9/25/11

P3 Toil & Trouble (while Ontario charges ahead). Short Video

The Ontario government is launching a massive drive to bring many more public private partnership (P3) hospitals to Ontario. While this is getting little play in the election, this form of privatization will have major consequences for Ontario.





England  started the P3 (or "PFI") craze, launching a similar, massive P3 drive over a decade ago.  They are now beginning to regret it dearly, with 60 hospitals falling into financial crisis due to their P3 deals.  

Here are some of the results in England  according to the normally conservative newspaper, The Telegraph :
  • The taxpayer owes a total of £121.4 billion on P3s  projects -- although they are worth only £52.9 billion. Next year’s P3 bill alone will be £8.6 billion (a little under $14 billion)
  • The National Audit Office reported in April that that each household will have to pay nearly £400 ($632) next year.
  • Young people starting work this year will pay taxes for the P3s until they are nearly 70.
  • Many P3 deals tie local authorities into expensive catering, cleaning and maintenance contracts (with the privatized P3 corporations), meaning the total bill to the taxpayer is £229 billion. In one case, a school was charged £320 ($505) for an electrical plug.
  • Private contractors who have P3 deals with the Government are set to make billions of pounds in profit, with some due to see returns of up to 71 per cent.
Some examples of P3 deals include:
  • A hospital which charged £52,000 for a job that cost £750. 
  • A P3 contractor which began charging £2,600 a year for the “extra cleaning" after a smoking hut was demolished.
  • A hospital in Bromley, south London, which will cost the NHS £1.2billion, more than 10 times what it is worth.
  • A P3 contractor that must be paid £370,000 a year for the next 16 years for a school in Belfast, even though the school closed .
The Telegraph also notes that an almost unknown London company, Innisfree, with only 14 staff, is the largest single player in the PFI market, owning or co-owning 269 PFI schools and 28 hospitals. It adds:


Innisfree’s profit margin was 53 per cent last year. A successful FTSE 100 company makes margins of around 6 per cent. David Metter, the founder and chief executive of Innisfree, owns almost three-quarters of the company and collected pay and dividends of £8.6 million last year.
Innisfree was recently part of the consortia that won a massive P3 hospital contract in Montreal.  Expect to hear more from them in Canada.


The Telegraph notes, "Even as far back as ten years ago unions began to give dire warnings about the future cost to the country of PFI schemes." 

The same is true in Ontario -- trade unions have warned the Ontario government about P3s.  And the government has received those warnings with the same indifference as the English government did ten years ago. 

The Ontario Liberals and PCs have both backed P3 hospitals.  Of the parties in the Legislature, only the  NDP has opposed them.  


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