Camden resurrects social housing PFI

Camden Council has relaunched its flagship social housing PFI scheme – £54m lighter – in the hope that the slimmed-down scheme will avoid the eagle eye of the Treasury, which recently rejected the scheme as too costly and uncompetitive.

The decision to reject the scheme was made by the Treasury Project Review Group (PRG) after Camden applied for extra PFI credits to raise the scheme from £55m to £119m. The PRG expressed concern that the scheme had only one bidder and that its scope
was “too grand” (CJ 15 June).

To avoid returning to the drawing board and further delaying much-needed improvements to the run-down Chalcot Estate in Swiss Cottage, council officials (with the help of single bidder

Partners for Improvement in Camden, led by United House Solutions) have reduced the value of the scheme from £119m to just £65m. The hope is that this smaller scheme will be beneath the PRG’s radar and will only need approval from the Office of the Deputy Prime Minister (ODPM).

A spokeswoman told CJ: “The Treasury approved £55m of PFI credits for the scheme in 2002 and we understand the ODPM has a tolerance zone that allows it to approve a limited increase in the value of a scheme, without having to go back to the Treasury for its approval. We understand the ODPM is happy to tolerate that increase in our scheme.”

The ODPM is expected to respond to the revised proposal in late July.