07 March 2008
Local authorities appear to be losing interest in the Private Finance Initiative as a means to build and refurbish housing.
Following a brief flurry of interest in the PFI four years ago after the government extended it to cover building new homes, only a handful of new schemes are being approved by ministers.
Three authorities that had applied to build homes through the PFI have withdrawn from the fifth round of the programme, it emerged this week.
Vale of White Horse Council said it could not afford the up-front funding cost that was required without any guarantee of a return.
East Sussex, which submitted a group bid on behalf of five district councils in the county, said the authorities had found alternative sources of funding.
The other council to pull out is the London Borough of Brent.
Birmingham's proposal to build 150 'extra care' homes and a further 30 homes for private sale or shared ownership was rejected by the Department for Communities and Local Government.
Three councils — Cheshire, Kent and Stoke — received the go-ahead last week to develop plans for nearly 800 extra care units and 400 other homes using the PFI.
This means that the DCLG has finally allocated the PFI credits that were allocated to housing in the 2004 Comprehensive Spending Review.
Ministers have still 'to decide how the £1.93bn in PFI credits allocated in last year's CSR will be divided between services such as fire and housing.
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