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“If there ever were a time for developing new models of public private partnerships in the housing sector, it is now”
DCLG announced on Monday that 1.85 billion pounds worth of future housing PFI projects are to be shelved. Whilst many of us were anticipating a significant scaling down of the programme, the savage extent of these cuts has caught many by surprise.
Although DCLG stated that it may also be able to consider business cases for these projects at a later date should more resources become available in the latter part of the spending review period, it is probably fair to say that such resources are unlikely to materialize.
However, all is not doom and gloom. Importantly, those projects currently in procurement (of which Devonshires are acting on 7) will, subject to a further review of value for money, continue. We will continue to support our partners on these schemes through to financial close and look forward to their successful implementation.
In light of the above, we expect many of the disappointed authorities to begin (or indeed continue) to explore alternative ways of delivering their much needed projects. HCA has offered its support in this respect and has stated that they will “work with those Councils which have received disappointing news [today], to look at any ways in which their objectives might be supported through a non-PFI route”.
With the dramatic change in the affordable housing landscape, Devonshires is confident that it will be at the forefront of creating new models of housing delivery, particularly in light of the changes to the housing revenue account, the overhaul of the rent restructuring regime, the emergence of local housing companies, the predicted tax incremental financing regime and the new homes bonus.
These factors, coupled with the dismantling of traditional central funding regimes and a realization that land values and development returns are unlikely to return to the heady heights of the property boom, mean that if there ever were a time for developing new models of public private partnerships in the housing sector, it is now.
For more information on how Devonshires might be able to assist in relation to those areas above, please contact:
Paul Buckland
Partner, Projects Group
Tel: 020 7880 4346
Email: paul.buckland@devonshires.co.uk
Julie Bradley
Partner, Property
Tel: 020 7880 4322
Email: julie.bradley@devonshires.co.uk
Andrew Cowan
Chief Executive
Tel: 020 7880 4350
Email: andrew.cowan@devonshires.co.uk
Gareth Hall
Partner, Corporate
Tel: 020 7880 4351
Email: gareth.hall@devonshires.co.uk
