Years ago, a friend’s brother working on oil tankers met his true love in a foreign port. After great efforts, he got her into the UK from the underdeveloped country where she lived. His bride thought she had arrived in the promised land, but the reality was a flat in an Edinburgh council scheme. Upon his return to sea, she stayed in the flat, and he left her with a credit card for bills. Watching daytime TV, she saw amazing offers for household and other goods, and all you had to do was phone. She took it literally and the sailor returned to a house full of possessions as well as a huge credit card bill. He was incandescent yet she was bemused by his anger, thinking these things were available on call in the west. Needless to say, it wasn’t a marriage made in heaven and soon ended. Every parent can tell a tale of an exasperated child when told there’s no money simply demanding that they go to the cashline.
Those tales remind me of the hype over PFI and PPP. I recall being told the glories that were on offer and now we’re paying the price. The problems of PFI/PPP have come back on to the political agenda with a bang and a big bill. It’s going to be a millstone around councils, health boards and even Governments necks for years to come.
Yet that’s not what we were told. In Holyrood I remember a Labour finance minister berating myself and other opponents. We weren’t just looking a gift horse in the mouth but passing up a magnificent bounty. PFI was going to allow schools and hospitals to be built and public schemes otherwise denied us. We weren’t just foolish in our concerns but harming our communities by rejecting this munificence.
It continued in the community. As clamour grew for a new secondary school in Portobello, a Labour peer berated me and the new Liberal/SNP coalition on the council for rejecting a new wave of PFI schools. Again, all that was needed was a contract to be signed and the promised land of a new school awaited. Of course, it wasn’t so simple as recent concerns over construction highlight.
Moreover, the cost of PFI/PPP schools is crippling Edinburgh council, hence why fewer new schools have been built in the city than in many smaller councils. The revenue costs are so much that available capital is limited. Those PFI/PPP costs will run for another generation and more; restricting the ability of a council of whatever political colouring to provide what’s really needed.
Of course, some improvements were made over time and PPP was better than the original PFI model. But I can’t help note that Victorian schools built are still standing and the 1960s schools are coming down after two generations. Yet many if not most PFI schools will only last the lifetime of the 25-year contract and will need to be torn down when the keys are finally handed over.
Never mind the construction problems that have plagued them, there’s the maintenance agreements that irritate and interfere. I recall a secondary that was also an outstanding school of football; but when the goalposts were broken had to wait weeks on the contract company attending to repair them. It was the sort of task a janitor would have completed immediately in a normally-funded school.
There was a collective madness that seemed to afflict normally sensible people. Whilst in opposition I had expressed opposition to private prisons. I recall the then Chief Executive of the Scottish Prison Service stating I’d need to increase taxes to meet the additional costs. It was PFI or higher public sector costs. I said it was a point of principle and I’d pay them if needs be, but disputed his figures.
It wasn’t just a collective madness but almost a conspiracy. On becoming Justice Secretary, the contracts for Addiewell prison had been signed and the cancellation costs were prohibitive. But I could change HMP Low Moss from a PPP build and private prison to a normal build, state-owned prison because no contracts had been signed. The opposition within higher echelons of the service and the department was substantial. It would cost more they said. I was told I couldn’t say that private prisons would costs more, as the evidence they said was different. I was supported by academics and unions, and persisted with my point, although I had to threaten that it was “me or them” before they relented. Labour, out of office by then, concurred in the abandonment of PPP.
I had disputed the figures that had been quoted on comparative costs. An extremely able researcher of mine, aided by two supportive academics, did some cursory research on the costs of the new prison to be built at Addiewell whilst I had been in opposition. His calculations came to a cost of over £1 billion for a prison that should have costs well under £200 million. This assessment was hotly denied. Yet the current chief executive has confirmed that the cost will be just under £1 billion.
The prison service south of the Border is paying a heavy price for the rush to the promised land of PFI. In Scotland, other public services are equally afflicted. The Royal Infirmary of Edinburgh has cost considerably more than a normal build, and has contract and service issues abounding. Of course, some PPP schemes are operating well and constructive arguments for their use, and the Scottish Government’s similar NDP scheme, can be made. However, a huge bill has been accrued from that hysteria and conspiracy which was akin to the South Sea Bubble. Bounty and plenty, but tomorrow and a reckoning would never come.
I thought we’d seen off the insanity. However, as Brexiteers seek to sail HMS Britannia away from EU shores to the South China Seas, restoring the grandeurs of the British East India Company or the glories of Jardine Matheson, I see its return. Free trade and unbridled wealth, what could possibly go wrong?