English Labour's love affair with private finance (PFIs) looks set to continue
This was published in the January 17th edition of The Edinburgh Evening News. Blair’s New Labour government unleashed PFIs onto the UK. We shouldn’t be fooled by English Labour’s weasel words that they’ll look after Scottish interests. Nothing could be further from the truth. Sir Keir and his motley crew are every bit as enamoured of private finance for public services. After all, their corporate donors will be expecting payback.
New Labour is culpable in the Post Office disaster. Blair’s government was warned the Horizon IT system developed by Fujitsu-owned ICL was “increasingly flawed”, expensive and inflexible. Yet it went ahead after assurances from the likes of Peter Mandelson who said cancelling the project would harm relations with Fujitsu and damage the credibility of Private Finance Initiatives (PFIs), where private finance is used to fund public hospitals and schools.
PFIs have been a colossal failure. A Tory idea, they weren’t implemented under John Major’s government due to civil service pushback and Labour opposition. Harriet Harman declared “when the private sector is building, managing and running a hospital, that hospital has been privatised.” Even Kenneth Clarke said PFIs would only work if the private sector assumed all the risk.
Nevertheless, egged on by wealthy Labour MP Geoffrey Robinson, New Labour aggressively pushed PFIs onto the NHS and local authorities for 13 years. They’ve cost the UK taxpayer billions with no benefit.
PFIs have failed because private investors were allowed to earn profits without bearing any of the risk. To attract private firms, New Labour rescinded laws passed under previous Labour governments that prevented hospital trusts and local authorities from concluding legal contracts with private businesses and passed new ones shielding companies from loss.
Public bodies were not only saddled with all the risk but also with staggering inflation-fuelled debt repayments stretching over at least 25 years which resulted in cuts to healthcare and other services. Thanks to PFIs, nearly 20% of English Local Authorities face bankruptcy.
Starmer’s English Labour is still enchanted with private finance for public services and has embraced private hospitals, outsourcing and donations from private health interests. Those donors will expect a return on their investment and it looks like Sir Keir won’t disappoint them.
This is true and has tremendous implications for the cost to the public for public services.
The Skye Bridge tolls issue was the first PFI imposed on Scotland by a Tory UK Government.
It was stounchly defended by Labour in Westminster, and later in the Scottish Parliament. It took 9 years of bitter struggle before the poeple defeated the Labour Government and got tis PFI scrapped.
Well said! On this and just about everything else Labour have been processed by City of London and right wing Tory constituencies they need to win to gain power. There's no difference really.