Inquiry into Hereford County Hospital contract called for as MP Jesse Norman brands PFI a "catastrophe"

Hereford Times: Jesse Norman branded PFI the “greatest catastrophe in infrastructure procurement over the past 20 years" Jesse Norman branded PFI the “greatest catastrophe in infrastructure procurement over the past 20 years"

THE case for a “full and public” inquiry into the Private Finance Initiative (PFI) contract that got Hereford County Hospital built has been pressed at Parliament.

Hereford and South Herefordshire MP Jesse Norman intervened in a high-profile Government statement on infrastructure to highlight concerns about safety and maintenance standards under the contract – as reported by the Hereford Times.

Mr Norman has already written to the Health and Safety Executive, calling for an investigation into conduct of the PFI contractors.

Approved in 1999, Hereford County Hospital was one of the earliest PFI projects. It was built and is currently owned and managed under a 30-year contract through a special purpose company, Mercia, which is owned by Semperian and Sodexo. Mr Norman went public with documents with papers and documents describing the deteriorating relationship between Wye Valley NHS Trust and its PFI partners over the exercise of contractual responsibilities and related legal wrangling.

Speaking in the Commons, Mr Norman called PFI the “greatest catastrophe in infrastructure procurement over the past 20 years". Highlighting the issuers at Hereford County Hospital, Mr Norman urged Danny Alexander, the Chief Secretary to the Treasury, not to repeat the mistakes of PFI in the next round of spending.

Speaking afterwards, Mr Norman said: “I have been campaigning for a better deal on the PFI contract at Hereford County Hospital since before my election in 2010. The campaign originally grew out of local anger at the PFI contractor's parking charges, but it has escalated recently to major concerns about fire safety, and about the maintenance of equipment relating to the operating theatres and maternity.

I am pressing for an early, thorough and public examination of these apparent failings.” ”

The full text of Mr Norman’s intervention at parliament is follows: Jesse Norman (Hereford and South Herefordshire) (Con): The greatest catastrophe in infrastructure procurement over the past 20 years was the private finance initiative under Labour. My investigations this week have shown a pattern of poor construction and inadequate maintenance at Hereford hospital on the part of the PFI contractors, and that relates to fire compartmentation, hospital ventilation, infection control, the emergency alarm system and maternity. That has been damaging to patient and staff safety and give no incentive within the contracts to save money. Will my right hon. Friend reassure the House that the evils of PFI under Labour will never be repeated in this new round of investments and that the apparently systematic pattern of delaying and thwarting necessary remedial actions will never be part of the plans that he has laid before the House?

Danny Alexander: My hon. Friend has played a very important role in scrutinising and making public many of the most appalling features of PFI under the previous regime, and I congratulate him on that work. As he will know, a few months back, we announced the new private finance 2 model, which strips out an awful lot of the things that he is concerned about. We are also engaged in a detailed cost review of PFI projects to try to make sure that, where we can, we reduce cost pressures, as we did successfully with the Romford hospital PFI.

Comments (14)

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11:20am Tue 10 Dec 13

silentbull2 says...

"Better late than never"

"Too little to late" comes to mind!!!

Didn't these concerns come up even before the hospital was built??
"Better late than never" "Too little to late" comes to mind!!! Didn't these concerns come up even before the hospital was built?? silentbull2

12:51pm Tue 10 Dec 13

littlewhitebull says...

silentbull2 wrote:
"Better late than never"

"Too little to late" comes to mind!!!

Didn't these concerns come up even before the hospital was built??
Yes, you are right. This issue is 'old news' and has been discussed many times. Just glad that our MP has been 'brought up to speed'.
[quote][p][bold]silentbull2[/bold] wrote: "Better late than never" "Too little to late" comes to mind!!! Didn't these concerns come up even before the hospital was built??[/p][/quote]Yes, you are right. This issue is 'old news' and has been discussed many times. Just glad that our MP has been 'brought up to speed'. littlewhitebull

1:27pm Tue 10 Dec 13

Everywhere says...

Please excuse my lack of knowledge of Parliament but is the below a technical name for "Oh dear ! In my position I should have seen this coming....?

I am pressing for an early, thorough and public examination of these apparent failings.” ”
Please excuse my lack of knowledge of Parliament but is the below a technical name for "Oh dear ! In my position I should have seen this coming....? I am pressing for an early, thorough and public examination of these apparent failings.” ” Everywhere

2:07pm Tue 10 Dec 13

GDJ says...

To be fair to him, he has been working on this problem for several years - including before he was an MP - he has always seen the dangers of being completely under the control of a private company to provide public services (with a guaranteed profit). When the conservatives were in opposition they criticised the PFi scam and then cancelled a lot of planned projects. However they have been lured back in to keep giving the impression of public investment because the excess costs don't appear for a lenght of time beyond the political cycle.

