A provocative letter to Julie Pearce, head of housing PFI at the ODPM, calls for the third round of schemes to be "at least 2000 homes in size" and to aim for neighbourhood renewal rather than "simple housing refurbishment programmes".
The letter came from Ben Denton, director at housing consultant Abros. He said: "Some schemes should be as large as 6000 homes – essentially, whole neighbourhoods.
"If projects are not big enough, private organisations simply won't bid, resulting in fewer high-quality project teams and ultimately undermining the value for money of PFI. If the government doesn't take on board the recommendation of the letter in its upcoming third round and provide scope to join up PFI schemes – for example schools and housing – a golden opportunity to build sustainable neighbourhoods will be missed."
Steve Trueman, a director at local government adviser 4Ps, said: "I thoroughly agree with the letter. Having got the nuts and bolts right, we must now use PFI to deliver on a broader agenda.
"Whether councils are sufficiently confident and able to think in these terms and produce these types of attractive packages is yet to be shown, but if we are to take full advantage of PFI this is the way we have to go."
Trueman added that the government should initially encourage councils into this rather than forcing them to come up with bigger PFI schemes.
Denton's letter – copied to a number of councils and private sector players involved in the first two rounds of housing PFI – comes a month after Bank of Scotland, the largest PFI lender, called for bigger social housing schemes to make the process more attractive (HT 15 August, page 14).
An ODPM spokeswoman said: "We are aware of the issues and will consider these in due course."
She said the ODPM still planned to launch the third bidding round, expected to be for £685m of government funding, by the end of this month.
Source
Housing Today
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