Local councils, housing authorities and other groups with an interest in the Public Finance Initiative are to be consulted over proposals designed to help improve council tenants’ homes. The plans have been published in a consultation paper from the Office of the Deputy Prime Minister. It expects the proposals to help clear the way for an increase in the number of Housing Revenue Account Public Finance Initiative schemes to provide funding to improve council houses.It suggests replacing the current system, where the level of HRA subsidy for PFI schemes in a year is linked to the housing authority’s interest rate. Housing authorities operating PFI schemes have been concerned that under this formula historically low interest rates have meant that long-term subsidy entitlement might not match the true costs of the scheme because charges to the authority are fixed for the period of a project and take no account of interest rate fluctuations.
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