Skip to main content

Another body blow for P3 privatization. But this Zombie keeps getting up...

Just when I thought the authorities couldn't possibly  find any more problems with public private partnerships (P3s) in Britain, another revelation comes along.  This time from the Public Accounts Committee of the House of Commons.  Here's the Guardian's account of the latest P3 (or, as the Brits call it, "PFI") scandal,  Investors 'using tax havens to cash in on PFI contracts':


City investors have made bumper profits from taxpayers by buying up the contracts for schools and hospitals funded through the private finance initiative and taking the proceeds offshore, the public accounts committee warned on Thursday.  "They're milking the PFI system for profit," Margaret Hodge, the Labour MP who chairs the committee, told the Guardian, accusing Treasury officials of being "dreadfully complacent" about tackling the issue.

... in a highly critical report, the cross-party committee says the PFI became "the only game in town" after 1997, and Whitehall officials failed to ensure the taxpayer was getting value for money. In particular, the committee criticises the Treasury for assuming PFI contractors would pay tax, when many are based in offshore tax havens. 

Stella Creasy, a Labour MP on the committee who has tabled a series of parliamentary questions about the taxation of PFI firms, said: "There is tax out there that the British taxpayer is owed and the Treasury is doing nothing to get it back." She warned that the Treasury was still banking on receiving tax revenues from the 61 projects in the pipeline. 

Dave Prentis, general secretary of the public sector union Unison, said: "It is a disgrace that many of the PFI investors are registered offshore for tax purposes. They are literally ripping the taxpayer off twice, and making huge profits in the process. It is time to ditch PFI once and for all."

Some of the 700-plus projects have changed hands several times since their inception, often making healthy gains for the original contractors. The accounts committee said: "We suspect that initial investors are able to make excessive profits from selling PFI shares, yet we lack the information to know for sure."

The committee calls for the controversial scheme to be brought within the scope of the Freedom of Information Act, so that the public can judge whether they are getting value for money and contractors can no longer hide behind commercial confidentiality....

In the appendix to the report, the PAC identifies 91 PFI projects held in overseas tax havens, including 33 owned by HSBC Infrastructure, an offshoot of the high- street bank, based in Guernsey. (My emphasis throughout - Doug)
Innisfree, one of the largest investors in PFI, told the committee that 72% of its shares were held by investors based in Guernsey.  With a 30% share, Innisfree is part of the consortium that won a massive P3 hospital bid in Montreal. (I expect to hear more from them.) 

How much profit these corporations are protecting from taxation is unknown as "commercial confidentiality" protects this, along with much else.  Despite all the problems, Ontario continues to march in Britain's P3 footsteps, with plans for many more P3 hospitals.   Here's the Guardian cartoon:

PFI cartoon by Dave Simonds

Comments

Popular posts from this blog

Public sector employment in Ontario is far below the rest of Canada

The suggestion that Ontario has a deficit because its public sector is too large does not bear scrutiny. Consider the following. 

Public sector employment has fallen in the last three quarters in Ontario.  Since 2011, public sector employment has been pretty flat, with employment up less than 4 tenths of one percent in the first half of 2015 compared with the first half of 2011.


This contrasts with public sector employment outside of Ontario which has gone up pretty consistently and is now 4.7% higher than it was in the first half of 2011.



Private sector employment has also gone up consistently over that period. In Ontario, it has increased 4.3% since the first half of 2011, while in Canada as a whole it has increased 4.9%.







As a result, public sector employment in Ontario is now shrinking as a percentage of the private sector workforce.  In contrast, in the rest of Canada, it is increasing. Moreover, public sector employment is muchhigher in the rest of Canada than in Ontario.  Indeed as…

The long series of failures of private clinics in Ontario

For many years, OCHU/CUPE has been concerned the Ontario government would transfer public hospital surgeries, procedures and diagnostic tests to private clinics. CUPE began campaigning in earnest against this possibility in the spring of 2007 with a tour of the province by former British Health Secretary, Frank Dobson, who talked about the disastrous British experience with private surgical clinics.

The door opened years ago with the introduction of fee-for-service hospital funding (sometimes called Quality Based Funding). Then in the fall of 2013 the government announced regulatory changes to facilitate this privatization. The government announced Request for Proposals for the summer of 2014 to expand the role of "Independent Health Facilities" (IHFs). 

With mass campaigns to stop the private clinic expansion by the Ontario Health Coalition the process slowed.  

But it seems the provincial Liberal government continues to push the idea.  Following a recent second OCHU tour wi…

Hospital worker sick leave: too much or too little?

Ontario hospital workers are muchless absent due to illness or disability than hospital workers Canada-wide.  In 2014, Ontario hospital workers were absent 10.2 days due to illness or disability, 2.9 days less than the Canada wide average – i.e. 22% less.  In fact, Ontario hospital workers have had consistently fewer sick days for years.

This is also true if absences due to family or personal responsibilities are included.
Statistics Canada data for the last fifteen years for Canada and Ontario are reported in the chart below, showing Ontario hospital workers are consistently off work less.
Assuming, Ontario accounts for about 38% of the Canada-wide hospital workforce, these figures suggest that the days lost due to illness of injury in Canada excluding Ontario are about 13.6 days per year ([13.6 x 0.68] + [10.2 x 0.38] = 13.1).

In other words, hospital workers in the rest of Canada are absent from work due to illness or disability 1/3 more than Ontario hospital workers. 

In fact, Canad…