Top government ministers are being criticised for promoting 'rip-off' PFI schemes in impoverished countries

LONDON — A new report from campaign group Jubilee Debt Campaign has condemned senior Conservative ministers for promoting “rip-off” schemes in impoverished foreign countries.

Top ministers, it says, including Liam Fox, Jeremy Hunt and Boris Johnson, have all criticised Private Finance Initiative (PFI) schemes in the UK, yet their departments are actively promoting similar healthcare schemes in countries including Liberia, Sierre Leone and Zambia.

“Jeremy Hunt, Liam Fox, Priti Patel and Boris Johnson all know and acknowledge the huge cost of PFI in the UK,” said Sarah-Jayne Clifton, director of the Jubilee Debt Campaign. “It’s outrageous that their departments are actively promoting similar schemes abroad, threatening healthcare provision and risking a huge debt trap for some of the most impoverished countries in the world.

“The government needs to stop this dishonest promotion, and tell the world the true rip-off cost of PFI,” she said.

Under PFI schemes, private companies take on the initial cost of constructing buildings in return for annual repayments from a public authority, with interest, over a contracted length of time — typically between 25 and 30 years. Repayments made by NHS Trusts in the UK are on average seven times the actual cost of building the hospitals.

In 2015, Health Secretary Jeremy Hunt said, “One of my biggest concerns is that many hospitals now facing huge deficits are seeing their situation made infinitely worse by PFI debt,” while Trade Secretary Liam Fox said in 2013, “we all know from reports that have gone to parliament the cost the [PFI] has ultimately given the taxpayer.”

However, according to the report, the Departments for Health and International Trade are promoting similar schemes as “efficient” and “cost effective” abroad, through a body called Healthcare UK.

Boris Johnson’s Foreign Office, it goes on, is promoting similar schemes, known as Public Private Partnerships (PPPs), despite Johnson having described them as akin to “looting” in 2010. Of the 23 developing countries with active, proposed or stalled health PPPs, says the report, the UK government promoted the schemes in at least 18.

For example, the report goes on, the Foreign Office used aid money to build two PPP hospitals in Peru in 2013. The interest payable on the buildings, it says, is almost double the amount that would have been paid had the Peruvian government borrowed the money (at 6%, through dollar-denominated bonds) and built the hospitals itself.

PFI schemes were first introduced under Labour, something Tory MPs have often been keen to point out. Commenting on a report into the profits made by private companies from NHS PFI projects earlier this month Minister of State at the Department of Health, Philip Dunne, said, “Of the 125 PFI contracts reviewed in this report, 188 were negotiated by the last Labour government, which saddled the NHS with a crippling £80 billion of debt.”

“This government has refused to sign up the NHS and taxpayers to such appalling deals,” he said.

A government spokesperson said, “Thanks to the radical reforms to PFI which this government introduced, we no longer sign or promote the kinds of poor value agreements previously signed. Instead we are happy to share lessons learned and the expertise we have in the UK with other countries who are looking to invest in improving health facilities.”

“When projects deliver results for the poorest people and are value for money, we encourage private sector investment to provide expertise and build the capability of government to structure projects that help them stand on their own two feet.”

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