One of the functions of the modern, market state is invite capitalist firms to make guaranteed profits out of public sector activities. New Labour, acting as the managing agents for the corporations, has used the state to enrich firms through the "private finance initiative" or PFI. At the same time, PFI has stripped the public sector, especially the National Health Service, of urgent resources. Quite some achievement! Today Britain PLC – otherwise known as the New Labour government – announced that a £1.5bn new wave of hospitals will be built under PFI. Under PFI, hospitals are built, owned and run by private companies, with NHS trusts repaying them over a period of around 25 or 30 years. Reports in 2002 by the National Audit Office (NAO) and the Commons public accounts committee exposed companies' ability to make significant sums by refinancing debts to take advantage of improved interest rates. The NAO this year said that private investors made more than £80m out of a refinancing deal at the Norfolk and Norwich University Hospital but the hospital was only handed £34m. In December, the Queen Elizabeth Hospital in Woolwich also cited PFI when admitting it had become technically insolvent. PFI is costing the hospital an additional £9m a year compared with traditional ways of financing hospital projects.
Mike Jackson, senior national officer at Unison, said: "Government claims that these schemes have been subject to extra scrutiny don't stack up, because PFI is fundamentally flawed. We don't want to risk waiting another five years to find out they were wrong again and more of our money has gone down the drain. These new schemes tie hospitals into 30-year plus contracts for services such as cleaning, catering and portering. They allow PFI companies to sweat even more money from the contracts. Time and time again PFI companies milk these projects through overcharging and lucrative refinancing deals. These new hospital schemes could and should be paid for by much cheaper public sector borrowing." Unfortunately, Unison’s fine words have never been followed up with action. The union’s leaders have sat on their hands and watched New Labour parcel out the NHS to the private sector.
What Unison can’t acknowledge is that New Labour is a capitalist government through and through, which has helped create a market state and turned the public sector into an investment opportunity. Unison’s leaders should either put up or shut up. They should either organise some action against New Labour or stop moaning about policies New Labour has had since it came to office in 1997.
Paul Feldman, communications editor
Mike Jackson, senior national officer at Unison, said: "Government claims that these schemes have been subject to extra scrutiny don't stack up, because PFI is fundamentally flawed. We don't want to risk waiting another five years to find out they were wrong again and more of our money has gone down the drain. These new schemes tie hospitals into 30-year plus contracts for services such as cleaning, catering and portering. They allow PFI companies to sweat even more money from the contracts. Time and time again PFI companies milk these projects through overcharging and lucrative refinancing deals. These new hospital schemes could and should be paid for by much cheaper public sector borrowing." Unfortunately, Unison’s fine words have never been followed up with action. The union’s leaders have sat on their hands and watched New Labour parcel out the NHS to the private sector.
What Unison can’t acknowledge is that New Labour is a capitalist government through and through, which has helped create a market state and turned the public sector into an investment opportunity. Unison’s leaders should either put up or shut up. They should either organise some action against New Labour or stop moaning about policies New Labour has had since it came to office in 1997.
Paul Feldman, communications editor
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