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Who's Getting Rich on Your Money?

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Eamonn Walsh | 12:24 UK time, Monday, 28 November 2011

As the Chacellor prepares to deliver his Autumn statement, one group of businessmen know they will keep making vast profits from our taxes while getting us ever deeper into debt.

Since 1997 almost every new school and hospital in the UK has been built by private companies who lease them back to the government. But what's in it for the taxpayer?

John Ware investigates the inflexible terms and conditions of what has become the government's flexible friend - the Private Finance Initiative - a kind of ministerial credit card which racks up huge public debts without showing on the nation's balance sheet.

He uncovers evidence of how government claims that PFI gives taxpayers value for money have been manipulated.

And he asks why the coalition government signed so many PFI deals when in opposition both the prime minister and his deputy branded them as 'dodgy accounting'.

Comments

  • Comment number 1.

    Good program, well done but the next question has to be how can the government be held to account for what many people must be thinking is fraud on the tax payer. Surley if I ran a buisness in the same way then I would be taken to court by the authorities for fraudulant activities. The next part of the investigation should to look at how many MP's have directorships or expect to take up directorships at those companys who operate PFI deals.

  • Comment number 2.

    yet another example of our politicians not understanding how clever businessmen can twist a good scheme when the safeguards are not put in place at the start. We pay policiticians to put in place systems to manage the country fo rthe good of its citizens not benefit the elite.... lets hope they can call time on these companies creaming rents for empty buildings when the money should be going to funding research on medical topics relevant to our injured servicemen. Michael Moseleys programme last night was a shame on the uKs priorities.

  • Comment number 3.

    so the gov are paying rent on buildings which are empty.
    then why dont they get local trades to convert these buildings into flats for young people. i know they dont belong to the country but surly use of the buildings would be beneficial to all concerned. the rents could be truly affordable not what they say is affordable

  • Comment number 4.

    When I was a member of my local Labour party I put forward a resolution for the London Underground to remain publically owned and funded. It was universally accepted by my branch. Unfortunately it never got to the conference to become party policy as the general committee of New Labour Careerists passed a motion to do with the timetable for cleaning the loos which went instead where I believe it won praise from PFI advocates, TB and GB who then proceeded to asset strip the country and put us in debt for years to come and which the Tory led coalition are only too pleased to carry on with.

  • Comment number 5.

    I can’t believe we as tax payers are not getting a better deal? The program highlighted the power of these organisations. It seems they can dictate their terms and conditions. This constant drain on tax payers money from companies that see tax payers as cash cows giving little value if any value at all back is scandalous. Poor administration is only exacerbating the problem. Privatization was heralded as paving the way for growth giving value by increased competition. Was this a ruse? I'm beginning to think government couldn’t make the rail system profitable for the tax payer, neither the water, energy, education nor NHS. Is UK PLC the next failing government project? It seems that way; I don’t hear anything positive in the media these days... Makes me mad!

  • Comment number 6.

    It's a wonder we can all sleep nights with such blatant corruption taking place!
    Pleeeeeeze will somebody do something. A huge investigation with people HAVING to attend and answer questions. We are all such muts that we allow it to go on and on. In a couple of weeks time it will be all 'under the carpet' and it will be business as usual. Tell me that the Chancellor isn't announcing today, more of the same.
    What can the normal person in the street do to stop this debacle?

  • Comment number 7.

    I'm sorry. but while last nights programme made many valid points it was very slanted and one sided. I appreciate none of the major characters wished to comment but there must have been some pro-PFI people available somewhere.
    Yes, the government could pay for the hospitals and schools at much lower borrowing, but they wont and PFI is the only option available in many cases. Schools and fire stations being left empty is not the fault of the banks or construction company's but of the people who requested the buildings be built, from local authorities to ministers who signed of deals obviously not fully planned out.
    The point where a company giving a trust 35 million of a 116 million windfall, which they had no contractual right to, being made to look like a bad thing was absolutely stunning.
    The fact also that the cost of PFI includes the 25-35 year maintenance contracts is often under played. I would suggest that a PFI run hospital, built in the last 10 years, compared to a traditionally funded hospital build where the chief exec holds the maintenance budget, will look in much better condition and still be functioning at the end of the 30 years, whilst the traditional build will be run down and will be a blight on the NHS (if it still exists).
    I would also decry the break up of NHS estates as the main body of construction negotiation and suggest that with the billions spent on infrastructure the deal available would have been much more palatable had the NHS strategically planned their builds and went to the market as one body.
    Finally the fact that the health minister and chancellor were unwilling to be interviewed, like some sort of shady businessmen caught scamming, is an absolute disgrace.
    I feel the programme made many good points but overal was biased and not balanced. I expect better journalism from the BBC.

    David Platt

  • Comment number 8.

    This was an important issue to raise again - I work in the NHS and am well aware of problems with PFI. However I was disappointed in the way that statements that the government 'cannot afford to build new hospitals' were never challenged. Governments always find money for projects they prioritise and are committed to, and there are numerous examples of things which the government has funded which I am sure most tax payers would see as less important than hospitals.

  • Comment number 9.

    In the opening to this program it says that all this is "hidden from view". But the terrible costs of PFI have been known about for years, it's just that the BBC and most other mainstream media have barely reported them. It has been left to blogs and responsible publications like Private Eye who have been banging this drum for ages. This Panorama is a good five or ten years too late. Shame on the BBC for ignoring this issue for so long.

 

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