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We must recognise the role of PFI debts in the NHS funding crisis

The first weeks of 2017 in the UK have been filled with news that the NHS and social care are in crisis, due to a lack of government funding.

It has been shocking, in one of the wealthiest countries in the world, to learn of patients dying on trolleys while they wait to be treated, and of the huge stress and strain NHS staff are under during what the Red Cross has described as a ‘humanitarian crisis’.

protect-our-nhs-large

Photo: Garry Knight/Flickr

Yet despite all the focus on NHS underfunding, there has been little attention paid to one of the significant financial strains being put on the health service here in the UK – that of the Private Finance Initiative (PFI).

For even as we campaign for countries around the world to have the funding they need to develop public health services, the precious resource of the NHS in our own country is being undermined by the kind of unjust debt burden we’ve spent decades fighting in the global South.

We know that our public health system is valued dearly by many Jubilee supporters, but up to now the issue of NHS debt has not been on the agenda of our campaign in the UK. It’s time to change that.

PFI in the NHS

The Private Finance Initiative is the name used in the UK for public-private partnerships, a form of financing of public infrastructure which has spread around the world over the last two decades.

In the NHS, a PFI hospital is built when a consortium of private sector banks and construction firms finance, build, own, operate and lease hospital buildings and services to the UK taxpayer, typically over a period of 30 or more years.

The main advantage of this arrangement is that the costs of building new hospitals do not count towards the national debt. But this public accounting trick comes at an enormous cost.

Take Calderdale Royal Hospital in Halifax. It cost £65 million to build, but over 30 years, £312 million has to be paid to cover the PFI debt and interest costs. If the money had been borrowed publicly, it would have cost an estimated £127 million. So the hospital will cost £185 million more than it should have done – enough for another one and a half hospitals.

Overall, the National Audit Office has found that private finance costs at least twice as much as if the government had borrowed to build the hospitals itself. Spread that out over more than 100 PFI hospitals, and it’s easy to see why the NHS is paying out over £2 billion every year to private companies on PFI contracts which stretch out for many years into the future.

This ‘NHS debt’ was a major contributor to the record £2.45 billion deficit faced by NHS hospitals in England in 2015/16. Cash-strapped hospitals are even more hard up while profit-making companies benefit.

NHS debt matters

We think that it’s time that the public and decision-makers know just how bad PFI debts are for our NHS and for the hospitals we all rely on.

Access to good quality, affordable healthcare is a basic human right and is being threatened by NHS underfunding and PFI debts. This affects everyone in the UK reliant on our celebrated NHS, but especially the people who need it the most: the poorest sick and elderly people, mothers and children.

We need to demand an end to crippling PFI debts so that crucial NHS funds go towards treatment and care rather than profits for corporations.

Plus, while we try and warn the world of the global debt iceberg caused by these kinds of public-private partnerships, it also falls to us to show that it is possible to fight back against the logic that ‘there is no alternative’ to private finance.

That’s why we’re asking you – Jubilee supporters – to get active with us on the issue of NHS debt in 2017.


Join the #OurNHS march

As a first step, on Saturday 4 March we’ll be joining the #OurNHS march through central London to spread the word about NHS debts.

If you want to join us at the march, there are coaches coming from all over the country. The march is assembling at Tavistock Square, London, WC1 – close to Euston train station – at 12 noon. If you would like to join the Jubilee block on NHS debt, please email [email protected] and we will let you know our exact meeting location when it’s confirmed.

Help spread the word about NHS debt

If you can’t make it in person, we will have copies of our leaflets about NHS debt available soon so that you can spread awareness in your area. Again, please email [email protected] if you’re interested in them or keep an eye on our website for more.

And if you’re on Twitter, please join in on social media using the #OurNHS hashtag. And follow @dropthedebt on the day to share our tweets regarding NHS debt.

We hope you’re ready to get active with us in 2017 to take on the unjust NHS debts impacting hospitals up and down the country.

Next steps


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United Kingdom
  • Gerald Downing

    Absolutely correct. It’s not just more funding for the NHS but where is the funding going. Begun by John Major it was Tony Blair who really expanded the hold of this massive parasite on the NHS. His clear intention was to prepare the ground for full privatisation and it has moved that goal far closer now.

