27 June 2003
Ministers seriously underestimated the complexity of setting up housing Private Finance Initiative schemes, an independent report has found.
The review, carried out for the Office of the Deputy Prime Minister by PA Consulting, says local authorities launching PFI pathfinder schemes for council housing since 1998 found the 'learning curve' far steeper than expected.
Bidders were put off by the lengthy procurement process, with some claiming that schemes had not been clearly scoped by authorities.
'The process has cost pathfinders a great deal and constitutes a significant overhead,' says PFI for housing revenue account: early lessons from the pathfinder programme, published on June 25.
Two PFI housing contracts have been signed, while 16 schemes are at procurement stage. The ODPM has pledged to make the process simpler.
'Many assumed that it would be easy to translate the PFI concept to housing,' the report adds. 'The difficulties in managing the bids on all sides have been thrown into sharp relief by the belated discovery of the scale of many of the risks.'
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