Private Finance Initiative

jambutty · 18-08-2006, 15:35

Quote:

The Private Finance Initiative (PFI) is a small but important part of the Government's strategy for delivering high quality public services.

In assessing where PFI is appropriate, the Government's approach is based on its commitment to efficiency, equity and accountability and on the Prime Minister's principles of public sector reform. PFI is only used where it can meet these requirements and deliver clear value for money without sacrificing the terms and conditions of staff.

Where these conditions are met, PFI delivers a number of important benefits. By requiring the private sector to put its own capital at risk and to deliver clear levels of service to the public over the long term, PFI helps to deliver high quality public services and ensure that public assets are delivered on time and to budget.

Or put another way it is a license to print money for the entrepreneur.

PFI drains hundreds of millions of pounds from front line services whilst at the same time creating a £4 billion-a-year industry.

If the government was to borrow the money to build a new school or hospital or whatever the interest charged on the loan would be small compared to an entrepreneur doing the same. Loans to the government are seen as low risk whereas loans to an entrepreneur are seen as high risk thus the difference in interest rates.

The entrepreneur gains a contract from the government to build, say a hospital, obtains the required funds and the hospital gets built, usually on time and within budget. Then the entrepreneur can run the hospital for 30 or 35 years and charges the local health authority to use the hospital. But the entrepreneur reserves the right to provide ancillary services like meals, cleaning and maintenance. As was shown on a recent TV programme (Dispatches, Channel 4 last Monday), the maintenance charges were exorbitant. If memory serves me well it was quoted that it cost £142 to change a power socket. Another example was when a PFI built new school wanted to screen off a room from reception the head teacher was quoted some £13,000 from a local builder. The school owner (the entrepreneur) wouldn’t allow the school to go ahead and brought in its own builder for more than twice the fee.

However that is chicken feed compared to what the entrepreneur does next. The charge to the NHS to use the hospital is based on the capital raised plus the interest due on it so that eventually it is the NHS that pays for the hospital. For NHS read the taxpayer.

Once the hospital has been built and is a going concern the entrepreneur then raises another loan to cover the cost of the original loan and pays it off. But this new loan is for what is now seen as a low risk venture (the hospital is a going concern not a building site) so the interest charged is much less. The NHS still pays up at the old rate and the entrepreneur is quids in. Millions of quids in actually and those millions are taken out of the hospital’s budget and into the pocket of the entrepreneur. And of course the millions are not available to pay for the service that the hospital is supposed to provide.

In a nutshell our taxes are being used to line the pockets of entrepreneurs under the guise of improving the health of the nation.

SPUGGIE J · 18-08-2006, 16:07

It drains money faster tan a river drains water with all the problems with debt jobs cancelled operations due to lack of staff. Yet they still want another 10 to save them the hassle of coffing up the readies. Its a national scandle!!!!!

bullseyebarb · 18-08-2006, 17:09

Hey, Jambutty - You're busy today! The problem with "public services" such as the NHS is that the public isn't actually involved. Once you have a third party payer in the equation, such as the government using tax money as a funding mechanism, the consumers have no control at all. Someone else is making healthcare decisions for you - i.e., what you can have, how much of it you can have, when you can have it and, yes, even whether you can have it at all. I much prefer a true free market approach with no government involvement whatsoever. The government does nothing well and always brings along with it a vast bureaucracy, which sucks up valuable resources. Prices are manipulated and shortages inevitable. Having lived under both systems, I vastly prefer the free market. It's a good, efficient, flexible system here - despite what you may have heard or read.

g jones · 18-08-2006, 17:58

Quote:

Originally Posted by bullseyebarb

Hey, Jambutty - You're busy today! The problem with "public services" such as the NHS is that the public isn't actually involved. Once you have a third party payer in the equation, such as the government using tax money as a funding mechanism, the consumers have no control at all. Someone else is making healthcare decisions for you - i.e., what you can have, how much of it you can have, when you can have it and, yes, even whether you can have it at all. I much prefer a true free market approach with no government involvement whatsoever. The government does nothing well and always brings along with it a vast bureaucracy, which sucks up valuable resources. Prices are manipulated and shortages inevitable. Having lived under both systems, I vastly prefer the free market. It's a good, efficient, flexible system here - despite what you may have heard or read.

Have you checked a health insurance policy State's side for your family? Try it online and prepare to be shocked by free markets and their ability to empty your bank account.

There is no doubt Bevan's NHS reduced Health Care costs in the UK substantially over the free market.

bullseyebarb · 18-08-2006, 20:55

That's because you don't buy a health insurance policy! You buy major medical insurance, which covers unexpected events and hospitalization. That is what insurance is supposed to do....help you out in a tight spot. Visits to a doctor or specialist are paid for out of pocket. I know that's a real gasper for those of you in the U.K. who think you are getting it all for free. Nonetheless, I believe that medical care is a service just like anything else and a responsible person should provide for it - just as they buy insurance for their home and automobile and pay for the maintenance of said home and car out of pocket. Imagine how expensive your auto and home insurance would be if the government required insurance companies to cover absolutely everything......oil changes, replacement windshield wipers and tires, for example. And that is what some U.S. states do when it comes to healthcare - which is why such insurance is so costly in many areas. I am glad you are happy with your NHS but I'll take freedom over socialism any day.

jambutty · 19-08-2006, 08:19

Welcome to the Accy forum bullseyebarb.

