Plymouth Go

Manchester City Council started working up the Plymouth Grove Housing Revenue Account PFI scheme in September 1998. Last week, it became the first such pathfinder to achieve commercial close – four-and-a-half years after project inception. In fact, it will be another three years before the investment in the social housing, community facilities and infrastructure is substantially complete.

So why has it taken so long – and, more to the point, was it worth the effort?

A long and complicated journey
Plymouth Grove is in effect a regeneration scheme shoehorned into a PFI contract structure. It will deliver 663 refurbished homes and approximately 500 newly built homes intended for private sale.

Herein lies one of the reasons the process has taken so long: as the scheme involves demolishing about 425 homes within the remodelling plan, ABROS – which oversaw the process – couldn't just push ahead without extensive community consultation. Keeping the community interested has been difficult, particularly through the long periods when not much seemed to be happening.

This was exacerbated by complex legal issues. The pathfinder encountered certain problems when it came up against existing legislation and guidance that were not perfectly suited to PFI – this meant working in and around the rules. Also, the project is difficult because, in addition to having to fit a regeneration solution within a PFI-compliant project agreement, this had to be overlaid with compulsory purchase procedures and road closure orders. These need to be handled very sensitively, particularly given the demolition proposals.

The financial aspects of a PFI deal are obviously complicated, so negotiating a flexible finance package from the Nationwide building society with revolving credit facilities, term loans and the funding of the infrastructure works, was a critical element in ensuring that a quality solution could be delivered and value for money achieved.

For ABROS, integrating the proposed commercial developments into the PFI contractual structure has been challenging, but it is critical to achieve the diversity of tenure and the comprehensive regeneration of the Plymouth Grove Estate.

The PFI solution doesn’t just mean new kitchens, bathrooms, windows and roofs

As with many pathfinder schemes, some good ideas and concepts have taken time to evolve, but this exercise should now enable future PFI housing schemes to be completed sooner.

Advice for other PFIs
Plymouth Grove may be the first HRA pathfinder to achieve commercial close but a project in Islington, north London, is close on its heels and may well be signed by the time you read this. It's likely that PFI will become more and more common in the housing sector, so what lessons have the Manchester team learned that others could benefit from? The council and Grove Village have fitted holistic regeneration objectives into a PFI project and won. The contract joins up the delivery of high-quality services and investment to create a place where people choose to live. It must therefore have elements that can be applied to other regeneration projects.

Getting the process right, with a clear communication process within the team and to the community, is absolutely fundamental. With the benefit of hindsight, we would approach it from a different perspective, but it is only participating in the pathfinder process, that we have learned what the most effective process is to implement the contract.

What is most rewarding is that the final plans for Grove Village very closely match the original vision of a joined-up renewal project. The PFI solution doesn't just mean new kitchens, bathrooms, windows and roofs. The project will diversify tenure within the estate and the added income generated within the estate through this diversification will help secure the redevelopment of the run-down shopping centre, to provide new shop units and facilities for the local population. An innovative method of service charging within the estate will fund neighbourhood wardens to help maintain the high quality of the place and sense of security.

So good they're doing it again
The Plymouth Grove contract might be complex but delivering the outcomes that the project will achieve through alternative routes would be just as difficult, if not impossible. We are pleased with what we have managed to achieve.

While we might think "never again" at the moment, the learning experience that we have gone through is very useful for future PFI and non-PFI projects."