En interessant artikkel fra helgens Financial Times om Storbritannias erfaring med Offentlig Privat Samarbeid. Noe å ta med seg i den hjemlige debatten (Note: Mr Bacon er altså Tory – eller Konservativ).
“I first really began to worry about the private finance initiative back in 2003,” says Mr Bacon. “I ran into an investment banker who said: ‘I like the PFI. It’s good for business. We make a lot of money out of it. But as a taxpayer, it really cheeses me off.’ That rather woke me up. This was not a trade unionist complaining. It was a City fat cat getting fatter on the proceeds.”
Mr Bacon is perhaps an unlikely critic of the use of private finance for public goods. He is, after all, a Conservative – the senior partner in the UK’s ruling coalition government – and his party has traditionally advocated a more limited role for the state than its opponents.
But these days his is just one voice amid a rising chorus of parliamentary scepticism that PFI – which has delivered 700 big items of British infrastructure and services in the past 20 years – is proving value for money. In recent weeks, its practitioners have found themselves accused by MPs from all parties of “ripping off the taxpayer”, making excessive returns and “running a racket”.
PFI works a little like the marriage of a mortgage to a full repairing lease. The public sector decides what type of project it wants. The private sector then designs, finances, builds and operates it – usually on a contract of 25-30 years that includes full maintenance. At the end of the contract, the public sector is handed back the project in full working order. If it is delivered late or over budget, or fails to perform once up and running, in theory the private sector pays.
In the past decade many other countries – including Canada, Australia (which invented it) and significant parts of Europe – have adopted PFI-type approaches. Indeed, it has arguably never been more popular, as countries crippled by debt see it as a way of creating social infrastructure without the need for yet more government borrowing. America is taking an increasingly keen interest.
Why has it proved to be so popular? “For three reasons,” a former Treasury adviser says. “Governments think it transfers risks, and works. Because they don’t have to raise the capital now. And because accounting rules mean it often does not count on the government’s books.
Two things can, however, be said with some certainty. First, without the off-balance-sheet financing, this vast array of new infrastructure would not have been built. The last Labour government, which left office in 2010 after 13 years in power, was simply not prepared to borrow to fund it. Second, at least part of the PFI theory has worked.
Unlike much conventional procurement, PFI has overwhelmingly delivered to time and to budget. When it has not, the private sector rather than the taxpayer has almost without exception met the bill. Over the years, John Laing lost £68m when designs for the National Physical Laboratory proved unbuildable; £100m was lost on Dudley hospital in the West Midlands; and, when the PFI constructor and service company Jarvis went bust, the costs fell to the banks not the public.
PFI contracts, however, have proved very inflexible. It is not just the many tales of £1,000 charged to move a plug socket, or £900 to install a Christmas tree in the Treasury. It is that significant changes in use have all too often proved hugely expensive, making it costly to adapt to changing needs. Sir Peter Dixon, former chair of one of London’s biggest hospitals, complained to parliament that under the contracts “we just had to cough up”.
Furthermore, some of PFI’s virtues have suddenly become vices. Hospitals were built on the assumption of rising health spending and growing business. But spending is now flat for four years, and care is being shifted out of hospitals and into the community to save money. As a result no fewer than 22 PFI hospitals spend so much of their income on fixed PFI payments – up to 18 per cent – that they no longer look financially viable. The health department is almost certain to have to take some of their debt on to its books.
Equally, the idea that the public sector should not skimp on maintenance, running up much bigger bills for later, is a virtue in a normal downturn. But, amid the biggest spending cuts in decades, that has produced “an insane situation”, according to Austin Mitchell, a Labour member of the Commons public accounts committee. “Virtually every other area of spending is being cut, but the return for PFI investors just comes in guaranteed.” It is, he says, “a racket”.
That has produced demands, led by Mr Norman, for a “rebate” on the deals. But this is not on the cards. First, the private sector refuses to reopen long-term contracts voluntarily signed on agreed terms. Second, the ownership of contracts has become vastly complicated as investors have sold their stakes, both to take their profit and to recycle the cash into other projects.
Pension funds, including local authority ones, now own significant parts of the equity and the debt in PFI because the long-term nature of the payments matches their long-term liabilities. In many cases arranging a cash rebate, in the unlikely event that the requisite 20 or 30 people could be gathered in the same room, would look like robbing Peter’s pension to pay Paul, the taxpayer.
Hence the Treasury’s recent search for operational savings instead. Many of these, however, involve cuts in services, such as less frequent cleaning; the public sector taking back risks; or the “mothballing” of facilities that will still have to be paid for.