What is the link between the Grenfell tower fire and the EU? The Blair government was keen on Britain joining the Euro and to do so Britain had to adopt the Maastricht stability criteria. These require that the countries deficit should not exceed 3% of the Gross Domestic Product (GDP) and that the total debt must not exceed 60% of GDP.
To try and achieve this the government adopted ‘creative’ accounting so that government debt did not appear in the public sector accounts. One way to do this was through Private Finance Initiatives (PFIs) which allowed the private sector to invest in public services such as building new hospitals or school buildings, which are then paid for by the public sector over many years. This of course requires paying higher interest than the government would pay if it borrowed directly or increased the public debt.
The second method was the creation of ‘Arms Length Management Organisations’ (ALMOs) such as the Kensington and Chelsea Tenant Management Organisation (KCTMO), which could then receive the finance for housing improvements but not appear in the council’s accounts. Of course, both devices allow increased power and profits for the private sector. A PFI was used to deliver the dangerous and flawed refurbishment Grenfell cladding while the housing was managed by the KCTMO. The consequences are now tragically clear.