Treasury's £18bn PFI underestimate

baby_boomer

"...deals signed under the private finance initiative will cost the taxpayer £18bn more than the Treasury is claiming over the next 25 years, according to the leading public finance think tank...."

The Treasury's estimate is conveniently based on no more being signed. Which is an interesting silent indictment of past government policy.

Mail on Sunday

But these days, what's a few £10billions between friends

SGE1

Having actually bothered to read the article, I can't even be arsed to comment. The part you'd picked completely misrepresents even what the Mail is trying to pull off.

lynzpower

SGE1 wrote: »

Having actually bothered to read the article, I can't even be arsed to comment. The part you'd picked completely misrepresents even what the Mail is trying to pull off.

what do you mean?
I just read the article and seems qite clear to me?

PFI costs us more than running it out of taxation. ( any one who has worked with PFI contrators in LG knows just how true this is- does it really cost 700 quid to change a tap?)

Suggestions that no mopre PFI deals would be signed. Well of coursd they will IF the private sector can stuump upthis cash. If they can then the taxpayer keeps them afloat- including bonuses. Right, tell me how thats good for the taxpayer!

If they priivate sector CANT produice this neverending pot o gold then im certain the government will spin this into some sort of VFM argument.

Or more as likely ther governemnt will lend these companies money to keep operating so they can rip off the taxpayer ad infinitum.

Great :j

SGE1

lynzpower wrote: »

what do you mean?
I just read the article and seems qite clear to me?

PFI costs us more than running it out of taxation. ( any one who has worked with PFI contrators in LG knows just how true this is- does it really cost 700 quid to change a tap?)

Suggestions that no mopre PFI deals would be signed. Well of coursd they will IF the private sector can stuump upthis cash. If they can then the taxpayer keeps them afloat- including bonuses. Right, tell me how thats good for the taxpayer!

If they priivate sector CANT produice this neverending pot o gold then im certain the government will spin this into some sort of VFM argument.

Or more as likely ther governemnt will lend these companies money to keep operating so they can rip off the taxpayer ad infinitum.

Great :j

I mean this:

However, the institute took the view that new deals would continue to be signed and that total annual payments in today's money on PFI deals would total about £168bn between now and 2033-2034, instead of the £150bn the Government is claiming.

Which basically means, the said think-tank says that it cost us more, IF NEW DEALS ARE SIGNED. The Institute of Fiscal Studies must be headed by Captain Obvious.

Also annoying is the headline, shock-horror, 18bn unaccounted for - when actually, the IFS has marked up the total cost by 9% only. I'm not claiming that 18bn isn't a lot of money - but when you look at it in context, this is evidently a non-story.

Rochdale_Pioneers

Your headline suggests that existing PFI deals will cost an additional £15bn over what is budgeted.

The article says that ADDITIONAL future PFI deals will cost a further £15bn. Extra cost for extra benefits, not the government doing its sums wrong.

mizzbiz

Lots of things don't get taken into consideration when PFI's are bid for. These extra hidden costs are still claimed back through the contractor via Variation Orders, thus the true cost of PFI is considerably bigger than the costs attributed.

exil

Never been keen on PFI's, they always looked like a sort of black magic. And just in case you think they were invented by the present government, they were in fact started under the previous one.

18bn over 25 years, however, is small potatoes compared to the billions and trillions of pounds being thrown at the recession by this and other governments at the moment.

bubblesmoney

there are loads of hidden costs like disguised land leases extending beyond PFI contract but mentioned in PFI contract which cost more money. building and contract negotiation over runs cost more money, see prev examples in the links below

Who owns this place?




