Sunday, 30 January 2011


The government have cottoned on to how we have been taken to the cleaners by the PFI companies and are looking into retrieving some of the misspent money.

They don’t seem to have much idea though about how to go about it, saying only that they are “looking for ways to claw back money for taxpayers. “ 
One of the avenues they could possibly explore would be to look at the original contracts. Right at the bottom they will find the signature of the individual who originally entered into the deal. Those who signed these contracts off have in my view some explaining to do. I can see only two reasons for their actions. 

The first is that they simply did not bother to sit down and do the sums, and were so incompetent that they simply did not realise or care what they were getting the taxpayer into. 

The second possibility is that they received some inducement from the PFI company. If there is any hint of such corruption that would make things easier as the law allows confiscation of the proceeds of crime, and we could get our money back, and confiscate the hospital. There would be the added advantage of prison for the guilty. Some may think the possibility of corruption unlikely, but the MPs expenses scandal shows that such a culture definitely exists in our administrators.

And if it is found that the scandal is down simply to incompetence, then at least we can remove such people from positions where they can repeat their actions.

Or is there a third explanation that I have missed?


  1. We all knew this was a disaster at the moment when the contracts were being signed. The reality is that this was being driven by successive governments because of the way it appeared on the balance sheet.

    As you will know, those responsible for these decisions would have been told that the only way of getting a new hospital was through PFI so it was either PFI or no new hospital - Hobson's choice.

    I remember worrying at the time about how my grandchildren were going to pay for this. Then I realised that the government of the day just didn't care about my grandchildren. They cared only about tomorrow and the next election.

  2. There is a third reason. It was Government policy. People were told that this was the only way to get refurbishment of their hospitals, schools etc.

    The shameful Labour Government embraced a seedy Tory policy with eagerness, because the accounting rules kept the cost off the PSBR (Public Sector Borrowing Requirement) making the politicians look more prudent than they were.

    Essentially we have to pay exorbitant costs for a depreciating asset, and have forced our children, and their children to pay.

    The other issue is the lack of transparency. Government say "commercial confidentiality", but most of us know that the deals struck were appalling value for money.

    I doubt we will see the details for many many years.

    It was a deal struck between politicians, big business, senior managers, lawyers and bankers.

    None of these professions are highly regarded by the people.

    I wonder why?

  3. It has always seemed to me to be quite extraordinary that the government prefers to have private companies borrow money on the government's behalf when the government has access to money much more cheaply. But, as JD says, this is about having the numbers on the right spreadsheet.

    There was a time when governments thought differently but those days are long gone. Why are things so different now? I think JD has the answer.