Labour left taxpayer £60 billion bill for new hospitals
The last Labour government left taxpayers with a £60 billion bill for the scores of new hospitals it built during its 13 years in power, new figures reveal. They shine a fresh light on the profligacy of the party’s use of Private Finance Initiative (PFI) schemes.
Labour ministers only paid £5 billion of the £65 billion “spent” on building more than 100 hospitals between 1997 and 2010. The rest of the money, some £60 billion, must still be repaid by the taxpayer – with some of the gigantic debt lasting for more than 30 years.
The highest profile case concerns Barts and the London NHS Trust project, signed by ministers 2006, which provided two new hospitals in the capital.
By the time the coalition took office four years later nothing at all had been repaid – leaving an outstanding bill of £5.3 billion.
Jesse Norman, the Conservative MP, accused Labour of “extraordinary hypocrisy”. Their PFI bill for hospitals will cost every working family in Britain £3,600, according to Mr Norman’s figures.
PFI schemes were started by the last Conservative government under John Major in the early 1990s. However, they mushroomed under Labour with Gordon Brown, as Chancellor, using them as a way of meeting his own public borrowing rules.
Under the schemes, instead of the government raising money upfront, a private company is given a lengthy contract to build a school or hospital and then provides related ‘services’ to the public sector.
The Government leases the building for the length of the contract before it goes back into public ownership. Any change, however small, to the building or service provided can be charged at sky-high rates, allowing the company to make a profit.
New analysis of official figures shows that Labour initiated PFI contracts to build 103 new hospitals between 1997 and 2010. The party proclaimed at the time of the last election it has been responsible for a “new generation” of hospitals in Britain.
The total “unitary charge” payments for these hospitals was £5.1 billion. However, many projects will not be fully paid off for more than two decades – with the last one not “completing” until 2048. The total accumulated “unitary charge” payments for the hospitals will be £65.1 billion – meaning that only 7.8 of the total was actually paid for before Labour left office.
Costs have escalated because of rising fees and additional charges for maintenance, cleaning and catering. According to official figures, the NHS currently pays back £1.25 billion each year – but this figure will increase until 2030 when it is expected to hit £2.3 billion.
The Barts and the London NHS Trust project, to develop Barts into a “centre of excellence” for cancer and cardiac treatment and to build a new hospital at The Royal London , was started in 2006 – but payments will not even commence until 2013-14 and will not be finished until 2048. By that time, it will have cost £5.3 billion despite only having a “capital value” of £1 billion, according to the Treasury.
Poorly negotiated PFI contracts have already led to examples of waste including Queen Elizabeth Hospital in Woolwich having to have 64 visits a year from pest controllers even if there are no pests to control. When there are pests, the trust must pay for further visits. In another example, officials at the Central Middlesex Hospital in north west London said that, on average, contractors charged it £210 to install an electric socket.
Senior Labour figures including Gordon Brown strongly defended using PFI schemes while in power but, more recently, leading shadow ministers have admitted errors. John Healey, the shadow health secretary, said earlier this month: “There is definitely a case for saying we were poor at PFI, poor at negotiating PFI contracts from the outset.”
Andy Burnham, a former health secretary who is now shadow education secretary, said last year: “We made mistakes. I’m not defending every pen stroke of the PFI contracts we signed.”
Mr Norman, a member of the Treasury select committee, said: “This shows extraordinary hypocrisy. The last Government claimed to be investing in public services. “In fact their true investment was less than less than one tenth of what they claimed. Labour didn’t manage to pay for even one new PFI hospital on their watch.
“Labour maxed out the nation’s credit card with a £60 billion bill for new hospitals, loading future generations with staggering debt repayments. “After bringing the country to the brink of bankruptcy, they now have no credible plan to clear up the mess they left us with. “Their approach – to spend less without making any reforms at all – would leave the NHS in crisis.”
More control over admissions for British schools as council lotteries face axe
Schools could get significant new powers over how they admit pupils in reforms to be proposed by ministers within days. The Sunday Telegraph understands that the current system which allows local authorities to stage lotteries to determine which children are given places at oversubscribed schools is to be stopped.
Michael Gove, the Education Secretary, plans instead to let only individual schools stage lotteries if they are oversubscribed – a move which would hand them greater power at the expense of councils.
