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Private Finance Initiative

Volume 222: debated on Thursday 2 April 1992

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To ask the Secretary of State for the Environment what steps his Department has taken to implement the private finance initiative announced in the autumn statement on 12 November 1992 and in the Treasury private finance guidance published on 9 December 1992.

[holding answer 1 April 1993]: Private finance already makes a contribution of about £2 billion a year to the achievement of the Department's objectives, notably in housing and urban development.Private finance is an important element in our housing programme. Housing associations, which are the main providers of new social housing, are required to raise part of their development funds from the private sector; our objective is to increase the proportion of private funding in order to obtain the maximum benefit from the public resources available. In addition, some £1·5 billion of private finance has been raised as a result of large-scale voluntary transfers of local authority properties to housing associations; this finance is being used to improve existing stock, to repay debt and to develop new social housing. We continue to encourage investment in the private rented sector, and to consider how to maximise the use of private sector funding and expertise in meeting housing need.The Department continues to look for new opportunities to use private finance. An initial list of 21 new urban development projects, has been identified on which proposals from interested developers and financial institutions have been invited. A copy has been placed in the Library. Further projects are in the pipeline.On 23 March I met the chairman and senior executives of a number of leading development companies to discuss private finance; and I have held discussions with merchant banks and City financial institutions to explore ways in which projects could be financed using private finance.In addition the Department will shortly publish guidance on how greater use could be made of private finance in the implementation of its policies and programmes.