>> >> Ah, the PFI Xmas model.
>> >>
>> A reasonable concept, scandalously misused by politicians
Not really, as is evidenced by the massive ongoing costs of hospitals that were paid for years ago.
You really have to believe in the market-driven efficiency of private enterprise to think that outsourcing hospitals to people who use far more expensive capital and debt, then add a tidy profit and a risk premium, is going to cost less than the government running it as carp as they might be. Of course they never thought it would cost less, only make it look as if they were staying within borrowing limits when they weren't.
And of course that competition disappears once the contract is awarded. And anybody in construction and related services will tell you that you really start to make money providing services outside the contract.
PFI contractors have already had a nice bonus too from reduced corporation tax rates and are eagerly anticipating more to come.
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