Summary:
In August 2006 Communities and Local Government began a review of the cost of delivering new build social rented housing through non-Housing Revenue Account Private Finance Initiative (non-HRA PFI) and Social Housing Grant (SHG).
Initial findings indicated that while non-HRA PFI costs were generally significantly higher than SHG costs, non-HRA PFI housing could be delivered at an acceptable cost compared to SHG housing. This was confirmed by findings from Stage 2 of the review which focused on capital build costs and demonstrated that non-HRA PFI can show acceptable capital build costs compared to SHG schemes.
The findings from the first 2 stages of the review provide a sound basis for moving forward with outstanding non-HRA PFI new build schemes, subject to ongoing work to ensure that the costs on which these proposals are based are reasonable and justifiable.
Stage 3 of the review will consider the impact of operational, financing, risk and procurement costs, in addition to capital build costs, as these non-HRA PFI schemes move through development and into procurement.
The review is ongoing however this paper provides a summary of the findings and conclusions from the first two stages.
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