UNISON, the UK’s largest union, today warned of a scandal of profiteering by private companies involved in re-financing PFI projects at the expense of taxpayers.
Octagon, the company that built the Norfolk and Norwich PFI hospital, is set to pocket £70 million by “re-mortgaging” while the cash-strapped hospital will get only £1million a year from the deal.
Dave Prentis, UNISON General Secretary said:
“There is a financial crisis at the Norfolk and Norwich University Hospital, which is facing soaring waiting lists, acute bed shortages and an overflowing accident and emergency department.
“It is particularly galling that the company which built the hospital under PFI can walk away with £70 million while the hospital gets only £1 million a year.
“We cannot stand by and allow private companies to profiteer from public services. Think how much could be done in that hospital with £70 million.”
In the past month alone, there have been similar re-financing deals by Carillion at Darent Valley Hospital, while Jarvis is set to make a £21 million windfall gain from London Tube public-private partnership.
Two years ago, UNISON warned about the scandal of profiteering by private companies involved in PFI, who cash in through excessive profits and re-financing deals.
The Government produced guidance in July 2002 recommending that the public sector receive a 50% share of refinancing of PFI projects. However, hundreds of projects signed before that guidance are not subject to those arrangements and it’s taxpayers who are losing out to private companies to the tune of hundreds of millions of pounds which should be used to improve public services.