Shared equity: using the private finance initiative to boost extra care housing
- older people
Date: June 2008
Type: Report, case studies
This report by IPC examines the potential advantages to local authorities of using the Private Finance Initiative (PFI) to fund Extra Care Housing (ECH) projects, via detailed case studies of three existing PFI-financed schemes. By way of introduction, the report offers an overview of PFI as a form of procurement, and of ECH as an alternative to residential care. It provides a step-by-step guide to the approval and procurement process, and identifies the characteristics of a “good” PFI deal.
For each case study, an overview of the key characteristics and aims of the specific project is provided, along with the partners involved, the approach to partnership working, management of the project, and details of the tendering and contractual process, including the criteria for evaluating bids and how risk is divided.
Key findings include:
- The high cost of the development process, irrespective of contract size, means PFI is not cost-effective for smaller projects.
- A balanced project management team, incorporating previous PFI experience and the additional expertise of outside advisors, is the ideal.
- Project teams commonly felt they needed more training in negotiation.
- It is important to identify technical problems, such as land title and planning issues, early.
- Early involvement of potential bidders in a market testing exercise can provide valuable feedback for the procurement process.
- A realistic, affordable output specification that has the support of all stakeholders must be set out.
For further information please contact Liz Cairncross at IPC
Tel: 01865 790312