1.  Purpose

This guidance is intended for local authorities in order to clarify the requirements of HMT, IUK, CLG and HCA in respect of the derogations review process applicable to Housing PFI projects.  

For the purposes of this guidance the term "derogation" means any proposed amendment, however minor, to the sector specific Project Agreement and associated non-HRA project drafting contained within the updated 2009 version of the Housing PFI Procurement pack (referred to as 'HPP' hereafter). Any such amendment must be approved by HCA and DCLG and, in the case of any provision which constitutes required drafting from Standardisation of PFI Contracts1 drafting (referred to as 'SoPC4' hereafter ) , also by IUK. .

Please note that for HRA Housing Contracts the Project Agreement specified in the Housing PFI procurement pack must be used.  For Non HRA projects, the HRA Housing Contract should be used as a base document, and modified in accordance with the Guidance given in the Non HRA Guidance. The Non HRA Guidance provides suggested drafting provisions which can be used to modify the base HRA Housing Contract. These drafting provisions have been approved by DCLG , HCA and IUK, and to the extent that they are adopted without change, no further derogation approval is required.  If however changes to these provisions are made (as may be the case given the variety of possible Non HRA Housing structures and funding) then the normal approval process must be used (including, in the case of SoPC 4 required drafting, IUK approval).

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1  See paragraph 1.4.1 of SoPC 4 on the HM Treasury web-site