Salford City Council - Record of Decision
I, Ian Stewart City Mayor in exercise of the powers conferred by paragraphs 4a and 7 of
the Scheme of delegation on approve
1. The outcome of the final bid evaluations;
2. That Bidder A as the Preferred Bidder for the Creating a New Pendleton (HRA) PFI
3. That the formal announcement of the Preferred Bidder can only be made upon
approval of the Pre Preferred Bidder Final Business Case by the sponsoring
Department, Department of Communities and Local Government (DCLG);
4. That the Home and Community Agency (HCA) and DCLG are content with the
Final Business Case and that the business case is currently with HMT for the final
assessment. The City Council has been advised by HCA that the assessment
should be concluded and approved by the end of May 2012.
5. That the approval of the Final Business Case and Contract award is subject to a
further decision to be considered by the City Mayor, planned in September 2012;
6. That the Financial Close, planned in September 2012 can only be made upon
approval of the Final Business Case by the sponsoring Department.
Assessment of Risk:
It is a condition of approval from the Department of Communities and Local Government,
that an optimal distribution of risk between the council and Contractor is achieved. A full
assessment of project risks was submitted with the Full Business Case and will be
managed via the governance arrangements outlined with The Management Case of the
The source of funding is:
In November 2010 the HCA carried out a Value for Money (VFM) review of all Housing PFI
schemes in procurement to achieve further efficiencies. The outcome of this review (July
2011) for the Creating A new Pendleton project was a PFI Credit reduction of £5.7m from
£121.020m to £115.320m.
The council is committed to project affordability and will only process with a project that it
is satisfied is affordable in both the short and the medium to long term.
The approx £424m Unitary Charge (nominal) over the 30 year period, will be funded from
the following sources:
A PFI credit of £115.32m to which will be applied a PFI credit interest rate of 5.5%;
Allocation of repairs and maintenance budget of £1,184 per unit per annum and
supervision and management budget of £753 per unit per annum at April 2011
Additional HRA revenue resources required of £1.921m per annum at April 2011
prices, to achieve a nil surplus/deficit at the end of the concession.
Legal Advice obtained Yes - Addleshaw Goddard/Norman Perry (0161 234 3410)
Financial Advice obtained Yes – Ernst & Young / Neil Thornton / Chris Mee
The following documents have been used to assist the decision process.
Housing Investment Stock Option Appraisal – June 2005
Pendleton PFI Outline Business Case report to Cabinet – June 2008;
Pendleton PFI Outline Business Case; Financial Affordability report to Cabinet –
Outline Business Case – September 2008;
Pendleton Planning Guidance – March 2009;
(Documents which are exempt)
Contact Officer: Paul Longshaw Tel No 793 2444
Signed: …………Ian Stewart …
Date ……11th June,2012 ……………………
This decision was published on .12th June, 2012
This decision will come in force on 20th June,2012 unless it is called-in in
accordance with the Decision Making Process Rules.