Sunday, October 31, 2010

NHS: Perfectly Safe?

Is the NHS safe? Of course! But at a cost………..

There is little doubt that our NHS is being privatised one way or another. See Dr Grumble.

LONDON, Sept 21, 2010

Serco said on Tuesday it had won a 300 million pounds ($468.5 million) contract to provide pathological services to London's King's College Hospital NHS Trust.
Under the agreement, Kings College will join the existing joint venture between Serco and Guy's and St Thomas' NHS Trust, creating the UK's largest provider of pathological services.
The combined service will conduct more than 10 million individual tests a year for customers in the NHS and wider health sector, the support services firm said in a statement.
Serco said the deal would contribute about 110 million pounds to its revenue over the 10 years of the agreement.

Today Serco hit the news:

Serco is to be ordered to explain to the Government why it took the highly unusual step of writing to its leading suppliers to demand that they pay a blanket 2.5pc "cash rebate" on their work this year or risk losing future contracts.

Francis Maude, the Cabinet Office minister leading the Government's efficiency drive, is furious and has ordered Serco to account for its actions. "We unequivocally disagree with and are highly critical of the approach taken by Serco," said a Cabinet Office spokesman. "Francis Maude will be calling them in to explain themselves."

Do governments learn? Perhaps not:

National Express loses East Coast line
National Express is handing the East Coast rail franchise back to the Government after admitting that funding for the distressed London-to-Edinburgh network will run out towards the end of the year.

After months of attempts to renegotiate the £1.4bn contract, the company admitted yesterday that its NXEC subsidiary – which holds the franchise – has slipped £20m into the red this year and is rapidly burning through its resources. Richard Bowker, the group chief executive, will step down at the end of August.
A publicly owned company will take over East Coast operations when NXEC hits the buffers, Lord Adonis, the Secretary of State for Transport, announced yesterday. The process of finding a replacement operator from the private sector will then start at the end of 2010.

The Guardian: Metronet
The most shocking aspect of the Metronet scandal is that not enough people are sufficiently shocked. The news that the government is bailing out Transport for London to the tune of £2bn as a result of the debacle was barely covered in the national press and was mentioned on the Today programme long before the peak 8-8.30am period.

Yes, of course, it's complicated and rather esoteric, but the pure bones of this scandal are quite simple and opposition politicians, the newspapers and, indeed, the public, should be making much more of a fuss about the waste of several billion pounds because of new Labour's love affair with the private finance initiative.

In July 2007, Metronet BCV and Metronet SSL, two companies set up to modernise London Underground’s infrastructure, went into administration when they became unable to meet their spending obligations. Their failure resulted in London Underground Limited (London Underground) having to buy 95 per cent of Metronet’s outstanding debt obligations from its private sector lenders in February 2008 rather than repaying this debt over the 30 years of the contract. The Department for Transport (DfT) made £1.7 billion of grant available to help London Underground do so.

The taxpayer has borne some of the direct costs of Metronet’s failure, including the unexpected upfront payment of £1.7bn. We estimate there has been a direct loss to the taxpayer of between £170m and £410m.

Ernst & Young was paid £33m for handling the administration of Metronet.

Are we aware how much those working for Metronet were earning?

More skilled labourers, such as signal technicians, cost up to £79.19 an hour, or £144,000 a year, based on a 35-hour week, although not all of this is passed on to the individual employee.

The "charge-out rates" - paid by Transport for London from fares and taxpayer subsidy - were agreed by London Underground in August last year after Metronet went into administration and remain in force. The company continues to carry out much of its track renewal and repair programme under the control of the administrator.                                               

……… Tony Travers of the London School of Economics said: "By the end of next year, £10billion will have been spent on the PPP, overwhelmingly from the public purse, and what the hell can we see for it - a few tiles at stations, a bit of re-railing. It's a terrible catalogue of failure."                    More>>>>>

18 April 2009

So last month the Treasury was forced to establish a unit whose remit replaces the "private" in PFI with "public". For long-standing critics of PFI, this bailout of £13bn worth of projects is the nadir of Brown's grand plan to protect the taxpayer from financial risk. Instead, taxpayers' money is being used by the government to subsidise the operation of many of the UK's largest PFI schemes.

"The financial crisis has highlighted a basic truth - that private finance is only a way to borrow money that will have to be repaid by the taxpayer sooner or later," says Stephen Glaister, professor of transport and infrastructure at Imperial College London. "Risk transfer has proved difficult or impossible, so the taxpayer has ended up bailing out the commercial failures of the PFI companies."

A dishonest system

He said: "It is now very clear that PFI has largely collapsed as a mechanism for funding infrastructure. This was a dishonest system of accounting, designed to hide taxpayers' liabilities. If the private sector cannot now come up with the money, and is unwilling to take the risks, we need to move to a simpler, more honest system of public investment for public projects."

……….The taxpayer, through the infrastructure finance unit - dubbed the "Treasury bank" - now lends directly to PFI projects and also to the EIB and government-owned banks. This money is then lent on by these institutions, at an increased margin, to the PFI consortiums. The consortiums build the project and charge the taxpayer a fee for the next 25 years for the provision of goods and services. In the case of one of the largest PFI schemes, the £5.5bn M25 widening scheme, banks are charging the PFI consortiums 2.5%, or 3.5% over the inter-bank lending rate. This is up to five times the rate payable before the credit crunch.

Now we know!!!

There are currently about 110 PFI projects in the pipeline, worth an estimated £13bn - all in line for a handout from the Treasury bank. This includes £3.5bn of waste treatment and environmental projects, £3.1bn of transport schemes and £2.4bn of schools projects. Among the largest of these are the M25 widening, Manchester Waste, the North Bristol NHS Trust Southmead hospital redevelopment, Bradford Building Schools for the Future, Victoria hospital Fife, North Tyneside housing and Croydon & Lewisham street lighting.

The Manchester waste scheme was rescued this week thanks to a £120m injection of senior debt from the Treasury bank and £40m of cash from nine local authorities in the Manchester area. The Department for Environment, Food and Rural Affairs also put in £125m.

In the end I am sure the NHS is safe: but at what cost to the tax payers!!!

NHS Posts:

Enemy Of The People: NHS, Internal Market & Safety Net

Local Authorities: NHS Reform & Iceland

NHS: Changes Or A Conspiracy Against The Public Interest

1 comment:

Garth Marenghi said...

god this is bad

the privatisation of things like pathology is a disgrace

the dismantling has begun and the drop in quality/accountability will begin