65. The Department claims that the proposed
order would have a number of other benefits for local housing
- Those local authorities currently pursuing housing
PFI contracts will be able to proceed with contracts in the form
- Authorities will in the future be able to enter
into longterm contracts for all the management functions
where the manager can subcontract elements of those functions,
rather than being limited to making a management agreement with
a contractor who is the sole provider. This will enable authorities
to achieve better value for money for the provision of the services
- The changes will contribute towards authorities
achieving the Decent Home target in England and the Welsh Housing
Quality Standard in Wales, and complying with other Government
targets and initiatives such as Best Value and Modernising Government.
66. The Department also claims that the changes would
have a number of other benefits for other parties. It considers
that the proposal would benefit tenants as follows:
- Tenants will benefit from the arrangements by
virtue of the increased investment in their properties and environment,
and better value for money from their rent.
- Tenants will also benefit from the knowledge
that services will be provided to set standards for the length
of the contract period, that their rights to consultation are
being retained and that they will remain tenants of the local
authority. There will be similar benefits to leaseholders where
they are part of such schemes.
- Where PFI and other similar contracts are concerned,
tenants will have the opportunity to be involved in the process
of specifying the requirements, evaluating bids and having a say
in monitoring the contracts.
- Tenants will have the security of knowing that
the housing and services will be maintained at the levels laid
down for the length of the contract (in PFI arrangements, these
will be for periods of thirty years).
We note in passingas did some of the respondents
to the consultation on this proposalthat these last three
points in particular are perhaps less benefits of the proposal
itself than of the arrangements which the Government intends should
be put in place once the proposal is implemented. Whether, and
how, tenants might also be enabled to gain these benefits even
if the proposal were not implemented is debatable.
67. The Department considers that the proposal would
benefit business in the following ways:
- Businesses will benefit by being able to bid
for the functions as consortia in the form of Special Purpose
Vehicles, which will give them the flexibility to appoint subcontractors
who offer value for money.
- Businesses will also benefit from entering into
longterm arrangements where payment is made by the authority
on a regular basis for thirty years in return for achieving certain
standards in housing and services.
- Smaller businesses will benefit through the opportunity
of being appointed as subcontractors.
68. The Department also notes that "a number
of contracts envisage other benefits such as regeneration of the
area, overall improvements to the estates, reductions in crime,
greater tenant involvement, provision of work and training locally
etc.", and comments, "Perhaps the major benefit which
cannot be quantified is the improved quality of life for tenants
where they are a part of these projects."
69. A Regulatory Impact Assessment has been completed
and may be found at Annex A of the explanatory statement. We
are satisfied that the proposal has been the subject of, and taken
appropriate account of, estimates of increases or reductions in
costs or other benefits which may result from the implementation
of this proposal.
70. We conclude that the proposal should
be amended as recommended in paragraph 59 above before a draft
order is laid before the House.
48 Appendix B, para A8, final paragraph. Back
Explanatory statement, para 4.8. Back
See Appendix B, section A6; Qq 79ff., 84f. Back
Standing Order No. 141(6)(h) Back
Explanatory statement, para 9.8. Back
Appendix B, section A10(a). Back
Appendix B, section A10(b). Back
See Chapter Twelve of the explanatory document. Back
The Regulatory Impact Assessment (Annex A to the explanatory statement;
para 20) says £740m. Back
Explanatory statement, para 6.7. Back