The Private Finance Ini0a0ve How to End The Rip Off Helen Mercer: - - PowerPoint PPT Presentation

“The Private Finance Ini0a0ve How to End The Rip Off”

Helen Mercer: People vs Barts PFI

h;ps://peoplevsbartspfi.wordpress.com/

16/11/2016

PFI “one of the costliest experiments in public policy making ever a;empted” Jesse Norman, Conserva0ve MP

• £10bn per year in ‘unitary payments’ on 725 PFI contracts.
• “One hospital for the price of two”
• Average loss of 30% of beds in the first wave of hospital PFIs
• Overcharging for any service outside of the original contract.
• Construc0on problems esp. ‘fire compartmenta0on’ issues at

schools and hospitals

• Friends of the Earth – waste disposal projects have been

expensive, very long in coming into service and s0ll not embodying the most up to date technologies

• Poor services eg Carillion and food hygiene
• Inflexibility, long contracts, changes need protracted

nego0a0ons and are expensive

• Poor staffing eg at PFI prisons (young offenders Medway)

How a PFI works

Lewisham hospital Finance from banks etc (90% of loan) Construc0on Hard Facili0es Management Sod Facili0es Management Unitary payments to cover interest, principal and contracted out services Payments on loans from banks etc (90%) and from the owners of the SPV ( 10% interest rate – ‘usurious’. Loan from

• wners of the

SPV (10%) Payments for services

SPECIAL PURPOSE VEHICLE

How a PFI works….for them!

Construc0on Hard Facili0es Management Sod Facili0es Management

Unitary payments

Ravensbourne Health Services Ltd

• wned by….

Administra0on = fees to….

*Directors (appointed by

• wners of SPV)

*Auditors *Management

Repayment of loan Dividends – profits made by the SPV

Senior bondholders ‘Junior bond’ – provided by owners(s)

• f the SPV = HICL

HICL

A – As you were…ask for subsidies B – Buy-outs C – Centralise the debt in the Treasury NB – All of the above gild an already 5dy and gilt- edged investment. Instead of mending them…we can end them! D – Default E – Expropria0on – na0onalise the Special Purpose Vehicles

The ABCDE of solu0ons