Tory cuts & privatisation: Just like the good old days

July 17th, 2010 § 1 comment § permalink

The Guardian

A government efficiency drive aimed at slashing spending in town halls and boosting productivity in the health service is likely to deliver billions of pounds of new business for private companies, the Guardian has learned.

Outsourcing firms are preparing for a bonanza of local authority contracts to provide everything from bin men to back office bureaucrats and have reported a doubling in the number of deals on offer this year. Private health companies are also expecting to earn billions of pounds from the planned overhaul of the NHS in which GPs would take over responsibility for spending £70bn.

Executives at Capita, the UK’s largest outsourcing firm, said the number of opportunities for local authority contracts has already doubled this year and they see the healthcare market as “vast and potentially lucrative”.

Richard Marchant, head of local government strategic partnerships at Capita, an FTSE-100 company which already works for councils in Harrow, Swindon, Southampton and Sheffield, said: “A major problem for the public sector is, we feel, a significant opportunity for us. Opportunities are at their highest level in two to three years. This year we have probably seen a 100% increase in opportunities [compared with 2009] and I suspect we will see another 50% increase in the following year.”

The private companies are rubbing their hands together, then. The money to pay for these services still has to come from somewhere, and at the end of the day it’s us. Me and you. The taxpayer. We either pay it as a tax or direct to the supplying company. Or more likely, in taxes that then get paid to a private company that’ll provide an inferior service that’ll seem cheaper to begin with but will sooner or later cost a fuck load more than expected. PFI anyone? (New Labour may have enjoyed all the off the balance sheet perks of the scam, but they were a Tory idea.)

First off, and I’ve probably said it before, why can’t a local government provide services as cheaply as a private contractor seemingly can? I understand economies of scale and all that jazz, which local governments and councils should able to achieve if they get their shit together work together as some sort of buying union. But just as local governments don’t generally have the buying power of these big companies that take on the contract, they also don’t have the shareholders to look after either.

A lot of these companies that provide public services after privatisation or are contracted out are foreign, too*. This means not only are profits being given out that could instead have meant the service could be provided cheaper or more of it even, but the profits are going abroad and helping to keep another nations economy in the black.

What is needed is for councils to get together and sort their shit out rather than at the first sign of trouble start flogging stuff off and handing out the contracts.

*I am prepared to be shot down in flames at this statement, but even if ‘a lot of’ is a little er, generous, the point remains.

“As is normal, these contracts have been written to protect the public purse.”

April 7th, 2009 § 0 comments § permalink

The quote in the title is Jacqui Smith talking about the NHS Database.

Do not believe it. What the Tories started in 1992, Labour have embraced used it extensively. That ‘it’, is Private Finance Initiative.

The latest PFI is to widen the M25. And seeing where the money is coming from is like playing Find the Lady.

George Monbiot

The government, as usual, is telling us as little as it can get away with. But the Department for Transport has admitted that, to make the project viable, it might have to bail out the M25 consortium(12). Some reports suggest that to make sure the consortium remains solvent during the construction phase of the contract – which is worth £1280m(13) – the government will have to lend it £400m(14,15). The European Investment Bank has already pledged £500m(16), which is also taxpayers’ money. This private finance initiative scheme doesn’t require much private finance, or initiative.

If the government underwrites the scheme, the greater part of the risk will fall on taxpayers, negating the entire rationale of PFI. But, citing higher lending risks during the recession, the banks backing PFI infrastructure projects have increased their margins, in some cases by 500%(17). The government will lend or promise to lend cheap money to the banks, which will then charge us, through the consortium, crushing rates of interest for the use of our own cash.

Weird enough for you yet? Well one of the banks reported to be backing the scheme is RBS. The taxpayer now owns 58% of it. This is likely to rise soon to 95%(18). If the government underwrites the M25 expansion, it will in effect be bailing out RBS twice then charging itself for the privilege – and for the bankers’ fees, including salaries and bonuses. RBS – in other words you and me – already has £10bn invested in PFI schemes in this country(19), for which we are paying extravagant rates. If you have come across a state spending scheme madder than this, please let me know.

It’s a fucking road. The government doesn’t have to make a profit out of making it or the upkeep of it, so why can’t it just build a fucking road?
If company A can build a road and make a profit, the government should be able to match the price and build a better road or build the same road cheaper.

The governments, and not just Labour as this was started in 1992 and won’t stop if the Conservatives get back in, fucking us over, trying to i) blag the books to make themselves look good and ii) ensure employment when they retire/ get voted out.

It makes me shit-fucking-kicking mad.

“It’s cheaper to carry on…”

April 6th, 2009 § 5 comments § permalink


From the Scotsman:

SCRAPPING plans for a national identity card scheme would cost £40 million, Jacqui Smith, the Home Secretary, said yesterday.

In an attack on the Conservatives, who have pledged to abolish the scheme, Ms Smith said doing so would “not free up a large fund of money to spend on other priorities”.

Is it me or or Labour resorting to blackmail in an attempt to enforce their ID card plans? In any event, it’s still a bit less than the billions they plan to waste of the bloody things.

Too expensive to scrap? Contracts haven’t been awarded yet, so unless the government are paying people to ask for jobs.

Rest assured though, the government always tries to get value for money…

[Jacqui Smith] She told MPs two contracts would be awarded next month,

adding: “As is normal, these contracts have been written to protect the public purse.

As is normal? Er, What about passports, the NHS Database, and Private Finance Initiatives in general?

Where Am I?

You are currently browsing entries tagged with private finanace initiatives at Sim-O.