Government report threatens to delay PFI housing projects

Private finance initiatives in social housing could be delayed after the stock surveys system was criticised by the government body intended to help the PFI run smoothly.

In a consultation document released this week, 4ps branded the current system of stock surveys as an "inadequate reference point" for housing PFI bidders.

4Ps' report, which is open for consultation until the end of June, says that the present stock survey model is "unlikely to be sufficiently comprehensive to enable … accurate and reliable pricing by bidders".

The problem is that, if the basis of the PFI bids is inaccurate and has to be reassessed at a later date, then the entire negotiating process could be stalled by several crucial months.

This would add to the already steep costs of bidding for lucrative PFI housing contracts to manage the facilities and services of large housing estates and could deter potential bidders from future projects.

It adds that the experiences from the early pathfinder projects backed up its point. Many bidders found the stock condition surveys that are normally commissioned by local authorities to be inadequate to allow for accurate bids.

After last month's bumper funding for the second round of arm's length bidders and the failed Birmingham transfer, the guidance provides further evidence that the government is shifting emphasis away from stock transfer.

The PFI is one of the government's three main methods of injecting much-needed funding into the housing sector in order to meet the affordable homes target in 2010.

Although PFI has proven successful in other areas such as the construction of new schools and hospitals, it has yet to take off in the social housing sector.

The PFI pathfinders, which were established by the DTLR in October 1999, include Camden, Leeds and Manchester.