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

Health care funding falls, again

Real provincial government health care funding per-person has fallen again this year in Ontario, the third year in a row.  Since 2009 real funding per-person has fallen 2.6% -- $63 per person. 

Across Canada real per person funding is in its fourth consecutive year of increase. Since 2009, real provincial funding across Canada is up $89 -- 3.6%.
In fact the funding gap between Ontario and Canada as a whole has gown consistently for years (as set out below in current dollars).

Ontario funds health care less than any other province -- indeed, the province that funds health care the second least (B.C.) provides $185 more per person per year, 4.7% more.  
Provincial health care spending in the rest of Canada (excluding Ontario) is now  $574 higher per person annually than in Ontario. 

 Ontario has not always provided lower than average health care funding increases-- but that has been the general pattern since 2005.
Private expenditures on health care have exceeded Ontario government increases …

Ontario long-term care staffing falls far short of other provinces

CUPE and others are campaigning for a legislated minimum average of four worked hours of nursing and personal care per resident per day in long-term care (LTC) facilities.  New research indicates that not only is LTC underfunded in Ontario, it is also understaffed compared to the other provinces. 
LTC staffing falls short:  The latest data published by the Canadian Institute for Health Information (and based on a mandatory survey undertaken by Statistics Canada) indicates that staffing at long-term care (LTC) facilities falls far short of other provinces. 
Part of this is driven by a low level of provincial funding for LTC.





Ontario has 0.575 health care full-time equivalent employees (FTEs) per bed staffed and in operation.[1]  The rest of Canada reports 0.665 health care FTEs.[2] The rest of Canada has 15.7% more health care staff per bed staffed and in operation than Ontario.[3] 


No other province reports fewer LTC health care staff per resident (or per bed) than Ontario.[4]

Occupancy r…

More spending on new hospitals and new beds? Nope

Hospital funding:  There is something off about the provincial government's Budget claims on hospital capital funding (funding to build and renovate hospital beds and facilities).   

For what it is worth (which is not that much, given the long time frame the government cites), the province claims it will increase hospital capital spending over the next 10 years from $11 billion to $20 billion – or on average to about $2 billion per year.  But, this is just a notional increase from the previous announcement of future hospital capital spending. 

Moreover, even if we did take this as a serious promise and not just a wisp of smoke, the government's own reports shows they have actually funded hospital infrastructure about $3 billion a year over the 2011/12-2015/16 period.

So this “increase” is really a decrease from past actual spending. Even last year's (2016-17) hospital capital funding increase was reported in this Budget at $2.3 billion - i.e. about 15% more than they have ann…