UK outsourcing expands despite high failure rates

The number of PPP strategic partnerships has increased 35% in just two years with 18 additional contracts valued at £8bn. 60 contracts are currently operating, four were terminated and one completed the contract term, but was not renewed. A further two are being terminated in 2014. Strategic partnerships originated in ICT and corporate services, but have extended into planning, education, police, fire and rescue and property services. The failure rate is very high - nearly one in four contracts are either terminated, reduce scope as services are brought back in-house, and/or suffer major financial and operational problems. Savings, new business and new jobs targets continue to be illusive. Read the sixth edition of the PPP database here:
http://www.european-services-strategy.org.uk/news/uk-outsourcing-expands-despite-high-failure-ra/ppp-strategic-partnerships-database-2012-2013.pdf

The Con Dem Addiction to Austerity

Jonathan White, writing on the Compass website, examines why - despite the overwhelming evidence that austerity measures are failing on their own terms - the UK Government persists with cuts to public spending and privatisation policies: 'austerity policies function as an ideological cover for a new wave of de-regulation, privatisation and outsourcing in favour of the public services industry...

Lessons of historic Skye PFI victory

The 2004 victory against the Skye Bridge tolls was “a genuine victory and if we are to profit from it we need to learn the lessons. The fight was part of our historic movement", writes Malcolm Burns in the Morning Star. But the unjust PFI system still saw a £20m PFI bridge cost the public up to four times that including polls, subsidies and buy out. Burns reviews the story as told in ‘An Drochaid’ (The Bridge Rising) on BBC Alba at 8.05pm tomorrow or on iplayer until Saturday. http://www.morningstaronline.co.uk/news/content/view/full/12775

Outsourcing is a dead end of low pay & casualisation

The G4S Olympics security debacle, is the latest in a long list of fundamental service failures caused by outsourcing, writes Natalie Bennet in the New Statesman: 'The outsourcing of hospital cleaners contributed to a rise in hospital-acquired infections and super-bugs. Multiple government IT projects have gone seriously and expensively off the rails. Then there’s the still unfolding scandal of the ruinously expensive PFI scheme for hospitals (and other public institutions such as schools) which has just claimed its first victim, with the South London Healthcare NHS Trust going into administration. And railways and the Tube, and call centres…. the list goes on and on'
http://www.newstatesman.com/blogs/voices/2012/07/g4s-just-latest-long-line-outsourcing-disasters

PFI - the early years

Believe it or not there wasn't always a trade union consensus against the use of PFI to fund public sector capital projects. The report of the Trade Union Congress on 9th September 1997 records a debate in which the TUC rejected a composite moved by the late Jimmy Knapp of the RMT, and supported by UNISON, calling for opposition to the PFI programme being promoted by the newly elected Labour Government. Knapp's speech rings down the years:

UNISON said it from the start, we say it again - PFI is a debt time bomb

At the 2002 Labour Party Conference the affiliated trade unions, led by UNISON, defeated the Labour leadership on their use of the Private Finance Initiative to fund public sector capital projects.
  10 years on, Dave Prentis, who was the subject of much abuse and negative briefing by New Labour ministers at the 2002 conference, restates in today’s Guardian UNISON’s objections to PFI: "We're sitting on a PFI debt time bomb, and the sheer scale of the burden paints a seriously grim picture for the future of our public services." As predicted back in 2002, PFI had left the UK with a "staggering mountain of debt"
http://www.guardian.co.uk/politics/2012/jul/05/pfi-cost-300bn?newsfeed=true

PFI Firms told to hand back profits

The influential Commons Public Accounts Committee is calling for Companies making excessive profits from Private Finance Initiative (PFI) deals to hand back a share to councils, health authorities and other public bodies. The Telegraph reports that under PFI, taxpayers are committed to pay £229 billion for new hospitals, schools and other projects with a capital value of just £56 billion: http://www.telegraph.co.uk/news/politics/9239282/PFI-firms-should-be-forced-to-share-excessive-profits-with-councils-and-health-trusts.html

Sack Lothian PFI contractor says UNISON

UNISON Scotland has called for Consort PFI contactor to be sacked from Edinburgh's Royal Infirmary after a patient had to be sewn up by torchlight when workers power was cut at two theatres - the latest in a catalogue of failures. http://www.scotsman.com/news/health/eri-surgeon-forced-to-operate-by-torchlight-1-2242627

Government Accounts do not meet 'true and fair' requirement

The Commons Public Accounts Committee has just published a damning report on the Government's Whole Government Accounts 2009-10, which contain a mine of information including the staggering facts that 'the accumulated value of future commitments under PFI schemes was £131.5 billion - four times the value of the assets secured through the deals' and 'the amount of unpaid tax written off by the government was as high as £10.9 billion' http://www.guardian.co.uk/news/datablog/2012/feb/07/whole-government-accounts-public-accounts-committee

Osborne to raid LGPS funds to finance PFI-type Infrastructure Projects?

