Welcome to the world of the Private Finance Initiative

EVERYTHING MUST GO!
Welcome to the shady world of the Private Finance Initiative
from SchNEWS Issue 219, Friday 9th July 1999

If you've been getting all hot under the collar recently waiting for your passport, who have you been pointing the finger of blame at? The government? The new child's passport? Initial teething problems of a new computer system? Perhaps you jumped on the Telegraph bandwagon and blamed the Millennium Bug? Or nodded in agreement with the Times that it is the "culture of mismanagement that is still ingrained in parts of the public sector." No-one it seems wants to face facts and shake an accusatory digit at big business for making such a monumental cock-up of the passport system.

Welcome to the world of the Private Finance Initiative (PFI).

Siemens Business Systems were given the 120m contract to install the passport department's new computer system under the little publicised Initiative, which is essentially privatisation by the back door. The scheme was hatched by the Tories and has - oh, surprise- been taken up rather enthusiastically by New Labour. Schools, hospitals, the fire service, you name it, are being touched by the hand of big business. Siemens managed to get the passport contract by promising to make the system: cheaper - sacking staff to reduce costs, they've now had to re-employ more people to sort out the backlog; faster - waiting time at the two offices with Siemens new system has more than doubled. And more secure - in desperation at the backlog 'security procedures' have now been relaxed.

As that blatant anarchist kill-joy publication Computer Weekly pointed out, Siemens' "reducing staff in anticipation of a new system's introduction is madness." But if you think that's bad check out the Immigration and Nationality Department, which makes the Passport Agency look efficient. Here some of the world's most vulnerable people fleeing repression and torture are forced to wait for up to six years for a decision on whether they can stay. In fact things have got so bad at the immigration offices in Croydon that a roomful of unopened letters has started to rot, and staff can no longer even enter the room due to health risks!

But don't panic it's Siemens to the rescue, who have missed both their deadlines, sacked staff and made refugees wait even longer. But they still made a mint from the 'efficiency gains' they hadn't even made, because they get paid for reducing costs, not improving the service. Nice little earner, this one: the more people you sack and the more chaotic the system becomes, the more you get paid.

Meanwhile over at the National Health Service, that well-known revolutionary organ the British Medical Journal, called the PFI "perfidious financial idiocy that could destroy the NHS." Clearly they haven't understood that the whole point of the PFI is that it allows corporate fatcats to get their claws on some of the last bits of the country they don't already own.

Nearly all the new hospitals being built are funded under the PFI, which means the NHS doesn't get to choose where they will be built, but has to pick up the bill later anyway. And as the 'miracle' of private finance is involved, the treasury doesn't give 'em any more cash to pay, which means... yep, cutting beds, sacking staff and closing hospitals. One PFI scheme alone, at the Edinburgh Royal Infirmary, will mean 900 medical staff getting sacked.

So if you've been fingering your collar in queued annoyance waiting for your passport, are holed up in some dodgy refugee detention centre, or waiting for an operation, don't jump on the Tory Blair bandwagon and blame the public sector for its 'lack of modernisation and reaction to change'.

Sale of the century!

The basic idea of the PFI is that business stumps up the cash to pay for big capital projects like building a new hospital, then lease it back to the local health authority over a period of time. This saves the tax-payer money. Simple.

Except it doesn't, because unfortunately PFI schemes require interest payments some 5% above the rate the Treasury would pay if it borrowed directly. This means for every 1 billion of PFI contracts there is an extra cost to the public sector of 50 million per year.