Council breaks silence over Leeds PFI housing delay – hoping for start in spring

Waiting for a refurb - Meynell Heights in Holbeck

Waiting for a refurb – Meynell Heights in Holbeck

Leeds City Council has broken its silence over what’s holding up the start of its troubled PFI council housing project. It says it now hopes work can get under way in spring.

A statement today from housing chief Cllr Peter Gruen said the council was “waiting for the contractor to finalise their funding and construction programmes for the scheme”.

“All council approvals are in place and I would hope that a start can be made in the Spring, once the contractor has been formally appointed,” he said.

In a press release the council said today it had been told by the proposed contractor and funders that good progress was being made towards getting the contracts for the scheme finally signed.

Demolition 2010, new-build ???

Demolition 2010, new-build ???

Cllr Gruen sounded a note of caution, however.

“Although I welcome the progress, we have been made promises before and the onus, however, is on the new company (PFI consortium) Sustainable Communities for Leeds and its funders to resolve these issues in a timely manner,” he said.

His caution is understandable: planning applications for much of the PFI scheme started to be heard in 2008, residents were moved ahead of major demolition in 2010, and the start-date for on site work has slipped four times in the last 18 months.

In July 2011 the council was hoping work would get under way in January 2012. In March 2012, it was hoping for July. In July for the end of the year. And now we’ve got to the end of the year, it’s spring 2013.

Public test of confidence in banks

Housing chief Cllr Peter Gruen

Housing chief Cllr Peter Gruen

The £180m scheme to refurbish over 1,200 council homes and build 388 new ones in the inner city areas of Little London, Beeston and Holbeck has been by dogged by difficulties and delays over the past two years.

The project was held up initially for several months by a central government value-for-money review.

Then at the beginning of July this year the council stepped in with around £40m of taxpayer cash to rescue the project after one of the banks funding it pulled out.

And it’s at the banks where Cllr Gruen’s finger now appears to be pointing.

“For the communities in South Leeds, this is becoming a public test of confidence regarding whether the major banks have really turned the corner or not,” Cllr Gruen said. “This is a blue-chip scheme and the Leeds public will draw its own conclusions if there is continuing delay in investing in Leeds,” he added.

“The proposed contractor and funders of the scheme have told the council that they are making good progress towards financial close and have expressed optimism that the process is on the way to completion early in the new year”, the council press release said.

New-build starting spring 2013?

New-build starting spring 2013?

The new-build, refurbishment and maintenance work on the scheme is to be carried out by Frank Haslam Milan and Milnerbuild, two subsidiaries of regeneration sector specialists Keepmoat.

It’s not clear what effect the delays have had on the 20-year scheme’s overall cost. As long ago as October 2011, Cllr Gruen was speaking of an extra £1m per month that was going to have to be found because of the delay up to that point.

That was 14 months ago.

As each subsequent projected deadline for the signing of contracts has been missed, the detail of the financial implications has been kept under wraps.

For fuller background to today’s announcement you could start here and work your way backwards.

Help me out, dear readers

No expert

No expert

I’m no expert, so I’m having difficulty working out what the phrase “waiting for the contractor to finalise their funding and construction programmes” means.

As far as I’m aware there are five major parties to this scheme, two of which, the council and central government, aren’t responsible for the current delay in getting the project signed off.

So that leaves the banks providing the funding, the people who are going to do the actual work (Keepmoat) and the consortium who put the deal together (the “contractor” Sustainable Communities for Leeds).

The problem’s presumably about money, but whose money? And why?

Any help much appreciated.

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5 Responses to Council breaks silence over Leeds PFI housing delay – hoping for start in spring

  1. Alison Neale says:

    I just love the ‘in the spring’, as they announced exactly that in late 2011 for spring 2012. In fact, I’m pretty sure they said at the time that if it went beyond that spring, it would become financially non-viable…? I lived in Beeston Hill at the time and it was impossible to find out what was preventing work from starting, what precisely was going to be built when they did start work, and how the work would affect residents. The small amount of information that is available is online, so not much good to locals who don’t have internet access. Even asking local councillors didn’t help – they didn’t seem to know any more than the general public.

    • Last time they mentioned managing the project’s costs was July when they said “the affordability position cannot be guaranteed to remain unchanged” beyond September. But the current haggling doesn’t seem to involve the council, which would make you think there’s no cost implication for it. Confused? I am.

      Agree about the message. Don’t know how it’s getting out to residents who’ve lived with all the uncertainty.

  2. Bywater blog says:

    Leeds City Council currently give 25% of its rented housing to people with a local conection. They are consulting on reducing this. I havnt heard this anywhere else, but I thought you might be interested.

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