Having private health or medical insurance is all very well for those who can afford to do so but more than half the people in this country cannot. They are just as responsible as those who can afford to buy medical insurance, they just don’t earn enough money to be able to afford to do so.

The whole idea of the NHS was that anyone who works pays a weekly contribution aptly named ‘National Insurance’ so that if they ever fall ill or on hard times there will be medical treatment for free and also benefits to a minimum standard and a state pension on retirement from the workforce. Those people who are unemployed or unable to work because of illness were credited with paying the NI contributions so no one lost out.

Over time we lost free dental treatment, free prescriptions and free glasses although the chronically ill, the unemployed, the young and retired still get free care. However it is not really free because we paid the ‘National Insurance’ during our working lives. Where it has all gone wrong is that the NI contributions were not ring fenced and the money was used for something else.

I have one question though. If the private sector can supply a service to the community and make a profit, why can’t the government do the same and use the profit to further enhance the service?

andrewb · 19-08-2006, 08:48

They tried that with NHS trusts, having managers etc, they failed in a ton of beaurocracy and unnessesary admin.

lettie · 19-08-2006, 09:08

Our new Royal Blackburn has been funded by PFI. The maintenence costs are appalling, I have just been quoted £23 to have one phillips type screw removed from a wall mounted appliance which we no longer need. That's right....... £23 to remove 1 screw!!!!!!! I have thrown away the quote and will keep our appliance where it is.

Many PFI funded hospitals such as ours were already struggling with millions worth of debt. Not only do we have to claw back this debt but now we have to pay PFI for the cost of the new build. This can only be achieved by cutting back in certain areas. The govt and powers that be claim that this will not affect patient care, but it already is.. The wards are so short staffed and short of essential equipment that we are finding it difficult to do our jobs. The reduced nursing and midwifery staff are struggling to give people basic care because there are too many patients and not enough nurses. This has been a problem for a long time but has recently become worse. A few of my colleagues are so disillusioned that they have taken up jobs abroad and given their notice. One left yesterday and there are 3 more leaving from an already overstretched workforce. These people are not being replaced.......

I cannot give you the political arguments for or against PFI, I can only tell you what it is like on the shop floor and believe me........It aint good. I have worked in nursing and midwifery for 19 years and I love my job. I trained in Blackburn and have always worked locally. I am not renowned at work for being a moaner but am now seriously considering emigrating to New Zealand where, although the pay is not as good as here, the benefits of having the staff and equipment to allow me to do the job I love properly are very appealing.

The Kiwis think that they are short staffed. My friend works on a post natal ward in Auckland where there are 6 midwives per shift and 2 support staff looking after 24 mums and babies. Here, there are 2 midwives (3 on a good day) looking after 22 mums and babies. We do not have support staff on all shifts. Many of our mums have had C Sections and many of our babies are premature or of low birth weight and need extra care. We are absolutely flogged and then people wonder why we leave. I know for a fact that the general wards are just as short staffed as we are.

jambutty · 19-08-2006, 10:24

It is good to read about the maintenance charges straight from the horse’s mouth so to speak. Not that for one moment am I suggesting that you are a horse lettie! I was beginning to wonder if I saw and heard right on Dispatches. However much obliged for setting the record at the truth.

Throw in the horrendous telephone and TV charges and the entrepreneur has been given a license to print money at the expense of the most vulnerable in our society - the sick - not forgetting the rest of us. I believe that friends and relatives can now ring a patient in the hospital but the charges are out of this world.

It is a few years since I was a guest of the NHS but it wasn’t so clever then so I hate to think what it is like today.

Your experience lettie should have you leaning heavily in the direction of no PFI.

NHS trusts, although not perfect because of the baggage that they came with – multiple layers of non-medical bureaucracy – the NHS trusts at least didn’t line the pockets of entrepreneurs.

garinda · 19-08-2006, 11:49

Quote:

Originally Posted by bullseyebarb

That's because you don't buy a health insurance policy! You buy major medical insurance, which covers unexpected events and hospitalization. That is what insurance is supposed to do....help you out in a tight spot. Visits to a doctor or specialist are paid for out of pocket. I know that's a real gasper for those of you in the U.K. who think you are getting it all for free. Nonetheless, I believe that medical care is a service just like anything else and a responsible person should provide for it - just as they buy insurance for their home and automobile and pay for the maintenance of said home and car out of pocket. Imagine how expensive your auto and home insurance would be if the government required insurance companies to cover absolutely everything......oil changes, replacement windshield wipers and tires, for example. And that is what some U.S. states do when it comes to healthcare - which is why such insurance is so costly in many areas. I am glad you are happy with your NHS but I'll take freedom over socialism any day.

I paid N.I. contributions right from graduating until I was diagnosed with Parkinson's Disease two years ago when I was thirty nine.

