Lessons from PFI and other projects - Public Accounts Committee Contents


Written evidence from Infrastructure UK, HM Treasury

Q205: Austin Mitchell:  Grimsby's Heritage House is part of the PFI deal between Treasury and Mapeley STEPS….... But the public services which were brought there are now all leaving ……because the rents are too high…..Grimsby is the kind of place where it is cheaper than the real world: we could provide a lovely home for public services, and should do. Is this a consequence of the prices charged under a PFI deal being too high for the Departments to pay?

RESPONSE FROM HMRC

Heritage House was included in the 2001 Strategic Transfer of the Estate to the Private Sector (STEPS) outsourcing contract with Mapeley. The contract comprised the transfer of around 600 freehold and leasehold properties to Mapeley for a £220 million upfront payment and £150 million in reduced payments over the contract term. Under the contract, Mapeley provides serviced accommodation and bears associated property risks in return for a monthly payment.

The monthly payment, or unitary charge, was fixed in 2001 and although it is property specific the quantum of charge was set in the context of the overall pricing of a national contract covering an extensive range of services. The unitary charge is uplifted on an annual basis by indexation and has no link to market terms in the specific location.

HMRC cannot comment on other government departments' vacation decisions. HMRC's decision to vacate Heritage House was taken in December 2008 as part of its transformation to ensure it operates in the most efficient and cost effective way and makes best use of its estate as a whole.


 
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Prepared 1 September 2011