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Houses of Straw Pfi Blows Our Future Scottishleftreviewissue 33 March/April 2006 Contents Comment Issue 33 March/April 2006 scottishleftreview £2.00 houses of straw pfi blows our future scottishleftreviewIssue 33 March/April 2006 Contents Comment ........................................................2 Living with PFI ..............................................18 A midwife The private finance illusion ............................4 Incapacitated Scotland .................................20 Dave Watson Margaret and Jim Cuthbert Only the profit is healthy ...............................10 Birth of a phantom revolution .......................22 Mark Hellowell Aileen Orr The profit myth ..............................................14 Restoring wisdom .........................................24 Andy Cumbers Chris Thomson The strange case of the Ayrshire schools ....16 Fairness in action ..........................................28 Henry McCubbin/Campbell Martin Molly Scott Cato Comment he sensation of PFI is like the sensation of watching your driver behind PFI. Understanding the real attraction of PFI is Tdrink get knocked over but in slow motion – you know that difficult for most people; most of us simply don’t think in terms by the time you grab it, it’s really too late. The evidence against of how to ensure that the very rich become richer at the expense contracting private companies to build public buildings and of the rest. But that’s the thing about PFI. Business expansion then leasing them back over 30 years is overwhelming. They – in the eyes of the true believer – is hampered by no-go clearly cost more – much more. The need to squeeze profits areas, prime among them the public sector. Almost everything out of these public buildings results in cuts – hospitals typically the Blair Government has done has been about enabling big lose 30 per cent of their beds when rebuilt in this manner. commercial interests to more efficiently exploit markets, The contracting out process simply does not transfer risk as particularly markets that were closed to them. The neo-con is claimed – the contracts are heavily loaded in favour of the orthodoxy say – ‘of course he has, that’s good government’. developer (which means against the public). The evidence Unfortunately, there was a very good reason why the ability to of efficiency is scant. The evidence of quality is clear – these exploit was limited. There is only so much gambling we really buildings are put up by people whose interest is in maximising want in society, hence limits on casinos. We don’t want people profit, not creating quality public assets with longevity. And we drinking themselves to death, hence licensing laws. The Royal know there is no future-proofing – the contracts last 30 years Mail was supposed to be about providing a service to all, not and we’ll be honouring them to the dot and comma, whatever dropping the unprofitable bits like a hot potato. Water services changes the in healthcare educational practices. We are now in desperately poor countries were not run by profit-making a decade into the Public Finance Initiative (or translated into companies for a reason. Schools were not run by religious nuts Labour, Public Private Partnerships) and these things have and ideologically-driven businessmen because of what would been shown through bitter experience. The galling thing is happen. that these catastrophic results were demonstrated before they happened. Work by Alison Pollock, George Monbiot and many And schools, hospitals, bridges and all of the infrastructure others started exposing the insanity of PFI from before the first which constitutes ‘our’ country was owned by ‘us’ and not foundation of the Skye Bridge was sunk. So why did no-one ‘them’ very precisely because the experience of ‘them’ owning listen? the fabric of society was Victorian squalor. The rate at which this is being reversed is petrifying. But there’s a reason for this The answer is because these disastrous consequences were haste, and it is that it has to be done before the public learns either precisely the point or were viewed by PFI’s architects as properly the extent of the corruption involved in this scandal. necessary. The PFI agenda has two root causes. The first is the We have been lied to, we have been cheated and where cheating one many people who know something about PFI cite – that it and lying hasn’t worked, we have been kept in the dark. When managed to rebuild infrastructure while keeping the liability the corruption is proved beyond doubt, the evidence is simply off the public books. By an elaborate rent-back scheme it was ignored. And the whole thing is set up in a manner which possible to keep public borrowing down. That it cost us more ensures that it is very difficult to undo – we’re stuck with this every single year for the length of the contract didn’t matter. This state of affairs for a long time. Stopping this travesty tomorrow is not only short-sighted, it seems barely legal. Shareholders in would be too late. a company who discovered that the company was paying three times as much