I'm glad you are well and happy with the health service in the States. Sadly a lot of people I know there, with long term degenerative illnesses, aren't so fortunate and most medical insurance companies wouldn't touch them with a ten foot barge pole, even if it was shaking wildly.

g jones · 19-08-2006, 19:04

Quote:

Originally Posted by garinda

I paid N.I. contributions right from graduating until I was diagnosed with Parkinson's Disease two years ago when I was thirty nine.

I'm glad you are well and happy with the health service in the States. Sadly a lot of people I know there, with long term degenerative illnesses, aren't so fortunate and most medical insurance companies wouldn't touch them with a ten foot barge pole, even if it was shaking wildly.

There was a BBC programme about Brits living in the USA and everyone of them said the one thing they missed was NHS. It was a far better system. Some admitted they flew back to Blightly for health care and this caused a storm amongst UK Brits about what is essentially health tourism and the abuse by ex Brits of our NHS.

On this idea of free markets;
Conservatives believe in market forces and a minimum of government interference into the way markets operate. It is market forces that have driven up the cost of dentistry, and to boot house prices and utility bills (for different reasons ). As Conservative's I guess you are rejoicing in the operation of a free market in these areas?

SPUGGIE J · 19-08-2006, 19:53

I supose I have the best of both worlds with private health care through work (medical check Friday) as well as the NHS. Niether one can be ignored or treated lightly as both can and do serve the purpose they say they do. If I get walloped by a car its the NHS that does the "rescue" wereas the private side does the "rescue" if I need an operation that has waiting lists months long. So though I can benifit from the public and private side of health care they should stay seperate. Public health service = public money private health care = private money hence my objection to PFI. Where the hell is all that tax money going that we cant afford hospitals and for that matter schools?

bullseyebarb · 20-08-2006, 18:15

If someone develops a long term illness, yes, I'll grant you, it can be financially draining. But there is help from a variety of sources, both public and private. I have lived in the U.S. for decades. I am not wealthy. But I have always managed to provide for my own medical care. Now how can that be possible if things are as rotten as most of you seem to think they are? One thing I can say about the U.S. healthcare system....it's very inventive and dynamic and finds many, many ways to provide services at prices people can afford. Trust me on this.

Strange thing about people in the U.K. So often they complain about the NHS - yet rush to defend it if someone else points out the obvious. My dealings with the NHS in recent years have not been all that hot. Trying to get appropriate care for my aged parents, (who resided in Padiham - now deceased). It isn't that you don't have some good professionals in the field - but they are so often overwhelmed by the circumstances under which they are forced to toil. Canadians, who also have a NHS, (and where private care is illegal), come across our northern borders by the thousands. Apparently, they would rather pay for care in the U.S. than endure the waiting lists under their own government scheme. So, at the end of the day, I guess no system is perfect, is it?

garinda · 20-08-2006, 19:00

Quote:

Originally Posted by bullseyebarb

If someone develops a long term illness, yes, I'll grant you, it can be financially draining. But there is help from a variety of sources, both public and private. I have lived in the U.S. for decades. I am not wealthy. But I have always managed to provide for my own medical care. Now how can that be possible if things are as rotten as most of you seem to think they are? One thing I can say about the U.S. healthcare system....it's very inventive and dynamic and finds many, many ways to provide services at prices people can afford. Trust me on this.

Strange thing about people in the U.K. So often they complain about the NHS - yet rush to defend it if someone else points out the obvious. My dealings with the NHS in recent years have not been all that hot. Trying to get appropriate care for my aged parents, (who resided in Padiham - now deceased). It isn't that you don't have some good professionals in the field - but they are so often overwhelmed by the circumstances under which they are forced to toil. Canadians, who also have a NHS, (and where private care is illegal), come across our northern borders by the thousands. Apparently, they would rather pay for care in the U.S. than endure the waiting lists under their own government scheme. So, at the end of the day, I guess no system is perfect, is it?

Like I said earlier I'm glad you are healthy and well, and happy with your system in the States.

All health insurance companies are businesses, and their ultimate aim is to make as much profit as they can for their shareholders.

These health insurers are all well and hunky dorey if you brake your leg or need a hip replaced, but again as I said earlier, if you are trying to get them to pay for expensive drugs for a long term, I wish you the very best of luck. It isn't cost effevtive or economic for them to fund people who need long term care/drugs.

I for one am very happy with the National Health care system we have in Britain, and which we fund through our National Insurance contributions.

Bazf · 20-08-2006, 19:01

Quote:

That's because you don't buy a health insurance policy! You buy major medical insurance, which covers unexpected events and hospitalization. That is what insurance is supposed to do....help you out in a tight spot. Visits to a doctor or specialist are paid for out of pocket.

Your making it out to be the best thing when in reality if you have no insurance you have no way of getting seen unless you pay up front, and that is not cheap. Both systems are going to be good for some and not for others, look at the wait list, the poor service, the over the top administration in the NHS but it costs a paltry sum, there is no comparison with the USA who have up to date equipment, an appointment in a couple of days and everything done for you by 400 secretaries, but you will pay $350 month.