Unfortunately, this isn't the answer to all our PFI woes
Outlook This week's exit by Northumberland County Council from its local health trust's onerous hospital PFI contract with Lend Lease saved taxpayers millions, but can it be replicated?
To recap, Northumberland is borrowing more than £100m from the Treasury and lending the money to its local NHS trust to buy out of the remaining 19 years of a service contract. The deal will save it £3.5m a year.
Many of the early PFIs were financially disastrous – proved by these massive savings. So it seems logical that every effort should be made by other trusts to buy out their PFIs.
Steve Mason, Northumberland's lead executive director, tells me several other councils have asked him for advice. Unfortunately, he's not too optimistic that his council's trick will work elsewhere.
First, the NHS trust has to be good for the money: no council should be lending to an unstable hospital which could end up struggling to make the repayments. Second, a loan is less likely to work in a big city-centre hospital, where the catchment area might be spread across several different councils. Finally, the council and NHS trust must have a strong working relationship – apparently not always the case.
These three hurdles seem to weed out many potential PFI buyouts. But another issue, as Balfour Beatty's hugely lucrative sale of PFI school and hospital contracts showed last week, is that local authorities would face stiff competition from overseas infrastructure funds bidding to buy contracts.
Sadly, Tony Blair and Gordon Brown's legacy of corporate profiteering from PFI has decades to run yet.
Top Gear presenter is no stranger to foot-in-mouth controversy
Review: Mike Leigh biopic is a rambling, rich character study
Want to ward off (or welcome) trick-or-treaters? Here's how
- 1 'Nasa Confirms Six Days of Darkness in December': No, they don't - it's a hoax
- 2 Canadian actor punched in face after 'Islamophobia' experiment goes wrong in wake of Ottawa shooting
- 3 Topshop at centre of row over body image as 'shocking' skinny mannequin photo goes viral
- 4 If you think Russell Brand’s new book is confused, you should read what his critics have to say about it
- 5 Kentucky gang rape: 15-year-old boy left in critical condition after sexual attack by group at party
'Nasa Confirms Six Days of Darkness in December': No, they don't - it's a hoax
Canadian actor punched in face after 'Islamophobia' experiment goes wrong in wake of Ottawa shooting
Topshop at centre of row over body image as 'shocking' skinny mannequin photo goes viral
Halloween 2014: From the Screaming Man of Pluckley to the 'White Lady' of the Tower of London - Britain's 20 most haunted places
Russian politician says Apple CEO Tim Cook should be 'banned' from country after coming out as gay
Pope Francis declares evolution and Big Bang theory are real and God is not 'a magician with a magic wand'
Huge surge in Ukip support after EU funding row, according to new poll
Ukip ‘exploiting grooming scandal’ to secure party’s first police chief
Nigel Farage: 'There’s nothing wrong with white people blacking up'
Maureen Lipman says 'she can't vote Labour while Ed Miliband is leader'
Muslims, immigration and teenage pregnancy: British people are ignorant about almost everything
iJobs Money & Business
£20000 - £23250 Per Annum pro rata: Clearwater People Solutions Ltd: Pro rata ...
£40 - 48k + Benefits: Guru Careers: We are seeking a Marketing Manager to join...
£45,000 - £65,000: Saxton Leigh: Our client is a well-known APAC Corporate and...
£60000 per annum: Ashdown Group: Compensation and Benefits Manager - Compensat...