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
ebooks
ebooksAn introduction to the ground rules of British democracy
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
SPONSORED FEATURES
Independent Dating
and  

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

iJobs Job Widget
iJobs Money & Business

SThree: Experienced Recruitment Consultant

£20000 - £40000 per annum + OTE + Incentives + Benefits: SThree: Established f...

SThree: Trainee Recruitment Consultant

£20000 - £25000 per annum + OTE 40/45k + INCENTIVES + BENEFITS: SThree: The su...

Recruitment Genius: Collections Agent

£14000 - £16000 per annum: Recruitment Genius: This company was established in...

SThree: Trainee Recruitment Consultant

£20000 - £25000 per annum + OTE 40k: SThree: SThree are a global FTSE 250 busi...

Day In a Page

Refugee crisis: David Cameron lowered the flag for the dead king of Saudi Arabia - will he do the same honour for little Aylan Kurdi?

Cameron lowered the flag for the dead king of Saudi Arabia...

But will he do the same honour for little Aylan Kurdi, asks Robert Fisk
Our leaders lack courage in this refugee crisis. We are shamed by our European neighbours

Our leaders lack courage in this refugee crisis. We are shamed by our European neighbours

Humanity must be at the heart of politics, says Jeremy Corbyn
Joe Biden's 'tease tour': Could the US Vice-President be testing the water for a presidential run?

Joe Biden's 'tease tour'

Could the US Vice-President be testing the water for a presidential run?
Britain's 24-hour culture: With the 'leisured society' a distant dream we're working longer and less regular hours than ever

Britain's 24-hour culture

With the 'leisured society' a distant dream we're working longer and less regular hours than ever
8 best children's clocks

Tick-tock: 8 best children's clocks

Whether you’re teaching them to tell the time or putting the finishing touches to a nursery, there’s a ticker for that
Isis profits from destruction of antiquities by selling relics to dealers - and then blowing up the buildings they come from to conceal the evidence of looting

How Isis profits from destruction of antiquities

Robert Fisk on the terrorist group's manipulation of the market to increase the price of artefacts
Labour leadership: Andy Burnham urges Jeremy Corbyn voters to think again in last-minute plea

'If we lose touch we’ll end up with two decades of the Tories'

In an exclusive interview, Andy Burnham urges Jeremy Corbyn voters to think again in last-minute plea
Tunisia fears its Arab Spring could be reversed as the new regime becomes as intolerant of dissent as its predecessor

The Arab Spring reversed

Tunisian protesters fear that a new law will whitewash corrupt businessmen and officials, but they are finding that the new regime is becoming as intolerant of dissent as its predecessor
King Arthur: Legendary figure was real and lived most of his life in Strathclyde, academic claims

Academic claims King Arthur was real - and reveals where he lived

Dr Andrew Breeze says the legendary figure did exist – but was a general, not a king
Who is Oliver Bonas and how has he captured middle-class hearts?

Who is Oliver Bonas?

It's the first high-street store to pay its staff the living wage, and it saw out the recession in style
Earth has 'lost more than half its trees' since humans first started cutting them down

Axe-wielding Man fells half the world’s trees – leaving us just 422 each

However, the number of trees may be eight times higher than previously thought
60 years of Scalextric: Model cars are now stuffed with as much tech as real ones

60 years of Scalextric

Model cars are now stuffed with as much tech as real ones
Theme parks continue to draw in thrill-seekers despite the risks - so why are we so addicted?

Why are we addicted to theme parks?

Now that Banksy has unveiled his own dystopian version, Christopher Beanland considers the ups and downs of our endless quest for amusement
Tourism in Iran: The country will soon be opening up again after years of isolation

Iran is opening up again to tourists

After years of isolation, Iran is reopening its embassies abroad. Soon, there'll be the chance for the adventurous to holiday there
10 best PS4 games

10 best PS4 games

Can’t wait for the new round of blockbusters due out this autumn? We played through last year’s offering