Some public bodies in Scotland are still attempting
to argue that ancillary services have to be transferred in new
PFL projects to achieve the necessary "risk transfer".
This is no longer the case, since the publication of the new accounting
The main problems appear to be in local government,
where some authorities are quoting confused advice from the DETR,
which claims the new rules do not constitute a fundamental change
Apart from the fact that DETR guidance has no status
in a devolved Scotland the new rules are quite explicit in no
longer -ring staff transfers.
The full accounting treatment is set out on the
Treasury Taskforce site at http://www.treasury-projects-taskforce.gov.uk.
This is however a very technical document and for
plain English guidance, authorities should be directed to the
Scottish Executive's PFI Scotland newsletter on http://www.scotland.gov.uk/pfi/
Under frequently asked questions the newsletter
"Is it true that some ancillary services
need not be included in PH deals?
"Yes. there are no hard and fast rules
in relation to whether a particular ancillary service should be
included within a PFI contract Transfer of staff will be decided
by the PFI procurer an a case by case basis in the best interest
of their staff and subject to over-riding value for money issues."
In the NHS specific guidance has been issued under
the provisions of NHS MEL (1999)55. paragraph 11 of which states
"the revised guidance also excludes the risks related to
supports services from the accounting judgement?' The only staff
which may have to be included in any PFI contract are those directly
connected with the maintenance of the fabric of the building.
Branches will of course still have to demonstrate
that keeping services in-house represents best value. The important
change is that it's no longer a requirement to transfer staff.
& Ninewells are first devolved PFI's
Glasgow's Southern General Hospital Geriatric Medicine
Assessment Facility (Capital value £11m) and Dundee Ninewelis
Psychiatric Services (Capital value £10m) have now been
The SGH contract is for a 210-bed facility to be
run by Tarmac and is the first health PFI scheme to be signed
under devolution. The Ninewells Hospital contract is for an 84-bed
acute psychiatric unit, which win be run by a subsidiary of Jarvis
In total 38 health projects, with a capital value
of £485m, have now been signed in the NHS in Scotland. A
list of all Scottish Executive PFI projects can be viewed at http://www.scotland.gov.uk/pfi/.
cut to deliver... profits!
Glasgow City Council has voted to sign a £192m
contract with a consortium of private contractors to build and
refurbish 29 secondary schools. Led by the Miller Group, this
contract will last for 30 years.
The details of this scheme -which the council refuses
to publish - have recently come under fire from teachers in the
schools concerned. Staff were given only days to comment on proposals,
which in some schools will result in a cut of 1/3 in classroom
provision and very limited staff accommodation. At least six swimming
pools have been earmarked for closure along with a number of gymnasiums.
(This is of course precisely what happened in NHS PFI schemes,
which ended up costing the tax payer more for less facilities.)
they ever learn?
Councillors would do well to learn the lesson of
the NP'S and of schools schemes south of the border. In the journal
Public Finance (29 October 1999), Jean Shaoul highlights the costs
of Pimlico School in London, which is being rebuilt under PFI.
Her analysis of that scheme demonstrates that key questions have
not been answered and the figures provided simply do not add up.
grind up profits
The Miller Group - the lead company in the Glasgow
schools consortium - have reported increased profits from 14.8m
to 18.5m. The, family owned, Scottish company is reported as being
interested in making a cash exit following a fun stock market
flotation. The Glasgow schools deal is initially worth 159.2m
but analysts believe that it could be worth over 1 billion in
the long term - all courtesy of the Glasgow tax payer!
UNISONScotland is orgnising a major PFI conference
with the Centre for Scottish Public Policy on Monday 10 January
2000 in the University of Edinburgh Conference Centre.
Speakers include Jack McConnell MSP, Scottish Finance
Minister; Dave Prentis, UNISON Deputy General Secretary; Alf Young,
Herald Deputy Editor; Allyson Pollock, University College London
and Andrew Wilson MSP, SNP Finance Spokesperson. Details of the
outcome in our next bulletin.
The media and others continue to confuse Public
Private Partnerships (PPP) and the Private Finance Initiative
(PFI). PPP is the government's umbrella description for all projects
which involve partnership with private sector. PFI is a specific
scheme under the PPP umbrella - although stlll the main method
of introducing private cash into public services.
The UK Government is now committed to almost 84billion
of revenue spending under the private finance initiative, a growth
of £15billion from last year. This is expenditure that it
will be unable to break without massive contract penalties.
In Scotland, the capital value of PFI projects
has grown to over 2billion (equivalent revenue costs have not
been published) made up as below
| Completed Projects:
| Signed Projects:
These figures only include projects under the overall
responsibility of the Scottish Executive. There are other projects
for example in the Ministry of Defence, which are not included
in these figures.
no longer OK
Despite announcements by Scottish Executive Finance
Minister. Jack McConnell, on greater openness in future Fri schemes,
public authorities are still reluctant to release information.
The worst culprits are local authorities.
Branches may find it helpful to quote guidance
published by the "Four Ps", which reflects the new Government
policy stance. The key section states "any procurement by
a local authority, including those employing the PFI, should be
managed on the assumption that all information arising from the
transaction will be in the public domain in the future. Therefore,
discussions about disclosure should focus on when information
is to be disclosed rather than 'whether' (our emphasis).
