The People Vs. PFI Campaign

The Private Finance Initiative is an unfair, unaccountable rip-off, destroying our NHS.

The Private Finance Initiative (PFI) is the biggest scam you’ve never heard of.

At first glance, the hospital you rely on, the school your children go to, or the roads you drive on every day look just like any other. But scratch beneath the surface and you’ll find that you and I – the taxpayer – no longer own or control large chunks of our public infrastructure. Instead private corporations own it – and rent it back at extortionate prices.

Here’s how it works. A private finance initiative (PFI), also known as a public private partnership (PPP), is a government programme that is funded and operated through a partnership between the government and one or more private sector companies.

A PFI hospital isn’t owned by you and managed on your behalf to make sure you get the best care. It’s owned by a private company and run to make shareholders rich. The fact that people receive medical care in their building is only incidental.

We were told the high costs of PFI were because the private sector was taking on the ‘risk’. But this is nonsense. Private companies usually form a new front company, called a “special purpose vehicle”: a separate legal entity which allows them to isolate themselves from the financial risks involved in the PFI project. If a PFI project goes bust, the government usually has to bail it out, because as a public utility its continuing function is vital. This is regardless of how much profit the private sector investors have accrued from their involvement.

PFI is unfair – communities have to live with the results of badly designed, rip-off contracts for decades. PFI is unaffordable because the iron-clad contracts demand a total of £10bn a year in unnecessary extra costs from the public purse, which forces the closure of other essential services. And PFI isunaccountable because commercial confidentiality means we can’t fully understand how costly these contracts are, or challenge the people responsible when things go wrong.

And things do go wrong – all the time. Hereford Hospital found that their hospital had been in breach of fire safety regulations for over a decade.Birmingham’s flagship PFI hospital is under investigation for chlorine contamination and a possible link to the deaths of two patients. Local authorities get charged ridiculous fees for additional works: such as £965 to replace a single TV aerial or £22 for 65p light bulbs. And residents in a PFI housing estate in Lambeth who challenged repairs that hadn’t been completed are now being sued for ‘causing trouble’.

PFI has far-reaching political consequences too: who owns the infrastructure and how it is financed determines who gets to use it – and at what price. It even determines what kind of infrastructure does or does not get built in the first place. That’s why many PFI hospitals built with too few beds are now finding themselves chronically overcrowded, making effective treatment even more difficult in an incapacitated NHS. But you’re unlikely to ever know that there’s a problem, until all of a sudden you find your public services at risk of closure – remember Lewisham? The implications for equality, social mobility and environmental stability are obvious.

The PFI programme has been a slow-motion train wreck that people are trying their hardest to keep secret. In fact, government ministers continue to endorse PFI as a way of providing public infrastructure and services.

One thing is clear: No one is going to solve this problem for us. It’s up to us to team up and tell the government and the private contractors that PFI is unaffordable, unaccountable and unfair – and it’s time for it to stop.

The People Vs. PFI

We can challenge this disastrous policy – but only with your help.

On November 1, the People vs. PFI campaign will officially launch at the London School of Hygiene and Tropical Medicine. Put together by a small group of activists, academics and journalists, this campaign has been gaining steam and attracting the support of organizations such as MedactUnite the Union, and We Own It.

PFI affects all aspects of our lives. It represents a ‘financialisation’ of our public infrastructure – and so, a common ground for campaigns and struggles on many fronts.

The varied conference programme will look at the impact of PFI and how to take it on, including tracking private finance, initiating Freedom of Information requests and mobilising communities with expert help.

In the last year we paid PFI companies £10bn. That’s £ 27,945,982 per day, £19,407 per minute or £ 323 every second. In the time it’s taken you to read this article alone that could have paid for the annual salary of at least 3 staff nurses; in total it could have wiped out the entire NHS “funding gap” many times over. And yet the Tory-led coalition tells us that 4,000 senior nurses had to be axed since they came into power because “we can’t afford it”.

The only way NHS trusts can pay off these extortionate PFI debts – and avoid liquidation – is to sacrifice staff, standards and service quality.

 The People vs. PFI campaign is for those who believe enough is enough.

There is an alternative. There are cheaper, more transparent and fairer ways to provide public services. Join public sector workers, professional groups, trade unionists, campaigners, researchers, journalists and members of the public on November 1st to find out what they are.

It’s time for us to stand up and say NO to the politicians and private contractors that want privatization-by-stealth. It’s time to make public services ours again.

Additional reporting by Caroline Molloy

[Originally posted: 28.10.14 on OpenDemocracy]