The Treasury has been in discussions with the Local Government Association to establish how the money we pay into the Local Government Pension Funds could be used to finance the rebuilding of schools, bridges, hospitals – these are known as infrastructure projects. Publishing the Government’s response to its report into Private Finance Initiative (PFI) funding, the Treasury Select Committee says the National Infrastructure Plan supporting 500 projects and programmes worth £250bn, involves further risks in the form of additional government liabilities and guarantees: http://www.localgov.co.uk/index.cfm?method=news.detail&id=104564

Debt-infected PFI chickens come home to roost

Back in 2002 at Labour’s conference, UNISON inflicted a (then) rare defeat on the party leadership over the Private Finance Initiative – the union case being that the expensive leverage of private money to renew public services did not provide long term value-for-money (£267bn in repayments are due to be made to private companies over the next 50 years). Tragically, Labour didn’t listen to the unions when in power and there is a bitter irony that a decade later it has fallen to a Tory Chancellor George Osborne to announce a "fundamental reassessment" of the use of PFI contracts in a bid to cut costs: http://www.bbc.co.uk/news/uk-politics-15731755  See also We said 11 years ago PFI was a bad deal - at last they’ve got it http://www.unison-scotland.org.uk/siu/aug10/4.html

PFI debt-infected chickens come home to roost

Confirming UNISON warnings to Labour as far back as 1997, the rising cost of paying for hospitals built through the Private Finance Initiative is jeopardising the finances of some NHS Trusts, according to the Department of Health which says 22 trusts, which run 60 units, are facing spiralling costs running into billions:
http://www.bbc.co.uk/news/health-15010279
'We told them so' http://www.unison-scotland.org.uk/siu/aug10/4.html

UNISON FOI ruling shows need for end to secrecy in privatisation

No business cases can be traced for multi-million pound PFI wastewater contracts – and a Scottish Parliament committee appears to have been misled – according to a decision by the Scottish Information Commissioner over Scottish Water. http://www.unison-scotland.org.uk/news/2011/julyaug/2208.htm

Treasury Select Committee slates PFI

Private Finance Initiative (PFI) funding for new infrastructure, such as schools and hospitals, does not provide taxpayers with good value for money and stricter criteria should be introduced to govern its use, the Treasury Select Committee has concluded in a new report. http://www.parliament.uk/business/committees/committees-a-z/commons-select/treasury-committee/news/pfi-report/

UNISON Report: Case for PFI even weaker

UNISON has produced a new report that warns about the high cost of PFI. The report shows that PFI is not value for money but the Coalition and the Scottish Government are both continuing the “chronic waste of public money”, despite strongly criticising it in opposition.

UNISON highlights continuing PFI waste

The FT reports on UNISON criticism of the Con Dem Government for pressing on with billions of pounds worth of private finance deals for public projects - despite a Tory manifesto commitment to dump PFI. UNISON's critique of PFI has been supported recently by the House of Commons Public Accounts Committee: http://www.ft.com/cms/s/0/1d8d0c36-7f25-11e0-b239-00144feabdc0.html?ftcamp=rss#axzz1MSJVZ29a

The case for PFI needs to be challenged more - National Audit Office

The FT reports that Parliament’s public spending watchdog has called on the Treasury to look for alternatives to PFI for delivering big infrastructure projects:

Cost of PFI comes home to roost

Private Finance Initiative (PFI) firms are raking in guaranteed profits at NHS hospitals even as cash-strapped NHS Trusts are cutting jobs and beds as well as asset-stripping sales of land and property in order to bridge the funding gap left by the Government's £20 billion cuts programme. http://www.morningstaronline.co.uk/index.php/news/content/view/full/103069

New evidence of large profits from PPPs

A report today exposes the level of profiteering from PPP deals, with an increased use of tax havens for insfrastrucure funds. The European Services Strategy Unit reveals a £10bn sale of shares in Public Private Partnership companies. “The level of profiteering from PPP equity transactions makes a nonsense of the original value for money assessments... PPP projects are little more than money-making mechanisms for builders and banks”, said report author Dexter Whitfield.

Osborne Looks To Make PFI Savings - Will Workers Pay?‏

Con Dem Cancellor George Osborne is hoping to shave hundreds of millions of pounds off the cost of thousands of controversial private finance initiative deals in an attempt to cut Government spending still further.