Dear All
PFI was favoured by Labour Party for funding big building projects; it was ‘buy now, pay later’.
And how the taxpayer will pay as controversial private finance initiative (PFI) chickens comes home to roost.
PFI is really buy now pay forever, it was a stupid short term measure so ill judged that it is a scandal.
It maybe ‘tick the boxes’ of legality but morally, it was unjustifiable in the extreme.
Ministers are warning generations of Scots will have to pay for past school and hospital building projects which were funded by the controversial initiative (PFI).
Public schools and hospitals are now funded by the alternative Scottish Futures Trust that retains public ownership.
And get this, some contracts included leases lasting more than a century and those contracts need to be paid out of the public purse, a massive drain on resources.
Infrastructure Secretary Alex Neil described these deals as "shameful".
They go beyond shameful, I see them as abuse of public office in public office, cheap political electioneering to be seen to be doing something.
The financial bubble has burst, we all know that the chances of double dip recession are increasing, at presents it is said that there is a 17% chance of this, and this is before massive cuts to budgets come into play.
I have been blogging for sometime that we will go into a double dip recession as the system of both finance and local government is in meltdown.
An example of the PFI stupidity includes the Hairmyres Hospital.
Set in sunny South Lanarkshire, it cost £68m to build but the contractor will get 10 times that over the next 30 years.
In other words, the taxpayers have been legally fleeced.
The new new Edinburgh Royal Infirmary building contract lasts for 25 years but the lease on the land goes on for 130 years.
How could anyone allow a contract such as this to be signed in the first place?
It goes beyond incompetence.
SNP Minister Alex Neil said:
"It could go on for generations because some of these leases last up to 100 years, even where the PFI contract only lasts up to 25 years. So that means another 75 years of a potential liability. It is outrageous and the people who signed these contracts on behalf of the Scottish Executive before 2000, and indeed the UK government, should be utterly ashamed of themselves."
Seven projects across Scotland have been identified with lengthy leases.
New Craigs Psychiatric Hospital on the outskirts of Inverness is another donkey we are saddled with, the building contract lasts 25 years but the land will be held by the private finance company for 99 years.
Malcolm Iredale, finance director for NHS Highland, said:
"At the time the deal was the best deal that we could get. I think it is very easy to look back and say we could do things differently. I think it is difficult to say would we do the same deal again."
Maybe better management is another option, instead of ‘going along to get along’.
Scotland needs its own office of budget responsibility to act as an independent unit to scrutinise major public building works and were appropriate refer them back to the Scottish Government.
And contracts such as above should never have been signed, they are so bad. In business you don’t give up the controlling stake, any idiot can tell you that.
Lewis MacDonald, the party's Holyrood spokesperson on infrastructure, said:
"One of the things we said in the run-up to the 1997 UK general election was that we would keep in place for the first two years the spending plans we inherited from the Tory government. Not because we thought they were good spending plans but because we knew that it was critical that the money markets had confidence that an incoming Labour government would maintain economic stability."
We are paying millions of pounds over decades because the Labour Party didn’t want to upset someone?
Is he for real?
Yours sincerely
George Laird
The Campaign for Human Rights at Glasgow University
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