Britain’s National Health Service saddled with massive debts

[Hannah Bell]

Last week, the BBC published figures from the Department of Health that show the extent to which the previous Labour government mortgaged the future of the National Health Service, saddling it with a legacy of debt that will have to be paid off for decades to come.

Hospital trusts have been burdened with a massive £65 billion total repayment for 103 new building projects whose construction cost was £11.3 billion, once the associated contracts for estate maintenance, cleaning, portering, catering, and laundry are taken into account. In some cases, annual payments could be made for another 50 years.

This off-balance sheet debt for hospitals built under the Private Finance Initiative (PFI) is a colossal transfer of government funds to the banks...Introduced in 1992 under the Conservative government, PFI was a means of transferring parts of the public sector to private corporations. But it was under the Labour government in 1997 that PFI really took off—helped by its army of financial advisers recruited from the same private sector corporations that have a commercial interest in the policy.

It became Labour’s flagship policy for privatising public services under the guise of “modernisation”. Labour refused to make public money available, forcing hospital trusts to turn to the private sector to build much needed new hospitals. The main beneficiaries of PFI, as with most of Labour’s policies, are the financial institutions, which now have a guaranteed annual income, courtesy of the taxpayer...

Under PFI, which is essentially a leasing mechanism, an NHS hospital trust pays an annual fee in return for a new hospital that is designed, built, financed and operated by the private sector. All “non-core” services are carried out by private corporations, with only clinical services remaining with the NHS. In other words, the NHS has been privatised by stealth. The BBC’s figures show that PFI is taking at least 10 percent of a trust’s income...

http://www.wsws.org/articles/2010/aug2010/nhsp-a19.shtml


Job cuts & poorer service coming -- same game plan around the world --

[mike r]

1. "The main beneficiaries are the financial institutions which now have a guaranteed annual income,

courtesy of the taxpayer..."

[Selatius]

2. Idiotic on the British government's part. Or, it was intentionally done this way.

I lean towards the latter. Nothing worse than seeing collusion between private corporations and the government. Just get your guys into seats in the government and write your own policy.

[Hannah Bell]

3. I lean toward the latter too. Rentier economy. JP Morgan made his first bucks on government

contracts -- war contracts.

It's classic.

[leftstreet]

4. 'the main beneficiaries.....financial institutions' I'm shocked I tell ya!

K&R



http://www.lowwagecapitalism.com/

[Hannah Bell]

5. well, they deserve it, you know. they're so much smarter & more productive, always dreaming up

these clever new ideas.

[dkf]

6. All the countries were competing on keeping their taxes low

creating all this debt burden.