Press Release - PFI: The New Headquarters for the Home
Office
15 June 2003
Sir John Bourn, head of the National Audit Office, told
Parliament today that the Home Office will get what it wants at a
good price from the PFI deal to provide serviced headquarters
accommodation for 3450 Home Office and Prison Service staff, but
risks remain.
The Home Office is due to move into the new building on the site
of the old Department of the Environment building at Marsham Street
in Westminster in 2005 when it will begin paying a monthly charge
for the building and associated services amounting, at contract
signature, to £311 million (net present cost) over the 26 year life
of the project.
The deal will replace inadequate existing accommodation with a
more modern, flexible working environment that is expected to
deliver business benefits. However, there has been a significant
increase in Home Office and Prison Service headquarters staff
numbers in central London from a total of 3200 in 1998, to 4900 in
2003. Current projections for 2005 are subject to review but if
numbers remain constant, there will not be enough space for all
staff. Options are currently being considered and a decision is
expected by no later than mid-2004.
The Home Office got a good price for the deal. It ran a good
competition, it has appropriately allocated risks and a good price
for the financing was obtained. The innovative financing structure
means that the Home Office’s annual payment is reduced.
The deal has been co-ordinated with other departments’
accommodation requirements. The Department for Constitutional
Affairs was identified as a suitable occupier for the Home Office’s
surplus leaseholds and has committed to taking over the lease of 50
Queen Anne’s Gate thus saving the Home Office the otherwise
considerable cost of its disposal.
The Home Office has retained the risk of disposing of its
freehold properties once they are declared surplus. It has advised
the Office of Government Commerce that the freeholds may be
available for use by other government departments if required, if
not it will sell the property to the private sector. In a market
that is currently declining, the Home Office must manage this risk
carefully in order to secure value for money for the taxpayer.
Sir John said today:
"Through this PFI deal, the Home Office should gain a
good quality working environment at a good price, that will support
the way it wants to work in the future. However, risks to the
Accommodation Strategy remain and must be managed well. In
particular, I urge the Home Office to decide how excess staff will
be accommodated soon in order to determine the budgetary
implications and manage staff expectations."
Notes for Editors
- The Home Office signed a deal with Anne’s Gate Properties plc
in March 2002 for demolition of the existing building at 2 Marsham
Street, funding, design and construction of new headquarters
accommodation on part of the site and provision of associated
services for 26 years.
- Anne’s Gate Properties plc is a company owned by Byhome Ltd
(indirectly owned by Bouygues S.A., a major French construction
group) and HSBC Infrastructure Ltd.
- The Prison Service is an executive agency of the Home
Office.
- Press notices and reports are available from the date of
publication on the NAO website at http://www.nao.org.uk/ Hard copies can
be obtained from The Stationery Office on 0845 702 3474.
- The Comptroller and Auditor General, Sir John Bourn, is the
head of the National Audit Office which employs some 800 staff. He
and the NAO are totally independent of Government. He certifies the
accounts of all Government departments and a wide range of other
public sector bodies; and he has statutory authority to report to
Parliament on the economy, efficiency and effectiveness with which
departments and other bodies have used their resources.
Press Notice 51/03
All enquiries to Mark Strathdene, NAO Press Office:
Tel: 020 7798 7183
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