PFI schools built in Scotland owned by offshore firms

An hour-long BBC television ‘Scotland Investigates’ programme on 22 August revealed evidence by Dexter Whitfield that over 80% of Scotland’s PFI schools are partly or wholly owned in offshore tax havens. The programme investigated the cause of the closure of 17 Edinburgh schools for repairs after construction defaults were found. Equity in this project had been sold 13 times. Part of the interview was on the BBC Television National 6.00pm news and was the lead item on the Scottish News.

Salford Star exposes massive PFI profits at Salford Royal Hospital

A prime example of connecting the £11.5m profit from Balfour Beatty’s 50% stake in the PFI special purpose company to the HICL offshore infrastructure fund generating a 19% return; the Salford Royal NHS Foundation Trust’s forecast of a £14.9m deficit this year; a £17m PFI payment due in 2016 towards the total project cost of £705m for building works that cost £137m; and the junior doctors strike:

SERCO pays £4m after contract terminated

The New Zealand Department of Corrections took over management of Serco’s 10-year NZ$300m Mount Eden remand prison contract in 2015 after just four years. Serco has now agreed to pay £4m for the cost of state intervention and outstanding performance penalties. It is limited to a labour supply agreement at cost until 31 March 2017.

‘Why have councils fallen out of love with outsourcing vital services’

The title of an article in The Guardian (by Lizzie Presser) which draws on ESSU’s database of PPP Strategic Partnerships and evidence of a high contract failure rate. Includes comments about the benefits of in-house services from leaders of Cumbria County Council, Liverpool City, the London Borough of Islington and the Local Government Association’s improvement and innovation board.

The Private Finance Initiative: nationalise the Special Purpose Vehicles and end profiteering from public assets

This is a radical proposal by the People vs Barts PFI campaign which has been researching and discussing ‘what to do about PFI’ for several years. The paper explains what SPVs are, how SPVs spin off private profit from public assets and proposes a mechanism for nationalising the SPVs. Proposals to strengthen the public design, project management and ‘intelligent client’ functions be strengthened in non-PFI public sector construction projects and problems with the proposal to centralise the debt are detailed in two appendices. A proposal to centralise and reduce PFI obligations contained in Part 4 of the NHS Reinstatement Bill are also examined. Access paper:

Somerset CC terminates contract with IBM

The Council finally terminated the 2007 contract after years of failing to achieve savings, poor performance, expensive contractual disputes and returning some services in-house. Details of these events are contained in various editions of the PPP Strategic Partnership Database.

Two reports by ESSU predicted these problems – Somerset ISIS or Crisis and Southwest One Lessons and New Agenda.

Dave Orr, a retired UNISON member, and Nigel Behan, UNITE, undertook a rigorous investigative 8-year campaign to expose the fundamental flaws in the contract.