Blunkett may sell Job Centres estate to private contractor

DAVID BLUNKETT'S Department for Education and Employment is considering selling off its entire property estate, including the country's 390 JobCentres, to private sector contractors.

The DfEE is understood to have put out feelers to potential bidders following similar moves by the Department of Social Security and the Inland Revenue and Customs & Excise.

In addition to the nationwide network of JobCentres, the department's estate includes headquarters buildings in London and properties occupied by the school inspection unit Ofsted, the Equal Opportunities Commission and a range of other bodies from the Further Education Funding Council to the Government's Student Loans Company. The DSS's estate, compromising 800 buildings covering 1.6 million square metres, was sold to Trillium, a consortium led by the US investment bank Goldman Sachs, for pounds 250m in April 1998.

Trillium has a 20-year contract worth pounds 2bn with the DSS to provide accommodation and services ranging from maintenance and security to cleaning and catering.

In a report last April, the National Audit Office estimated that the contract could produce savings for the taxpayer of pounds 560m over its 20-year life.

The success of the DSS deal has encouraged other government departments to look at handing over their estates to the private sector.

The sale of the Inland Revenue and Customs & Excise estate - the second biggest after the DSS's with 1.5 million square metres of space - is due to be completed by the spring of 2001.

A shortlist of three bidders has been drawn up and asked to submit bids by next April. The list consists of Trillium, the Japanese investment bank Nomura and a real estate fund run by George Soros.

The sale will raise about pounds 220m but there are likely to be substantial savings for the taxpayer above and beyond that as part of the long-term letting contract agreed with the successful bidder.

As a result of the DSS deal, Trillium has become the UK's largest commercial landlord. The DSS estate is bigger than the Canary Wharf complex.

Under the contract, Trillium has assumed all the liabilities attached to the estate, including rental obligations and is also liable to pay penalties on up to 60 per cent of its income in the event of poor performance. In the first year of the contract it paid pounds 760,000 in penalties, although the figure will be higher this year.

Trillium is seeking to negotiate a modified incentive regime with the DSS so that as well as being penalised for poor levels of service it can be also be rewarded for outperformance.

It is not clear at this stage whether the DfEE will chose to sell its entire estate or whether any deal would involve the same level of risk transfer as the DSS contract.

Start your day with The Independent, sign up for daily news emails
Voices
Homeless Veterans charity auction: Cook with Angela Hartnett and Neil Borthwick at Merchants Tavern
charity appeal
Sport
Amir Khan is engaged in a broader battle than attempting to win a fight with Floyd Mayweather
boxing Exclusive: Amir Khan reveals plans to travel to Pakistan
Arts and Entertainment
Strictly finalists Simon Webbe, Caroline Flack, Mark Wright and Frankie Bridge
tvLive: Simon Webbe, Caroline Flack, Mark Wright and Frankie Bridge face-off in the final
Sport
Ched Evans in action for Sheffield United in 2012
footballRonnie Moore says 'he's served his time and the boy wants to play football'
PROMOTED VIDEO
ebooks
ebooksA year of political gossip, levity and intrigue from the sharpest pen in Westminster
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Carlton Senior Appointments: Private Banking Manager - Intl Bank - Los Angeles

$200 - $350 per annum: Carlton Senior Appointments: Managing Producer – Office...

Carlton Senior Appointments: San Fran - Investment Advisor – Ind Advisory Firm

$125 - $225 per annum: Carlton Senior Appointments: San Fran - Investment Advi...

Sheridan Maine: Commercial Finance Manager

Up to £70,000 per annum + benefits: Sheridan Maine: Are you a qualified accoun...

Sheridan Maine: Regulatory Reporting Accountant

Up to £65,000 per annum + benefits: Sheridan Maine: Are you a qualified accoun...

Day In a Page

Amir Khan: 'The Taliban can threaten me but I must speak out... innocent kids, killed over nothing. It’s sick in the mind'

Amir Khan attacks the Taliban

'They can threaten me but I must speak out... innocent kids, killed over nothing. It’s sick in the mind'
Homeless Veterans appeal: 'You look for someone who's an inspiration and try to be like them'

Homeless Veterans appeal

In 2010, Sgt Gary Jamieson stepped on an IED in Afghanistan and lost his legs and an arm. He reveals what, and who, helped him to make a remarkable recovery
Could cannabis oil reverse the effects of cancer?

Could cannabis oil reverse effects of cancer?

As a film following six patients receiving the controversial treatment is released, Kate Hilpern uncovers a very slippery issue
The Interview movie review: You can't see Seth Rogen and James Franco's Kim Jong Un assassination film, but you can read about it here

The Interview movie review

You can't see Seth Rogen and James Franco's Kim Jong Un assassination film, but you can read about it here
Serial mania has propelled podcasts into the cultural mainstream

How podcasts became mainstream

People have consumed gripping armchair investigation Serial with a relish typically reserved for box-set binges
Jesus Christ has become an unlikely pin-up for hipster marketing companies

Jesus Christ has become an unlikely pin-up

Kevin Lee Light, aka "Jesus", is the newest client of creative agency Mother while rival agency Anomaly has launched Sexy Jesus, depicting the Messiah in a series of Athena-style poses
Rosetta space mission voted most important scientific breakthrough of 2014

A memorable year for science – if not for mice

The most important scientific breakthroughs of 2014
Christmas cocktails to make you merry: From eggnog to Brown Betty and Rum Bumpo

Christmas cocktails to make you merry

Mulled wine is an essential seasonal treat. But now drinkers are rediscovering other traditional festive tipples. Angela Clutton raises a glass to Christmas cocktails
5 best activity trackers

Fitness technology: 5 best activity trackers

Up the ante in your regimen and change the habits of a lifetime with this wearable tech
Paul Scholes column: It's a little-known fact, but I have played one of the seven dwarves

Paul Scholes column

It's a little-known fact, but I have played one of the seven dwarves
Fifa's travelling circus once again steals limelight from real stars

Fifa's travelling circus once again steals limelight from real stars

Club World Cup kicked into the long grass by the continued farce surrounding Blatter, Garcia, Russia and Qatar
Frank Warren column: 2014 – boxing is back and winning new fans

Frank Warren: Boxing is back and winning new fans

2014 proves it's now one of sport's biggest hitters again
Jeb Bush vs Hillary Clinton: The power dynamics of the two first families

Jeb Bush vs Hillary Clinton

Karen Tumulty explores the power dynamics of the two first families
Stockholm is rivalling Silicon Valley with a hotbed of technology start-ups

Stockholm is rivalling Silicon Valley

The Swedish capital is home to two of the most popular video games in the world, as well as thousands of technology start-ups worth hundreds of millions of pounds – and it's all happened since 2009
Did Japanese workers really get their symbols mixed up and display Santa on a crucifix?

Crucified Santa: Urban myth refuses to die

The story goes that Japanese store workers created a life-size effigy of a smiling "Father Kurisumasu" attached to a facsimile of Our Lord's final instrument of torture