Gordon Brown is back in the news this morning, or rather his legacy of debt is (an issue
examined in depth by Pete and Fraser in 2008). The disastrous £12.7 billion NHS
computer project is to be scrapped and, more important than that, the Telegraph reports that the care budgets at 60 hospitals are being squeezed by the costs of repaying PFI
contracts totalling more than £5.4 billion. Andrew Lansley has taken to the
airwaves to explain that Labour left the NHS with an “enormous legacy of debt”; he was keen to point out that no hospitals were built under PFI before 1997, so that there was no
doubt where blame should be apportioned. Lansley claims to have spent a year uncovering this mess and will surely begin to use this story as an example of why the NHS must be reformed. This is
a political opportunity to articulate Nick Clegg’s view that Labour is responsible
for Britain’s current ills and must never be entrusted with the economy again.
Away from party politics, the Treasury Select Committee has had its eye on PFI for a while, warning last month that the scheme needed urgent reform to provide value for money. Under PFI arrangements, a private contractor constructs a hospital, for instance, and it owns that building for a maximum of 35 years, during which time the taxpayer pays construction, maintenance and interest costs. This often means that repayments exceed the value of the asset – see the Telegraph for specifics. George Osborne has already tightened rules and is pressing to renegotiate contracts to make savings. Committee member Jesse Norman made these points on the Today programme this morning. He also warned there is worse to come because two thirds of the £210 billion PFI expenditure remains outstanding.
That’s not all. The Guardian previews a report by shadow defence minister Jim Murphy (interviewed in the latest issue of the Spectator by James Forsyth, subscribers click here) and Lord West in which they admit that Labour lost control of the defence budget. That may not but news, but their contrition is of note, especially after Ed Balls’ apology about Labour’s failure to regulate banks effectively in the Commons last week. As Ed Miliband prepares for his first proper conference as party leaders, it may be that Labour’s new tactic is to criticise the previous government’s record.
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