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Leeds Housing Project Faces Further Delays

February 19, 2013 | Company News  

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The £180m Private Finance Initiative (PFI) scheme is much troubled and has been heavily criticised over the years. Its aim is to construct 388 new homes and refurbish over a thousand other properties in the Little London, Beeston Hill and Holbeck areas of Leeds. Work was scheduled to begin last November, but was halted when a bank withdrew funding.

Leeds City Council announced that new funding arrangements were being sought, saying that work will not now start before October. The Government has commented that the original terms by which the PFI scheme was to be funded are no longer feasible.

The PFI mess stretches back as far as 2002, when the council first balloted the tenants and residents of Woodhouse and Little London on whether they wanted a PFI to regenerate council housing in the area. It was intended that housing developers be funded up front by private banks to finance council house regeneration. The scheme was resoundingly rejected. Unsatisfied, the council tried again, this time targeting specific ‘Yes’ areas. Second time around the scheme got the go-ahead.

In 2007, a formal complaint was submitted following community consultation in which it was contended that Leeds City Council had deliberately misled tenants and residents, and dishonoured the agreed consultation code, denying their representatives a genuine, meaningful input into the development and regeneration options. Despite this and a ‘Save Little London’ campaign, demolition began in February 2010.

But due to the latest set-back, the council has been advised that its preferred bidder, Sustainable Communities for Leeds (SC4L), should seek improved value for money through alternative funding options. This means setting the project back yet again, but it could potentially save millions of pounds. The council is committed to seeing it through, having shelled out £40m to rescue it when one of the three banks providing loans withdrew.

Peter Gruen, the council’s executive board member for neighbourhoods, said, “The progress made to gain financial close has been slow and the costs of funding the project have increased.

“This has been frustrating, and as a result we have encountered a number of delays.

“I know that, in the short term, this is extremely disappointing for local communities affected by this project. I want to stress that the council is still totally committed to pushing the project through to completion.”

Hundreds of homes have already been demolished in Beeston and Holbeck to clear the way for the 388 new homes set to be build under the scheme. However, due to deteriorating conditions, the council intends to carry out the refurbishment of 1,245 properties in Little London before getting started on construction.

 

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