Friday, April 15, 2011

How NHS millions take a trip to Guernsey

IT all started off so well. A beautiful new hospital was being built in Corsham, Portsmouth, thanks to the Private Finance Initiative (PFI). Services would be moved to be provided there. Well, not quite all. A ward that cared for end-of-life patients would go, replaced by mobile nurses making bedside visits. And then other news did not look too good.

'TRUST axes jobs to plug £12 m. debt", reported the BBC Hants and Isle of Wight news, on February 9, 2010. And on March 9 this year:

'A £256m Hampshire hospital which opened 18 months ago has cut 700 jobs and shut wards, the BBC has learned. The Queen Alexandra Hospital in Cosham was rebuilt using private finance and opened in July 2009. The hospital, run by Portsmouth Hospitals NHS Trust, confirmed the job losses and the closure of 100 beds.

Finance director Robert Toole admitted the situation was "challenging" but said the hospital was on course to save £29m this financial year.However the hospital was still likely to be facing a deficit of about £6m in an overall budget of £430m even with the savings'.

Well, we all have to make sacrifices, don't we? But don't worry, there's good news for some.

As reported by

'A leading high street bank set up a company to divert millions of pounds of NHS money into an offshore "tax haven", a BBC investigation has found. HSBC used a legal tax loophole to handle the profits from private finance initiative schemes such as the Queen Alexandra Hospital in Portsmouth. Over the next 30 years money will go to Guernsey-based investment firm HICL. It said it was subject to UK tax laws.

Unison called the move "unjust" at a time when the hospital had axed jobs.

In six months last year the company - which was set up by HSBC - made more than £38m profit from its 33 PFI schemes and paid £100,000 in UK tax. That equates to less than half of 1% of the profits.HICL said the profits did not stay in Guernsey and had been paid to mostly UK shareholders so far.

HSBC said it set up the scheme to give people a chance to invest in PFI projects.

Mike Wilson, of Unison, said: "It's a huge amount of money and it's money that is coming from the tax payer, so it's safe profit.

"This money is going to bankers who caused the financial crisis who are now in offshore tax havens.

"They are not paying corporation tax on the profits they are making - that is fundamentally unjust when patients are losing services and my members are losing their jobs."


The firm - previously known as HSBC Infrastructure Company Limited - bought an 89.9% stake in the Queen Alexandra Hospital (QAH) project last year.

The hospital has cut 700 jobs in 18 months.

Jock McLees, from Portsmouth LINK, which speaks for patients, said: "It's immoral, it's wrong but nobody seems to get it.

"Nobody seems to be able to do anything about it and we're coming to the conclusion I think that some of these financial institutions and big business are more powerful than government.

"They seem to be out of control."'

We've often heard how the private sector makes money, or even "creates wealth", while the public sector spends it, but here we see how good the private sector is at making money from the public.

And before we take this story as a typical result of Tory policies and the Con Dem coalition, let's remember that though the Private Finance Initiative began as a Tory idea, none were keener on promoting and developing it than New Labour and Gordon Brown the bankers' friend.



At 8:48 AM, Anonymous Chris H said...

The private sector financial institutions aren't out of control, they are in control and that's the issue. They're bleeding us dry under a guise f benevolence through the PFI. Labour should hang it's head in shame.


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