There is a wider point why PFI was used rather than borrowing directly to pay for new construction for education, hospitals (and social housing by the way). It was in fact an accounting move so that the cost of the developments would not appear on the "Public Finance Borrowing Requirement". Under EU rules this is limited to a percentage of the nation's GNI.
It was certainly that. There is also the fact that, by creating ongoing revenue streams for PFI contractors, Gordon Brown (who has been the real force behind PFI) is forging a new interest group of City-based financiers and consultants who will lobby future governments to maintain spending levels on the welfare programmes which are the ostensible purpose for these contracts - he's intending to make defunding these programmes a 'third rail' issue for the Tories when (not if) they get back in to power.
Brown's calculation, as far as I can tell, is that locking in a coalition of interests which will preserve the programmes for a multi-decadal period is more important than the final cost to the fisc or the creation of what are, in effect, a cadre of tax farmers. Personally I think this is likely to blow up in his (or more likely his successor-but-one's ) face, but you can't fault the man for not thinking long term.
Regards Luke -- #include witty_sig.h
http://www.eurotrib.com/?op=displaystory;sid=2007/5/11/4047/06568
Non- toxic local investment in local productive assets is one of the consequences. "Any economic unit can emit money. The serious problem is to get it accepted" Hyman Minsky
The only thing that's public about it is the fact that it swallows vast sums of public money. Rather too much of that goes on free-market theatre and management consultancy, not on patient provision.
However, because Gordo has cunningly avoided saying 'We're privatising the NHS', people have been willing to put up with the changes - if only because there's no single political leverage point that can be used to fight against them.
If the Tories push try to push the process over the finish line, service provision will become a major political issue and it's unlikely they'd survive another term.
It's all rather devious, and actually quite clever.
The solution for the Tories would be to lower expectations. 'We'd love to provide a full NHS, but unfortunately - growing elderly population - increasing costs - not enough money - reluctantly we'll have to - essential services only...'
That would probably work, and there are already signs that both sides are gearing up to make exactly those kinds of statements.
(The other alternative would be to increase taxes, especially on the rich. But we all know that's not going to happen.)
