Skip to main content

AAA credit rating may fall under weight of P3 debt

The conservative newspaper The Telegraph reports that an economic think-tank, The Integenerational Foundation, has found that the total cost of  British P3s (public private partnerships) has reached such great heights that it is threatening Britain’s AAA credit rating.

The credit rating determines how cheaply the Government can raise money on the international markets. The lower it goes, the more it costs the government to borrow money.

The think tank reports that the P3 debts are £239 billion ($380 million), 80 per cent higher than the report of £131.5 billion in P3 debts released this week by the government in its new "Whole of Government Accounts".

The think tank warned the cost of P3s has been under-appreciated. “Such build-ups clearly put Britain’s AAA credit rating at risk by adding over a quarter to the country’s £1 trillion national debt,” said Angus Hanton, co-founder of Intergenerational Foundation.

Reportedly, P3 debt is up to £13,000 per taxpaying household.

A Government spokesman said the higher figure of £239 billion covers the total cost of P3 repayments. The lower £131.5 billion figure in the government accounts leaves out costs for maintenance, cleaning and other services related to the P3 deals.

David Parker, author of the report and Emeritus Professor of Economics at the Cranfield School of Management, said “It seems clear that decisions made over the last decade or so have been made selfishly. This has involved providing new infrastructure now, while handing down to our children a significant proportion of the costs of provision.”

The  British government conceded last week that a number of P3 hospitals will get a £1.5 billion taxpayer bail-out because of the unsustainable costs of P3 contracts.

Critics of P3s in Ontario and Britain have long claimed that P3s were far too expensive.  Regardless, Ontario continues on with privatized P3 hospitals -- while preparing to slash vital public services with the help of the Drummond Commission.  

Bay Street, at least, will be happy.


Comments

Popular posts from this blog

Ford government fails to respond to 72% increase in COVID inpatient days, deepening the capacity crisis

COVID infections continue to drive up hospital costs and inpatient hospitalizations in Ontario. For the most recent fiscal year (April 1, 2022- March 31, 2023) hospital stays related to COVID cost $1.221 billion, according to new CIHI data.   This is about 4% of total hospital spending, creating a very significant new cost pressure beyond the usual pressures of population growth, aging, inflation, and rising utilization.   Costs for COVID related hospitalizations increased 22.2% in Ontario in 2022/23 from the previous fiscal year, rising from $999 million to $1.221 billion.  That rise is particularly notable as the OMICRON spike of late 2021 and early 2022 had passed by the the 2022/23 fiscal year.   The $222 million increase in COVID hospitalization costs came in the same year as the Ford government cut special COVID funding and, in fact, cut total hospital funding by $156 million.     In total, there were 60,653 COVID hospitalizations...

The hospital crisis: No capacity, no plan, no end

While Canada has achieved universal public healthcare coverage, that does not mean conservative forces have given up trying to erode that coverage and expand corporate care where it does not currently exist. The battle has become particularly intense in Ontario under the Ford Progressive Conservative government, which is implementing serious cuts to the level of care and moving to bring in for-profit mini-hospitals. Inadequate Staffing.   Less and less of hospital spending is on staff.   Employee compensation as a share of hospital expenditures has consistently shrunk in Ontario. This is not some immutable law of hospital development.  It is in stark contrast with the rest of Canada, where compensation has become a larger share and now accounts for 67.1%. Hospitals in provinces other than Ontario now have 18 percent more staff per capita than hospitals in Ontario. Overall, if Ontario had the same staffing capacity as the other provinces and territories, there would be another...

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...