    Corbyn must pledge to ger rid of these bloodsuckers. Of course allied to that are the rip off by the equipment manufacturers and the drug companies. A socialist health service would nationalise these without compensation and integrate the whole help care system. That’s what they do in Cuba and it’s marvellously successful as a result. Although the education system is also nationalised and integrated with the health care and that is also part of what is necessary for a proper health care system

  • lbrian

    PFI is atrocious; but even more fundamental is the idea that government has to borrow from the private banks which create the money they lend, as they lend it, when the government could create and spend its own money and not grow the National Debt. The whole world is drowning in ever-growing debts due to the take-over by private banks of the role of money-creator. We have the potential to meet everyone’s needs, given a money system which had governments returning to their former function of major, or exclusive, creators of national money, to be spent into circulation, without creating debt in the process.

    • Tim Jones

      Thanks for your comment Ibrian. We agree that the current ways that banks can lend is not regulated enough, as well as the fact the the Bank of England’s quantitative easing policy has primarily benefited the rich.

      The UK government borrows from a variety of people. However, only 8% of the UK government’s debt is owed to British banks and building societies. In contrast, 27% is owed to pension funds in the UK, 26% to governments, companies, banks and people outside the UK, 23% to the UK government itself (the Bank of England) 8% directly to individuals in the UK and 8% to other kinds of companies (not banks).

      At times of crisis, the Bank of England could create money to be spent by the government. But this could never go anywhere near funding government services without causing huge inflation. However, for the last decade, the UK government could have borrowed more from savers, such as pension funds in the UK, for investment in things which would save it money in the medium term, such as public housing, energy efficiency and public housing.

      Here is some further reading on the monetary system you may be interested in:
      https://criticalfinance.org/2017/01/18/full-reserve-banking-the-wrong-cure-for-the-wrong-disease/

      https://www.opendemocracy.net/ourkingdom/ann-pettifor/why-i-disagree-with-positive-money-and-martin-wolf

      • lbrian

        The Bank of England can create money to be spent by the government, and does create the notes, even now. If private banks were stopped from creating money-and-interest-bearing debt as substitute for government money created and-spent, then the government would gain the seigniorage on this, and would have direct control of the amount in circulation, to meet society’s needs without causing inflation by doing so. The current system has caused massive inflation over the last several decades. Current high levels of debt are also fundamentally due to the banks’ take-over of money creation. Ending this would make possible the extinguishing of nearly all of them – including the ‘National Debt’.

        We desperately need a ‘debt-free’ money supply. Over history, nearly all money was created by government, giving it the seigniorage and leaving society with little debt – and any existing was out of the total in circulation, not caused by the way money entered circulation. Debt used to be something to avoid, and inability to repay could result in debtors’ prison. One thing to note about all the proposals to end the private banks’ privilege of money creation is that they all emphasise that the State’s money-creation or -reduction body should be independent of Parliament in its operation, while working to aims decided by parliament, such as keeping inflation levels low. Money creation should be separated from Government money spending.

        (Other issues need attention as well, such as usury, privatisation of the ‘Commons’, gambling on exchange rates and stocks, etc. etc., but little progress can be made until we end debt-based money.)

        I have quickly read the first link you appended, and find several misinterpretations of the Positive Money proposal.

  • Monique Buchli

    Britain is playing Russian Roulette with the lives of it’s citizens. It should be enshrined within the Human Rights Act that the government must ensure good public healthcare. PFI is very costly for the budget. Agree with raising funds from the public. The banks are greedy and governments should keep well clear of them. Successive Governments of Britain want to protect the British public from foreign attacks by keeping and updating Nuclear Submarines at exorbitant costs, while the people are getting impoverished, and to make it worse, with wealth accumulating in fewer hands. The top notches in the military say that these weapons cannot be used defensively , but are offensive weapons of mass destruction. 250 billions is z lot of money! And spent on making weapons industrialists wealthier. The threat is out there and it is asking for trouble !

    • Kathy Bramley

      Russian roulette. That’s exactly what I said to Philip Davies in reply to his “aid budget, you lefties” reply to the 38Degrees action on the NHS.

      • Kathy Bramley

        (Via email to be accurate: wrote not ‘said’)

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