicted. Why are public bodies encouraged by the Treasury to engage in this foolishness? The answer is that the inappropriately long service contract is dictated by the fact that the PFI contractor has to borrow over a long period – 25 years or more – in order to keep the cost of borrowing within reasonable bounds. To borrow over that period, the consortium has to be guaranteed an adequate income stream throughout the period in order to service the borrowing. So, there has to be a contract for service delivery for 25 years or more, even though service needs cannot possibly be predicted for anything like that length of time.

In other words, the inappropriately long service contract is a necessary condition for getting unnecessarily expensive finance for public projects via PFI. Gordon Brown has brought the world of Alice in Wonderland to the provision of public services.....

With even the Tories criticising public private partnerships, is it now safe for Irish political parties to not approve of such a massive waste of resources?

Seeing as we ape what happens in the UK so slavishly (asbos being a recent numbskull example..) can the parapet be stood over and it meekly be said that 'the emperor he has no clothes'?

[Badboy]

It is promising that the right are starting to evaluate issues on their merrits again as oppose to rely on "old certainties". (Those of us who got things so wrong on Iraq should think long and hard before pontificating on other things.)

There is a time and a place for private investment in infrastructure. The health service does not seem to be one of them.

Anyone I know who works in either the NHS or the Irish service makes two points.

1) public care is at a much higher standard than private care.

2) Private insurance does not come near paying for the resources the "private" industry takes from public service.

[stannis]

Time to abandon this ideologically-driven waste of money

Pity we have to take the lead from the Tories though.

[Sidewinder]

Could the PDs admit they were completely wrong about everything for their entire existance and own up to having wasted billions of euro in their mad ideologically-driven dash to PPP everything in sight, and privatise everything owned by the State, with drastic consequences for quality of life and economic competitiveness?

WingNut economics never made any sense, has never worked anywhere it has been tried. The sooner the PD virus is purged from the body politic the better for all of us: but it will still cost yet more billions to buy out all the mad PPP contracts foisted on us by this deranged clique of nutters.

[Libero]

I've long thought of PFI as using the most expensive form of financing (private v public) to fund projects that will be managed by the worst form of management (public v private). Worst of both worlds, generally speaking.

WingNut economics never made any sense, has never worked anywhere it has been tried.

The thing about playschool terms of abuse (like 'WingNut') is that they can mean whatever the speaker wants them to.

If you're referring to the right-of-centre economic orthodoxy that has guided Irish policy since the 1990s, it seems to have worked reasonably well, though I'd agree that overall policy implementation has been a story of missed opportunities and co*k-ups.

[Pax]

I've long thought of PFI as using the most expensive form of financing (private v public) to fund projects that will be managed by the worst form of management (public v private). Worst of both worlds, generally speaking.

Long thought? As in since about a year ago then...