NHS could lose millions on PFI land clauses


Taxpayer may have to pay £170bn for PFI schemes, says Treasury

http://www.guardian.co.uk/uk/2007/nov/27/politics.economy1

http://www.health.ed.ac.uk/CIPHP/Documents/PMM_2007_Time_and_cost_overrun_Pollock.pdf
see table 2 and 3 to see cost over runs of PFI hospitals

about rail projects http://business.timesonline.co.uk/tol/business/industry_sectors/transport/article2577797.ece


http://www.bloomberg.com/apps/news?pid=20601102&sid=ayvyhypJki9s&refer=uk

just to pass time between articles you can see this 2billion bungle
http://www.timesonline.co.uk/tol/news/politics/article1655001.ece

rigging in contracts
http://news.bbc.co.uk/1/hi/programmes/file_on_4/6284126.stm

http://www.guardian.co.uk/business/2008/mar/23/creditcrunch.marketturmoil1

see when govt ends up paying for the default

http://www.publications.parliament.uk/pa/cm200203/cmselect/cmpubacc/764/76403.htm
see summary about PFI overruns in parliament report

see nhs hospitals PFI projects that were dropped later because of cost escalation
http://www.timesonline.co.uk/tol/news/uk/article789032.ece

http://www.guardian.co.uk/uk/2006/jan/16/politics.publicservices

PFI hospital goes bankrupt http://www.guardian.co.uk/uk/2005/dec/16/publicservices.topstories3 guess who paid the bill later

http://www.ft.com/cms/s/0/0021804a-d51f-11dc-9af1-0000779fd2ac.html?

apologies for the formatting. got to go to somewhere, no time to edit

lynzpower

bubbles really would appreciate if when you come back you can seperate these stories, they are of great interest to me - but when I click on each i still get the woolwich hospital one

thanks x

lynzpower

lynzpower wrote: »

what do you mean?
I just read the article and seems qite clear to me?

PFI costs us more than running it out of taxation. ( any one who has worked with PFI contrators in LG knows just how true this is- does it really cost 700 quid to change a tap?)

Suggestions that no mopre PFI deals would be signed. Well of coursd they will IF the private sector can stump upthis cash. If they can then the taxpayer keeps them afloat- including bonuses. Right, tell me how thats good for the taxpayer!

If they priivate sector CANT produice this neverending pot o gold then im certain the government will spin this into some sort of VFM argument.

Or more as likely ther governemnt will lend these companies money to keep operating so they can rip off the taxpayer ad infinitum.

Great :j

Here we go, i knew Id read an article on this recently

http://www.telegraph.co.uk/finance/financetopics/recession/4341770/School-and-hospital-building-works-delayed-by-financial-crisis.html

One-hundred school and hospital building projects costing nearly £2.4 billion have already been put on hold because of the difficulty securing finance during the recession, according to a report by Glenigan, the construction industry analysts.
Private Finance Initiative (PFI) schemes, under which the capital funding is provided by private companies, are being badly hit by the lack of credit available to firms, the report says.
A multi-billion pound plan to rebuild sixth-form colleges and road building schemes including the widening of the M25 are also being held up, The Times newspaper claims.
The financial difficulties facing existing construction projects casts doubt on Alistair Darling's pledge last year to bring forward billions of pounds from future spending programmes to help bring Britain out of a recession with a new wave of building works.
The construction industry is now calling for the Government to inject more cash to kick-start PFI projects and business leaders have written to Peter Mandelson, the Business Secretary, with suggestions for how to revitalise building schemes.
"I guess the Government is trying to fix the banking industry rather than these projects. But if the current market conditions continue, there will have to be more support," said David Metter of the PPP forum, which represents the PFI industry.
Chris Wilson, executive director of the 4Ps, which monitors joint private-public projects, said: "Essentially, too many projects are chasing too little money."
A spokesman for the Treasury said that the Government was committed to a £21 billion programme of PFI, but that "the focus must be on restoring bank lending".

So, lemme get this straight.

These schools & hospitals. We cant actually afford them? But we can somehow increase the propping of banks, to see if they will or wont lend to these businesses ( likes of Mears/ connaught/ et al can hardly be called "small businesses") sop that if they DO get lent to, then the cost will have to cover bank interest- on top of everything else- and in turn, we the taxpayer have to pay for it!overcharged in tax money to pay for them
Seriously, Ive never understood why this country has not woken up to PFI.

bubblesmoney

lynzpower wrote: »

bubbles really would appreciate if when you come back you can seperate these stories, they are of great interest to me - but when I click on each i still get the woolwich hospital one

thanks x

i separated it after realising somehow all the links got linked to only one linbk. now its sorted. no time to edit formatting. see my earlier post for the correct links