26th Jan 2005 08:00
Land Securities Group Plc26 January 2005 26 January 2005 LAND SECURITIES GROUP PLC ("Land Securities" / "Group") National Audit Office endorses Land Securities Trillium's expanded propertyoutsourcing contract with the Department for Work and Pensions The National Audit Office ("NAO") today announced its formal endorsement of theexpansion to the PRIME property outsourcing contract between the Department forWork and Pensions ("DWP") and Land Securities Trillium and its conclusion thatthe 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 anon-competitive negotiation with Land Securities Trillium was justified. Sir John Bourn, Comptroller and Auditor General and head of the NAO, said, "TheDepartment got what it required at a good price. Where public bodies can showthat a non-competitive negotiation is the best option, the approach used for theexpansion of the PRIME contract provides a number of lessons on how to achievegood value for money - which should be applied in the future." Jane Kennedy, Minister for Work, said, "This is a very positive report for theDepartment for Work and Pensions which fully supports our approach. Theexpanded agreement with Land Securities Trillium has been tailored to meet thecurrent and future needs of this department and secures best value for money forthe taxpayer." Ian Ellis, Chief Executive of Land Securities Trillium, commented, "We aredelighted to have the NAO's independent seal of approval on this deal. Thecontract 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 DWPand today it has approved the expansion of the contract. The NAO estimatescombined savings of £780 million (Note: 1, 2) for the taxpayer over the life ofthe expanded contract and their report clearly demonstrates that we offer bestvalue for money. "This expanded contract is a fine example of how Land Securities Trillium'slong-term property solutions can meet clients' business needs both now and asthey change over time." Peter Besley, Director of Estates at DWP, said, "We had two priorities inundertaking this deal: to make it a financial and operational success forgovernment. I am delighted that the NAO has found that we have succeeded onboth fronts." - Ends - For further information, please contact: Land SecuritiesIan Ellis / Cat LeyTel: +44 (0)20 7796 5500 Financial DynamicsDido LaurimoreTel: +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 adeal known as PRIME (Private sector Resource Initiative for the Management ofthe Estate) to a private sector consortium, now Land Securities Trillium.Following the 2001 election, and the creation of the Department for Work andPensions, this contract was expanded by the Department to take in property ofthe Employment Service. Under the PRIME expansion Land Securities Trillium paid DWP an appropriateamount for the estate. £100 million was paid up front with the balance taken asa reduction in the annual unitary charge payment. At the end of the contractDWP will retain the right to occupy the buildings it then wishes to continue tooccupy 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 theformer Department of Social Security (DSS) and parts of the former Departmentfor Education and Employment (DfEE) including the Employment Service (ES). DWPis responsible for the Government's welfare reform agenda and delivers supportand 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'sleading providers of property outsourcing solutions. Capital, estate strategy,property management, facilities management and risk management services arecombined to meet the particular needs of corporate and public sectororganisations. Land Securities Trillium currently owns or manages over 8,400properties throughout the UK. Clients include the Department for Work andPensions, 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'scommercial property industry for 60 years. Today, the Group maintains itsmarket leading position as the UK's largest quoted property company by providingcommercial accommodation and property services to a wide range of occupiers.The Group's objective is to create attractive and sustainable returns for itsshareholders through its activities, which include property investment,development and property outsourcing. Land Securities holds a market leading position in three areas of the UKcommercial property market: • Retail • Central London offices and • Property outsourcing. Its £8 billion investment portfolio includes more than 810,000 sq m of officespace in Central London and substantial retail holdings in Oxford Street,Tottenham Court Road and Notting Hill Gate. In addition the Group owns 18shopping centres and 25 retail parks located across the UK. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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