14 The PFI model itself is not inherently poor value for money and success depends on the circumstances in which it is used and how it is applied. The Department has used PFI as a flexible and useful funding route to improve existing housing and build new stock. It has secured housing improvements and some wider benefits for communities. The Department, however, has not managed the risks to value for money effectively in terms of:
• Delivery to time and budget. A majority of projects have been affected by significant cost increases compared to business case estimates prior to contract signature and all have experienced delays compared to project targets.
• Evaluation of whether PFI is the best value option. Local authorities reported that their initial choice of PFI at a project level was influenced by the Department's funding structures and policy constraints rather than a focus on value for money. The Department has undertaken limited evaluation of whether PFI housing delivers value for money compared to alternative investment routes at a programme level.
• Putting in place adequate programme management. For early projects the Department's programme management was weak and under-resourced. This has been a contributory factor in the lengthy procurement timescales of projects seen to date and the slow pace of the programme.
15 The Department has introduced a series of improvements to the programme which it plans to build on. It is currently too early to tell whether these improvements will have an impact on delivery outcomes leading to better value for money in the future.