What is PFI?
The Private Finance Initiative (often referred to as simply PFI) is a means by which Salford City Council is able to secure substantial investment from the private sector to improve, manage and maintain its housing, giving tenants a choice of good quality homes that meet the Decent Homes Standard.
In basic terms, the council enters into a long-term contract with a PFI consortium. This usually consists of a housing association, a building or construction firm and a financial partner such as a bank or building society.
The contract sets out the standard to which homes must be refurbished and specific performance targets e.g. for repairs and maintenance and a range of other services formerly provided by the council.
Under PFI, the properties remain in council ownership and tenants remain as council tenants. Tenants keep all of their tenancy rights including Right to Buy.
The word ‘private’ refers to the finance involved - financial institutions make money available to finance the improvements to the properties. The council, combined with financial support from the government, gradually pays back the cost of this work over the period of the contract.
Tenants and leaseholders are consulted throughout the process, and together with the council, will clearly specify the standards that the private sector partner must reach in terms of property availability and performance standards when delivering the contract. Services provided by the contractor could include rent collection, tenancy management, caretaking and security.
The PFI process is being developed alongside another key project for the area – the Pendleton Planning Guidance.
This page was last updated on 15 August 2008
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