The government has held back £230m earmarked for the third round of the housing private finance initiative.
The sum – more than a third of the £600m that was available for the third round – has been retained to allow the nine successful bidders to finalise their bids.

Any money left over after the bids are confirmed will be shared between unsuccessful bidders that will be placed on a reserve list by the ODPM. The membership of the reserve list has yet to be confirmed.

An ODPM spokeswoman said: "The indicative bids from the successful councils total £370m. This is only an early indication and no money will be allocated until outline business cases have been assessed later in the year."

The ODPM's decision to approve only nine of the 19 PFI bidders caused surprise in the sector. It announced details of the third round on 5 May (HT 7 May, page 11).

But the decision reflects the tendency for bids to rise in value when the outline business cases are made.

Ben Denton, director of consultant Abros, said: "The issue is, you put in the initial bids, and these tend to increase as you move up to the outline business case stage. Certainly I've never seen a bid go down."

The nine councils accepted onto the third round of the private finance initiative are: Cheshire, Croydon, Derby, Islington, Kent County, Kirklees, Lambeth, Manchester and West Wiltshire.

Source

Housing Today