Friday's Argus carried a paean for the wonders of the Private Finance Initiative written by one of its chief reporters, Tim Ridgeway. It is entitled "Why I quite like the results of PFI".
Ironic really, since I doubt that if the taxpayers of Brighton and Hove knew the truth, they would "quite like the results of PFI".
Strangely, much of Ridgeway's article makes an eloquent case against its own conclusions. I have seen this before - even PFI's most enthusiastic advocates cannot avoid what a huge financial con it is. He points out that private companies charge huge added interest which means that the total cost of a project far outweighs the initial construction cost. In the case of Jubilee Library - a £12m project ends up costing £63m. But they take refuge in the idea that, however costly it is, it delivers wonderful projects which we could not possibly afford in any other way.
But is that really true?
No, of course it isn't.
Before the Tories came up with PFI in 1992, projects like new schools, hospitals and libraries were financed by Government borrowing at preferential rates with full public control of how the money was spent, and no "profit" being made and sold on by various private capitalists.
Back to the Jubilee Library.....if this had been financed back in 2004 by traditional government borrowing at the then Bank of England base rate of 4.5%, it would have cost £19.7 million instead of the £63.8 million we will all have paid out to Aviva Plc by 2030.
Labour originally opposed PFI, but in Government they became addicted to it as a way of keeping what was really public spending off the public balance sheet. What a wonderful return for all the PFI companies on all those prawn canopes at New Labour conference receptions!
Ridgeway has one more argument up his sleeve. In return for all this largesse, we had the benefit of the "expertise" of these companies in building projects. Perhaps Ridgeway should ask the headteacher of Varndean and other Brighton schools what they think of the "expertise" of Jarvis Plc!
The Jubilee Library PFI alone is now costing the Council £3 million a year (the cost has gone up, now that we've actually paid off the building cost). That's £3 million which is not available for services which are facing massive cuts over the next 3 years, it is £3 million which is not available to secure the future of the Martlets Hospice day centre (closing down this week for lack of funds) for the next 15 years.
Still "quite liking" the results of PFI now?
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