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.

peopleFrankie Boyle responds to referendum result in characteristically offensive style
Arts and Entertainment
Highs and lows of the cast's careers since 2004
New Articles
i100... with this review
ebooksAn unforgettable anthology of contemporary reportage
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating

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

iJobs Job Widget
iJobs Money & Business

Senior BA - Motor and Home Insurance

£400 - £450 Per Day: Clearwater People Solutions Ltd: **URGENT CONTRACT ROLE**...

Market Risk & Control Manager

Up to £100k or £450p/d: Saxton Leigh: My client is a leading commodities tradi...

SQL Developer - Watford/NW London - £320 - £330 p/d - 6 months

£320 - £330 per day: Ashdown Group: The Ashdown Group have been engaged by a l...

Head of Audit

To £75,000 + Pension + Benefits + Bonus: Saxton Leigh: My client is looking f...

Day In a Page

Scottish referendum: The Yes vote was the love that dared speak its name, but it was not to be

Despite the result, this is the end of the status quo

Boyd Tonkin on the fall-out from the Scottish referendum
Manolo Blahnik: The high priest of heels talks flats, Englishness, and why he loves Mary Beard

Manolo Blahnik: Flats, Englishness, and Mary Beard

The shoe designer who has been dubbed 'the patron saint of the stiletto'
The Beatles biographer reveals exclusive original manuscripts of some of the best pop songs ever written

Scrambled eggs and LSD

Behind The Beatles' lyrics - thanks to Hunter Davis's original manuscript copies
'Normcore' fashion: Blending in is the new standing out in latest catwalk non-trend

'Normcore': Blending in is the new standing out

Just when fashion was in grave danger of running out of trends, it only went and invented the non-trend. Rebecca Gonsalves investigates
Dance’s new leading ladies fight back: How female vocalists are now writing their own hits

New leading ladies of dance fight back

How female vocalists are now writing their own hits
Mystery of the Ground Zero wedding photo

A shot in the dark

Mystery of the wedding photo from Ground Zero
His life, the universe and everything

His life, the universe and everything

New biography sheds light on comic genius of Douglas Adams
Save us from small screen superheroes

Save us from small screen superheroes

Shows like Agents of S.H.I.E.L.D are little more than marketing tools
Reach for the skies

Reach for the skies

From pools to football pitches, rooftop living is looking up
These are the 12 best hotel spas in the UK

12 best hotel spas in the UK

Some hotels go all out on facilities; others stand out for the sheer quality of treatments
These Iranian-controlled Shia militias used to specialise in killing American soldiers. Now they are fighting Isis, backed up by US airstrikes

Widespread fear of Isis is producing strange bedfellows

Iranian-controlled Shia militias that used to kill American soldiers are now fighting Isis, helped by US airstrikes
Topshop goes part Athena poster, part last spring Prada

Topshop goes part Athena poster, part last spring Prada

Shoppers don't come to Topshop for the unique
How to make a Lego masterpiece

How to make a Lego masterpiece

Toy breaks out of the nursery and heads for the gallery
Meet the ‘Endies’ – city dwellers who are too poor to have fun

Meet the ‘Endies’ – city dwellers who are too poor to have fun

Urbanites are cursed with an acronym pointing to Employed but No Disposable Income or Savings
Paisley’s decision to make peace with IRA enemies might remind the Arabs of Sadat

Ian Paisley’s decision to make peace with his IRA enemies

His Save Ulster from Sodomy campaign would surely have been supported by many a Sunni imam