Department of Health

Website of the Department of Health

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Social care PFI initiative

The private finance initiative (PFI) procurement method may also be used by local authorities (LAs) for the development of adult social care.

Eligible social care PFI schemes can be awarded PFI credits from DH. The award of PFI credits (paid in the form of an annuity to LAs alongside their central grants) supports PFI in LAs.

It follows the principles of PFI that apply in all other areas, which is that the private sector partner carries out the design, build, financing, operating and maintenance of the build, with payment from the public sector when the building is commissioned, using a payment mechanism that is based on performance and availability standards.

LAs can submit bids to the Department of Health for the award of PFI credits for their schemes. DH has an annual budget out of which the awards are made; these lump sums, which support the capital cost of a scheme, are converted into an annuity by DCLG (Communities and Local Government), which is paid to the council when the unitary charge starts to be incurred.

(Gateway reference: 8451)

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