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.


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…

Six more problems with Public Private Partnerships (P3s)

The Auditor General (AG) has again identified issues in her annual reportwhich reflect problems with Ontario health care capacity and privatization.   First, here are six key problems with the maintenance of the 16 privatized P3 ("public private partnership") hospitals in Ontario:
There are long-term ongoing disputes with privatized P3 contractors over the P3 agreements, including about what is covered by the P3  (or “AFP” as the government likes to call them) contract.The hospitals are required to pay higher than reasonable rates tothe P3 contractor for  maintenance work the contractor has deemed to be outside of the P3 contract. Hospitals are almost forced to use P3 contractors to do maintenance work the contractors deem outside of the P3 contract or face the prospect of transferring the risk associated with maintaining the related hospital assets from the private-sector company back to the hospitalP3 companies with poor perf…