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Lack of cash hits new schools and hospitals
Paul Waugh26 Jan 2009
Multi-billion-pound schemes to rebuild Britain's schools, hospitals and roads are being stalled by a lack of private cash, it emerged today.
In a major blow to Gordon Brown's hopes of using public works to revive the flagging economy, his flagship Private Finance Initiatives have been hit by the credit crunch.
PFIs — in which banks or consortiums lend cash for public projects for a 25-year period and the Government pays it back in instalments — have been one of Mr Brown's favourite ways of injecting money into public services.
But projects involving more that 100 schools and hospitals have been delayed or are on hold, according to a study by Glenigan, an intelligence unit for the construction industry. Research by Glenigan indicates that nearly £2.4 billion worth of health and education projects are affected.
In addition, a multi-billion-pound plan to rebuild sixth-form colleges has stalled because the institutions have been unable to find enough cash.
Schemes including the widening of the M25 and the Government's £45 billion programme to rebuild or renovate 3,500 secondary schools could be at risk.
The NHS also relies on PFI for hospital renovations. Nigel Edwards, from the NHS Confederation, said that he had been contacted by a number of chief executives alarmed by the funding crisis. “There is a growing feeling that funding is drying up and there is no public capital plan B,” he said.
Reader views (5)
Tom/London - Are you Gordon Brown or Mandelson. "Spin" is over. The facts are that Labour used PFI/Debt to help provide the illusion of wealth. For 12 years G Brown has relied upon this contrivance. Was he forced to do so by Mr. Clarke and the Conservatives? Or are you implying that they Labour is just incompetent and has no idea what they have done to this country? The situation is serious. Get Real.
- Kr, Florence Italy, 26/01/2009 18:46
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Well I guess the money went to the banks instead.
- Georgie, Islington, London, 26/01/2009 18:26
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It seems the longer Crash Gordon digs the deeper we sink here in Britain. He should leave!!
- Peteo, Primrose Hill, London, 26/01/2009 15:54
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Crash Brown loaded taxes onto the overindebted companies, loaded taxes on the people working, wasted the tax money on banks and overindebted the state... wher you think the money could come from to invest in this country?? Currency is too weak so no foreign investment either...
- Phil, Islington, London, 26/01/2009 14:12
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How convenient that Ken Clarke is back in the public eye. Since he invented them, perhaps he can explain how to uninvent them?
- Tom, London, UK, 26/01/2009 12:00
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