HL Deb 29 October 2003 vol 654 cc45-6WA
Lord Oakeshott of Seagrove Bay

asked Her Majesty's Government:

In respect of the former Employment Service Estate which is to be outsourced by the Department for Work and Pensions to Land Securities Trillium (LST), (a) how many organisations were invited to bid for this agreement, and how many did so; (b) if there was no competitive bidding process, how is value for taxpayers' money assured; and (c) whether there were any provisions for exclusive or preferential access to future agreements in the original PRIME agreement between the department and LST; and [HL4896]

In respect of the former Employment Service Estate which is to be outsourced by the Department for Work and Pensions to Land Securities Trillium, what is the amount of the agreed freehold valuation; and [HL4897]

In respect of the former Employment Service Estate which is to be outsourced by the Department for Work and Pensions to Land Securities Trillium, what independent valuations have been carried out on these properties; when they were carried out; by whom; and on what basis; and [HL4898]

In respect of the former Employment Service Estate which is to be outsourced by the Department for Work and Pensions to Land Securities Trillium, what are the total number, total area and total estimated rental value of the freehold properties in the estate; and [HL4899] In respect of the former Employment Service Estate which is to be outsourced by the Department for Work and Pensions to Land Securities Trillium, what is the current estimated valuation of the freehold properties in the estate on a vacant possession basis; and [HL4900]

In respect of the former Employment Service Estate which is to be outsourced by the Department for Work and Pensions to Land Securities Trillium (LST), what are the estimated total payments for each year up to 2018 to LST under the proposed agreement (a) if no properties are vacated and (b) if all options to vacate properties are exercised as soon as possible; and [HL4901]

In respect of the former Employment Service Estate which is to be outsourced by the Department for Work and Pensions to Land Securities Trillium (LST), how much space out of the total of 834,000 square metres the department will be able to vacate with no further financial liability in each year up to 2018. [HL4917]

The Parliamentary Under-Secretary of State, Department for Work and Pensions (Baroness Hollis of Heigham)

Following a full option appraisal review, the Department for Work and Pensions took the decision that the best way to deliver an optimum value for money solution for the management of its estate was to expand the existing PRIME contract, through negotiation, to include the former Employment Service buildings. On this basis only Land Securities Trillium, as the incumbent service provider for PRIME, was invited to submit a formal proposal. The original PRIME contract did not have any specific exclusivity or preferential provisions.

Ensuring the key objective of obtaining value for money necessitated transparent and demonstrable calculations. Financial comparators have been used against all aspects of the bid, and the final negotiated package is deemed to offer DWP an overall price that compares very favourably with external benchmarks as well as delivering an improved and consistent level of service. The process has been subject to ongoing independent scrutiny to ensure the robustness of the outcome.

DWP commissioned the Valuation Office to value those properties being transferred as part of the expanded contract. This work was undertaken during the summer of 2003. The agreed valuation of the freehold properties being transferred to Land Securities Trillium, which was carried out on a vacant possession basis, is £128.4 million.

The expected number of freehold properties to be transferred is 336. These properties total 223,000 m² (net internal area) and have an estimated rental value of£15.7 million.

Under the agreed terms of the expanded PRIME contract and in line with DWP's departmental plan, in addition to existing surplus space, the department can vacate up to 228,000 m² of space during the course of the contract.

Under the two different vacation scenarios cited, DWP would make the following estimated payments to Land Securities Trillium during the period up to 2018:

  1. (a) a total of £2,962 million if no properties are vacated; and
  2. (b) around £2,200 million if all options to vacate properties are exercised as soon as possible.