UK government exporting Public-Private Partnerships


The UK is exporting Public-Private Partnerships, despite their failures. ILLUSTRATION/Martin Rowson/Jubilee Debt Campaign

Carillion has showed how disastrous public-private partnerships are in the UK. But this government is exporting them abroad as well.

The UK’s health service is, yet again,suffering a massive winter crisis, waiting times soaring to a nine-year high – so much so that 55,000 non-urgent operations have been cancelled earlier this month to relieve pressure. To add to the pressure, Carillion, a major private provider to the NHS, has now gone bankrupt, leaving questions over who will now provide vital cleaning and maintenance services and over the future of several major hospital construction projects.

Barts Health, in East London, received an initial private sector investment of £1.1 billion, which has left the public sector on the hook to pay six times more – £7.2 billion – between 2007 and 2048

The crisis in the National Health Service (NHS) has been created by a mixture of government underfunding and privatization and marketization of services, which have left services fragmented and profits diverted out of healthcare. On the front line, while attempting to come to terms with government cuts, hospitals are also watching their limited finances bleed out to repay gargantuan debts to private companies.

These are a result of disastrous ‘Public Private Partnerships’, or PPPs. And now the UK government is trying to export them overseas.

PPPs are private finance schemes through which a private company would build a public building, using private loans, and then rent it back to public authorities over several decades. They were originally encouraged as a way of getting public spending off the government’s debt books. But they have proved to be disastrous, not least because investment from corporations involves borrowing at much higher interest rates compared to government borrowing.

One UK hospital trust (Barts Health, in East London) received an initial private sector investment of £1.1 billion, which has left the public sector on the hook to pay six times more – £7.2 billion – between 2007 and 2048. Even with such a lucrative contract, the private entity that built the hospital demanded changes to make the contract more ‘affordable’. Eventually, the Royal London Hospital was finished, but the top two floors were mothballed, inaccessible to the trust and patients.

The UK government continues to have a policy for new PPPs in the UK, known as PF2 – in 2010-2015, four new health PPPs were agreed, with an investment value of £1.1 billion (down from 62 health PPPs with a value of £8.5 billion from 2004 to 2009).

Now many government ministers have condemned the so-called ‘Public Private Partnerships’ (PPPs). ‘In other countries this would be called looting, here it is called the PPP,’ said Boris Johnson after spiralling costs on a London Underground scheme while he was the Mayor of London.

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