Delivery times
2.10 The time taken to develop business cases has increased over time (Figure 6 overleaf). The Department took one month to assess bids for funding from local authorities for round two. This time has increased steadily in subsequent rounds, most recently taking nine months. Increases partly reflect more rigorous scrutiny of bids by the Department. Once projects have been accepted onto the programme they develop business cases, and in early rounds most local authorities took a year or less to do so while many later projects have taken closer to two years. The increases are a result of the Department's agreement with the Treasury to ensure business cases are robust before they proceed for formal approval. The Department expects round six projects to take between 12 and 18 months to develop their business cases.
2.11 Across the programme the Department and local authorities' estimates for the time it would take to procure projects have been overly optimistic (Figure 7 on pages 24 and 25). All signed projects have been delivered later than the targets set out in their business cases. The delays range between five months, and five years and one month, the average being two years and six months. All but four projects currently in procurement have already exceeded their targets, demonstrating that the Department and local authorities were over-optimistic about how long procurement would take.
2.12 For round six projects the Department has set procurement targets of 30-36 months for council housing projects and 25-29 months for non-council social housing projects. One early council housing project and four round three non-council social housing projects were procured within these targets which shows quicker procurement is achievable. Other projects took considerably longer with council housing projects taking between 34 and 75 months and non-council social housing projects between 26 and 43 months.9 In our 2007 report Improving the PFI Tendering Process we found that procurement periods in PFI procurement overall lasted an average of 34 months.10
2.13 The Department learnt lessons from early projects and developed guidance to improve procurement times but it is difficult to assess whether times are improving as many projects are not sufficiently advanced for us to make an assessment. Some have already exceeded the Department's new targets. An additional complication is that more recent projects are procured under new European Union rules which are perceived to lengthen procurement times.
2.14 The Department has monitored the progress of construction and refurbishment work after contracts have been signed through regular meetings but there have been gaps in the process and a more formal system is now in place to do this. With a few exceptions projects told us that milestones are largely being met and where there are delays these have had minimal impact on the overall project.
Figure 6 Council housing Projects
Non-council social housing Projects
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NOTES 1 Little London was delayed and is now being jointly procured with a round five project, Beeston Hill & Holbeck. 2 These projects have not yet had business cases approved, so the time shown is that which has elapsed to date. 3 The Extra Care Housing business case has only received conditional approval to date. 4 Two non-council social housing projects have been excluded due to lack of data. Source: National Audit Office analysis of data from the Department for Communities and Local Government and local authorities |
Figure 7 Signed projects have experienced significant delays | ||||||||
Council housing | Non-council social housing | |||||||
Project | Target date for contract signature | Actual date of contract signature | Delay (months) |
| Project | Target date for contract signature | Actual date of contract signature | Delay (months) |
Plymouth Grove (Manchester) | February 2001 | March 2003 | 25 |
| Holmewood PFI Housing Scheme (North East Derbyshire) | March 1998 | August 1998 | 5 |
Canning Town (Newham) | July 2001 | June 2005 | 47 |
| Non-HRA PFI Scheme (Selby) | January 2002 | March 2004 | 26 |
Hawthorn Fields (Sandwell) | October 2001 | March 2006 | 53 |
| Nursing Homes and Extra Care (Hammersmith and Fulham) | April 2002 | March 2004 | 23 |
Swarcliffe (Leeds) | October 2001 | March 2005 | 41 |
| Anson & Blenheim Close / John Morris House (Warrington) | January 2004 | September 2004 | 8 |
North Whitley (Reading) | November 2001 | March 2004 | 28 |
| New Homes For Old (Coventry) | March 2004 | March 2006 | 24 |
Chalcots Estate (Camden) | January 2002 | May 2006 | 52 |
| New For Old (Croydon) | March 2006 | December 2006 | 9 |
Street Properties 1 (Islington) | March 2002 | March 2003 | 12 |
| Housing and Adult Social Care (Brent)2 | December 2004 | December 2008 | 48 |
Miles Platting (Manchester) | May 2003 | March 2007 | 48 |
| Extra Care Housing 1 (Cheshire) | November 2006 | October 2007 | 11 |
Brockley Housing (Lewisham) | October 2003 | June 2007 | 44 |
| Better Homes Active Lives (Kent) | January 2007 | October 2007 | 9 |
Sheltered Housing (Oldham) | October 2003 | October 2006 | 36 |
| Independent Living (Leeds) | October 2007 | June 2008 | 8 |
Street Properties 2 (Islington) | December 2003 | September 2006 | 33 |
| Inner City Regeneration (Derby) | not known | not known | not known |
Forest Gate (Newham) | December 2003 | January 2009 | 61 |
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Stanhope Estate (Ashford)1 | April 2004 | April 2007 | 36 |
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Most projects still in procurement are already later than their target date | ||||||
Council housing | Non-council social housing | |||||
Project | Target date for contract signature | Delay to date (months) |
| Project | Target date for contract signature | Delay to date (months) |
Excellent Homes for Life (Kirklees) | March 2007 | 39 |
| Wiltshire Non-HRA PFI Scheme (West Wiltshire)4 | March 2008 | 32 |
Myatts Field (Lambeth) | April 2008 | 26 |
| PFI Housing (Derby) | March 2008 | 27 |
Gateways to Oldham (Oldham) | April 2009 | 14 |
| Priority Homes (Woking) | October 2010 | - |
Beeston Hill & Holbeck (Leeds) | January 2010 | 5 |
| Excellent Homes for All (Kent) | September 2011 | - |
Brunswick (Manchester) | March 2010 | 3 |
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Quality Homes for Older People (North Tyneside) | July 2010 | - |
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Creating a New Pendleton (Salford) | March 2011 | - |
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Little London (Leeds)3 | not known | not known |
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Notes 1 After losing confidence in the initial procurement Ashford ended the process and retendered the contract extending the overall procurement time. 2 After the project was endorsed Brent decided to put the project on hold delaying the start of procurement. 3 Little London is now being jointly procured with a round five project, Beeston Hill & Holbeck. 4 The Wiltshire scheme has gone to a single bidder which means additional time is being spent benchmarking costs. Source: National Audit Office analysis of data from the Department for Communities and Local Government and local authorities | ||||||
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9 One very early project took 10 months to procure. At £360,000 in value this project is considerably smaller than all other projects in the programme and so not representative.
10 This was the average for all central Government PFI contracts including schools and hospitals that reached financial close between April 2004 and June 2006. See National Audit Office report, HC 149 2006-07, 8 March 2007.