Agenda item

The Environment Select Committee has previously taken an interest in the housing PFI project.  Following recent ministerial approval of the position reached through the value for money review, the project is now approaching a key internal decision. 

The Committee is asked to consider the report and identify any factors, in addition to those included within the report, which should be taken into account when making the decision whether or not to enter into the contract.

The Cabinet Member for Adult Care, Communities and Housing was in attendance to present a written update on the Housing PFI contract following the successful outcome a value for money (VfM) review of the project and subsequent ministerial approval.

A concern for some members of the committee was the ‘high’ risk rating of the project, given that officers and councillors were soon to enter into the PFI contract and planned financial close was estimated to occur in November.

In response the Cabinet member clarified that the project must still achieve approval from the Homes & Communities Agency, the Department of Communities and Local Government (DCLG) and the Treasury. The need for these external approvals rather than any issues with the project itself or with local partners gives rise to a higher risk than would otherwise be the case.  Once the necessary approvals have been obtained from external agencies, the risk level is likely to drop substantially.

Subsequent questions from councillors centred around which level of the Code for Sustainable Homes (CSH) that the homes would be built to (Level 3), and the possible benefits and drawbacks to building the houses to CSH Level 4.

The Cabinet member confirmed that the other funding streams for improvements such as Photo-voltaic (PV) roof panels were possible, and drew the committee’s attention to continued uncertainty regarding the future level of feed-in tariff payments for householders and business which generate their own renewable energy. It was confirmed that the monetary gains from any PV panels installed by householders on a self-financing basis, would pass directly to the homehold.

Further questions from committee members concerned the value for money of the PFI contract and the details of the process by which nomination rights were transferred. It was explained that ‘Homes 4 Wiltshire’, (the partnership of the Council and the Registered Social Landlords), will be used by the PFI contractors to source tenants. Even after the contract period of 20 years has passed, it was felt highly likely that the houses would remain available for allocation by Homes for Wiltshire.

Should the project not advance partner funding in the region of £5-6 million would be lost in addition to the Council’s total predicted set up costs of £2.5 million outlined in the accompanying report.

The committee commended officers and councillors for their work over the last few years.

Resolved:

1)    To welcome the work of the Cabinet member and officers towards successful delivery of the project, and at this stage not to raise any specific issues for the Cabinet member to take into account when making the necessary decisions to formally enter into the PFI contract.

2)    To welcome the invitation from officers to supply an update on the progress of the project, to return to committee once work on the ground has begun.

3)    That officers be tasked to investigate the ‘New Homes Bonus’, and whether or not Wiltshire Council qualified for the funding available, with a written response to be circulated to members of the committee.