“The Private Finance Ini0a0ve How to End The Rip Off” Helen Mercer: People vs Barts PFI h;ps://peoplevsbartspfi.wordpress.com/ 16/11/2016
PFI “one of the costliest experiments in public policy making ever a;empted” Jesse Norman, Conserva0ve MP o £10bn per year in ‘unitary payments’ on 725 PFI contracts. o “One hospital for the price of two” o Average loss of 30% of beds in the first wave of hospital PFIs o Overcharging for any service outside of the original contract. o Construc0on problems esp. ‘fire compartmenta0on’ issues at schools and hospitals o Friends of the Earth – waste disposal projects have been expensive, very long in coming into service and s0ll not embodying the most up to date technologies o Poor services eg Carillion and food hygiene o Inflexibility, long contracts, changes need protracted nego0a0ons and are expensive o Poor staffing eg at PFI prisons (young offenders Medway)
Loan from owners of the How a PFI works SPV (10%) Finance SPECIAL PURPOSE VEHICLE from banks etc (90% of loan) Construc0on Lewisham hospital Hard Facili0es Management Payments Unitary payments to cover for services interest, principal and contracted out services Sod Facili0es Management Payments on loans from banks etc (90%) and from the owners of the SPV ( 10% interest rate – ‘usurious’.
How a PFI works….for them! Construc0on Ravensbourne Health Unitary Services Ltd Hard owned by…. payments Facili0es Management Sod Facili0es Management Dividends – profits Administra0on Repayment of loan made by the SPV = fees to…. *Directors Senior (appointed by ‘Junior bond’ – bondholders owners of SPV) provided by owners(s) HICL *Auditors of the SPV = HICL *Management
The ABCDE of solu0ons A – As you were…ask for subsidies B – Buy-outs C – Centralise the debt in the Treasury NB – All of the above gild an already 5dy and gilt- edged investment. Instead of mending them…we can end them! D – Default E – Expropria0on – na0onalise the Special Purpose Vehicles
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