However he would strengthen his position if he publicly stood out against this current government's equivalent programmes and if his government insisted that all pfi revenues and profits were booked and taxed in the UK
To be fair to him, he has been working on this problem for several years - including before he was an MP - he has always seen the dangers of being completely under the control of a private company to provide public services (with a guaranteed profit). When the conservatives were in opposition they criticised the PFi scam and then cancelled a lot of planned projects. However they have been lured back in to keep giving the impression of public investment because the excess costs don't appear for a lenght of time beyond the political cycle. However he would strengthen his position if he publicly stood out against this current government's equivalent programmes and if his government insisted that all pfi revenues and profits were booked and taxed in the UK GDJ

3:16pm Tue 10 Dec 13

fmrbill says...

in 3/4 years time he will be saying what a diaster the local adminstration were (conservative council) rather than getting involed now and attacking them head on. To much to late Mr Norman why are all policticians and public servants 4 yrs behind Jo public on any event. Then say we got it wrong ????
in 3/4 years time he will be saying what a diaster the local adminstration were (conservative council) rather than getting involed now and attacking them head on. To much to late Mr Norman why are all policticians and public servants 4 yrs behind Jo public on any event. Then say we got it wrong ???? fmrbill

4:29pm Tue 10 Dec 13

jfarrar says...

Mr Norman always seems to forget that PFI was introduced in 1992 by John Major. We actually thought Blair would cancel all PFI but he, Brown and Milburn decided to keep it going. To anyone on the inside in the mid-90s it was inevitable it was going to be a disaster.
Mr Norman always seems to forget that PFI was introduced in 1992 by John Major. We actually thought Blair would cancel all PFI but he, Brown and Milburn decided to keep it going. To anyone on the inside in the mid-90s it was inevitable it was going to be a disaster. jfarrar

5:32pm Tue 10 Dec 13

jarvis 2 says...

sounds like sodexo arer a second rate bussiness like Amey and balfour betty
there only intrested in profite and not quality and they employe the lowest quality of staff they can and pay a pitance
sounds like sodexo arer a second rate bussiness like Amey and balfour betty there only intrested in profite and not quality and they employe the lowest quality of staff they can and pay a pitance jarvis 2

7:01pm Tue 10 Dec 13

probono says...

Good work Jesse, it is much appreciated. Your predecessor did little to take the concerns of Hereford residents seriously and little indeed for his whole constituency. Yous have been so pro-active since your election, one can even start to think that maybe the Civil Service and some politicians may know where Herefordshire is.
On second thoughts they will have confused it with Hertfordshire like the Post Office and our letters !
Good work Jesse, it is much appreciated. Your predecessor did little to take the concerns of Hereford residents seriously and little indeed for his whole constituency. Yous have been so pro-active since your election, one can even start to think that maybe the Civil Service and some politicians may know where Herefordshire is. On second thoughts they will have confused it with Hertfordshire like the Post Office and our letters ! probono

7:15pm Tue 10 Dec 13

Rod Williams says...

When PFI was first mentioned the government were told then it was a disaster. It was a stepping stone to privatisation. Why do politicians fail to see the dangers, they wade in blind folded. Someone may have got a back hander perhaps? Now they can see the disaster they have left behind. The public have to pay for their mistakes.
When PFI was first mentioned the government were told then it was a disaster. It was a stepping stone to privatisation. Why do politicians fail to see the dangers, they wade in blind folded. Someone may have got a back hander perhaps? Now they can see the disaster they have left behind. The public have to pay for their mistakes. Rod Williams

9:24pm Tue 10 Dec 13

WYSIATI says...

Basic arithmetic tells you PFI will be a mistake - no company can borrow at as low an interest rate as the Government so finance costs must be higher.

It was sold as a way to get the private sector to take project risk - bad news (blindingly obvious really) the private sector is not interested in taking risk - much more interested in guaranteed profit.

Not only does the arrangement cost more every year than financing and operating in the public sector, I believe that there are absolutely scandalous clauses in passing ownership of assets to companies at the end of the contract periods.

Introduced by a Conservative govt, presumably as a prelude to privatisation, embraced by labour too frightened to honestly take investment in public services on the books. Result - disaster.

Anyone noticed the proposals to sell off the East Coast Mainline - happens to operating as the single best rail franchise - in the public sector since the private operator walked away a few years ago. Now ready to be "transformed" by the private sector apparently - presumably back into a sinecure for a private company seeking rent. http://www.independe
nt.co.uk/travel/news
-and-advice/simon-ca
lder-on-track-on-tim
e--so-why-change-tra
ins-8941741.html?ori
gin=internalSearch
Basic arithmetic tells you PFI will be a mistake - no company can borrow at as low an interest rate as the Government so finance costs must be higher. It was sold as a way to get the private sector to take project risk - bad news (blindingly obvious really) the private sector is not interested in taking risk - much more interested in guaranteed profit. Not only does the arrangement cost more every year than financing and operating in the public sector, I believe that there are absolutely scandalous clauses in passing ownership of assets to companies at the end of the contract periods. Introduced by a Conservative govt, presumably as a prelude to privatisation, embraced by labour too frightened to honestly take investment in public services on the books. Result - disaster. Anyone noticed the proposals to sell off the East Coast Mainline - happens to operating as the single best rail franchise - in the public sector since the private operator walked away a few years ago. Now ready to be "transformed" by the private sector apparently - presumably back into a sinecure for a private company seeking rent. http://www.independe nt.co.uk/travel/news -and-advice/simon-ca lder-on-track-on-tim e--so-why-change-tra ins-8941741.html?ori gin=internalSearch WYSIATI

10:31pm Tue 10 Dec 13

Mrfade says...

