The Private Finance Initiative was a great 'wheeze' dreamt-up to park long term liabilities off of the balance sheet of UK Inc. You know, the kind of thing that got Enron into trouble and caused UK politicians, of all hues, to rain down criticism on these people. No hypocrisy there!
NHS hospitals are under increasing financial pressures and are faced with long term liabilities (PFI contracts) that they simply cannot sustain. If the NHS was a commercial organisation it would approach it's landlords and seek revised terms - bluntly stating that they can't afford the payments, any longer.
So why don't they or rather the individual trusts do just this? What will these finance companies do - sue the NHS trusts? If the NHS just turned back the property to the funding institution and each trust declared itself bankrupt, what then? I can't think that there would be anything to stop other organisations immediately (or even in anticipation) setting themselves up as trusts (authorised by the Department of Health) and then offering to make use of these facilities but at reduced rates.
It is only because the PFI companies know that at the end of the day, the UK Taxpayer sits behind and acts as financial guarantor for the NHS Trusts, that they do not adjust their rates.
So, take away that guarantee.
I know, some will say 'it is unfair to change contractual terms after signing a contract' but that happens all the time in business. The majority of these contracts were signed when the UK was living in denial and way beyond its means. Times have changed. These contracts need to do likewise.
The smart PFI people will read the writing on the wall and volunteer to reduce rates.
If we can't do the above, then let's tax the gross income from such contracts at a higher rate - say a special levy of 25% might be a good start.
NHS hospitals are under increasing financial pressures and are faced with long term liabilities (PFI contracts) that they simply cannot sustain. If the NHS was a commercial organisation it would approach it's landlords and seek revised terms - bluntly stating that they can't afford the payments, any longer.
So why don't they or rather the individual trusts do just this? What will these finance companies do - sue the NHS trusts? If the NHS just turned back the property to the funding institution and each trust declared itself bankrupt, what then? I can't think that there would be anything to stop other organisations immediately (or even in anticipation) setting themselves up as trusts (authorised by the Department of Health) and then offering to make use of these facilities but at reduced rates.
It is only because the PFI companies know that at the end of the day, the UK Taxpayer sits behind and acts as financial guarantor for the NHS Trusts, that they do not adjust their rates.
So, take away that guarantee.
I know, some will say 'it is unfair to change contractual terms after signing a contract' but that happens all the time in business. The majority of these contracts were signed when the UK was living in denial and way beyond its means. Times have changed. These contracts need to do likewise.
The smart PFI people will read the writing on the wall and volunteer to reduce rates.
If we can't do the above, then let's tax the gross income from such contracts at a higher rate - say a special levy of 25% might be a good start.
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