The government has confirmed its faith in the private finance initiative as a way for councils to meet the decent homes target.
It has increased the amount it intends to spend on housing PFI projects during the next three years to more than 拢1bn.

This is an increase of 拢390m on the government's previous comprehensive spending review in 2000, which allocated 拢760m for housing PFI.

It also confirms housing as a major area of spending, behind education.

The housing PFI figure has been increased to 拢1.15bn following chancellor Gordon Brown's announcement last month of an extra 拢1.4bn for housing each year (HT 18 July, page 7).

Ben Denton, senior director at consultant Abros, welcomed the extra money, but warned it would be hard to spend unless the government addressed long-standing funding issues: "There remain issues surrounding the ability of councils to actually sign contracts. These need to be ironed out."

Those involved in the housing PFI process have consistently expressed concerns that funding shortfalls will hold back the delivery of new and refurbished homes (HT 1 August, page 14).

Denton said there was evidence the funding problem was effectively turning private firms against PFI in housing: the number of bidders in the second round of housing PFI had halved in some cases.

Source

Housing Today