§ Mr. BercowTo ask the Secretary of State for the Home Department what the cost of buildings insurance to his Department was(a) before and (b) after 11 September 2001. [66922]
§ Mr. Bob AinsworthDepartments are required to comply with the Government's general policy on insurance, which is set out in Government Accounting, Chapter 30, para 30.2.5, which notes that Government do not need to purchase insurance to protect the viability of its business, and should consider insurance only where the value of claims met would exceed the cost of insurance premiums. Commercial insurance of a building is acceptable in cases where(a) insurance is a condition of a lease (b) the lessor will not accept a Government indemnity (c) incurring the total cost of the accommodation in question, including the cost of the insurance, is more cost-effective that other accommodation options [Government Accounting, para 30.2.11a].
The Home Department complies with this policy and with rare exceptions self-insures buildings in which it is the sole occupier. Where part of a building is leased and insurance forms part of the services provided to the building as a whole by the lessor, an element of the service charge payment will relate to the insurance cost, but extracting this element from such charges could only be done at disproportionate cost.
Private Finance Initiative (PFI) contracts involving accommodation provision an insurance element also forms part of the overall PFI charge. The Department's policy, based on advice from the Office of Government Commerce is that any additional insurance costs following 11 September is primarily a matter for the private sector.