The Truth - Labour Privatized The NHS between 1997 and 2010, Now Their Toxic Policies Are Bankrupting It
New figures reveal weight of PFI burden on NHS trusts
by Phil T Looker
The controversy surrounding the PFI deals made by New Labour to create the illusion it was keeping its pledges to increase health spending while all the time it was saddling taxpayers with massive debts shows no sign of cooling down, According to recently released figures from the Public Accounts Office the total bill for PFI repayments has increased by nearly £200 million in just two years, from £459 million in 2009/10 to £628.7 million in 2011/12 (these amounts only apply to NHS trusts in England).
For anyone who is not aware of how Blair and Brown's NHS PFI deals worked, in order that the Labour government could claim to have kept its promises on building new hospitals and investing in the NHS (while it was really blowing taxpayers money on American wars and its leaders vanity projects) the government would invite private, for profit healthcare companied to build new hospitals, which having been filly equipped and staffed would be operated by the for profit organizations as managed facilities which the NHS pay facily management contract fees for.
If that seems bad, it gets worse, much worse.
The figures, which were released as part of a new report on healthcare in the UK by social policy think tank the Nuffield Trust, showed that PFI repayments have risen by an average of 18% per year over the last two years.
What’s gone wrong with PFI?
PFI deals are playing havoc with NHS finances 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 the money required to service PFI contracts comes out of hospital budgets they divert funds away from other services which the hospital must provide (A&E, cancer care etc.), and can lead to redundancies, ward closures and the loss of departments as private profit sucks the lifeblood from the system. At a time when most NHS trusts are facing squeezed budgets because austerity mesures necessitated by the need to get the government deficit under control after Labour's years of profligate spending and rising demand for services which causes what money is available to be spread more thinly.
It is indicative of Labour's financial incompetence that they allowed NHS trusts to sign deals which require by contract law that PFI payments are prioritized above other areas of spending. Thus no matter how many people need urgent treatment for serious illneses, the private hospital operators get their money first
To balance this article lest readers think it is just an anti Labour polemic, while PFI schemes were introduced by the conservatives in 1992, they we
re not at that time used for financing essential services but for infrastructure projects. New Labour's PFI schemes were deliberately designed to transfer wealth from taxpayer's pockets into corporate coffers. It is five years since Labour left office however and the Conservative / Liberal Democrat coalition have done nothing to address the iniquities of this corrupt policy.
The Nuffield Trust report states that the burden of PFI schemes is not distributed evenly across the NHS. Variations in the number of new schemes which used PFI financing have created a strong regional imbalance.
London NHS trusts have the biggest PFI payment burden, followed by the West Midlands. In the last financial year, NHS trusts in London spent £143.9 million on PFI repayments (nearly a quarter of the total in England), almost five times higher than the total amount spent by NHS trusts in the region with the smallest PFI bill, the South West.
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%)
South London Healthcare NHS Trust made headlines in 2012 when it it was put into administration. Its future is yet to be fully resolved. The report also emphasizes that interest repayments on PFI debts are mostly up-rated using the retail price index measure of inflation (RPI), which tends to be higher than other measures, such as the consumer price index (CPI). This means that government policies which have an impact on RPI can indirectly cost the NHS money in higher PFI repayments.Despite the disturbing facts this report brings to light, the current government is still continuing to give further PFI projects the green light. This is deeply unfair on future generations, who will still be paying for these schemes long after their benefits have been exhausted.
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p>Labour's NHS Privatization By Stealth PFI Deals Are Killing Hospital Patients
It is really gobsmacking to see every day, Labour supporters blaiming the Conservatives and Lib Dems for the NHS cisis and accusing UKIP of wanting to privatize the NHS,, when in reality UKIP, the only party whose leaders have real world business experience, are the only party that can or even wish to save the NHS. Get wise to LabLibCon corporate piracy.
NHS hit by spending cuts
Crippling PFI deals leave Britain's NHS Trusts £222bn in debt
from The Independent
Every man, woman and child in Britain is more than £3,400 in debt – without knowing it and without borrowing a single penny – thanks to the proliferation of controversial deals used to pay for infrastructure such as schools and hospitals.
The UK owes more than £222bn to banks and businesses as a result of Private Finance Initiatives (PFIs) – “buy now, pay later” agreements between the government and private companies on major projects. The startling figure – described by experts as a “financial disaster” – has been calculated as part of an Independent on Sunday analysis of Treasury data on more than 720 PFIs. The analysis has been verified by the National Audit Office (NAO).
The headline debt is based on “unitary charges” which start this month and will continue for 35 years. They include fees for services rendered, such as maintenance and cleaning, as well as the repayment of loans underwritten by banks and investment companies.
Read more ...
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NHS executives 'earn £35 million in pay rises' despite funding crisis
While Labour, Lib Dem and Green politicians accused the Conservatives of starving the NHS of cash,and as many Hospital Trusts faced financial problems and having to cut back on standards of care given to patients, we are learning that NHS bosses awarded themselves over £35 million in pay rises during the worst financial year in the history of the service.
We are all paying for New Labour's toxic PFI legacy
from The Independent
At the weekend, my colleague, Jonathan Owen, produced a stonking analysis of the country’s Private Finance Initiative debt, which he found has reached £222bn. It is, claim critics, another sorry indictment of a policy they condemn as privatisation by stealth.
The funny thing was, on entering Number 10 in 1997, Tony Blair was sceptical about the PFI. He even called a review of what was, of course, originally a Conservative policy.
But the Prime Minister and his neighbour, the Chancellor, Gordon Brown, were soon convinced of the merits of letting the private sector stump up the initial cash to build or refurbish schools, hospitals and roads and paying them back with interest over a 25 to 35-year period. This might be more expensive than the state just overseeing the work itself, but it was not an immediate cost and, in theory, New Labour could leave a legacy of state-of-the-art facilities that would be the envy of the world.
Read more ...
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NHS management crimes Latest Posts
How PFI is crippling the NHS
from The Guardian
Last year the NHS underspent its budget by £900m, returning much of it to the Treasury. This raises serious questions about stewardship of public funds, at a time when hospitals with PFI-associated deficits, such as Hinchingbrooke, have been franchised out to companies such as Circle, and other PFI hospitals in south London and elsewhere are under "special measures". Before 1990 any hospital overspending would have been managed without recourse to closure, and failing hospitals were unheard of.
Failure is a product of successive governments' policies since 1990: Kenneth Clarke's introduction of capital charges and trusts, New Labour's PFI policy, foundation trusts and payment by results, and now Lansley's new funding regime and policies.
Given how quick Lansley has been to lay the blame for PFI at Labour's door, the question is why he has been so slow to open up the contracts to show the true cost of PFI. Why is he still sheltering PFI contracts behind claims of commercial confidentiality?
The affordability problems caused by the high cost of PFI and debt finance are not new. Under New Labour, the Treasury and Department of Health signed off these PFI contracts, which lock the taxpayer into long-term debt. The chief executives of the trusts and PCTs were required to pass the affordability test set by the Treasury. In other words, they needed to show how the annual debt charge would be met from the operating budgets of hospitals and other services, ie the budget that normally pays for staff and supplies.
Since the policy was launched in 1992, report after report over almost two decades has shown how each wave of PFI has been associated with trust mergers, leading to 30% reductions in beds; staff lay-offs; and closures of hospitals, accident and emergency departments and an untold number of community services – all because of lack of affordability. PFI, once trumpeted as the largest hospital-building programme, was in fact the largest NHS hospital and bed closure programme.
Read more at The Guardian ...
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