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Put heads together now on PFI successor

The announcement by the Department of Communities and Local Government that 13 PFI social housing schemes will not go ahead has been interpreted as the final nail in the coffin for the initiative - specifically for social housing and most likely across the board.

The announcement by the Department of Communities and Local Government that 13 PFI social housing schemes will not go ahead has been interpreted as the final nail in the coffin for the initiative - specifically for social housing and most likely across the board.

PFI was not ideally suited to social housing projects, although it worked better for new build than refurbishment. Slow, cumbersome and inefficient, it was never
terribly popular, despite the millions the Labour government put on the table for its much-beloved finance model.

But for councils that now won’t get PFI credits - and the contractors who would have done the work - that is of little consolation. The writing has been on the wall ever since the government removed the ring-fence around PFI credits, effectively making the money a moveable line in departmental budgets.

It’s now vital that policy-makers, contractors, clients and consultants put their heads together and come up with PFI’s successor or successors. Enterprising companies, such as Barratt, are forming joint ventures as a sensible way to ensure work doesn’t grind to a halt, but broader, off-the-shelf solutions must be developed. Infrastructure projects, which at least the government has committed to partially funding, will need new ways to attract the remaining three-quarters of the
private sector cash they will need to get off the ground.

There is no time to waste. If PFI has had its day, it’s time to stop wondering what alternative funding models will look like and start developing them.

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