Thursday, 29 November 2012

Peterborough Hospital PFI

The Private Finance Initiative (PFI) uses the equivalent of a full operational lease used by many governmental authorities in the UK. Financiers form a company borrow the money to (re)build a new hospital. The PFI company then leases back the building to the local Hospital Trust, but there's a kicker. As part of the deal the PFI company also gains exclusive rights to provide services such as facilities management within the hospital. It is a very very expensive method of financing the hospital (re)build.  In recent year Governments liked this method of financing because it does not show up on the capital borrowing total for public finances, it is in effect a future operating cost. These contracts go on for 30 - 50 years. 

It would be much cheaper for the public purse if the Government was honest and just borrowed the money up front and built the hospital using their own managers. In the news today is yet another report of a Hospital Trust struggling to pick up the bill for a PFI. Peterborough and Stamford hospital Trust have been criticised by the National Audit Office for poor financial control and mounting debt.

Much of the unplanned cost comes from the provision of services not included in the original contract. Minor changes such as moving a phone or installing an extra shelve must be be purchased via the PFI company. As there is no competition these costs are greatly inflated by the PFI company.

The consequences of the "overspend" caused by the PFI is that hospital staff including nurses are made redundant. Clinical services are cut back.   Peterborough Hospital PFI was agreed in 2007, it is a very nasty financial legacy left by the Labour Party Government at the time. I've seen estimates of £800 Million required to rescue the hospital finances.

Sunday, 4 November 2012

Post-Sandy situation predicted

Many of the post Hurricane Sandy problems in New York and New Jersey could have been alleviated if the authorities had followed the guidelines in my Foundation of Honour Handbook and had set up social groups to help after the event of a major regional disaster.

Such problems as:
  • Lack of fuel;
  • No access to power;
  • Contacting lost friends and family;
  • Limited food and shelter;
 could have been prepared for in advance and local populations be prepared for self help at a low cost.  Copies of the books are available on Amazon in e-book form. If anyone cannot afford the couple of bucks price contact me at and I'll send you a copy free.

There are other measures the authorities could have taken like forcing gas stations to hold 15 days supply of gas with protected standby generators to allow the pumping of fuel when mains electricity is available. The "just in time" stock holding of 2-3 days gas (petrol) might make a slight improvement in short term  company profits, but it is a lousy call when it comes to public infrastructure resilience.