Leeds City Council has been asked to review the funding arrangements for the Little London, Beeston Hill and Holbeck project.
With very little notice the government have advised the council that it should ask the preferred bidder, Sustainable Communities for Leeds (sc4L) to seek improved value for money through alternative long term funding options, which it says are now available for similar large scale projects.
The government has indicated that whilst it remains committed to providing continued support for the project, the original terms on which the PFI scheme was to have been funded are now no longer feasible and that new, more advantageous funding options are available.
The decision means the project is still set to go ahead, but faces further delay.
Councillor Peter Gruen, Leeds City Council executive board member for neighbourhoods, planning and support services said:
“We have had many months of detailed negotiations and repeated assurances from the banks telling us that they are committed to the project. However, despite these assurances, 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.
“The council has moved quickly to respond to this further challenge and our preferred bidder is working hard to identify a viable alternative solution which should achieve better value for money over the project’s lifespan.
“The programme for moving forward is still being established, but will ensure that the local community will still benefit from the refurbishment of the 1245 council homes, construction of 388 new council homes to rent and environmental improvements to the estate. In addition to this, the PFI project will include a training and employment scheme leading to around 250 jobs, work placements, apprenticeships and social enterprise opportunities.
“As part of moving forward with the regeneration in the area and to complement the PFI project, the council will invest £2.53 million to bring 87 properties in the Beeston Hill area back into use. Along with this, the Little London local centre and education facilities in the area will be improved in the next few years to address some of the neighbourhood’s needs. These additional schemes bring real benefits and opportunities to the people of these communities.”
The council is currently in on-going discussions with the government to assess the next steps forward and how the project can progress.
For media enquiries, please contact;
Catherine Milburn, Leeds City Council press office (0113) 247 4450