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PFI

TheBigBeanTheBigBean Posts: 14,006
edited September 2017 in The cake stop
The Centre for Health and the Public Interest (CHPI) has just released a report on the impact of PFI on the NHS.

https://chpi.org.uk/papers/reports/pfi- ... firmaries/

Stella Creasy, Labour and Co-operative MP for Walthamstow, has jumped in with an opinion.

https://www.theguardian.com/commentisfr ... um=twitter

Most of the opinions expressed here don't really make much sense and wouldn't pass any form of cross-examination (IMO). My question is why does PFI have such a bad reputation that it has become the go to scapegoat? How did this public hatred actually start?

Posts

  • mamba80mamba80 Posts: 5,032
    Short termism by Labour and carried on by the Tories, contracts need renegotiating but given the love of the private sector by Hunt, unlikely.
    who says the public hate PFI? the majority of voters in the UK would nt have a scooby as to what it is or means much less how much it costs, just as your avg referendum voter had no clue as to the SM, CU or what WTO is.
  • TheBigBeanTheBigBean Posts: 14,006
    mamba80 wrote:
    the majority of voters in the UK would nt have a scooby as to what it is or means much less how much it costs

    Exactly.

    Maybe I'm wrong and the public doesn't have an opinion and instead politicians are playing politics.
  • kingstongrahamkingstongraham Posts: 17,773
    TheBigBean wrote:
    How did this public hatred actually start?

    It ramped up to highest levels at about the same time as Enron was taking debt off its books.
  • dinyulldinyull Posts: 2,964
    I'll be the first to admit, I don't know if it's good or bad....but I know for a fact we wouldn't have all the new schools/hospitals/fire stations without it.

    As someone who went to school in a building that was falling down around us, with totally inadequate heating (I left in 2000) I can vouch first hand how disruptive this was during exams etc. Days off over the winter were pretty much the norm when temps were below a certain threshold as the pipes had either frozen or the central heating wasn't working.

    There was also wall and roof being blown down during one "storm", which meant the whole place being shut down for a few days whilst inspections took place.

    There is a nice new school stood in it's place today thanks to PFI.
  • dinyulldinyull Posts: 2,964
    At the other end of the stick, the last company I worked for specialised mainly in PFI/BSF projects and i can also vouch first hand at how much money was wasted in getting bespoke/one off school building designs when in many cases a "set" design could have worked.*

    *Tbf, I won't ever give the tories much credit but this is one of the first things they did when they took over power in 2010. It also brought about the demise of my previous employer :lol: :shock:
  • TheBigBeanTheBigBean Posts: 14,006
    Dinyull wrote:
    At the other end of the stick, the last company I worked for specialised mainly in PFI/BSF projects and i can also vouch first hand at how much money was wasted in getting bespoke/one off school designs when in many cases a "set" design could have worked.

    I think that is a very legitimate criticism of what PFI, and BSF in particular, became under the Labour* government. Tenders were marked on the basis of the number of bells that could be provided for a price of X instead of the cheapest way of delivering Y bells.

    PFI has been exported around the world (congrats UK etc.) without aspects like this.

    I wish things like this could be discussed and refined to establish a better procurement route.

    *A reference to the period of time rather than blaming one party in particular.
  • ProssPross Posts: 29,559
    I think it just lends itself to those who want to shout about 'privatisation' of public services. Unfortunately there have been some high profile failures of PFI schemes and the successes get overlooked. At the end of the day it's just a different way of getting investment into public services rather than direct borrowing by government, I don't get the difference between a developer making a profit against a bank charging interest. I assume it helped keep government borrowing artificially low.
  • dinyulldinyull Posts: 2,964
    Dinyull wrote:
    I'll be the first to admit, I don't know if it's good or bad....but I know for a fact we wouldn't have all the new schools/hospitals/fire stations without it.

