Where Private Finance and Off-Balance-Sheet Solutions Fit, And Why They Matter Now

Moving beyond “debt thinking” 

One of the biggest blockers to progress is that private finance is often viewed narrowly as “more borrowing”.  

In reality, many emerging models are designed to: 

• Sit alongside core borrowing, not compete with it 

• Transfer delivery and performance risk away from the landlord 

• Pay for outcomes over time, rather than upfront capital spend 

This is where off-balance-sheet approaches come into play.  

What off-balance-sheet solutions actually enable 

At their best, off-balance-sheet models allow housing providers to: 

• Deliver retrofit or energy infrastructure without large upfront capital outlay 

• Pay for performance, energy, or outcomes over time 

• Share risk with delivery and finance partners 

• Protect borrowing capacity for other strategic priorities  

They are not about hiding liabilities. They are about aligning cost, benefit and risk more intelligently.  

Common examples in housing and retrofit 

While structures vary, typical applications include: 

• Energy-as-a-Service models, where a third party finances, installs and maintains systems, and the provider pays for energy or performance rather than assets 

• Long-term concession or service agreements, tied to delivery standards and outcomes 

• Special purpose vehicles, separating programme risk from core operations 

• Private finance linked to revenue-generating assets, such as renewables  

What matters is not the label, but whether the model: 

• Delivers better homes faster 

• Improves cost predictability 

• Reduces long-term revenue pressure 

• Protects organisational resilience 

Why this matters for CEOs and CFOs 

From a leadership perspective, the strategic value lies in optionality. Blended funding models that combine grants, capital, and private finance allow organisations to: 

• Move at pace when opportunities arise 

• Avoid bottlenecks created by funding cycles 

• Maintain control over standards and outcomes 

• Make long-term commitments with greater confidence 

Crucially, this supports a shift from reactive programmes to planned, multi-year delivery.  

CEO / CFO explainer: off-balance-sheet in plain terms 

Off-balance-sheet solutions are not about avoiding responsibility. They are about choosing the right financial tool for the job. Used properly, they: 

• Match payment to performance 

• Spread cost over the life of the benefit 

• Reduce the need for repeated reinvestment 

• Enable scale without overloading borrowing capacity 

They require strong governance, clear contracts and good data, but so does any serious long-term investment strategy. Avoiding them entirely does not remove risk. It simply pushes risk back into reactive spend, service pressure and asset deterioration. 

Questions boards should now be adding to the conversation 

To meaningfully explore private finance and off-balance-sheet options, boards should be asking: 

1. Which parts of our retrofit or healthy homes programme truly need to sit on our balance sheet, and which don’t? 

2. Where could performance-based or service-based models reduce long-term cost and risk? 

3. How confident are we that our current funding approach supports pace and scale, not just compliance? 

4. What delivery or performance risks could be better shared with partners? 

5. Are we protecting borrowing capacity for future priorities, or consuming it through stop-start programmes? 

These are strategic questions, not technical ones, and they deserve space at board level.  

The bigger shift 

The conversation is no longer about whether private finance should play a role. 

It’s about how intelligently it is integrated into a wider, values-led strategy for healthy homes.  

Grants open doors. Private finance builds momentum. Good governance keeps control. And leadership is what brings all three together.