Mike Small explains how and why Jeremy Corbyn and John McDonnell were right all along:
The Acronym Soup can get confusing. PPP, PFI, – they are all hurled about, but there
will certainly be no alphabet learning for more than 7,000 pupils across
Edinburgh locked out of school since the Easter break as building safety standards
are assessed and repairs undertaken.
The schools were built under the
controversial private finance initiative – PFI – by the Labour/Liberal Democrat
administration at Holyrood, and there’s now even talk that some of them may
need to be knocked down and rebuilt.
As a tangible symbol of rip-off Britain and the failed
privatisation of the public sector, it is exemplary.
In a week where the
reality gap between rich and poor and the fetid reality of our tax-dodging
governing class has been laid bare, it feels
like the end of a really bad experiment.
The system is discredited. The model
is broken. It is crumbling before our eyes.
What have the Panama Papers got to do with schools in
Edinburgh? It’s a perpetual circle.
Tax avoidance drains money from society,
forcing solutions that suit private contractors and let politicians off the
hook.
These building problems raise significant wider issues
about how we finance big public building programmes, and it’s not just about
schools.
As early as 2011, BBC Alba’s Eorpa programme revealed
that some contracts included leases lasting more than a century.
The
contract for the Edinburgh Royal Infirmary building lasts 25 years, but the
lease on the land is for 130 years. It’s a debt we’ll have to pay for years to
come.
George Monbiot has called PFI:
“A racket, the legacy of 13 years of New Labour appeasement, triangulation and
false accounting.”
Certainly this scheme, which started under the John Major
government, was enthusiastically embraced by Blair and Brown’s administrations.
Scotland wasn’t just the testing ground for this disaster (the first PFI project in Britain was the Skye
bridge), it has a far higher proportion than anywhere else.
As the
writer Gerry Hassan pointed out: “Scotland has 40% of PFI schools with 8.5% of
the population.” Why is that?
The journalist Mark Leftly suggests it was Brown who persuaded Blair to
take PFI forward – resulting in a debt Leftly puts at a cool £222bn.
Predictably the political parties have been trying to
blame each other.
The beleaguered Scottish Labour leader, Kezia Dugdale, said
that “she had nothing too apologise for, for building schools”, and her
Conservative counterpart, Ruth Davidson, had the brass neck to claim it was the
Scottish government’s fault for not monitoring the building work.
The Liberal
Democrats have called for an inquiry, a move they may regret.
Yet as many have pointed out, that’s a hell of a
coincidence. Unison’s Dave Watson has argued that there’s a built-in likelihood of
cost-cutting:
“There is a profit incentive to keep costs to the minimum. Any
saving that the construction partner can make increases profits to both the
construction company and the other SPV [special purpose vehicle] partners.
There is therefore a stronger
cost-saving incentive than in conventional procurement.”
The SNP then
established the Scottish Futures Trust and introduced the non-profit distribution (NPD) model.
NPD differs from PFI in that contractors invest solely in the debt of a
project, not putting in any equity and not receiving returns on their capital
investment.
Critics argue that it’s not as different as its supporters make
out.
PFI fundamentally alters the relationship between the
citizen and the state, so that our public bodies, buildings and institutions
are no longer owned by, or accountable to, us.
It’s a failure of democracy, not
just bad accounting.
In this way it’s not just a turn away from public
ownership, from the protection of a non-commoditised realm in areas of common
good such as “health” and “education”.
It’s a turn not just from public to
private, but from public to secret.
This is a world in which the Tory MP Alan
Duncan warns us that “we risk seeing a House of
Commons which is stuffed full of low achievers who hate enterprise, hate people
who look after their own family and know absolutely nothing about the outside
world” – and Fraser Nelson, the Spectator
editor, can tell Channel 4 News: “In Britain we tend to keep these things
private”.
It’s a world in which Toby Young pleads: “Winston
Churchill was notoriously bad with money. He borrowed and spent with abandon,
ran up huge debts, and was an inveterate gambler. If he’d been forced to ‘come
clean’ about his financial affairs, he’d have been hounded from office.”
This week is reminiscent of the end days of Major’s
sleaze meltdown, and it’s no coincidence that PFI is at the heart of the
crumbing ideological shambles.
Yesterday it emerged that a fund registered in a
tax haven owns a 20% stake in the schools.
Something called the
John Laing Infrastructure Fund has its registered office in Guernsey, though a
spokesman has said that the company pays tax in the UK.
We have a governing class that has been found out, and it
needs to be dragged out of the shadows of backroom deals and casino culture.
Why should our children have to put up with shoddy, potentially dangerous
buildings? That’s a disgrace in 2016.
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