In the NHS explicit instructions on disclosure
information are set out in MEL(1998)39 on openness and employee
The local Government Information Unit has produced
a useful new guide on PFI. Aimed at councillors and school governors,
it highlights issues to be considered;- when considering a PFI
scheme; when it is being developed and when it is completed. It
stresses the need for openeess and consultation, clear lines of
accountability and understanding the long-term service and finance
implications. Copies available from the LGIU, 22 Upper Woburn
Place, London WC1H OTB (http://www.lgiu.gov.uk).
pensions now transferable
Transitional arrangements have been published to
allow non-associated employers to be admitted to the local government
superannuation scheme on a temporary basis until the full regulations
are introduced, probably in March 2000. This means that staff
transferring to private companies under PFI or Best Value provisions
can remain members of the LGSS.
Discussions are ongoing regarding similar arrangements
in the NHSiS. However, as that scheme is financed on a "pay
as you go basis" there are a number of technical difficulties
to be overcome before such a scheme can be introduced in the NHS
approach to Health PPPs
Scottish Health Minister, Susan Deacon has asked
the Scottish Partnership Forum to develop a staffing framework
for PPP The SPF has considered a draft framework, which provides
for a partnership approach to PPP projects.
This enables proper scrutiny of all capital projects
and key protections for any staff who might be transferred to
other employers. The SPF will consider comments at its February
meeting before the framework gees back to the Health Minister
muck there's brass
Scottish Lawyers, Tods, Murray, legal advisors
to Edinburgh Royal Infirmary PFI project, are selling their "expertise"
south of the border. The company is linked up with Balfour Beattie
to bid for projects in Haringey, Tower Hamlets and Stoke-on-Trent.
Apparently Scottish lawyers come cheaper than their English couaterparts,
which will no doubt be a small crumb of comfort to English taxpayers
being ripped off under PFI.
when you thought PFI schemes could get no crazier...
Kilmarnock's new £130m PFI prison
is being run by a company, headed by an ultra-right-wing American
Billionaire and former Spy master, George Wackenhut. The company
is linked with several notorious right-wing causes and has links
with former Republican Presidents The company is also behind the
private prison at Doncaster in Yorkshire, dubbed as "Doncatraz".
Inspectors from the Prison Reform Trust painted a bleak picture
of secrecy; drug abuse, intimidation and violence and a record
number of suicide attempts.
Strathclyde Police's new L80m training centre in
East Kilbride is to be built under PFI. South Lanarkshire Council
gave planning permission to the scheme, which is linked to a housing
estate and a private sector leisure centre, despite 51 formal
objections from the local community.
The Treasury's PFI Taskforce is to be privatised
as a company under the name "Partnerships UK".
It will, in addition to advising the Government on PFI, take equity
stakes in key projects and finance itself through royalties and
consultation fees. It is anticipated that the leading figures
in the new company win receive six figure pay packages and performance
related bonuses. More cream for the fat cats.
There appears to be no end to the bizarre uses
of PFI. The Ministry of Defence is considering the privatisation
of Air-Sea Rescue with helicopters and pilots being provided under
PFI instead of directly buying the new craft.
are brought to you courtesy of....
PFI will soon be used to spy on us all. The Ministry
of Defence is to constrict its next generation of top secret military
satellites under PFI. Somewhat bizarrely, the cornpanies would
be free to sell unused capacity aboard the satellites to commercial
customers. Presumably we should be grateful that Trident nuclear
submarines on the Clyde are being paid for by the tax payer or
no doubt they would be handed over to a prnate company!
The National Audit office has
warned that Government Departments are being plunged into chaos
by over ambitious PFI computer contracts. ThePassport Office shambles
and the Home Office's £77m immigration service IT system
are two of the most well pubhcised disasters, along with the Social
Security Department's troubled National Insurance system.
The Chairman of the Commons Public Accounts Committee said, "the
deal seems to be a good one for the tax payer and will deliver
cost savings, yet the system is in chaos". He warned that
Departments "must not allow themselves to get carried away
by the enthusiasm of prospective suppliers".
Public authorities in Scotland take note!
The Communications Department has produced a PFI
leaflet, which can be adopted for local campaigns. It is available
to be downloaded on the UNISON website at http://www.unison.org.uk/resources/downloads/main.htm
game in town
UNISON has produced a hard-hitting analysis of
the Carlisle PFI, wriflen by David Price, Declan Gaffneyy and
Allyson Pollock (order code 1704). The analisis claims that the
Government has given approval to an uneconomic scheme with an
ill-defined capacity. According to the Government's own rules,
Carlisle's new hospital should not have been a PFI. It will have
25% fewer beds and 87 fewer qualified and trained staff. Essential
reading for anyone involved in a PFI scheme.
Copies of these
materials can be obtained from UNISON House, 14 West Campbell
Street, Glasgow G2 6RX. Tel 0141 332 0006. Communications Officer
Chris Bartter is also available to assist branches in producing
local campaign materials. His e-mail address is email@example.com
UK Publicity Downloads (PFI leaflet)
Treasury Taskforce site
Scottish Executive's PFI
Scotland newsletter and Scottish Executive PFI projects
Local Government Information Unit