The People vs PFI
is a campaign to end the scandal of the Private Finance Initiative. Today, the total PFI debt owed by the public is… £ 305,584,667,765.
It is institutionalised theft and it affects all of us.
Two complementary reports were released last week that draw significant and damning conclusions about the Private Finance Initiative (PFI or PPP) funding of public infrastructure capital projects. The reports are all the more significant in that they were produced independently of each other and are directly concerned with the risks and financial rewards related to PFI.read more
PFI was cooked up by the government, big banks and accounting firms to secretly make a profit by providing our hospitals, schools, public transport and other services. PFI is …
Private finance costs far more to raise than when the public sector borrows directly. And this gap has grown since the 2008 financial crisis, with some PFI contracts signed off at interest rates of 8% – double the cost of UK government borrowing (4%). These over-priced PFI deals have saddled the public purse with future liabilities of £240billion over the next 40 years. But our research suggests the true cost could be far more when procurement, consultancy and unforseen contract costs are factored in. That’s why Professor Allyson Pollock says: “With PFI schemes it’s like you pay for three hospitals, and get only one!”.
The case for PFI was disproved before the programme even got underway. But politicians decided to forge ahead and push these projects on us regardless. Now PFI public services aren’t run for us, but to generate profits for giant corporations and offshore infrastructure funds. Where contracts have been signed, it’s next to impossible to for the public to assess whether they’re receiving value for money. Financial reporting guidelines allow for the costs to be concealed and Freedom of Information requests for even basic information are often unjustly disputed.
We were never given a choice about the Private Finance Initiative. Projects were pushed through on the orders of central government with little or no public consultation . Even though many PFI projects are failing, the public sector is locked into these contracts and has to keep making gargantuan payments. Ultimately this leads to the loss of public services, such as the safe, clinically effective and financially sound Lewisham Hospital being threatened with closure to pay off the debts of its two PFI neighbours.
Who’s losing out?
While massive service contractors, huge building companies and offshore companies benefit, ordinary people suffer: PFI affects where you work, how you get to work, our schools, hospitals, even our homes. By the private sector, for the private sector, PFI is only about private interests and is killing off public services.
So what can I do?