The first victim of PFI?
Discussion
cuneus said:
Hospital want to use PFI building for extra operating at weekend - contract says no
Incompetatnt NHS management who agreed the contract. Not PFI's fault.PFI works well if applied corectly. The problem is that it is not applied correctly, and its much the same with other Government procurements, the people applying the system do not understand it.
As I said before there are a whole raft of procurement and funding routes avialable to the public sector they have to use the right one in the right place, but above all they have to know what they bare doing. The deals are complex, and more complex than they need to be by a slow bureacratic system that gives no real responsibility to anyone
blueg33 said:
As I said before there are a whole raft of procurement and funding routes avialable to the public sector
Yes I know and you keep labouring that point. If you think no political pressure was brought to bear then you are naive. NHS real estate issue are to some extent a legacy and exacerbated by such things as the internal market, cuts and the proliferation of "management"
cuneus said:
Yes I know and you keep labouring that point. If you think no political pressure was brought to bear then you are naive.
NHS real estate issue are to some extent a legacy and exacerbated by such things as the internal market, cuts and the proliferation of "management"
Of course there is political pressure, there always will be with public services.NHS real estate issue are to some extent a legacy and exacerbated by such things as the internal market, cuts and the proliferation of "management"
NHS real estate issues are a legacy but one that is continuing, lessons have not been learnt. I see this stuff first hand, the lack of joined up thinking, poor planning, failure to understand their own need etc is enormous. I could cite a new example I have seen every month of every year, however, as this is a public forum I wont.
Here is an example naming no names - Trust wants new outpatients dept, they have vacant land and an old building, they decide they want to convert the old building, all the bidders say this will be difficult, expensive and will not meet the needs in their own statement. They go ahaed with new outpatients dept and build new offices on the vacant land.
2 years on, new procurement, move out patients to the new office building which will need significant conversion, demolish old building and build a car park. Why, apparaently the converted outpatients building doesnt meet their needs! Totally stupid, total waste of money.
blueg33 said:
Please understand what PFI does.
It [IS] more expensive than other funding because it usually wraps a whole host of extras like lifetime FM.
Corrected for accuracy. The only reason it was done was that it converted capital expenditure into current expenditure and the total liability was off the government's balance sheet. It is very similar to and no more magical than taking HP on a car, and the servicing package, and the Supagard, and the PP Insurance, and the GAP insurance, and everything else, and loading it all onto the finance. It [IS] more expensive than other funding because it usually wraps a whole host of extras like lifetime FM.
Actually that wasn't the only reason it was done. It was done partly because of lobbying of the Conservative Government by powerful supporters within the construction industry.
The net effect in both cases is that the purchaser gets screwed. I don't doubt that the facilities are good, but the build and maintenance costs are by any normal standards outrageous. But that's the public sector for you. I imagine that most PH'ers if they saw the building you are referring to that needs £9m of repairs would say 'You have got to be joking', but then they don't work in the la-la land of extraordinary requirements that is the NHS, where money means sweet FA to most of the users who just want their every wish granted. That other publicly owned institution RBS isn't a great deal better, and we all understand why defence projects cost billions and get scrapped for no benefit.
Because it is all about running empires with complex governance and other rules, scoping plans, managing change, planning meetings, holding meetings, changing plans and not delivering results, what happens in these places is what a sensible layman would identify as a gross waste of money. We have the same in Glasgow City Council. We get demands that say 'Pay Up for Glasgow!', but they can't fix the roads, maintain the parks or anything else. However, if you looked back at the days when they actually could do these things, they didn't have the enormous numbers of staff, some of them extremely well paid, that they have now, even after the raft of redundancies, most of them on pretty lavish packages at the taxpayer's expense. I do not blame the individuals - if someone offered me employment on those terms I would take it - but the system is clearly bust, and public expenditure is actually out of control.
Edited by cardigankid on Wednesday 27th June 13:58
cardigankid said:
blueg33 said:
Please understand what PFI does.
It [IS] more expensive than other funding because it usually wraps a whole host of extras like lifetime FM.
Corrected for accuracy. The only reason it was done was that it converted capital expenditure into current expenditure and the total liability was off the government's balance sheet. It is very similar to and no more magical than taking HP on a car, and the servicing package, and the Supagard, and the PP Insurance, and the GAP insurance, and everything else, and loading it all onto the finance. It [IS] more expensive than other funding because it usually wraps a whole host of extras like lifetime FM.
