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Housing LIN and 4ps share the benefits of using PFI to provide Extra Care Housing

Successful procurement of Extra Care Housing (ECH) using the Private Finance Initiative (PFI) needs the early involvement of all stakeholders, potential bidders and likely residents, a study published today has concluded.

Analysis of three ECH projects funded through the PFI route, all of which are now operational, also emphasises the importance of settling output specifications and contractual and technical issues at an early stage.

The research was commissioned by the Care Service Improvement Partnership's Housing Learning and Improvement Network (Housing LIN) and local government's projects delivery specialist 4ps. They asked researchers at Oxford Brookes University's Institute of Public Care to examine projects at Kent and Cheshire county councils and Oldham Metropolitan Borough Council.

Jeremy Porteus, National Programme Lead for CSIP Networks (which oversees the Housing LIN), said the thrust of key Government policies means ECH is rising rapidly up the agenda of local authorities providing housing and their partners in health and social care.

These include the objectives of bringing care closer to the homes of older people and vulnerable people and the provision of lifetime housing in appropriate neighbourhoods.

Jeremy Porteus said: "A series of Green and White Papers and circulars to local authority and NHS chief executives have emphasised the goal that more people retain their independence for as long as possible and that public sector organisations should be seeking to provide integrated housing and care. Extra Care Housing is crucial to that because it increases the choice of housing with care available to older people."

He continued: "As with other large-scale public sector building programmes, it is inevitable that many local authorities and their partners will look to the PFI route to deliver such homes."

Andrew Rowson, 4ps' Housing and Property Director, said: "The provision of specialist forms of housing for older people and vulnerable adults is a fundamental service delivered by local authorities in their areas.

"Increasingly, local authorities are using PFI to deliver Extra Care Housing schemes and it is important that they receive support and training - not only to ensure projects are delivered on time and on budget, but also so these schemes meet the needs of staff and users. The three schemes examined in today's report all benefited from 4ps' expert advice and PFI training."

Key lessons to emerge from the report, Shared Equity: Using the Private Finance Initiative to Boost Extra Care Housing, can also be applied to other PFI housing deals.

They include:

early identification and involvement of key stakeholders - including older people and other tenants
external consultants can play a vital role but average costs in developing the process probably means this route is best suited to larger projects
it is crucial to get the right project team in place and this should ideally be strongly-led and remain together throughout the process
4ps can provide invaluable training and guidance - the case studies suggested extra training with negotiation is often needed
output specification must be clear and unambiguous, including assessing technical issues
early involvement of potential bidders is beneficial to both the public sector organisations and the potential bidders.

While the report concludes that PFI can play a significant role in the development of Extra Care Housing, other significant sources of funding are emerging. These include the Housing Corporation, the Department of Health's Extra Care Housing Fund and increasing private sector investment.

In the cases examined, the three authorities called tenders for different packages; in one case the authority retained responsibility for care provision while responsibility for the building and care elements was split between different providers in other contracts.

In Oldham building, management and support were awarded in one package to a consortium led by RSL Housing 21. In Cheshire, the building and management work has been awarded to a private consortium, avantage, while Housing 21 provides care services.

In Kent, the council continues to provide care services while awarding the design, build and management elements to a Special Purpose Vehicle fully owned by Housing 21.

The report will be launched at the Better Housing for an Ageing Society conference in central London this week.

Editor's Notes:

1) The Housing Learning and Improvement Network is part of CSIP Networks, which is one of the four national programmes of the Care Services Improvement Partnership.

2) For more information please call Jerome Billeter on 0207 972 1330 or (media only) Chris Mahony on 0207 972 4382 or the 4ps press office on 7025 7590. You can also access the website at www.icn.org.uk/housing.

3) 4ps, local government's partnerships and project delivery specialist, works exclusively to help local authorities deliver better public services via major infrastructure and service projects. 4ps was established in 1996 by the English and Welsh local authority associations (predecessors to the LGA). For more information about 4ps' guidance on PFI please go to www.4ps.gov.uk

4) The full report can be downloaded under the link below

Links

Shared Equity - Using the Private Finance Initiative to Boost Extra Care Housing (June 2008) (pdf - 0.99Mb) (opens new window)

Published by Housing LIN and 4ps, June 2008 The Government has recently set out its vision for housing within an ageing society and in particular for specialist forms of housing1: "We want the specialised homes of the future to be desirable homes at the heart of strong communities, a place where older people aspire to live." They describe providing a choice of options: "For some this will mean housing collectives with shared space, for others retirement communities, for others extra care homes in lifetime neighbourhoods." This report provides an overview of PFI as a form of procurement; it explores what ECH is and how it can be procured through PFI. It then considers three individual PFI ECH projects in more detail and identifies the key lessons to be learnt from them by authorities considering this method of procurement.