Tag Archives: PFI
January 25, 2012Posted by on
While we may display genuine and heartfelt compassion for those in need of it, ultimately we all have a compassion fatigue point at which our self interest – be it physical or spiritual – ultimately triumphs. While that may sound like the writing of a consummate cynic, any such ethos is open to interpretation. I find myself becoming increasingly cynical about the role that economic theory plays in the ‘creation of money’ and the role played by politicians, either ‘in’ or ‘out of’ government,’ in the manipulation of ‘economic theory’. When economist, politicians and ultimately governments introduce fiscal measures it always involves other people’s money.
January 24, 2011Posted by on
Richard Murphy who maintains the web site ‘Tax Research UK’ has published an article today about PFI. PFI being a bête noire of mine, I have read and re-read the article a few times. Paraphrasing what Richard has written:-
“According to data from HM Treasury £56 billion of projects have now been financed by PFI at a total eventual cost of £252 billion. The ratio of cost to benefit is sufficient evidence in itself of the appallingly poor value for money inherent in these projects, many of which are now owned by banks. If cash has to be injected into the economy to provide liquidity then there can be no doubt that one of the best way to do so for the future benefit of the UK would be to buy out all PFI schemes now. Around £200 billion could be ‘saved . If new legislation to empower such arrangements is required we would argue that is a necessary price to pay to achieve this important social and financial goal for the UK as a whole”.
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January 23, 2011Posted by on
In 2009 it was claimed that the true level of government debt was £2,200 billion (i.e. £85,610 per household) and not £805 billion as was reported by the ONS. In a report issued by The Centre for Policy Studies (CPS) in 2009 — The Hidden Debt Bombshell — claims that the official figures did not take into account:
- the full cost of projects financed through the PFI (£139 billion)
- unfunded public sector pension liabilities (£1,104 billion)
- contingent liabilities such as Network Rail (£22 billion)
- the cost of recent interventions in the financial sector (£130 billion).
These hidden liabilities totalled £1,395 billion (100% of GDP). The true public debt was therefore £805 billion + £1,395 billion = £2.2 trillion (157% of GDP). This was an increase of £346 billion since 2008 – almost £1 billion a day or £700,000 a minute – when the true level of debt was £1.85 trillion (127% of GDP).
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