Housing private finance initiatives will be reviewed by the government following a damning report which showed the total cost of signed off projects was £694 million more than expected. The National Audit Office report revealed that the total cost of projects doubled to £1.39 billion, with 21 out of 25 schemes receiving extra government funding between the submission of outline business case and contract signature. The report, which criticised the CLG for failing to assess projects for value for money, also found all of the 25 projects had seen significant delays. The NAO report said the CLG had failed to evaluate housing investment models or collect data to demonstrate that PFI was better value for money than other options for improving stock, including stock transfer or creating an arm’s-length management organisation. Several councils reported that their choice of PFI was based on government policy and the CLG’s funding structures rather than on value for money. Read the full story plus an expert opinion as why PFI projects end up costing more than planned on Inside Housing.
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