Lots about PFI over the last few days - that is the folly of paying for capital projects on tick, or more correctly never paying for them at all. PFI and its various incarnations (PPFI, PPP, SFT etc) are exactly the same as the much discredited Photocopier industry - you buy the kit, then pay a rental and at the end you don't own it.
Alarm bells were ringing as far back as 2003 and fell on deaf ears in a zealous PFI obsessed government; this document dated 3rd November 2003 was particularly prescient - it should be re-released with the title "Told you so!"
I have a bit of an insight into this as many years ago I worked (contract) for a company called "Consort Healthcare (Edinburgh)", a nice bunch of construction and building management professionals brought together to build and manage a much needed new hospital for Edinburgh, which opened in 2002. I remember enquiring at the time why a private company was building and running the hospital, it was explained to me that "it was a licence to print money; built by the partners as cheaply as possible, on cheap finance courtesy of another partner, on cheap land (prone to flooding and previously unsellable) with the planning waved through." And the best thing was ultimately if the Health Board weren't happy there were plans on ice to turn the site into a retail & business park - "it is a great location, better for a shopping centre than a hospital"
The hospital was built by the Consort Healthcare consortium, comprising an alliance of Balfour Beatty Construction (Terminal 5 courtesy of), Haden, Morrison Development and The Royal Bank of Scotland (the peoples bank - literally). Having looked at the figures to date, and the little that has been made available via FOI requests it would appear that for their initial capital investment of £184million (the cost of building it) the partners will have earned about £1200million by 2061 from the Health Board alone. They also generate revenue from Edinburgh University, other concessions and continue to levy unjustifiable parking charges whilst supporting the paying of non-medical support staff minimum wage.
Surely now that we own the Royal Bank of Scotland we can put an end to this healthcare PFI rip off - although depressingly I suspect there is very little political will to do so. It would mean breaking a contract - interestingly Labour were willing to consider doing just this in the battle over Fred Goodwins pension; a drop in the fiscal ocean compared to this.
Consort are at the same game in at least 8 other locations and are involved in similar bids in Northern Ireland, it's just extortion - well to be more precise an 'off balance sheet' scam, i'll be watching this episode of Dispatches with interest and I recommend you do too...