Lotteries staged by local authorities have been criticised because they can force children to travel miles every day after being turned down by a first-choice local school. They were introduced four years ago under Labour in an attempt to break the middle-class hold on the most sought-after places. Many families paid premiums of tens of thousands of pounds to buy homes in the catchment areas of successful schools, leading to claims of selection by wealth.
If only individual schools could hold lotteries it is thought there would be fewer overall.
Those that did, however, would effectively become their own admissions authorities – allowing critics to claim that ministers were allowing “back door selection” of pupils, particularly if schools were allowed to determine exactly how the lotteries should operate.
Earlier this month around 540,000 pupils who applied for secondary school places in September were informed where they would be going – with early figures suggesting around 17 per cent did not get into their first choice. The lowest percentage of pupils getting into their top-choice school is thought to be 60 per cent in the London borough of Westminster. At the other end of the scale the comparative figure for Leicestershire was 98 per cent.
Grammar schools are allowed to select on ability but other secondaries are not – except for some “specialist” schools with subject which can “prioritise” up to a tenth of their intake on aptitude for music, sport or other skills.
Admissions policies vary between schools and areas, although the closeness of a child’s home, and whether they have a sibling already at the school, are usually key factors.
At least 30 councils in England, mainly in well populated urban areas, are understood to use lotteries – with more than 100,000 pupils applying in areas where their school admissions could effectively be decided “by a roll of the dice”.
A DfE spokesman said: “Ministers are clear they want a simpler and fairer admissions code. We will announce more details shortly.”
Overall, Mr Gove is determined to allow individual schools much more freedom and lessen the grip on the state school system currently exerted by local authorities.
His Education Bill unveiled earlier this year gives ministers more powers to intervene in failing schools, narrows the focus of Ofsted inspections and hands teachers extra powers to search pupils for “disruptive” items”.
Meanwhile, ministers are to spend an extra £70million helping children from poorer families stay on in education. A new fund of £180million will soften the blow of the abolition of Educational Maintenance Allowances which are worth up to £30 a week for 16, 17 and 18-year-olds.Originally £111million was earmarked for the fund but Liberal Democrat ministers, led by Nick Clegg, the Deputy Prime Minister, squeezed extra cash out of the Treasury. The measure was expected to be in last week’s Budget – but dropped out at the last moment.
Most of the new budget will be distributed to colleges to award, at their discretion, to students from less privileged backgrounds.
EU blocks £160m dockside face-lift in Cornwall that would create 800 jobs… just to protect ALGAE on the seabed
A £160 million regeneration scheme would have created 800 much-needed jobs in a struggling town. But it has been blocked by an EU ruling – to protect algae on the sea bed.
A rare form of algae called Maerl is growing off the docks in Falmouth, Cornwall – but it cannot be moved or tampered with because the site is listed as a Special Area of Conservation.
Sir John Banham, a former chief of the Confederation of British Industry who is now leader of the local Enterprise Partnership, attacked the ‘unaccountable bureaucrats’ who have blocked the scheme. He said: ‘They need to think very carefully about who they are working for and who pays their salaries.
‘What I am expecting from them is to find solutions to the situation and not indulge in negative bureaucratic foot-dragging. ‘We are in an era of austerity and we desperately need new jobs.’ ‘They need to wake up and smell the coffee. ‘EU rulings can’t take into account the impact on local lives.
The plans include dredging the Fal and Helford estuaries to accommodate larger ships and make the port deeper. But the Marine Management Organisation objected because of the EU directive. The MMO said Maerl can take up to 8,000 years to form and acted as a nursery for commercial fish stocks. Chief Executive James Cross said: ‘Maerl is considered a non-renewable resource that cannot be lost.’
The Port of Falmouth Initiative has been in the pipeline since 2009 when a number of stakeholders convened in a bid to redevelop Falmouth’s dockyard, where around 1,400 people currently work. An initial £106.5 million would be pumped into the scheme from a combination of public and private money, followed by £53 million over the next five years. The plans include an international harbour, offices, a 290 international marina and provide new super yacht workshops.
A Combined Heat and Power (CHP) plant, which would create low carbon heat and electricity for the docks and town, is also planned.
