In housing private finance initiative (PFI) projects, local authorities contract with the private sector to build, improve, manage and maintain social housing stock.
While management of the housing becomes the responsibility of the private sector contractor, the local authority continues to own the housing and retains its tenants. In addition, there are a number of projects where the private sector builds and owns new homes, with the local authority having nomination rights during the contract term and typically afterwards. PFI deals transfer risks from the public sector to the private sector, whilst maintaining value for money.
PFI projects have a capital-intensive element and a service provision element. The local authority pays for both over the course of a long-term contract, typically 20-25 years, on a performance-related basis. Government grant helps the local authority meet these payments.
HCA took on responsibility for delivering the 12 housing PFI projects in development and procurement from DCLG in December 2008. Further identified projects were not able to proceed due to resource constraints following the Spending Review 2010.
The final project in procurement, Stoke’s extra care housing PFI, reached financial close in July 2014, and the HCA managed programme has therefore now closed.
In total, some 40 operational housing PFI projects will continue to be supported by government up to 2043/44, when the final project ends. PFI was reviewed and reformed by HM Treasury in 2012 as Private Finance 2 (“PF2”), however DCLG currently has no plans to develop further housing projects under this initiative.
The 12 HCA-managed projects are:
For further information on all 40 projects please use the link below: