Thursday, 22 September 2011

Wasted money, PFI, Labour's legacy?

A couple of news stories have broken recently (one is actually old news but Andrew Lansley has brought it up again - maybe it's the first time he's recognised it).

The first story highlights the waste in the old Labour government. :

Reading the pretty damning coverage it appears that this just shows an inability to project manage, whilst also a willingness to throw money at projects without giving them the proper consideration.

As it happens I can see why people thought it was a good idea, 9 regional control centres could be better placed to handle large scale problems.  However it has turned into a colossal waste of money.  I wonder if you add up all of the amounts that were wasted under the old Government just how much you would reach?

The second story highlights just some of the element of privatisation that was performed in the NHS under Labour and how costly this may have been:

At first glance this is also pretty damning.  It's often been said that the Private Finance Initiatives were a bad idea and now the Department of Health is saying that the long term contracts that have been signed are putting 22 trusts in danger.  The problem appears to be that costs are rising with inflation whilst the income is remaining stationary.  

However, what's clear to me is that actually, the investment that was undertaken then was badly needed.  Potentially it may have not been the most financially sound way of providing it, however our hospitals did need modernising, some still do.  As such I am not going to say Labour were wrong to do this (wow, I rarely defend them) but maybe suggest that there may have been longer term cheaper alternatives - hindsight however is a wonderful thing.  At the end of the day not all trusts involved with PFI's are experiencing difficulties, and I don't actually believe any of them are actually on the verge of financial meltdown.  

That said, one of the passages in the BBC's report is:

"Professor John Appleby, chief economist at the King's Fund think-tank, believes renegotiation of the deals should be tried."

Surely irrespective of whether or not PFI's are currently affordable, if the government/health authority could be getting a better deal for the tax payer then they should try and do so?

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