'Govt may have to take on risk of PFI deals ....'

[SpookyFrank]

I can't figure out if Brown is insane, stupid or just pure evil. One thing he's not, and never has been, is fit to run the country. And, minor matter though it may be, the fact remains that nobody ever voted for the fat bastard in the first place

 

[Brainaddict]

Pretty predictable. This is what makes me fucking angry about PFI. If a PFI deal is for necessary public services then in reality the government ALWAYS bears most of the risk, because they are politically answerable for what happens (say if hospitals or schools close), so they HAVE to bail the projects out if they flounder or fail. Only a moron or a cunt can refuse to understand that this is the case.
So tbh for me this move only makes clearer the reality of the situation as it already exists.

Some cock in that article above talks about 'One hundred per cent risk transfer' as though that's what usually happens in PFI deals. Fucking delusional. The only projects you could do a hundred percent risk transfer on would be projects that are a hundred percent not politically necessary. And the government tries not to get involved in those at all, so it can never happen.
The people doing this aren't stupid - I even know someone who worked on it in the treasury. I don't think it's a conspiracy either - not as such. Just a combination of lobbying (some of it probably fairly secret) and a herd mentality that suddenly decided it was 'the right thing to do'. By the time their delusional bubble is pricked, billions of taxpayers money will be in private pockets. It's fucking tragic.

 

[shagnasty]

I can't figure out if Brown is insane, stupid or just pure evil. One thing he's not, and never has been, is fit to run the country. And, minor matter though it may be, the fact remains that nobody ever voted for the fat bastard in the first place

Spooky gordy does'nt like to be called fat.the way things are now the bounce is dissappearing and to be honest he is fucked how long before the knifes are drawn again.if these pfi's are going pear shape can't he just let that run it's course and pick up the pieces or is that not on

 

[FridgeMagnet]

One of the major points about PFI was that basically the companies involved had no risk. Their investment was always going to be protected. It's one of the things people have been shouting about PFI for years, that it basically means paying more for less and still shouldering any problems if things go wrong, but noooo, within New Labour it was Ideologically Correct and unchallengeable, and everyone else couldn't look past the length of their noses it seems.

 

[shagnasty]

Sorry when i said pick up the pieces i meant to not compensate the private companies and to take then under public control

 

[taffboy gwyrdd]

it only ever gets sicker :

http://www.guardian.co.uk/politics/2009/jan/27/pfi-deals-bsf-government-underwriting

I once read an amzing piece on just how much money the city made in the early 90's piecing together PFI deals , they were even exporting the model all over europe and beyond , with huge consultancy fees attached .

So the bankers making huge commissions upfront , on deals that stretched 25 yrs fwd , paying roughly from 0 - 10 % corp tax ( thanks to brown and co's "light touch" regulation and taxation approach ) , and guess what .... it was all a speculative farce , that not only consisently failed deliver to deliver to the "consumers" ( ie: ill patients etc ) , left us in hock to big buisnessfor 25 yrs at a time , privatised parts of the public sector by stealth ....but will now require bailing out by us .

Brown again covers himself in glory - pathetic .

Monbiot, the most consistent and thorough critic of PFI, did a great piece on how the deals were later refinanced to the largesse of the elite. The whole thing was a scam from the start. We are just going into a new phase of the scam.

 

[Hocus Eye.]

As someone who has been on these boards complaining about PFIs for a long time you can imaging how mad I am about this outcome. PFIs were a confidence trick, a scam. It was just a way of making it appear that there was investment going into schools and education while not having that investment appear on the accounts so that is did not appear as Public Borrowing for the purposes of conforming to EU regulations. Capital expenditure disappeared to be replaced by essentially a loan repayment like a mortgage, but a mortgage where the property never became the property of the payer.

It was going to end up on the tax bill of the public a few years down the line when the contracts came up for renewal, and the money spent each year on servicing the debt did not pay for the buildings which remain the property of the original contractor. On top of that the old buildings that were being replaced by new buildings on green field sites or part of the old site were demolished or refurbished for development for the profit of the contractor.

All of this was bad enough, but now it seems that the government - and hence the taxpayer is going to have to pick up the tab now instead of later. This is a complete mess. At a time when banks are being bailed out but still not being prepared to lend, and the steel and motor industry needing handouts there surely isn't enough money to do this.

It is easy to say "I told you so" but it is clear now that if the British and other governments had avoided Neo-liberal economics and stayed with the mixed economy consensus that prevailed in the years since WW2 up until the late 1970s this crash need not have happened.

