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The collapse of outsourcing company Carillion in May 2018 was described as "a story of recklessness, hubris and greed" by a parliamentary enquiry. While this is undoubtedly correct, in Liverpool in practical terms it meant a halt to the building of the new Royal Liverpool University Hospital.
This is a much needed facility for residents of the city and its surrounding boroughs.
The National Audit Office has just published a report which gets close to the true cost of this fiasco, initially funded under the discredited 'private finance initiative' (PFI) scheme, which enabled private-sector construction companies to rip off millions of pounds from public-sector contracts.
This scheme was abandoned once Carillion went under. The hospital should have been open and treating patients with state-of-the-art equipment by now, but the earliest current estimate of its opening is 2022.
As if this delay is not bad enough, the cost of building the new facility has rocketed from £350 million to at least £720 million.
This was following the discovery of major defects in work originally undertaken by Carillion. Concrete beams were found to have cracks in them, necessitating their replacement with conventional steel girders under a new contractor, Lang O'Rourke.
But the disastrous state of affairs does not end there. Following the Grenfell disaster, it was further discovered that the cladding on the external walls of the building was unsafe, posing major risks to life and limb in the event of a fire!
Brand new equipment has had to be taken out after it was discovered that three floors were liable to collapse. The existing hospital building has frequent power failures, and floods on a regular basis. But it actually has more beds than the 646 planned for the new building, raising doubts about its long-term capacity.
In political terms, the tragedy of this situation is the PFI scheme itself, introduced by the Tories, but embraced enthusiastically by both Tony Blair and Gordon Brown when Labour was in power. Under this scheme, companies continue to own and control the buildings for 30 years after they have opened, directly employing many of the workers, and raking in profits over that period.
In addition, it is clear from this and many other examples that oversight of the projects was scant, allowing companies to cut corners, and thereby costs, in pursuit of even greater profits. For capitalism, the public sector is little more than a chance to rip off the taxpayer to a massive extent.
The Socialist Party calls for the scrapping of all PFI schemes and debts; nationalisation of the major construction companies under democratic workers' control, to eliminate the profit motive that led to this disaster; and a fully funded, fully publicly owned NHS.
Public-Private Partnership (4)
Article dated 22 January 2020
The Socialist, weekly newspaper of the Socialist Party
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