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.

PROMOTED VIDEO
News
Bryan Cranston as Walter White, in the acclaimed series 'Breaking Bad'
news
News
There have been various incidents of social media users inadvertently flouting the law
news

Sport
Chelsea's Loic Remy opens the scoring
footballLatest score and Twitter updates from the Champions League tie at Stamford Bridge
Life and Style
tech

Board creates magnetic field to achieve lift

News
Renee Zellweger as Bridget Jones
i100
Life and Style
Stack ‘em high?: quantity doesn’t always trump quality, as Friends of the Earth can testify
techThe proliferation of online petitions allows us to register our protests at the touch of a button. But do they change anything?
News
ebooksAn unforgettable anthology of contemporary reportage
Sport
CSKA Moscow celebrate after equalising with a late penalty
football

News
people
Arts and Entertainment
music
Life and Style
Designer Oscar de la Renta takes a bow after showing his Spring 2015 collection in September, his last show before his death
fashionThe passing of the legendary designer has left a vacancy: couturier to America’s royalty, says fashion editor Alexander Fury
Life and Style
tech

Company reveals $542m investment in start-up building 'a rocket ship for the mind'

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

Helpdesk Analyst

£23000 per annum + pension and 22 days holiday: Ashdown Group: An established ...

Senior Helpdesk Analyst / Service Desk Co-ordinator

£27000 per annum + pension, 22 days holiday: Ashdown Group: An established ind...

Senior Pensions Administrator

£23000 - £26000 Per Annum: Clearwater People Solutions Ltd: Our client is curr...

Corporate Actions Administrator / Operations Administrator

£25 - 30k: Guru Careers: A Corporate Actions Administrator / Operations Admini...

Day In a Page

Indiana serial killer? Man arrested for murdering teenage prostitute confesses to six other murders - and police fear there could be many more

A new American serial killer?

Police fear man arrested for murder of teen prostitute could be responsible for killing spree dating back 20 years
Sweetie, the fake 10-year-old girl designed to catch online predators, claims her first scalp

Sting to trap paedophiles may not carry weight in UK courts

Computer image of ‘Sweetie’ represented entrapment, experts say
Fukushima nuclear crisis: Evacuees still stuck in cramped emergency housing three years on - and may never return home

Return to Fukushima – a land they will never call home again

Evacuees still stuck in cramped emergency housing three years on from nuclear disaster
Online petitions: Sign here to change the world

Want to change the world? Just sign here

The proliferation of online petitions allows us to register our protests at the touch of a button. But do they change anything?
Ed Sheeran hits back after being labelled too boring to headline festivals

'You need me, I don’t need you'

Ed Sheeran hits back after being labelled too boring to headline festivals
How to Get Away with Murder: Shonda Rhimes reinvents the legal drama

How to Get Away with Murder

Shonda Rhimes reinvents the legal drama
A cup of tea is every worker's right

Hard to swallow

Three hospitals in Leicester have banned their staff from drinking tea and coffee in public areas. Christopher Hirst explains why he thinks that a cuppa is every worker's right
Which animals are nearly extinct?

Which animals are nearly extinct?

Conservationists in Kenya are in mourning after the death of a white northern rhino, which has left the species with a single male. These are the other species on the brink
12 best children's shoes

Perfect for leaf-kicking: 12 best children's shoes

Find footwear perfect to keep kids' feet protected this autumn
Comment: David Moyes' show of sensitivity thrown back in his face by former Manchester United manager Sir Alex Ferguson

Moyes’ show of sensitivity thrown back in his face... by Ferguson

Manchester United legend tramples on successor who resisted criticising his inheritance
Two super-sized ships have cruised into British waters, but how big can these behemoths get?

Super-sized ships: How big can they get?

Two of the largest vessels in the world cruised into UK waters last week
British doctors on brink of 'cure' for paralysis with spinal cord treatment

British doctors on brink of cure for paralysis

Sufferers can now be offered the possibility of cure thanks to a revolutionary implant of regenerative cells
Let's talk about loss

We need to talk about loss

Secrecy and silence surround stillbirth
Will there be an all-female mission to Mars?

Will there be an all-female mission to Mars?

Women may be better suited to space travel than men are