Council to use PFI to fund new centre for independent living


A London council is hoping to become the first local authority to use funding from the controversial Private Finance Initiative (PFI) to set up a centre for independent living (CIL).

The London borough of Barnet – seen as a flagship Conservative-run council – has applied for £11.2 million in PFI funding (or “PFI credits”) from the Department of Health (DH).

If successful, it would use the credits to fund the building of a social care resource centre, which will house the new CIL.

The CIL would be led by disabled people and “host” services currently provided by the council-run Barnet Independent Living Service (BILS), including advice, support and information for disabled people.

The cost of building the centre has been estimated at £5.9 million, and if successful in its bid, the council would receive DH funding every year to lease the centre from the private sector companies that will build it.

The PFI credits would also help pay for ongoing maintenance and management of the building over the 25-year contract.

In its Improving the Life Chances of Disabled People report, the government said every area should have its own user-led CIL.

But this is believed to be the first time a council has tried to use the PFI to house a CIL, although Barnet has stressed that the PFI will only be used to fund the centre’s design, building and maintenance, and not to run the CIL itself.

A Barnet council spokesman said the DH funding would allow the council to build a “state-of-the-art bespoke facility with minimal input from its own finances” and deliver the project quicker, so “realising a long-held ambition of the disabled community in Barnet to have a centre for independent living”.

But there could still be controversy over the use of the PFI, as such projects can generate larger than normal profits for the private sector companies that provide the financing and assume the risk.

A DH spokeswoman said: “The key principle of PFI is that it transfers the risk of time and cost overruns to the private sector partner, whose entire capital investment is at risk if they do not deliver.”

A decision by the DH on whether the Barnet bid has been successful is likely this spring.

Bernd Sass, policy and external relations manager for the National Centre for Independent Living, said: “As long as there is a building for a CIL to develop and flourish, that is what counts.

“It would be a very different response if it was about the financing of the service provision. We would not accept a gamble associated with a PFI when it came to service delivery.”

9 December 2009

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