    As someone who went to school in a building that was falling down around us, with totally inadequate heating (I left in 2000) I can vouch first hand how disruptive this was during exams etc. Days off over the winter were pretty much the norm when temps were below a certain threshold as the pipes had either frozen or the central heating wasn't working.

    There was also wall and roof being blown down during one "storm", which meant the whole place being shut down for a few days whilst inspections took place.

    There is a nice new school stood in it's place today thanks to PFI.

    I've also just remembered that I NEVER used the toilets in high school in the 3 years I was there. Urinals were damaged and never repaired in all my time and as for the toilets themselves....no bog roll, no seats etc.

    Looking back it sounds like the 70's, not 98/99/00.
  • TheBigBeanTheBigBean Posts: 14,006
    I feel like I have triggered some childhood trauma there Dinyull!
  • dinyulldinyull Posts: 2,964
    TheBigBean wrote:
    I feel like I have triggered some childhood trauma there Dinyull!

    Haha, it had been suppressed.

    Only reason I brought it up is I think it helps see how bad things had become in some schools and boroughs. PFI might have been a desperate measure, but was very welcome up here at the time.
  • thistle_thistle_ Posts: 5,587
    Pross wrote:
    At the end of the day it's just a different way of getting investment into public services rather than direct borrowing by government, I don't get the difference between a developer making a profit against a bank charging interest. I assume it helped keep government borrowing artificially low.
    That's how I saw it - the government didn't have the cash to buy/build it so they got someone else to do it who leased it back to them.
    Like buy to let, or getting a car on finance.

    Edit: However getting the private sector to do the borrowing doesn't make sense because aren't (half decent) governments supposed to be able to borrow at lower rates than private companies?
  • TheBigBeanTheBigBean Posts: 14,006

    Edit: However getting the private sector to do the borrowing doesn't make sense because aren't (half decent) governments supposed to be able to borrow at lower rates than private companies?

    Yes, but there is a balance between risk and reward. The reason it costs a PFI company more to borrow is because the bank is taking more risk i.e. the government is taking less risk.
  • TheBigBean wrote:

    Edit: However getting the private sector to do the borrowing doesn't make sense because aren't (half decent) governments supposed to be able to borrow at lower rates than private companies?

    Yes, but there is a balance between risk and reward. The reason it costs a PFI company more to borrow is because the bank is taking more risk i.e. the government is taking less risk.

    not sure what the risk to Govt is of building a hospital unless we are looking at delivering projects on time, on budget.

    I see PFI as a good idea not always well executed
  • sungodsungod Posts: 13,774
    TheBigBean wrote:
    My question is why does PFI have such a bad reputation that it has become the go to scapegoat? How did this public hatred actually start?

    seriously?

    pfi was only ever a deceit to move investment/assets off government's books, to make it look like they were improving things (if you were gullible enough to believe them)

    this delighted the providers of capital who enjoyed high returns and essentially zero risk, and saddled the public sector wth far higher long term costs

    i.e. pfi gives a massive bung to the financiers, with the tax-payers footing the bill

    pfi 2, lipstick on a pig, it's still a pig
    my bike - faster than god's and twice as shiny
  • verylonglegsverylonglegs Posts: 3,640
    When you consider the alternative is to suggest higher taxes to update everything it's not hard to see why they opted for PFI, such in your face tax increases are politically toxic to the electorate and for that I can't blame them. SG the majority of the voting public are easy enough to fool on this, if it's massaged into the books covertly and over a period of time then they won't spot it or care, too busy debating the Strictly line up on twitter most likely.
  • Problem with many of the early PFI contracts is that they were poorly written and therefore became a bit of a cash cow for the private partners. Unfortunately it doesnt seem that lessons were learned quick enough and one I have previously worked at was still negotiating details, and costs, a number of years after the hospital opened for business.
  • TheBigBeanTheBigBean Posts: 14,006
    sungod wrote:
    TheBigBean wrote:
    My question is why does PFI have such a bad reputation that it has become the go to scapegoat? How did this public hatred actually start?

    seriously?

