PFI: To pay or not to pay?

Recently I had to make a trip to the local vet to help our poor pussycat Jaffa, yes for the curious among you, he too, like the eponymous orange, is also seedless. The sad mog was constipated and had a compacted one and half pound turd blocking up his bunghole. One deftly administered enema from an overly friendly glove wearing vet and a doxe of cat laxative paste later and he's shitting like a pedigree pooper. So far so icky, the reason I open with this particular scatalogical gambit is that whilst waiting for the vet to probe the cats innards, I met a recently retired former chief executive of a local authority not a million miles from where I live, who was visiting to get his pit bulls nails clipped. 

Having met him professionally on and off over the last dozen or so years, pleasantries were exchanged and mutual friends asked after, all over the cacophany of mewling, barking, squawking and soon to be shitting. Conversation in these instances usually runs dry and before you know it you're discussing weather and holiday destinations. So being a fully signed up member of the awkward bugger squad, I brought up the question of PFI and the local authorities slavish devotion to it during his tenure. Thinking that in his golden years he might be less circumspect in his answers, I mentioned some farcical examples of cost, poor service, delays and the fact that the councils PFI debt was the target for specialist PFI companies keen on the profits that can be garnered from the PFI subordinated debts, Cf passim. These work out at some £20 million per year for the next 31 years, until 2041/42...

Lo and behold there was a grudging acceptance from my fellow vet visitor that PFI had not been the most cost effective method of building or renovating the crumbling schools or leisure centre. In his defence, he uttered the immortal line, 'PFI was the only game in town and there was a lot of pressure from Holyrood to use it'.  

Chummy left his job in 2008, he'd been chief exec through most of devolution and was referring to a Holyrood under the Labour-Liberal Democrat coalition. In rebuttal I mentioned that the local authority, unlike the Scottish Government actually has legislative powers to borrow, an avenue deemed particularly sensible for capital costs, when interest rates are considerably lower than PFI interest rates...His demeanour suggested a lack of choice. 


This aspect of  'the only game in town' makes sense, when you look at the article in today's Guardian which pans Westminster Labour under the headline,  Labour government 'ignored cheaper alternatives to PFI'

The headline comes courtesy of the Westminster public accounts committee report which has scrutinised the use of PFI schemes in Englandshire by the Department for Communities and Local Government to provide housing and by the Department of Health to provide hospital support services.

In a quite spectacular display of dribbling amnesia, Margaret Hodge, the Egyptian born multi-millionairess (estimated wealth £50million), former Price Waterhouse senior consultant and commonly regarded as the original architect of PFI, Labour MP  oh and chair of the public accounts committee said: 

" Local authorities and health trusts used PFI because there was no realistic alternative, not because it represented best value for money."
  
" The use of PFI and its alternatives should now be robustly evaluated. Looking back at PFI procurements, the government should also do more to find out where and why PFI works best and capture the lessons. Departments should also do more to ensure they get the best out of existing PFI contracts.

" By bundling together large numbers of PFI projects, private sector investors may use the consequent economies of scale to drive up the value of their interests and generate bigger profits. We are concerned that the benefits arising from these economies of scale are not being shared by the taxpayer.

" At a time when public finances are so tight, government must use the weight of its buying power to negotiate with major PFI investors and contractors a better deal for the taxpayer."

All of which beggars the motherflipping question, what the shitting crikey were Margaret and her Labour cronies doing about it for the 13 long years they were in power?



The  vested interests were given a say, which drew the frankly terrifying response:


'The report drew a sharp response from business leaders, who warned against ministers trying to renegotiate contracts to get a better deal for taxpayers, suggesting that with constrained public finances, the role of PFI could become even more important.'

So in essence, they're saying 'shut up serfs, we are your masters and we will continue to shaft you as much as we want.' 

It's nigh on impossible to see a way out of PFI. Were the Scottish government to start by ripping up contracts, you can see the poor beleaguered banks and corporations being supported by the three Tory parties in Holyrood. I've no doubt when the likes of simpleton Andy Kerr (a former primary school classmate of mine) scrawled his big X on the legal parchments the Banks legal vultures must have guffawed under their powdered wigs at his naivety.

What gives me the twisted brain-wrong of a one-off man-mental is the conundrum, that since we bailed out the banks and we now are the majority shareholders in them we continue to pay those very same banks the PFI interest rates that are crippling our councils. Why? I mean really, WHY? Can anyone tell me why we can't legislate to stop paying these debts?


Hopefully, if the SNP are returned to power in May, we might see some sort of scrutinising committee take a proper look at PFI and the financial scams and trickery the Labour and Lib Dems signed us up to...Although finding an honest chairperson from Labour, Tory or Lib Dems after witnessing theWendy in action this week is as likely as me training Jaffa to flush after pooping...



PS last weeks post on TIME magazine has had the best part of 4000 readers, a few left comments. If anyone wants to comment or even defend PFI please get typing.