8  Change in Law

In circumstances where new housing owned by an RSL or RP is funded by way of social housing grant (SHG) no relief is afforded to that RSL or RP by central or local government for (and that RSL or RP would assume all risk associated with) both General and Specific Change in Law.  A non-HRA Project (being in essence the provision of housing to be owned by an RSL or RP) is analogous to housing provision funded by SHG and Authorities should explore during the procurement process the ability of the private sector to assume all risk in relation to both General and Specific Changes in Law.  In a general needs housing project, the norm should be that General and Specific Change in Law risk is borne by the private sector.  Paragraph 34 of the Guidance sets out approved derogations to the Change in Law provisions set out in HPP if General and/or Specific Change in Law risk is to be assumed by the private sector.

On extra care projects where care services are not outsourced as part of the PFI it would not be appropriate for the private sector to assume risk in relation to a Specific Change in Law which affects care accommodation requiring capital expenditure (for example, a requirement that all extra care housing (as opposed to residential care homes) is fitted with a sprinkler system).  No relief would need to be afforded in relation to the provision of the Care Services themselves as the cost risk of providing these services would be retained by the Authority.  Suitable drafting to deal with this issue is set out at paragraph 34 of the Guidance.