THINKTANK NEWS
Jim's, friends, family and social media politically awareness site
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Some things to really bitch about over a Beer.
"ARE WE REALY SELLING OFF BRITAIN AND WHAT THE HELL IS A PFI?"
Private finance initiatives were originally started as part of Great Britain’s strategy for providing high quality services. PFIs were first implemented there in 1992 and become popular after 1997. They were used to fund major public works projects such as schools, prisons, hospitals and infrastructure. Instead of funding these projects up front from tax receipts, private firms construct them and then make their money back through long-term (25+ years) repayments, plus interest, from the government. Thus, the government does not have to outlay a large sum of money at once to fund a large project. PFIs are also supposed to improve on-time project completion and transfer some of the risks associated with constructing and maintaining these projects from the public sector to the private sector. Financial advisers such as investment banks help manage the bidding, negotiating and financing process.
A key drawback is the interest and payments associated with PFIs burden future taxpayers. In addition, the arrangements sometimes include not only construction, but also ongoing maintenance once the projects are complete, which further increases these projects’ future cost and tax burden.
In the United Kingdom in the 2000s, a scandal surrounding PFIs revealed the government was spending significantly more on these projects than they were worth, to the benefit of the private firms running them and to the taxpayer’s detriment. PFIs have also been criticized as an accounting gimmick to reduce the appearance of public-sector borrowing.
Wait' wait' wait! Your telling me that private and often foreign investors borrow us the money to be paid back in terms of 25 to 50 years with interest and inflated extortionate values in the form of rent? So all though we pay for the project ten fold and more, it is never the publics? Also making it look that every thing is hunkey dori with deficit and current party's spending of publics money? So if the hospital or project goes bust we still pay rent till the end of the term? surely that doesn't make financial logic sense? does it?
The list of projects is endless, at first I thought just to copy and add here, however once getting past 200 projects I realized this would not be possible. It was like reading a book then having a 5 minute peek. Dont take my word for it. Take a look yourself and use this link. find link on page "get data"
http://www.theguardian.com/politics/datablog/2010/nov/19/pfi-public-finance
it will amaze, shock and astound you. What you have to remember is this is a legacy to our children and our children's children in some cases. The county already as the highest deficit in in the west actually second to Spain, and now a compound debt on top surly this will cripple our infrastructure and most possibly leave our children without the benefit of the NHS which we have been dependent on. Much like saying, dont worry about it, wont happen in your life cycle any ways?????? WTH!!!!
.wanted gold for the oil? the list in the middle east goes on, and not just for Oil. Today 26 countries boy cot the dollar including Russia and china, do you think they do this to be awkward?
Nurses and midwives picket for fair pay as investors make billions.
1st day! ecconimics, "it's better to own then to rent." every body on the planet knows this? what are they thinking?
To summarize, PFI deals have become problematic for three major reasons: they usually have very high interest rates, they impose much higher debts upon the taxpayer than the actual value of the infrastructure they originally helped to build (in 2011 the taxpayer owed £121.4 billion to pay for infrastructure which was only valued at £52.9 billion) and they often include expensive maintenance and service contracts which charge the public purse vastly inflated fees for performing simple tasks (one PFI hospital was apparently charged £333 to have a new light bulb installed under the terms of their maintenance contract, for example).
As PFI repayments come out of hospital budgets, they also divert money away from other services which the hospital could be providing, and can lead to redundancies, ward closures and the loss of departments if resources are spread too thinly. This is especially difficult in an era when most NHS trusts are facing squeezed budgets anyway, because of rising demand for services.
The report also highlights specific NHS trusts which are having to spend a particularly large proportion of their overall budgets on servicing PFI schemes. In England, there are now seven trusts where PFI repayments account for more than 5% of total revenue:• Dartford and Gravesham NHS Trust (7.9% of spending) • Sherwood Forest Hospitals NHS Foundation Trust (7%)
• South London Healthcare NHS Trust (6%) • Norfolk and Norwich University Hospitals NHS Foundation Trust (5.8%) • Barking, Havering and Redbridge University Hospitals NHS Trust (5.6%) • Peterborough and Stamford Hospitals NHS Foundation Trust (5.6%)
• St Helens and Knowsley Hospitals NHS Trust (5.3%)
There are more then 800 active PFI contracts in the UK, from Hospitals, Schools, Prisons, water plants, and government buildings. Most already beginning to fail and feeling the pressure of high repayments and maintenance expenses for a project we will never own although the tax payer will pay more then double back to foreign investors? "so this is Britain?"
PFI projects have been embroiled in controversy for a number of years. Another hospital, the Norfolk and Norwich was completed in 2000, but faced hundreds of job cuts as it sought to balance its books,
And just last month it was announced that a state-of-the-art police station is to cost taxpayers a total of £21million over the next 30 years, even though it is closed to the public.
333.00 pound to change a light bulb
The front desk at the station, which opened 11 years ago in a 30-year private finance deal, is shut to save costs, and has been replaced by a mobile police van in the car park for eight-hours-a-week.
But police are still committed to handing over £700,000-a-year for the station at Ammanford, Carmarthenshire, South Wales, in the finance deal until 2031.
The total cost for the building, which provides a home for the force's Hi-tech Crime Unit and the Neighbourhood Policing Team for the Amman Towry area, will be £21m - almost 10 times the cost of building the station. The contraversy continues with power plants water treatment centers schools,, by now the message must be getting across that PFI just doesnt A, make any financial logic sence, B, puts strain on the comunity it is soposed to support, C, wieghs heavy on maintainance that is paid for from infrastructure budget, which is already under pressure of goverment cut backs.
800
The number of existing UK PFI projects.
The proportion of equity transactions in PFI projects attributable to OFFSHORE infrastructure funds.
75%
1.5
The bail out agreed by the government in 2012 for seven NHS trusts that had severe difficulties meeting their PFI commitments.
29%
The average annual return on the sale of equity in UK PFI project-companies for 1998-2012 (twice that agreed to when contracts were signed)
22
The number of NHS trusts reported to be facing problems paying their PFI related debt and interest commitments.
200
The value of the coalitions five year UK infrastructure plan. Focusing on on PFI projects in energy, transport, waste, food,water, and telecoms.
BILLION
BILLION
ZERO!
The proportion of profits from the sale of equity in existing PFI projects that the private sector will be required to share with the public sector under new coalition plans.