We are paying the price of the influence of Milton Friedman on Reagan and Thatcher. The world wide rejection of government influence on economies meant that the markets let rip. Now that we have a world crash there is a sudden reversion to Keynesian 'pump priming'. But Brown and the other politicians throughout the world have no experienace of this and now that 'Globalisation' has created multinational companies bigger than the GDP of many large countries, government intervention is not powerful enough.

Brown is right about one thing though, and that is that it will take action by many countries working together to ameliorate the damage done by the economics of the last 20 years.

 

[scifisam]

It's basically the government equivalent of a dying man taking out huge overdrafts and credit card loans because he knows that he won't have to deal with the repercussions in his lifetime. Short-termism, in essence.

The only PFI school I worked in has convinced me to never work in a PFI school again. Caretakers and other ground staff are an essential part of the school, not something extraneous to be outsourced.

At that school, you were not even allowed to move the desks outside of the originial arrangement. New teachers would wait six months for a key to their often multiple classrooms (and you really do not want a class full of kids milling around for five minutes whle their teacher runs around the building trying to find the caretaker to let her in). Even the head had no idea who most of the assistant caretakers were, because they'd come in from some agency, with no knowledge of the school, always having to ask for directions. When the windows in the new PFI building started to break, injuring a student, the whole school had to be temporarily closed. Toilets break down? The girls have to share two toilet cubicles for weeks while the paperwork goes through and workers are found.

Contrast that to schools with proper caretakers and staff who are part of the school: key needed? OK, here you go. Toilets blocked? OK, Dave'll unblock them. Supply teacher doesn't know where the science block is? Dave passes them in the corridor and directs them. Faulty windows could happen in any new building, but these windows weren't really faulty; it was just that, if you tried to open them from the bottom rather than the top, they'd collapse in on you. You might be able to rely on permanent teachers to know this, but not temporary staff, and certainly not students. The PFI solution, btw, was to lock all the windows permanently shut.

I'd almost be tempted to say it was a classist issue, whereby white-collar professionals had no idea how much blue-collar employees contribute to a school, or a hospital, or any of those other institutions where the ground staff have been outsourced due to PFI.

 

[cantsin]

Agreed. Brown hasn't governed for the UK he has governed (misgoverned) for his own ego. He appears to care nothing for the people he has fucked over only his own power.

ridiculous micky mouse / Daily Mail view of recent history - he governed for a class and a system at a certain stage in capitalism's development , and if you think cameron abd Osbourne are going to change that , you're even more daft than you appear

 

[cantsin]

One of the major points about PFI was that basically the companies involved had no risk. Their investment was always going to be protected. It's one of the things people have been shouting about PFI for years, that it basically means paying more for less and still shouldering any problems if things go wrong, but noooo, within New Labour it was Ideologically Correct and unchallengeable, and everyone else couldn't look past the length of their noses it seems.

exactly - big business demanded ridiculous dividends cos of the "high risk" they were exposed to, pocket the dividend, and then we absorb the risk as taxpayers. Couldn't make it up etc

 

[agricola]

As someone who has been on these boards complaining about PFIs for a long time you can imaging how mad I am about this outcome. PFIs were a confidence trick, a scam. It was just a way of making it appear that there was investment going into schools and education while not having that investment appear on the accounts so that is did not appear as Public Borrowing for the purposes of conforming to EU regulations. Capital expenditure disappeared to be replaced by essentially a loan repayment like a mortgage, but a mortgage where the property never became the property of the payer.

Indeed, and its one of the especially bad things about this that journos, politicians and the commentariat generally all had access to the same info you and others had and continued (and continue) to stand idly by while all this idiocy went on. For all Livingstone's faults, he at least did make a stand against it (in the form of PPP).

It is easy to say "I told you so" but it is clear now that if the British and other governments had avoided Neo-liberal economics and stayed with the mixed economy consensus that prevailed in the years since WW2 up until the late 1970s this crash need not have happened.

We are paying the price of the influence of Milton Friedman on Reagan and Thatcher. The world wide rejection of government influence on economies meant that the markets let rip. Now that we have a world crash there is a sudden reversion to Keynesian 'pump priming'. But Brown and the other politicians throughout the world have no experienace of this and now that 'Globalisation' has created multinational companies bigger than the GDP of many large countries, government intervention is not powerful enough.

Brown is right about one thing though, and that is that it will take action by many countries working together to ameliorate the damage done by the economics of the last 20 years.

I think this is somewhat wide of the mark. Thatcher does deserve some of the blame for making public financing of projects less politically attractive than it was, but the point is about PFI (as has been said) is that its a scam - its not a fault with the system. In that respect its not too different from what is going on in the Lords.

edit: Brown asked two questions about PFI. In short - "Full steam ahead!!!!!!!!!!!!!11"