To accommodate larger ships, a seven mile stretch of the Fal and Helford estuaries measuring 650ft wide would need to be dredged and the port deepened from 15ft to 27ft.
But the Marine Management Organisation (MMO) objected to the proposals because an EU directive prevents the area from being touched after it was declared a Special Area of Conservation in 2004 because of the Maerl algae.
Groups behind the bid – including Falmouth Harbour Commissioners, Cornwall Council, Falmouth Docks and Engineering Company and A&P Falmouth – are now in desperate talks with the MMO over a possible reversal of their decision.
David Ellis, chairman of Falmouth Harbour Commissioners said: ‘There is a clear feeling from all the partners that this port will wither without the regeneration.. ‘We’re not just talking about the scheme benefiting Falmouth and the Penryn area. This will significantly improve the economy of Cornwall and turn Falmouth into a thriving gateway to the whole region. ‘The entire future of Falmouth as a thriving port hinges on the ability to grow and develop.
‘Negotiations are continuing with Natural England and the MMO to meet their concerns in a way that will protect the environment and move this project forward.’ Chris Bell, group managing director at A&P Falmouth said: ‘Dredging is needed because the channel into the docks is too shallow.
‘Dredging is a vital link in the chain of industrial development of the area.’ Peter Child, managing director of docks operator A&P Falmouth, said: ‘If it doesn’t happen you won’t see a change in the next year or two, but there will be a gradual decline over five to ten years. ‘If we got the approval tomorrow, there would be a gradual growth and you would hopefully see more ships, bigger ships and cruise liners.’
Diesel confusion in Britain
Owners of diesel cars face higher charges for annual parking permits in major cities amid growing concern over their effect on air quality. Councils have begun to raise the cost for the vehicles, which were previously considered more environmentally friendly because of lower carbon emissions. A motorist with a typical family diesel faces paying more than £150 a year to park outside his or her home.
There is growing concern in Whitehall over the green credentials of diesel vehicles, which are increasingly popular. According to a paper prepared for the Department for Environment, Food and Rural Affairs this month, they emit too many small polluting particles which damage local air quality, a particular problem in residential areas with heavy traffic.
The report said the Government should encourage “small, modern petrol vehicles, petrol hybrids and electric vehicles in urban areas in place of diesel vehicles”.
Diesels already account for one in four cars on the road, and four in 10 new cars. They are more fuel efficient and normally cost less to tax because of lower CO2 emissions.
But Tory-controlled Kensington and Chelsea council will impose a £15 surcharge on parking permits for them from next month and councils in other urban areas are likely to follow. The London borough’s most expensive parking permit will cost £176 and will apply to cars such as a three-litre diesel Range Rover. Owners of family cars, such as two-litre diesel Ford Mondeos, will have to find £153 a year.
Although the borough is thought to be the first to adopt a differential tax for diesel cars, other councils are understood to be monitoring the experiment closely.
The move is likely to be welcomed by environmentalists, but it has angered motoring groups. Diesel already costs up to 7p a litre more than unleaded petrol. Edmund King, the AA’s president, said: “Punishing someone for owning a diesel car that produces up to 20 per cent less CO2 than the petrol version is ludicrous. Councils are plundering residents’ parking for money to balance their budgets.”
Prof Stephen Glaister, director of the RAC Foundation, added: “Provided diesel cars are properly maintained there is no problem.”
The move has parallels with higher charges for the most gas-guzzling vehicles. Richmond upon Thames became the first council to charge more for parking permits where cars have higher carbon emissions. Similar charges are becoming commonplace.
According to the Defra paper, diesel cars still emit as much nitrogen oxide and dioxide as they did 15 years ago. They have been linked to childhood asthma and other respiratory problems. A spokesman for Environmental Protection UK, a campaign group, said: “Local authorities in the most polluted urban locations must start encouraging residents to choose petrol over diesel. This could be achieved through simple measures such as differentiating between diesel and petrol vehicles for residents car parking charges.”
A spokesman for Kensington and Chelsea council said: “Historically, diesels, while better on CO2 emissions, have tended to be rather worse than petrol engines of similar size in relation to local air pollutants such as particulates and nitrogen dioxide. In Kensington and Chelsea there is a problem with local air quality.”