The net effect in both cases is that the purchaser gets screwed. I don't doubt that the facilities are good, but the build and maintenance costs are by any normal standards outrageous. But that's the public sector for you. I imagine that most PH'ers if they saw the building you are referring to that needs £9m of repairs would say 'You have got to be joking', but then they don't work in the la-la land of extraordinary requirements that is the NHS, where money means sweet FA to most of the users who just want their every wish granted. That other publicly owned institution RBS isn't a great deal better, and we all understand why defence projects cost billions and get scrapped for no benefit.
Because it is all about running empires with complex governance and other rules, scoping plans, managing change, planning meetings, holding meetings, changing plans and not delivering results, what happens in these places is what a sensible layman would identify as a gross waste of money. We have the same in Glasgow City Council. We get demands that say 'Pay Up for Glasgow!', but they can't fix the roads, maintain the parks or anything else. However, if you looked back at the days when they actually could do these things, they didn't have the enormous numbers of staff, some of them extremely well paid, that they have now, even after the raft of redundancies, most of them on pretty lavish packages at the taxpayer's expense. I do not blame the individuals - if someone offered me employment on those terms I would take it - but the system is clearly bust, and public expenditure is actually out of control.
I have no idea how we get the champagne socialists, who live in a world where they genuinely feel entitled to a lifestyle of ease and succour, at the taxpayers expense to understand or recognise the truth in your statement.
With the likes of Milliweed Balls up and Yvet Cooper in control of the second largest political party in the house, there is no hope of any improvement, in the demonic dreams of Labour. Millionaires all, tax avoiding happily taking as much as they can get from the UK taxpayer and driving the country well on the road to ruin. In the name of Socialism, once, in more honest days, the bastion of the poor. You could not make it up.
[quote=cardigankidThe net effect in both cases is that the purchaser gets screwed. I don't doubt that the facilities are good, but the build and maintenance costs are by any normal standards outrageous. But that's the public sector for you. I imagine that most PH'ers if they saw the building you are referring to that needs £9m of repairs would say 'You have got to be joking',
[/quote]
The building I am referring to was oferred on the open market to developers for other uses. No one developer could make it stack up because of the cost or bringing the building back into a suitable state of repair.
I was cross examined by a select committee on the details and the cost of the works, they found that the building was uneconomic because of the costs of repair, they found that the trust in question had failed to maintain.
There is no la la land. The local MP thought the costs were too high, so he employed a specialist independant cost consultant and architects. They couldn't get down to our figure.
Build and maintennance costs are benchmarked and independantly tested, they are far from la la land, indeed in many cases we struggle to get the cost down to the target level set by the commissioning body.
Oh, and maintaining a health building is not normal maintennance by normal standards.
To give you a PH metaphor, you cannot buy a 5 series beemer and expect to run it for the cost of a Nissan micra. Modern health buildings are not just a brick box, if they were they couodnt function as the public expect.
I dont deny PFI is expensive, but looking at build and FM costs is the wrong place to look, you will incurr those anyway. The cost is in the process and the funding
[/quote]
The building I am referring to was oferred on the open market to developers for other uses. No one developer could make it stack up because of the cost or bringing the building back into a suitable state of repair.
I was cross examined by a select committee on the details and the cost of the works, they found that the building was uneconomic because of the costs of repair, they found that the trust in question had failed to maintain.
There is no la la land. The local MP thought the costs were too high, so he employed a specialist independant cost consultant and architects. They couldn't get down to our figure.
Build and maintennance costs are benchmarked and independantly tested, they are far from la la land, indeed in many cases we struggle to get the cost down to the target level set by the commissioning body.
Oh, and maintaining a health building is not normal maintennance by normal standards.
To give you a PH metaphor, you cannot buy a 5 series beemer and expect to run it for the cost of a Nissan micra. Modern health buildings are not just a brick box, if they were they couodnt function as the public expect.
I dont deny PFI is expensive, but looking at build and FM costs is the wrong place to look, you will incurr those anyway. The cost is in the process and the funding
blueg33 said:
You can show interset costs on the balance sheet especially as it would require a change in accounting rules anyway.
Funding, I have alreadyu said that prudential borrowing would be simpler - this is effectively using money raised by central gov via gilts, bonds, taxes etc. I am no economist, but surely issuing too many gilts impacts on the govs ability to borrow for other purposes?
Your next point is irrelevant, see above point
Of course there is a cashflow benefit, it spreads the cost of the development over 25 years or so rather than the gov taking a lump sum hit.
History tells us that the ne think the NHS etc doesnt do is maintain its buildings. The back log maintennance on non PFI buildings runs to billions (I said that before)
I agree with you on the developers funding costs, we have to cary lots of risk on that up front.
