Public Private Partnerships (PPPs) have, in all their forms, saddled the Scottish public sector with high levels of debt, poor service provision, lack of accountability and unsafe buildings. Despite this and heavy criticism of the model, the UK’s Department for International Development have put foreign aid into PPP deals!
The UK, the World Bank and the International Monetary Fund have championed PPPs as a successful route for building infrastructure and achieving the Sustainable Development Goals. It’s presented as a tool of aid, but arguably it leads countries further into the cycle of debt they have been trapped in for years.
Because complex PPP contracts are hidden behind commercial confidentiality agreements, they increase the risk of corruption and can undermine the right of the state to regulate in the public interest. The cost of the PPP contracts put a strain on public funds and diverts precious resources to private partner profits.
We saw an example of this in Lesotho. Due to failings in the PPP contract negotiated by the World Bank, Queen Mamohato Hospital is currently costing Lesotho $67 million per year, half of the entire health budget. The Hospital has put pressure on public funds with figures suggesting that in 2016 the private partner fees amount to 2.5 times the ‘affordability threshold’ set at the outset.
Despite these failings, the World Bank championed the hospital as a successful venture. When Oxfam investigated the case in 2014 they found that the hospital caused “a dangerous diversion of scarce public funds from primary health-care services in rural areas, where three-quarters of the population live” (Oxfam, 2014).
The UK government, the World Bank and the IMF need to acknowledge that the benefits of PPPs are massively outweighed by the commercial greed and inequality that circulate within them. We need to find a way to build up infrastructure in a way that addresses the needs of communities, instead of pursuing a broken system that has shown to cause suffering and inequality.
At Jubilee Scotland, we are proposing Local-National Partnerships, a new model that will hopefully lead as an example to bring an end to PPPs in Scotland and abroad. Read more about our campaign here.
You can also support our fight against PPPs by joining us at an event at the Scottish Parliament on the 29th of January 2020, to present our report “Rethinking Private Financing of Scottish Public Projects”.
At this event, Jubilee Scotland will be presenting a new model for Scotland as an alternative to Private Financing that can work someday to help tackle public financing issues internationally.
Let us know if you are planning to attend the event by contacting us at campaigndirector@jubileescotland.org.uk.
This article was written by Dr Line Christensen, Campaign Director at Jubilee Scotland.