Local Authorities are increasing faced with the problem of how to improve the sustainability of existing social housing stock, whilst providing additional units to meet increasing demand. The Private Finance Initiative (PFI) has been used as a means to deliver new and refurbished social housing using private, rather than public capital; however there have been concerns about the use of the PFI model to deliver sustainable infrastructure. This paper reports on the contextual factors that act as stimulants or impediments to sustainability within a large PFI housing project in the North East of England. The paper suggests that conceptually, the PFI procurement model should deliver sustainable housing. However it concludes that PFI procurement is hampered by a lack of skills, knowledge and understanding within the procuring local authority.