The GMB union has published figures showing the cost of Public Finance Initiative projects for schools and hospitals over their 25 to 30 year life span.The first 30 major PFI deals for schools have a capital value of 800 million pounds, but the leasing repayments are set to cost the taxpayer more than 2 billion pounds over the next 25 – 30 years. The first PFI consortia are set make average returns on their investment of between 12% and 14%. This equates to profits of more than 280 million pounds. Some projects, such as the Glasgow City council are set to generate as much as 1.2 billion pounds in rental and service repayments on an initial investment of 220 million pounds.
Total repayment for the 6 major PFI schemes so far completed within the NHS, will cost the Government 2.4 billion pounds, for contracts operating for between 27 and 30 years. This figure excludes the actual construction cost of the hospitals of 423 million pounds. The cost of contracts under construction and planned will cost 11.5 billion pounds. The profit for companies who participate in the Government’s health service building programme is set to exceed 3.4 billion pounds, or 5 pounds a year for every tax payer in the country for the next thirty years. Rates of return for payments to private sector companies involved in NHS private finance schemes are averaging between 11% and 25%, with profits set to total between 1.5 and 3.4 billion pounds over the next 30 years. This rate of return is in line with estimates of 15% – 25% a year published in The British Medical Journal.
GMB General Secretary John Edmonds said: “The Government’s privatisation plans are effectively creating a new breed of NHS loanshark at the taxpayers expense”.