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General Chat Thread, Brain Dead Morons in General; Must have come from the the same Brain Cell that dreamed up the BSF ! The Press Association: Hospitals 'face ...
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    m25man's Avatar
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    Brain Dead Morons

    Must have come from the the same Brain Cell that dreamed up the BSF!
    The Press Association: Hospitals 'face collapse over PFIs'

    We are all doomed I tell you....

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    broc's Avatar
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    PFI is a ticking timebomb; many BSF schools were PFI build, as were hospitals & many other public buildings, I bet the fire control centres in the news recently were also PFI.

    PFI is just another way of spending money you don't have. We, the public want new hospitals, schools etc & the Govt know the coffers the are bare, so they ask the private sector to build them & they will pay a 'mortgage' which they hope will be covered by future tax income. Unfortunately if the income fails to appear it suddenly looks very expensive.

    It is a 'classic' piece of accountancy, keep capital expenditure off the balance sheet as this makes the books look bad; businesses often lease 'capital' goods & pay out of income which can be partially offset against tax; companies sometimes even sell of assets & lease them back when they need working capital.... look at Southern Cross who did that with nursing homes.

    It's the same as Joe Public wanting a new car; they have no money in the bank, but the 'friendly' dealer offers finance... only £25 a week, for the next 10 years.... the punter doesn't look at the overall cost, just what he can afford week by week.

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    localzuk's Avatar
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    Some finance deals are perfectly fine. Personally, paying an extra 10% for something, but being able to pay it over the life of the object is a reasonable way of doing things.

    The problem is that the muppets who signed the PFI contracts didn't seem to pay attention to things like future income levels, inflation, etc... So, they don't notice that their £11.7bn projected lifetime cost is a ridiculous mistake.

    When most people sign a contract for leasing or similar, they have a payment schedule with fixed payments, and a clause covering a maximum possible adjustment due to inflation (for example, my old employer's copier contract could increase by 3% per year if inflation increased). That sort of protection doesn't seem to have been written into any of the PFI contracts. The costs can basically spiral out of control.

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    I think this puts it into context:

    Department of Health figures show yearly bills are forecast to rise by 75% to more than £2.5bn in the next 18 years, mainly because of inflation.
    It means once the last scheme is paid off - in 2049 - more than £70bn will have been handed over.
    That figure also includes, in some cases, fees for services such as building maintenance, cleaning, catering and portering.
    But even taking those services into account the sum far exceeds the value of the building projects, which stands at a combined £11.4bn.
    We're doomed, doomed I tell you!



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