PFI

“No Treasury Minister would appear on this programme.” Yet another example of our political class treating us with contempt. It is something which has been going on for some time. It happens far too frequently and is not confined to the coalition. It will not stop until we rise up. 

 An investigation on ‘File on Four’ into the lack of transparency and the huge profits available to the private sector for getting involved with PFI schemes ran into the usual wall when accountability crops up. PFI or the Private Finance Initiative, was the wheeze dreamt up by the Tories under Major and enthusiastically taken up by NewLabour. It works like this. Companies put money up to build a school, hospital or build fighter planes or similar. The government agrees a contract whereby the builders are paid back so much a year for 30/40 years. At very good rates. One research project established that a new hospital built under PFI would cost three times the actual cost spread over many years. It is no wonder that governments do not want us to see what they are doing. They are saddling future generations with masses of debt. 

The contract often then becomes a marketable asset in itself in that the contracts can be bought and sold. For reasons of ‘commercial confidentiality’ it is all hush hush. 

And that is why it stinks.

Without transparency corruption runs rampant. Without transparency  accountability can be denied or delayed. Without transparency the rich cream off masses of cash from the poor and keep the details secret. It is the FIFA approach to good governance. 

The silence from our political class is deafening. NHS defecit? MoD problems? Education cuts? All could be eased if this nettle were grasped.

According to the File on Four programme, contracts appear to have been somewhat generously drawn up to the massive advantage of the private investment companies. The sums involved are colossal. Billions and billions. Which leads us to another cause for concern which the programme did not touch on. The revolving door between Ministers, senior civil servants and private industry is well known but little tackled. Private Eye have made the point on numerous occasions. Defence Ministers who step down and within months are on the board of an arms company. Health Ministers who step down and walk into the boardroom of BUPA or similar. Former Home Secretaries on the boards of security firms. Senior civil servants responsible for negotiating the contracts walk away from Whitehall into the industry they have just been dealing with. The massive amounts of cash on offer in the off-balance sheet PFI deals are a great temptation for public servants feeling somewhat unappreciated and unrewarded. Nothing like a bit of back-scratching to sort out the pension. 

And so it goes and the cash flows into deep pockets. It is a real struggle to find out the extent and what the actual costs are in both short and long term. We are being ripped off by our financial institutions. And guess what? Many use offshore tax havens to maximise their profits. So we, the taxpayer, pay over the odds to companies who avoid paying taxes on the massive profits they make from public works.

It is wrong. It is rotten. It is false accounting and too many of our political leaders are happy to keep schtum.

It is no surprise that the government do not want to go on the record. Shame on them.