Model 1A HCA/CLG Prioritisation Criteria for HRA and Non-HRA Housing PFI Schemes and Qualifying Criteria for PRG Approval

Prioritisation Criteria for HRA & Non-HRA Housing PFI Schemes

In considering Housing PFI projects for submission to the Inter-departmental Project Review Group, Communities and Local Government will apply the following criteria in addition to the published assessment criteria of the Project Review Group:

Value for money: Schemes will need to demonstrate VfM using HMT's quantitative assessment tool which is part of the Communities and Local Government Housing PFI Financial Model. If the scheme includes joined up elements as well as housing, overall value for money will need to be demonstrated and details of other sources of income required to fund the scheme, including PFI credits from the relevant government department should also be provided. Non-HRA schemes will need to compare favourably
with the benchmarks established through Communities and Local Government's cost of new build social housing review.

Demand: Authorities will need to demonstrate continuing high demand for the properties in the PFI contract over the contract term.

Policy objectives - HRA: Authorities will need to demonstrate how the project will contribute towards achieving transformational change in local authority stock.

Policy objectives - additional social rented housing: Authorities will need to demonstrate how the project fits with regional housing priorities.

Strategic context: Schemes should be integrated within the authority's overall housing strategies and should represent an investment priority for the authority. Where appropriate, Communities and Local Government will also take account of the extent to which schemes are embedded within a wider regeneration strategy for the area and are linked to complementary initiatives. Authorities will also need to demonstrate how the project will contribute towards wider government priorities and initiatives, such as: tackling homelessness; combating social exclusion; addressing worklessness;

empowering communities; creating sustainable communities; providing larger units of family accommodation; helping first time buyers; increasing the number of new homes; revitalising areas suffering from low demand complementing housing market renewal investment; fostering innovation and cost-effectiveness in design and construction methods and promoting energy efficiency.

Tenant participation (HRA only): Authorities will need to demonstrate that they have considered the implications of the scheme for tenants and that they have a sound strategy for consulting tenants on the proposals. Communities and Local Government will take account of the extent to which tenants have already been actively involved in decision making for the area as part of the options appraisal process.

Efficiency: Communities and Local Government will look favourably upon schemes that promote the use of innovative and cost-effective solutions both in meeting their objectives and during the procurement process. Communities and Local Government is working on a number of ways in which efficiency in social housing procurement can be increased to deliver more resources to the front line. Efficiencies may not only result in cost savings but also in increased quality. Value for money is more likely to be secured if the PFI work is procured in such a way as to maximise efficiency.

Marketability: Authorities will need to demonstrate that there is commercial interest in the project from the private sector and that there is every prospect  of sustaining a competitive procurement.

Project management: Authorities will need to demonstrate that they have a good record of programme delivery, a good grasp of project management skills and arrangements in place to provide the resources required to deliver a PFI scheme.

Design quality: Authorities will need to take account of published guidance on design and quality. They should also promote the use of innovative and sustainable construction solutions in line with the principles set out in Rethinking Construction.

Communities and Local Government expects that homes provided through PFI will meet the standards of the day. Principally this means adherence to what are currently the Housing Corporation's Design and Quality Standards which include a requirement to meet minimum scores for key aspects of the Housing Quality Indicator (HQI) framework and also, progressively, the requirements of the Code for Sustainable Homes (CSH).

QUALIFYING CRITERIA

To qualify for support a project must demonstrate in its OBC that it meets the following qualifying PFI criteria. An OBC will also wish to demonstrate how the project contributes to general government objectives such as diversity, cohesion and empowerment.