Re. Outsourcing Contract
Land Securities Group Plc
26 January 2005
26 January 2005
LAND SECURITIES GROUP PLC ('Land Securities' / 'Group')
National Audit Office endorses Land Securities Trillium's expanded property
outsourcing contract with the Department for Work and Pensions
The National Audit Office ('NAO') today announced its formal endorsement of the
expansion to the PRIME property outsourcing contract between the Department for
Work and Pensions ('DWP') and Land Securities Trillium and its conclusion that
the transaction has succeeded in achieving its goals.
Specifically, the NAO reported to Parliament that:
• DWP got the deal it set out to achieve, by expanding its contract with
Land Securities Trillium to include the former Employment Service estate
• the deal is £220 million cheaper than a credible commercial alternative.
In addition, the NAO found that the DWP's decision to proceed via a
non-competitive negotiation with Land Securities Trillium was justified.
Sir John Bourn, Comptroller and Auditor General and head of the NAO, said, 'The
Department got what it required at a good price. Where public bodies can show
that a non-competitive negotiation is the best option, the approach used for the
expansion of the PRIME contract provides a number of lessons on how to achieve
good value for money - which should be applied in the future.'
Jane Kennedy, Minister for Work, said, 'This is a very positive report for the
Department for Work and Pensions which fully supports our approach. The
expanded agreement with Land Securities Trillium has been tailored to meet the
current and future needs of this department and secures best value for money for
the taxpayer.'
Ian Ellis, Chief Executive of Land Securities Trillium, commented, 'We are
delighted to have the NAO's independent seal of approval on this deal. The
contract is all about working with government to support their business changes,
whilst delivering better workplaces and value for money.
'In 1999, the NAO endorsed our original property outsourcing deal with the DWP
and today it has approved the expansion of the contract. The NAO estimates
combined savings of £780 million (Note: 1, 2) for the taxpayer over the life of
the expanded contract and their report clearly demonstrates that we offer best
value for money.
'This expanded contract is a fine example of how Land Securities Trillium's
long-term property solutions can meet clients' business needs both now and as
they change over time.'
Peter Besley, Director of Estates at DWP, said, 'We had two priorities in
undertaking this deal: to make it a financial and operational success for
government. I am delighted that the NAO has found that we have succeeded on
both fronts.'
- Ends -
For further information, please contact:
Land Securities
Ian Ellis / Cat Ley
Tel: +44 (0)20 7796 5500
Financial Dynamics
Dido Laurimore
Tel: +44(0) 20 7831 3113
1 'The estimated present value saving to the taxpayer from the PRIME deal
over its 20 year duration is some £560 million, or 22 per cent below the
cost of continued public sector ownership and management.' Source: NAO
report ' The PRIME project: the transfer of the Department of Social
Security estate to the private sector' 20 April 1999.
2 'The decision to proceed via a non-competitive negotiation with Land
Securities Trillium was the right one. DWP introduced competitive tension
into the negotiations, and the outcome was £220 million cheaper than a
credible commercial alternative.' Source: NAO press release 'Accommodation
services for the Department for Work and Pensions: Transfer of property to
the private sector under the expansion of the PRIME Contract' 26 January
2005.
NOTES TO EDITORS:
PRIME
In 1998, the former Department of Social Security transferred its estate under a
deal known as PRIME (Private sector Resource Initiative for the Management of
the Estate) to a private sector consortium, now Land Securities Trillium.
Following the 2001 election, and the creation of the Department for Work and
Pensions, this contract was expanded by the Department to take in property of
the Employment Service.
Under the PRIME expansion Land Securities Trillium paid DWP an appropriate
amount for the estate. £100 million was paid up front with the balance taken as
a reduction in the annual unitary charge payment. At the end of the contract
DWP will retain the right to occupy the buildings it then wishes to continue to
occupy with leases based on prevailing market terms.
Department for Work and Pensions
DWP, the Department for Work and Pensions was formed in June 2001 from the
former Department of Social Security (DSS) and parts of the former Department
for Education and Employment (DfEE) including the Employment Service (ES). DWP
is responsible for the Government's welfare reform agenda and delivers support
and advice through a modern network of services to people of working age,
employers, pensioners, families and children and disabled people.
Land Securities Trillium
Land Securities Trillium, part of the Land Securities Group, is one of the UK's
leading providers of property outsourcing solutions. Capital, estate strategy,
property management, facilities management and risk management services are
combined to meet the particular needs of corporate and public sector
organisations. Land Securities Trillium currently owns or manages over 8,400
properties throughout the UK. Clients include the Department for Work and
Pensions, the BBC, BT, Norwich Union and Barclays Bank.
Land Securities Group PLC
Land Securities Group ('Land Securities' / 'Group') is a FTSE 100 company,
quoted on the London Stock Exchange. It has been at the forefront of the UK's
commercial property industry for 60 years. Today, the Group maintains its
market leading position as the UK's largest quoted property company by providing
commercial accommodation and property services to a wide range of occupiers.
The Group's objective is to create attractive and sustainable returns for its
shareholders through its activities, which include property investment,
development and property outsourcing.
Land Securities holds a market leading position in three areas of the UK
commercial property market:
• Retail
• Central London offices and
• Property outsourcing.
Its £8 billion investment portfolio includes more than 810,000 sq m of office
space in Central London and substantial retail holdings in Oxford Street,
Tottenham Court Road and Notting Hill Gate. In addition the Group owns 18
shopping centres and 25 retail parks located across the UK.
This information is provided by RNS
The company news service from the London Stock Exchange
Latest directors dealings
- 11 minutes ago River Global Plc
- 1 hour ago Pipehawk
- 1 hour ago Frasers Group
- 1 hour ago DP Aircraft I Limited Pref
- 1 hour ago Cropper (James)