Our very own Enron

[D-Notice]

http://www.guardian.co.uk/comment/story/0,3604,1516031,00.html

How much longer can this farce carry on? Everywhere the chickens released by the government's private finance initiative are not so much coming home to roost as crashing into the henhouse and sliding down the wall in a heap of blood and feathers. The prediction made in 2002 by the Banker magazine - that "eventually an Enron-style disaster will be rerun on a sovereign balance sheet" - could be starting to materialise.

Last week, after spending £14m on lawyers, consultants, architects and miscellaneous money-wasting schemes, the NHS ditched its plans for a massive hospital in west London. The projected cost of the Paddington health campus had risen from £360m to £1.1bn, while the number of beds had fallen from 1,000 to 800. This is pretty normal for a PFI scheme; in one case I've studied, beds fell by 20%, while costs rose by 1,100%. What makes this case unusual is that the project was dropped before the money was spent.

Last Wednesday, the government admitted that PFI projects for council house repairs had been a costly disaster. This is hardly news to anyone who has watched this programme's seven-year meltdown. But despite the admission, the policy has not been officially scrapped; councils are still told they will receive no new money for refurbishments unless they hand their houses to the private or voluntary sector

[Briar]

1. ...and PFI is just as much a Brown passion

as a Bliar one.

Just when is someone going to stand up and challenge this consensus that favours the market over public provision?

[muriel_volestrangler]

2. And the Tories and Lib Dems are keen on it too

because they all realise the potential it has for passing the buck to future governments, or even generations, without it looking like vast sums are being borrowed by the state.

The late Paul Foot wrote an excellent guide to PFI for Private Eye last year (issue 1102 - not online anywhere , as far as I know). It keeps constuction firms sweet, the bankers make money hand over fist, and it doesn't look like any private company is really taking the 'risk' over from the government after all. It's a gravy train, for everyone except the users and taxpayers.

If anyone doesn't know someone who has back issues of Private Eye, I'll post you my copy, if you PM me your address (offer valid in UK only - no terms and conditions apply).

[Vladimir]

4. The problem with PFI's is that they are the worst of

both worlds - however much ultra liberals want to scream about the inefficiency of the public sector, there is nothing less efficient than a government subsidised private company with no democratic accountability. PFIs are about one thing - stuffing lots and lots of money into the pockets of businesspeople.

[fedsron2us]

3. A few of the politicians should try the PFI experience first hand.

It might change the way they think. I have had the misfortune to spend part of my working life in a public building that is leased under a PFI contract. From what I have seen the company supplying the 'service' pocket the money and do as little as possible in maintenance. As a result the toilets, when not closed due to some malfunction, are the home to numerous strange fungi and 10% of the tiles have dropped of the walls. The whole building has that indefinable 'late Soviet' feel that seems to be the house style of the crony corporate capitalism that is the prevailing ideology of early 21st century Britain. If I had enough money I would be very tempted to offer out my own contract to those who would supply a slow and painful demise to the bastards who thought up this idea.