    pfi was only ever a deceit to move investment/assets off government's books, to make it look like they were improving things (if you were gullible enough to believe them)

    this delighted the providers of capital who enjoyed high returns and essentially zero risk, and saddled the public sector wth far higher long term costs

    i.e. pfi gives a massive bung to the financiers, with the tax-payers footing the bill

    pfi 2, lipstick on a pig, it's still a pig

    What is the source of your opinion?
  • john80john80 Posts: 2,406
    PFI is only required if you follow the false logic that the government cannot borrow without increasing taxes. The government owes others on the world debt market at rates probably of 4% or less for our current national debt. Do you really believe that a private sector organisation is going to give the government a 100million for a hospital and get a less than 4% return. The only possible saving is that the hospital build will be manage to cost and schedule by a private entity for the least money possible as any overspend is money out their pocket. However the government could always just manage the build effectively and then there would be no saving.

    Then we get into the running costs in addition to effectively renting a hospital. Drunk piss head kicks in a hospital door then think how much it costs to replace by the time you notify the PFI contracts manager and they assign a repair company and then they manage the whole process. How is this any cheaper than a civil servant managing a building maintenance programme with direct staff and specialists as required.

    The whole game was a way of increasing the quality of public infrastructure which is a laudable aim but keeping it off the books so that Labour in 1997 for their first term could claim financial competence is a shocking case of miss management of public finances. From a comedic standpoint me paying more tax now to pay for buildings and infrastructure owned by foreign firms is certainly ironic. An amazing way of exporting money out of the country for no net gain.
  • xdocxdoc Posts: 331
    I've been working in NHS hospitals for 35 years. In the good old days, if I needed some extra shelving in my office, we'd give the hospital estates department a ring, and a few days later a carpenter/odd job man, employed by the hospital, would come along with his drill and screw driver and put up the shelving, total cost, a few quid. Now, we'd have to fill in some forms and send off to the PFI company, a few weeks later a couple of guys in suits the will come round with clip boards and inspect the proposed alterations, then a few weeks later we'll receive a quote for the work, the charge will be exorbitant, so my manager will veto my new shelving as being too expensive, so I'll have to manage without. PFI sucks :(
  • xdoc wrote:
    I've been working in NHS hospitals for 35 years. In the good old days, if I needed some extra shelving in my office, we'd give the hospital estates department a ring, and a few days later a carpenter/odd job man, employed by the hospital, would come along with his drill and screw driver and put up the shelving, total cost, a few quid. Now, we'd have to fill in some forms and send off to the PFI company, a few weeks later a couple of guys in suits the will come round with clip boards and inspect the proposed alterations, then a few weeks later we'll receive a quote for the work, the charge will be exorbitant, so my manager will veto my new shelving as being too expensive, so I'll have to manage without. PFI sucks :(

    It could be a good idea poorly executed.

    Plus your couple,of quid does not include his (and his mates) annual wages, plus pension contributions plus the cost of their share of HR and Finance costs and the rent on their space plus power bills. And then when he retires the cost of your shelf will include the cost of his underfunded pension.
  • xdocxdoc Posts: 331
    xdoc wrote:
    I've been working in NHS hospitals for 35 years. In the good old days, if I needed some extra shelving in my office, we'd give the hospital estates department a ring, and a few days later a carpenter/odd job man, employed by the hospital, would come along with his drill and screw driver and put up the shelving, total cost, a few quid. Now, we'd have to fill in some forms and send off to the PFI company, a few weeks later a couple of guys in suits the will come round with clip boards and inspect the proposed alterations, then a few weeks later we'll receive a quote for the work, the charge will be exorbitant, so my manager will veto my new shelving as being too expensive, so I'll have to manage without. PFI sucks :(

    It could be a good idea poorly executed.

    Plus your couple,of quid does not include his (and his mates) annual wages, plus pension contributions plus the cost of their share of HR and Finance costs and the rent on their space plus power bills. And then when he retires the cost of your shelf will include the cost of his underfunded pension.

