Government launches seven PFI housing schemes as part £1.2bn, three year programme.

The government has launched seven housing PFI schemes as part of a £1.2bn, three-year social housing programme, despite suffering several recent setbacks.

Housing minister Yvette Cooper was bullish about the use of the PFI route for housing regeneration. She said: “There can be no doubt that PFI helps redevelop areas in great need and provides new housing.”

However, the move – announced at last week’s annual Chartered Institute of Housing conference in Harrogate – still leaves £466m in the ODPM’s housing PFI fund, which has to be allocated by 2008.

This may prove difficult as PFI housing projects have suffered a series of problems over the past five months. These include:

  • North-East Derbyshire council’s confirmation that it was ditching its proposed £39m PFI project for the refurbishment of homes in the Pilsley, Danesmoor and North Wingfield areas because of mounting costs. The local authority is instead embarking on its own refurbishment programme.
  • The decision of Ashford council in Kent in early June to drop the PFI consortium that was to refurbish 1300-home Stanhope Estate. The move allegedly followed pressure from the government. The council is retendering the project.
  • In Camden, north London, the regeneration of the 700-home Chalcots Estate is in limbo because of deliberations over money. In February the Treasury vetoed the project because there were insufficient PFI credits to cover its capital cost. Since then, the original PFI sole bidder The Partners consortium, has worked with the local authority to come up with a more affordable scheme. This was presented to government in June, and the consortium is awaiting the government’s decision.

In her speech, Cooper announced PFI projects for Weymouth and Portland, in Dorset; Woking and Guildford, both in Surrey; and the Medway, in Kent, to deliver a total of 1500 social units. Projects in Oldham, Lewisham in south-east London and Manchester will refurbish 3000 homes.

There can be no doubt that PFI helps redevelop areas and provide new housing

Yvette Cooper

Also speaking at the conference Neil McDonald, the ODPM director of housing, played down the PFI’s difficulties. He said: “Some projects were bound to be difficult. But the lessons have been learned and the schemes are now coming through quicker.” He added that the government was looking to the PFI to provide a boost to housebuilding over the next three years.

McDonald said the government was considering delivering social housing through the more flexible NHS LIFT model. However, he cautioned: “The programme won’t be as big as NHS LIFT itself or Building Schools for the Future.”

Sandwell council in the West Midlands is looking at the delivery of extra-care housing in the borough through LIFT schemes. Pete Wilkinson, the council’s head of housing strategy, said: “We’re looking at it because it is a simpler, easier route.”

  • Cooper also announced a further 11 transfers of council homes to housing associations and said 10 more councils would be permitted to set up arm’s length management organisations.