§ Mr. Simon CoombsTo ask the Secretary of State for Social Security if he will make a statement on his plans for proceeding with the privatisation of the departmental estate. [4047]
§ Mr. LilleyThe three shortlisted bidders have today been issued with an invitation to negotiate along with supporting documentation about the Department's property assets and accommodation requirements. The bidders are being asked to make proposals according to the principles of the private finance initiative where the emphasis is on service delivery to specified standards rather than detailed specification of how the services are to be delivered. Overall, the aim of the transfer is to enable the Department to make significant savings in the costs of accommodation services, in part through lower service charges and in part through an immediate return to the taxpayer reflecting the value of these assets. The assets are to be transferred to the successful bidder which will be required to provide a payment of £250 million on completion of the contract to realise immediately an appropriate proportion of their underlying value. The Government also expect that the private sector will be able to provide accommodation services more effectively than if they had remained in-house and will be better able to realise additional development potential. The service202W charge will therefore reflect this greater efficiency and development potential and the costs to the bidder of raising the capital sum. Specifying a set capital payment will, however, simplify the bidding process for both the bidders and Government and reduce the financial risk to the Government over the lifetime of the contract.