What is housing PFI?

'PFI' stands for Private Finance Initiative. It is a government initiative to encourage partnerships between the public and private sector.

Housing PFI is the award of a long-term contract to a PFI contractor, who will use private sector investment to modernise homes and provide high quality housing services. Once the PFI contractor modernises the homes, they will maintain them at a high standard for the whole of the contract.

Although the PFI contractor will provide housing services, the council will still own the homes. Tenants in the area covered by the PFI contractor will remain council tenants and tenancy agreements will not be changed. Tenants' rights and responsibilities will also remain the same.

Rents will be set by the council in the same way as it sets the rents of homes it manages itself and in the same way the rights of people who lease their homes from the council will not be affected. The PFI contractor will administer the leases on the council's behalf but the terms of the leases will not be changed.

PFI has been used for many industries in the UK and abroad to modernise services for public use. However, housing PFI is a very new method of providing investment in local authority housing. Newham is one of eight pathfinder councils chosen by the government to try out PFI in housing.