Interesting that the government has missed this easy, open goal.Funding, I have alreadyu said that prudential borrowing would be simpler - this is effectively using money raised by central gov via gilts, bonds, taxes etc. I am no economist, but surely issuing too many gilts impacts on the govs ability to borrow for other purposes?
Your next point is irrelevant, see above point
Of course there is a cashflow benefit, it spreads the cost of the development over 25 years or so rather than the gov taking a lump sum hit.
History tells us that the ne think the NHS etc doesnt do is maintain its buildings. The back log maintennance on non PFI buildings runs to billions (I said that before)
I agree with you on the developers funding costs, we have to cary lots of risk on that up front.
Masses of construction workers out of work.
Existing building need maintenance.
The political capital of the current govt announcing a non-PFI existing hospital maintenance programme to generate much needed work for builders and much needed maintenance for hostpitals and schools to repair the shambles left by the previous government that didn't maintain assets that we all paid for etc etc is a simple win.
johnfm said:
Interesting that the government has missed this easy, open goal.
Masses of construction workers out of work.
Existing building need maintenance.
The political capital of the current govt announcing a non-PFI existing hospital maintenance programme to generate much needed work for builders and much needed maintenance for hostpitals and schools to repair the shambles left by the previous government that didn't maintain assets that we all paid for etc etc is a simple win.
I guess its missed because it requires a huge sum of money, in some cases more than it woyuld cost to replace the buildingMasses of construction workers out of work.
Existing building need maintenance.
The political capital of the current govt announcing a non-PFI existing hospital maintenance programme to generate much needed work for builders and much needed maintenance for hostpitals and schools to repair the shambles left by the previous government that didn't maintain assets that we all paid for etc etc is a simple win.
PFI Hospital:
Costs escalated in 3 years from £49m to £108m
Financial difficulties ensued and as a result 1 DGH closed , beds cut in a second - 56% reduction in beds over five years
Hospitals on red alert with patients diverted
district Auditor's report:
cuts in clinical resources were made in order to pay for the PFI meant that consultants were unable were unable to undertake full workloads because no beds were available for admissions
Be very interesting to see how many are built in the future.
Costs escalated in 3 years from £49m to £108m
Financial difficulties ensued and as a result 1 DGH closed , beds cut in a second - 56% reduction in beds over five years
Hospitals on red alert with patients diverted
district Auditor's report:
cuts in clinical resources were made in order to pay for the PFI meant that consultants were unable were unable to undertake full workloads because no beds were available for admissions
Be very interesting to see how many are built in the future.
blueg33 said:
cardigankid said:
The net effect in both cases is that the purchaser gets screwed. I don't doubt that the facilities are good, but the build and maintenance costs are by any normal standards outrageous. But that's the public sector for you. I imagine that most PH'ers if they saw the building you are referring to that needs £9m of repairs would say 'You have got to be joking',
Build and maintenance costs are benchmarked and independantly tested, they are far from la la land, indeed in many cases we struggle to get the cost down to the target level set by the commissioning body.Oh, and maintaining a health building is not normal maintenance by normal standards.
To give you a PH metaphor, you cannot buy a 5 series beemer and expect to run it for the cost of a Nissan micra. Modern health buildings are not just a brick box, if they were they couldn't function as the public expect.
I don't deny PFI is expensive, but looking at build and FM costs is the wrong place to look, you will incur those anyway. The cost is in the process and the funding
That is not to criticise those involved, all they can do is follow the rules, and that is hard enough. They won't be praised for making economies in the real world.
It is the same with the Police, what we want is effective policing, what we get is a raft of swish new offices which may be more pleasant to sit in but don't take us forward one inch.
In the Health Service, PFI means money which should be spent on patient care is in effect being spent on contractors' profits. Once more the public purse will wade in to meet the payments, I don't doubt, it is all effectively public debt, and like HP on that lovely Porsche you bought, one day it has to be paid. The real point is that the country can't afford it, and the bills are sooner or later going to be paid in funny money, at which point all these lovely facilities are going to have no drugs, bedding, water, heating, just like Rwanda. The solution is for people in public service to get real about what they are spending, and somehow I don't see that happening.
I would also add that if the Government can find tens of billions of pounds to 'save' the Banks (to no benefit to the British public that I can see)it is perfectly reasonable to ask why they can't find a few more to pay off the PFI debt, since it is at least British construction workers who are being employed, rather than New York bankers who are being paid off.
Edited by cardigankid on Tuesday 3rd July 20:12
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