From Private Eye 2010: Osborne Continues with PFI for Hospitals

This is another story from the 1st -14th October 2010 issue of Private Eye. It reports Osborne’s continuation of the Private Finance Initiative for the construction of hospitals, despite the fact that the Gidiot criticised New Labour’s use of the initiative and at least hinted that he would alter it, or discontinue it entirely.

It’s also extremely useful as it shows just was a swindle PFI really is.

The Tories have since then taken to wiping all their broken election promises off the internet, so no-one can know about them and judge for themselves how mendacious and insincere they were.

So here’s this article to remind them.

PFI Hospitals
Stuck to the Flaw

Last year as shadow chancellor George Osborne announced that “Labour’s PFI model is flawed and must be replaced”. So is the coalition doing anything about it? Er, no. Quite the opposite.

In June Osborne’s Treasury approved the use of “Labour’s flawed PFI model” for a new £450m hospital in Liverpool, despite local opposition. Then, more recently, Lib Dem MP Adrian Sanders asked health secretary Andrew Lansley “whether he plans to review the use of private finance initiative projects in the NHS”. As Lansley’s munderling Simon Burns replied: “There are currently no plans to review the use of the private finance initiative as a procurement vehicle in the National Health Service”.

Annual PFI costs, largely fixed for 30 years or so, are so high because future payments can be inflated by PFI companies before being “discounted” by government departments at rate well above inflation on the grounds that in the future we’ll all be much better able to afford the bills. The PFI deal thus magically becomes “value for money” and can be signed off.

In the age of austerity, when public services are less able to afford the extra bills than ever before, this is of course cobblers. Bizarrely, though, the incentive to choose PFI is greater than ever. As investment budgets are slashed, a scheme that defers payment, however expensively, looks too goo to miss to a short-sighted politicians.

The value for money offered by PFI is thus a useful accounting trick, which enables the government to part-privatise the NHS, boost the profits of their favoured investors, and then falsely claim credit for having saved the taxpayer money.

As for short-sighted politicians, the current crew are so myopic that it’s surprising they can find their own way to work in the morning.

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One Response to “From Private Eye 2010: Osborne Continues with PFI for Hospitals”

  1. sdbast Says:

    Reblogged this on sdbast.

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