Plans for Civil Service office sell-off move to next stage

Government proposals to sell a portion of the Civil Service estate have moved a step further, Finance Minister, Rt Hon Peter Robinson MP, MLA announced today.

In a statement to the Assembly, Mr Robinson informed MLAs that the PFI contract for the Workplace 2010 scheme, which is part of the Northern Ireland Civil Service Reform programme, is now at the Best and Final Offer stage.

Mr Robinson said that having looked at the various procurement options, the Executive had concluded that the financial case for PFI makes sense and he rejected criticism that Government was ‘selling off the family silver’. On closer examination, he said, the ‘family silver’ was in poor repair:

“We are not talking here about buildings of great historical or cultural interest. We are talking about office blocks and Portakabins, some of which are well past their sell-by date and in urgent need of attention.

“In the greater Belfast area, for example, we are dealing with 18 buildings that are currently owned by Government and of those, 14 will be either demolished or vacated once the refurbishment programme is complete – so that gives you some idea of the state of the owned buildings. And that is a situation that isn’t sustainable either in terms of efficiency or the conditions that people have to work in.

“Ironically, the best of the accommodation is already leased, so the idea of the Civil Service renting from the private sector is not new – 17 leaseholds will transfer in Belfast and we will continue to occupy the majority of these for the lifetime of the contract.

“Having looked at the various procurement options we have concluded that the financial case for PFI stacks up and gives us best value for money.

“To put it simply, the 77 buildings involved cost us about £70 million every year and that is only allowing us to tread water. The Workplace 2010 contract will see the successful private sector partner investing about £100 million on improving the accommodation. We will have a contractual guarantee that the estate will be maintained and serviced to a good standard for the next 20 years or so – and this will be done for broadly the same amount as we are spending at present.

“As things stand we can also expect to get a capital payment in the region of about £200 million to fund other projects such as roads, hospitals and schools within the Comprehensive Spending Review period – so by selling the ‘tarnished silver’ we are provided with ‘polished silver’ to use, and the money to buy new, valuable and urgently needed assets as well.”

The Minister made it clear that staff have nothing to fear from the transfer of the Civil Service estate: “We were also determined to ensure that any staff who wanted to remain in the Civil Service would have the opportunity to do so.

“I have been able to assure Ministers that there will be no compulsory transfers to the private sector and the Executive has agreed, unanimously, that this should be the case.”

Mr Robinson said that the procurement of a private sector partner for the Civil Service office estate will, however, be dependent on whether or not a court injunction can be lifted. And in response to questions the Minister voiced some concerns about the delay and the possible implications for Government spending.

He also announced an independent review of policy on the location of public sector jobs. This is following on from a public consultation which was carried out earlier in the year on proposed principles governing the location of new bodies relating to the Review of Public Administration. The Executive has agreed to the review, the outcome of which could be used to determine a location policy for Northern Ireland.

Notes to Editors:

1. Workplace 2010 is a PFI contract involving the transfer of some 77 Civil Service office buildings to the private sector. The contract is valued at about £1.5billion and includes a major upgrade of 15 core buildings at a cost in excess of £100million.
2. At its meeting on 13 September the Executive unanimously agreed that the procurement of a private sector partner should proceed to Best and Final Offers. The Executive also agreed that there should be no compulsory transfer of civil servants to the private sector as a result of the contract. There are currently about 300 messenger and support staff by the contract and these staff will have the opportunity to remain in the civil service if they wish to do so.
3. There is currently a court injunction prohibiting the Department of Finance & Personnel from inviting Best and Final Offers. This is as a result of a legal challenge by one of the unsuccessful bidders which was lodged during the summer. The Department is strongly opposing any proposal to extend the injunction on the basis that it would seriously prejudice the project.
4. The review of location policy is part of a two-pronged approach to the issue of location. The Executive has agreed to the review and the development of a framework that would support decision making on the location of RPA related bodies in due course.