Pat Rabbitte (Dublin South West, Labour)

The purpose of this debate is to highlight the crisis that has been created for hundreds of families at the locations mentioned because of the collapse of public private partnerships. Following years of discussion and planning, these families' hopes and dreams for new homes and community facilities have been dashed. It seems odd, on the face of it, that in the same week that this developer pulled back from the housing projects, this House, on the recommendation of the Government, recommended that he be the preferred bidder for the construction of Thornton Hall, the new prison, which is a sure-fire thing.

I came into the House just in time to hear Deputy Cuffe express the worry that we should not put upon private developers too much. I have listened to an array of Fianna Fáil speakers and the one thing they had in common was an approach to the effect of "let us protect public private partnerships". The people affected should know that it is the PPPs that failed them here. I question whether it is always suitable that a PPP is the way to proceed.

I would like to put on the record an article written by a Northern Ireland writer, Newton Emerson, on PPPs in The Irish Times of 28 May. He wrote:

As a British taxpayer, . . . [I am] often asked: "How do public-private partnerships [PPPs] work?"

The answer is surprisingly simple. Suppose a government has strict rules on the amount it can borrow but it wants to spend more on houses, schools and hospitals.

If a private firm takes out a loan to build them instead, the government can pay it back over decades in regular instalments without officially increasing the national debt.

As a British taxpayer, I am often asked: "Isn't that just another type of government borrowing?"

The answer is yes. However, it is not strictly the type of borrowing that the government has strict rules about.

As a British taxpayer, I am often asked: "Why in God's name would the government pay a private company to take out a loan when nobody can borrow as cheaply as the government?"

The answer . . . is that there are strict rules about government borrowing, and breaking them openly might be even more expensive than a PPP.

As a British taxpayer, I am often asked: "Is that the only official excuse for this exciting policy development?"

The answer is no, of course not. There are dozens of official excuses for this exciting policy development. For example, PPPs stimulate the economy by using private firms to build houses, schools and hospitals.

As a British taxpayer, I am often asked: "Didn't the government always use private firms to build houses, schools and hospitals?"

The answer is yes, I suppose it did. But by using them to arrange the finance as well, civil servants benefit from private-sector expertise.

As a British taxpayer, I am often asked: "Doesn't the private sector actually use its expertise to run rings around civil servants?"

The answer is yes, if you insist on putting it in such a negative ... [way]. But private firms have to negotiate the best deals for themselves to offset any risks.

As a British taxpayer, I am often asked: "What risks? Aren't PPP contracts always guaranteed by the government come hell or high water?"

The answer is that you should calm down. You sound like a communist. Private firms need cast-iron guarantees to justify the extra cost of borrowing on the open market.

As a British taxpayer, I am often asked: "Isn't that a circular argument? Also, as this borrowing takes place on the open market, don't the markets know all about it [anyway]?"

The answer is no, it's really more of a triangular argument and yes, the global financial system has now noticed the UK's hidden PPP liability and is starting to question our national accounts and downgrade our international credit rating. But it will take years to rewrite the auditing rules and a week is a long time in politics.

As a British taxpayer, I am often asked: "So this is your government's brilliant idea for public service delivery? Turning an obscure ideological experiment into the biggest accounting trick since Enron, dumping all the needless extra costs and risks on to future taxpayers and wrecking the public finances for decades, just to create the passing illusion of fiscal responsibility?

"What other country would be stupid enough to entertain such madness ....

I would like to hear the Minister of State rebut that. I would like him to say whether PPPs are suitable in all circumstances. I would also like him to respond to the people and the families who have lost their expectations of homes and community facilities because of the failure of PPPs, whatever about the personality of the developer, and I do not want to go there.

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