It is likely that a grant will continue to be available specifically for PFI projects, but there will be more freedom to decide the details of the types of project which will be supported. It would also mean that if a further HRA PFI bidding round is launched before April 2004 we would not be able to offer local authorities the opportunity to include new build in the scope of their schemes. Allow PFI bidders greater flexibility in meeting the Output Specification of the housing projects. Greater flexibility should lead to more competitive and innovative bids, with the aim of securing better value for money.
It may not be popular with some tenants because replacing their existing house with a new one would mean decanting the tenants, causing upheaval for them and possibly breaking up existing communities. At the same time newly built houses could be more popular than those refurbished so there may be a further increase of the number of tenants exercising their Right to Buy.
In practice we would expect the proposed change to benefit to both RSLs and local authorities as it is hoped that RSLs and local authorities will, in partnership with each other, provide new social housing through the private finance initiative. By changing Capital Finance Regulation 16 in April 2003 ODPM will be able to offer local authorities the opportunity to include the building of new social housing in any future HRA PFI rounds. It also may be possible for endorsed schemes to include elements of new build in their projects provided that it proves value for money.
The amendment to Regulation 16 will mean that local authorities will be able to include elements of new build to tackle their worst condition and problematic stock in the scope of their scheme when applying for PFI credits. Local authorities will be asked to prepare a robust case for demolition and new build, taking into account the costs for new build against refurbishment of existing properties and taking into account wider demand factors and the needs of tenants. visit website to learn more : Valuations SARead More