    You are quite correct, of course my 'few quid' does not include all the costs, but believe me, the 'old' system was far more cost effective than the new one, and offered us, the tax payers, far better value for money.
  • TheBigBeanTheBigBean Posts: 14,006
    It is certainly harder to make changes to specifications under a PFI contract, but by all accounts it is much easier to actually get something fixed*.

    *Assuming management is vaguely competent.
  • john80john80 Posts: 2,406
    Poor management of a building and its infrastructure does not justify an alternative ownership model. A smart person would just employ people who did a good job and aggressively removed those that don't.
  • secretsamsecretsam Posts: 4,864
    mamba80 wrote:
    Short termism by Labour and carried on by the Tories.

    Actually a Tory policy. Details...

    Anyway, people bang on about costs and all that. What most studies do not recognise is that PFI deals include FM services, including soft FM like catering. The buildings are maintained to a high standard. Maintenance is done, on time, always. It is not skimped on to make "savings", unlike in the rest if the publicly funded facilities.

    And people bang on about the private sector msking huge profits. Who built the non-PFI facilities? Fairies?

    I'm not a PFI apologist, it has many flaws, but nor am I blind to the benefits.

    It's just a hill. Get over it.
  • secretsamsecretsam Posts: 4,864
    xdoc wrote:
    I've been working in NHS hospitals for 35 years. In the good old days, if I needed some extra shelving in my office, we'd give the hospital estates department a ring, and a few days later a carpenter/odd job man, employed by the hospital, would come along with his drill and screw driver and put up the shelving, total cost, a few quid. Now, we'd have to fill in some forms and send off to the PFI company, a few weeks later a couple of guys in suits the will come round with clip boards and inspect the proposed alterations, then a few weeks later we'll receive a quote for the work, the charge will be exorbitant, so my manager will veto my new shelving as being too expensive, so I'll have to manage without. PFI sucks :(

    Yep. PFI is all about shelves. Not maintaining theatres, or piffling stuff like that. It's all shelves.

    It's just a hill. Get over it.
  • secretsamsecretsam Posts: 4,864
    john80 wrote:
    Poor management of a building and its infrastructure does not justify an alternative ownership model. A smart person would just employ people who did a good job and aggressively removed those that don't.

    See my first post. Successive governments didn't spend enough on maintenance. Under PFI, it's a contractual obligation.

    It's just a hill. Get over it.
  • SecretSam wrote:
    The buildings are maintained to a high standard. Maintenance is done, on time, always. It is not skimped on to make "savings", unlike in the rest if the publicly funded facilities.

    Reminds me of a previous hospital I worked at, where new PFI theatres were built. Not sure whose idea it was to put ophthalmology on the first floor, and then install bouncy floors.Anyone walking around on that floor caused the whole theatre to move up and down by nearly a centimetre. Clearly, when you're lasering eyes and whatnot down a microscope that's quite a big bounce. Unsurprisingly, the PFI theatres weren't used very much...

    Spotlessly clean tho.
  • SecretSam wrote:
    The buildings are maintained to a high standard. Maintenance is done, on time, always. It is not skimped on to make "savings", unlike in the rest if the publicly funded facilities.

    Reminds me of a previous hospital I worked at, where new PFI theatres were built. Not sure whose idea it was to put ophthalmology on the first floor, and then install bouncy floors.Anyone walking around on that floor caused the whole theatre to move up and down by nearly a centimetre. Clearly, when you're lasering eyes and whatnot down a microscope that's quite a big bounce. Unsurprisingly, the PFI theatres weren't used very much...

    Spotlessly clean tho.

    You can't leave it like that :shock:

    Why does the NHS need any bouncy floors? Which departments usually have the bouncy floors? Are visitors allowed to use them? If you go private are they bouncier?
  • I don't think they were supposed to be bouncy, but maybe they were supposed to be cunning and damping. The physios might like a bouncy floor, but I'm not sure anywhere else does.
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