OVER 2 YEARS AGO Jess Norman MP was asked to call for a full and public inquiry into the dreadful waste and incinerator contract which gives the hospital PFI some serious competition.

BUT HE DIDN'T WANT TO KNOW, STILL DOESN'T WANT TO KNOW. If it's bad it's bad Jesse and should be investigated. IT IS NOW GOING TO COST £1.6 billion and Hereford will be paying a quarter of the costs . Yet all the Tories are supporting burning your money, by supporting this scheme. As for the hospital, it's about time.

Is Mr Norman beginning to crank up his profile for a general election?

All the Tories and a Lib Dem have
OVER 2 YEARS AGO Jess Norman MP was asked to call for a full and public inquiry into the dreadful waste and incinerator contract which gives the hospital PFI some serious competition. BUT HE DIDN'T WANT TO KNOW, STILL DOESN'T WANT TO KNOW. If it's bad it's bad Jesse and should be investigated. IT IS NOW GOING TO COST £1.6 billion and Hereford will be paying a quarter of the costs . Yet all the Tories are supporting burning your money, by supporting this scheme. As for the hospital, it's about time. Is Mr Norman beginning to crank up his profile for a general election? All the Tories and a Lib Dem have Mrfade

7:44pm Wed 11 Dec 13

Mr.Herefordian says...

Yes he has not got a good memory he even forgot his wreath on Rememberence Sunday.
Yes he has not got a good memory he even forgot his wreath on Rememberence Sunday. Mr.Herefordian

6:43am Thu 12 Dec 13

megilleland says...

A lot of these PFI schemes are run by UK subsidaries of foreign companies and their profits sent home or invested offshore. Sodexo is French owned and the companies managing our waste contracts are Spanish.

Semperian was established to provide investors with access to a portfolio of PPP (public–private partnerships) and social infrastructure projects that have the following characteristics:

High current yielding;
Attractive long-run risk adjusted returns;
Inflation correlated revenues streams;
High quality counterparties;
Diversity of sectors, operators and funders;
Scale of opportunity, with 100 assets;
Limited correlation to economic cycle or public markets; and
Low cost and aligned management.

But nothing in value for the tax payers. In most cases they don't even get the assets that are paying for at the end of the contract. Worse than buying a house.
A lot of these PFI schemes are run by UK subsidaries of foreign companies and their profits sent home or invested offshore. Sodexo is French owned and the companies managing our waste contracts are Spanish. Semperian was established to provide investors with access to a portfolio of PPP (public–private partnerships) and social infrastructure projects that have the following characteristics: High current yielding; Attractive long-run risk adjusted returns; Inflation correlated revenues streams; High quality counterparties; Diversity of sectors, operators and funders; Scale of opportunity, with 100 assets; Limited correlation to economic cycle or public markets; and Low cost and aligned management. But nothing in value for the tax payers. In most cases they don't even get the assets that are paying for at the end of the contract. Worse than buying a house. megilleland

8:18am Thu 12 Dec 13

brianjmee says...

If nothing else Jesse should be credited for opening the eyes of Herefordians to the tsunami of a problem that is decimating the Health Service - the scandalous PFI contract. The Italian Mafia must be looking enviously at this scam. I would be willing to bet that when the contracts are examined there are clauses that prevent any cancellation without horrendous penalties. What legal minds allowed the health service to handcuffed to such arrangements. Until we examine the links between those who procured the PFI contracts and the multinationals, all culprit's will go free. Come on Jesse instead of talking the talk now walk the walk and name and shame. From what I can gather the County Hospital wasn't built with longevity in mind. In a very short time there'll be calls to replace the building and the process will be repeated. No wonder
NHS Hereford has no money, for Hereford NHS see desperate and homeless family at Christmas for PFI see money sharks.
If nothing else Jesse should be credited for opening the eyes of Herefordians to the tsunami of a problem that is decimating the Health Service - the scandalous PFI contract. The Italian Mafia must be looking enviously at this scam. I would be willing to bet that when the contracts are examined there are clauses that prevent any cancellation without horrendous penalties. What legal minds allowed the health service to handcuffed to such arrangements. Until we examine the links between those who procured the PFI contracts and the multinationals, all culprit's will go free. Come on Jesse instead of talking the talk now walk the walk and name and shame. From what I can gather the County Hospital wasn't built with longevity in mind. In a very short time there'll be calls to replace the building and the process will be repeated. No wonder NHS Hereford has no money, for Hereford NHS see desperate and homeless family at Christmas for PFI see money sharks. brianjmee

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