§ Mr. David MartinTo ask the Secretary of State for the Environment if he will now give final details of the PSA Building Management sales.
§ Mr. CurryThe sale of Building Management Scotland was completed on 1 September, and the sales of the other businesses on 1 October. The Government will receive considerations of £3.5 million for Building Management Scotland, a net £10.4 million phased over four years for Building Management South East and South and West combined, and £8 million phased over three years for Noreast Building Management. Government have made a
Business Transferred Selected for secondment Not selected for secondment Building Management South East 439 618 98 Building Management South and West 616 668 52 Noreast Building Management 494 405 110 Building Management Manchester 699 397 126 Building Management Scotland 484 273 106 The Government have entered into a severence sharing arrangement with each purchaser, under which it will fund redundancies including those of secondees and non-elected staff that may arise up to an agreed maximum figure. These are: Building Management South East £30 million, Building Management South and West £25 million, Noreast £29.5 million, Building Management Manchester about £28 million and Building Management Scotland £15 million. In aggregate these amount to about £127.5 million.
The Government have also guaranteed the redundancy entitlements of transferring staff against the purchasers' bankruptcy for up to five years post sale. The maximum aggregate value of this contingent liability is estimated at around £65 million.
The departmental minute laid on 14 June 1993 indicated that the maximum contingent liability to be undertaken in the sale negotiations was estimated not to exceed £200 million. Final details of the sums paid in respect of the sale of the building management businesses will not be available for some time as this will depend on the number of transferred staff remaining with the businesses for more than five years from the date of sale. 352W payment of £11.46 million to the purchasers of Building Management Manchester but the final amount may be up to about £12.1 million depending on the number of staff who transfer their entitlements to the new pension scheme. This will not be known until six months or more after completion.
In addition, the Government injected cash into each business at the point of sale to meet the estimated net liabilities transferred to the purchasers under the sale agreements. The amounts of cash injected were £1.9 million to Building Management Scotland; £1.0 million to Building Management South East; £1.4 million to Building Management South and West; £2.2 million to Noreast Building Management and £2.0 million to Building Management Manchester. In all cases these amounts will be adjusted pound for pound after preparation of completion statements to compare actual net liabilities at the point of sale with the estimates made. The assets transferred exclude the amounts owed by customers to the five building management businesses for work done up to the sale. These debts will be collected by PSAS and retained in Government.
Staff in all five businesses were asked to choose between transfer to the private sector or a possible period of secondment to the new business. Not all staff who were available for secondment were selected. The results are summarised below: