Social Landlords Preventing Tenants from Securing Best Energy Deals

Tenants on housing estates across London are unable to secure the cheapest energy deals because they have been 'locked' into long-term contracts with one supplier by their social landlord, according to the campaign group Fuel Poverty Action (FPA). The FPA says, in one case, residents of the Myatts Field North estate have been locked in to buying their heating and hot water from e.on for 40 years under a private finance initiative contract agreed by Lambeth council. Read more on 24dash.

Council Pays To End Care Home PFI Deal

Southwark Council is buying out a long-term contract with Anchor Homes, in a move that will save the council around £12m over the next 12 years, while continuing to provide the same quality of service to all care-home residents, who will continue to benefit from the new facilities brought in as part of the original deal.  In December 2000, the council arranged for Anchor to invest £12m into the rebuilding and refurbishing of four care homes in Southwark as part of a PFI deal lasting 25 years. However, in a show of partnership and co-operation, Anchor has agreed that Southwark Council can complete the repayments early, saving the authority nearly a million pounds a year in fees – around £930,000 per year - and allowing it to take on ownership of the buildings and responsibility for the repairs and maintenance.  Read more on the Southwark Council website.

Council Calls for Local Authorities Role in New Regulator

Complaints from councils concerned about poorly performing landlords should spring the new social housing regulator into action, a major London authority has urged. Lewisham Council has indicated its disappointment that local authorities were not specifically mentioned in a Tenant Services Authority consultation document about the future of regulation. ‘Lewisham would like to see a role for local authorities outlined in the standards,’ its consultation response states. ‘In a borough as complex as Lewisham (with an ALMO, community gateway organisation, several stock transfers, a housing PFI and three TMO’s) often the first indication of an issue with a housing provider is brought to the council either as a misdirected complaint or a members enquiry.’ Read more on Inside Housing.

150,000 Homes Target in Doubt If Subsidy Isn't Maintained

The Government's 150,000 affordable homes target is in doubt if state subsidy in housing is not maintained in the capital, a new report has warned. The report, produced by the London School of Economics (LSE) and Political Science for the g15 group of housing associations, sets out the case for investment in London's affordable housing at a time when the Government is rolling back state funding in housing - allowing social landlords to charge higher rents to build new homes. The report warns that while this model will allow more affordable homes to be built, it comes with limitations. These include: problems of affordability among London's lower-income employed households, a hike in the housing benefit bill, the risks of private finance and the slow turn-over in social sector re-lets. Read more on 24dash.

Hope for Meadows Scheme As Minister Agrees On City Visit

The Minister for Housing has agreed to come to Nottingham after city politicians complained about a £200 million regeneration project being scrapped. Grant Shapps faced lobbying from Nottingham South MP Lilian Greenwood and the city council after the Government cut a plan which would have seen 1,900 homes in the Meadows rebuilt or revamped. While Mr Shapps would not comment until a date for the visit had been set in stone, civil servants at the Department for Communities and Local Government confirmed that the visit will go ahead. The Meadows Neighbourhood Plan was to have been completed under a Private Finance Initiative, but in November last year the coalition said it would not provide any more funding. The council has been exploring other ways of raising money to complete the regeneration – including raising council rents. Ms Greenwood said: "First we need Grant Shapps to see the huge potential The Meadows has. Then we need him to see some of the problems that are caused by the current layout."

Council Looking Cash to Redevelop Meadows Homes

NOTTINGHAM City Council is looking for new ways to fund a revamp of housing in The Meadows. The city estate was due for a £200m facelift under the council's Meadows Neighbourhood Plan, which would have led to 1,900 homes being refurbished or rebuilt. But the Government pulled the plug on the Private Finance Initiative funding for the scheme in November last year. Nottingham City Council says it is now trying to find alternative sources of cash for the scheme and has held talks with housing minister Grant Shapps. Gill Callingham, the city council's regeneration manager, said one of the options they are looking at was an "affordable rent" scheme, with tenants paying more money in rent. Council house rents are currently about 50% of the amount charged in privately-rented homes. An affordable rent scheme would see council house tenants paying around 80% of the rent they would pay in the private sector. Read more on the Nottingham Evening Post website.

Housing PFIs: 'They've Cost More and Been Delivered Late' - Spending Watchdog

Councils and health trusts were forced to use private finance initiative (PFI) contracts to provide housing and hospital services because there was "no realistic funding alternative", the Commons spending watchdog has said. There was no evidence that PFI schemes offered better value for money, according to a report from the Public Accounts Committee, but in many cases they were the only way to fund projects. The Government failed to use its leverage in the market to secure the best possible deal for taxpayers, the committee found. The housing contracts have cost considerably more than originally planned and were, on average, two-and-a-half years late, the report said. Read more on 24dash.