for its core assets simply so it could cook the And the reason for despair grows when we consider the likely books in the short term would have the police in ten minutes outcomes. A just future would see criminal prosecutions for the after the auditors left. But in fact that is probably not the real extreme end of the activity here – the deliberate withholding of Editorial Committee Aamer Anwar John Kay Tom Nairn Mark Ballard Jacqueline Kelly Andrew Noble Reviews .........................................................30 Bill Bonnar Isobel Lindsay Jimmy Reid (Convener) Moira Craig John McAllion Robert Sharp Web review ....................................................34 Roseanna Cunningham Robin McAlpine (Editor) Tommy Sheppard Colin Fox Henry McCubbin Alex Smith Kick Up The Tabloids.....................................35 Gregor Gall David Miller Bob Thomson Illustrations: Articles for publication: [email protected] Pages: 24, 28: Andrew McGregor Letters and comments: [email protected] Website: www.scottishleftreview.org Tel/Fax 0141 44 004 [email protected] Scottish Left Review, 741 Shields Road, Pollokshields, Glasgow G41 4PL Cover and all other illustrations: Nadia Lucchesi Printed by Digisource (GB) Ltd [email protected] Unit 12, Dunlop Sq, SW Deans Industrial Estate, Livingston EH54 8SB evidence of malpractice (see the article on the Ayrshire schools) that wrong has been done (or some other impossibly high burden for example. There ought also to be action against those who of proof). When we do these will be ‘discredited’ or ignored. may not have broken the law but And in any case the only power to were tasked to act in the public hold the perpetrators to account is interest and clearly failed to do so. The confidence with which in the hands of the perpetrators. Those who made excessive profits this corrupt system has Meanwhile, for the next 30 years from the scandal should see those we will all pay the price in reduced profits reclaimed for the public. been pursued stems from service at extra cost. It cannot be Contracts which were written the experience of previous stated clearly enough; every person against the interest of the client in Britain will be paying more in (which is us) should be unilaterally examples of complex taxes for a poorer service for the rewritten. And procedure which commercial activity which single reason that super-wealthy ensures genuine transparency in developers have been given giant future, including clear checks on has failed the public. How chunks of our money for doing little executive power, should be put many people remember more than they would have done in place. But this is not what will anyway (given that it would almost happen. The confidence with which that great swathes of certainly have been the same this corrupt system has been public assets were sold off companies building these hospitals pursued stems from the experience and schools even if the government of previous examples of complex to private profit makers had paid for them as they should commercial activity which has at a price well below its have). Perhaps it is too pessimistic failed the public. How many people to assume that no-one will be held remember that great swathes of value. There were windfall accountable for this. Perhaps in public assets were sold off to private taxes levied (an important fact this will be a political turning profit makers at a price well below point in the political glorification of its value. There were windfall taxes precedent) but the private profit. Perhaps people will levied (an important precedent) public memory is hardly remember for years to come what but the public memory is hardly was done to them. Perhaps there imprinted with the iniquity of it. imprinted with the iniquity will be real redress. Unfortunately, Rather, the politics of amnesia will of it. like watching our spilling drink, we most likely return. There has been may collectively shrug our shoulders so much scandal around the Blair Government that it ought to and conclude that it’s too late to get annoyed. The difference will be considered one of the most corrupt in living memory, but even be in how those of us who know the level of corruption spread committed opponents can’t keep the volume of wrongdoing in the message. their heads. Can you even clearly remember who Derek Draper was and what he did to make the front pages? Tessa Jowell politics will probably be the result. We will be challenged to produce photographs and tape recordings proving the private finance illusion Dave Watson of UNISON explains the con that is PFI NISON calls PFI the Private Finance Illusion because it The financial crisis currently affecting many English PFI health Uis an expensive con. The UK and Scottish governments schemes, along with the impact of the new payment by results are conspiring in a wasteful use of public funds to create the funding policy in the NHS south of the border, is leading to illusion of generous investment in new schools, hospitals and predictions that most future private investment there will be in other public infrastructure.
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