HOUSING PFI

I wish to inform you of the outcome of the Department's SR10 position on Housing PFI in advance of the PAC's PFI in Housing hearing of 24 November.

The Spending Review Settlement provides funding for all Housing (also Fire and Joint Service Centre) PFI projects under contract and in procurement but no funding for pipeline projects.

The Secretary of State has agreed projects in procurement should continue to be supported by the Department, subject to rigorous demonstration of value for money. We currently expect decisions on individual projects to be made in December.

However, as pipeline projects can no longer be guaranteed PFI funding at this stage, Housing PFI pipeline projects (including all Round 6 projects) cannot continue to receive funding support.

The HCA will work with local authorities to consider future options. However we will not raise local authority expectations on alternative funding given the Department's tight SR10 capital and resource funding settlement.

We are in the process of advising local authorities of the position on their projects.

I trust that the early setting-out of the Department's SR10 Housing PFI position is helpful to both the NAO and PAC.

16 November 2010

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