Government Slashes £1.7bn of PFI Funding

The government has withdrawn more than £1.7 billion of housing private finance initiative credits. The decision, announced today, follows a review of the CLG’s spending priorities. Schemes in procurement or under contract will continue to be funded, but pipeline projects in initial design stages will not be. This means all 11 schemes in round six of the housing PFI, which were provisionally allocated £1.7 billion of credits, will have their funding withdrawn. In Nottingham, the Government has said it will not fund the £200 million project to redevelop The Meadows. Nottingham City Council has already spent over £700,000 to develop the proposals, which included hundreds of better homes and improvements to street layouts. Councillor David Liversidge, portfolio holder for Housing Delivery, said: "This is a devastating blow for the Meadows neighbourhood and our citizens who live and work there. Our plans were to transform the area by building new properties and refurbish existing council housing, creating better access to the neighbourhood, investing in better community centres and building new shops. A significant amount of consultation has been carried out with the local community to ensure that the people who live in the Meadows got what they wanted. These changes would have improved their quality of life." He added the scheme would have created hundreds of jobs for local people, particularly in the construction industry. The council has claimed it would have generated £6m for the local economy so the overall impact is massive.Read more on the Nottingham Post website.

Housing PFI in Doubt as Shapps Launches Review

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.

Politicians ‘Pushed’ PFI Regardless of Value

Politicians were ‘hell-bent’ on pushing forward private finance initiatives, regardless of value for money, a council officer who supervised one project has stated. The official, who oversaw one of the projects highlighted in the National Audit Office report, said: ‘PFI had happened elsewhere, and the politicians were determined to make it work in housing. ‘It clouded civil servants’ judgements, and made them say “yes” regardless of the costs.’ He added: ‘Fairly late in the day the Treasury woke up and started to ask more serious questions than the CLG had been asking.’ Read more on Inside Housing.

PFI Council Homes Schemes 'Hit by Delays and Extra Costs'

Private finance deals to build and refurbish council homes have consistently been hit by delays and cost over-runs, the National Audit Office (NAO) has warned. The former Labour government allocated £4.3 billion through the controversial private finance initiative (PFI) to council and social housing programmes. The NAO said that of the 25 projects that have so far been signed, 21 saw cost increases while all were behind schedule. In 12 cases the costs more than doubled, while delays averaged two-and-a-half years. The NAO criticised the CLG for carrying out only "limited evaluation" of whether PFI offered good value for money in housing projects. It said that local councils reported that they were driven to use PFI due to the CLG's funding structures and "policy constraints" rather than "a pure focus on value for money". Read the full story on the 24dash website.

Review of Council Housing PFI – Parliamentary Written Answer

Kate Hoey MP (Labour, Vauxhall – Lambeth Living and United Residents Lambeth): Will the Government undertake research into the cost-effectiveness of building of homes (a) by local authorities directly and (b) under private finance initiative schemes?
Andrew Stunell MP (Liberal Democrat, Parliamentary Under-Secretary of State for Communities and Local Government): Until recently there have been very few homes built by local authorities and no funding provided to them. Homes being built under the Local Authority New Build programme are subject to a value for money assessment by the Homes and Communities Agency before receiving support and Housing Private Finance Initiative (PFI) schemes also go through key value for money assessments. As part of the comprehensive spending review, my Department plans to assess the value for money of Housing PFI and other delivery routes.

Housing to Suffer from £160m PFI Cut

Housing schemes will bear the brunt of £160 million of cuts to the Communities and Local Government department’s private finance initiative budget. An unspent allocation will be taken out of the scheme as part of a package of cuts in grants to local government. The CLG said some of the £160 million would come from housing PFI, but could not give an exact figure. A CLG spokesperson said the savings will come from unspent allocations caused by delays in making claims by local authorities. Credits worth a total of £1.69 billion were allocated to 10 projects in round six of housing PFI, outline business cases have yet to be endorsed. Read more on the Inside Housing website.

£200m Nottingham PFI Opens For Bids

Nottingham City Council has become the first local authority to unveil its plans in the latest round of the £1.7 billion social housing private finance initiative. Last week the local authority presented its plans for the £200 million regeneration of The Meadows Gateway in the centre of the city to a number of interested parties, including developers, housing associations and funding organisations.The scheme includes an undisclosed share of a £1.7 billion housing revenue account PFI from the HCA, which was awarded last August. Nottingham City Council will now press on with the next phase of its plans to develop proposals that will allow it, in partnership with private sector contractors, to deliver new or improved council homes as well as new affordable rented homes. Read the full story on the Inside housing website by clicking on the logo below.