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PENDLETON RENTS TO GO UP 2% AS EXTORTIONATE PFI COSTS CRITICISED
 

Star date: 7th February 2017

SALFORD COUNCIL TO APPROVE 2% RISE IN PENDLETON TOGETHER RENTS

Yesterday, a report by the European Services Strategy Unit criticised 'fundamental flaws' in Private Finance Initiative, or PFI, projects including their 'affordability' and impact on 'public debt'.

Amongst the projects listed by the Unit was the Pendleton Together PFI, in which its £78.7million original capital cost will end up costing over £430million by the time it's finished. In April, rents within the Pendleton are set to rise by 2%, as Salford City Council states, "to meet the costs of the PFI scheme". 

Full details here...


Private Finance Initiative, or PFI, projects are draining Salford of much needed finance. The Salford Star has highlighted the financial affect on Salford Royal Hospital (see here) and on local schools (see here), while constantly monitoring the Pendleton Together PFI which will vastly reduce the amount of affordable houses in the area (see here).

Pendleton Together is a thirty year joint venture between Chevin, Keepmoat and Barratt to 'remodel' the area, including the refurbishment of 1,250 homes, the demolition of over 880 homes, and the development of around 1,600 new homes, of which only 500 will be 'affordable'. It also includes management and maintenance.

The original capital cost of the huge scheme was £78.7million but by the time the contract ends in 2044 it will have cost the public over £430million. In the next twelve months alone, from April, the total PFI cost to Salford City Council will be £5.971million, a rise of almost £400,000 on last year.

The total public money cost of the Pendleton PFI in 2017/18 is £13.482million, offset with central 'credits' of £7.511million.

Those renting so-called 'affordable' or social rent properties in Pendleton have seen massive rent hikes as part of the Government's 'convergence' policy – 7.62% in 2012/13; 4.55% in 2013/14; 5.13% in 2014/15 and 2.2% in 2015/16. Last year there was no rise, due to confusion in policy. But for 2017/18, while the Government has introduced a social rent reduction of 1% per year, it doesn't apply to PFI schemes – and Pendleton residents face yet another rent hike of 2% (Consumer Price Index, or CPI, plus 1%).

A Salford Council report states that this level of rent rises is based on an "assumption that a rent policy of CPI plus 1% would be needed to meet the costs of the PFI scheme which, in itself, is subject to an annual inflationary increase". It adds that changes in its housing budget estimates from last year are due to "Increased PFI costs in line with the agreed contract".

The Pendleton Together project - Creating A New Pendleton – was listed in new research, released yesterday, by the European Services Strategy Unit which criticised 'fundamental flaws' in PFI projects including their 'affordability', 'high transaction costs' and impact on 'public debt'.*

The Salford Council report on the rent hike states that "Support is provided to Pendleton tenants by Pendleton Together to assist with maximising income and mitigating the impacts of welfare reform.

"This" it adds "is provided through specialist support officer time providing bespoke advice to residents including on energy switching, access to charitable payments,
housing benefit reviews, job clubs and budgeting advice."


* To read the full European Services Strategy Unit report - click here


** After last year's massive service charge hike for Pendleton Together tenants, which saw increases of up to 10.5%, with those in the sheltered Lombardy Court having to find an extra 17.3% (see here), this year, most service charges are set to drop.

Charges for those living in the high rises are set to fall by an average of 2.41%, the low rises by 13.94% - but for those living in Lombardy Court sheltered housing there's another 2.64% rise on the way.


See also related Salford Star article – Pendleton Together Gentrification Slammed By IUD Project – click here
 

Political Conscience of Salford wrote
at 06:48:47 on 09 February 2017
PFIs, "Arms Length" and "Out Sourcing" are the root cause of all issues affecting all aspects of social care, NHS and housing. If I were to set up an company to undertake PFI, "Arms Length" and "Out Sourcing" organisations, I would pay minimum wages and charge as much as I could get away with to the Councils and NHS that wants my services. It's time to bring the DIRECT supply of services back under the control of local authorities and the NHS WITHOUT compensation to the current greedy money-grabbing private suppliers
 
Michael James Felse wrote
at 19:03:24 on 07 February 2017
Sorry to read about rent rise. However, I urge all Metro Mayor hopefuls to adopt the Labour call for more social housing. This housing crisis is something they can all pull together to solve.
 
part time socalist wrote
at 18:59:13 on 07 February 2017
I wonder while Local Labour Councillors gloat over the success of the project what do the people who have to face the cost think. Schools, Hospitals and Police stations Ian Stewart gloated to me on what Labour where doing today we see the results the city gets slowly strangled with Debt.
 
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