PracticePeople In PracticePAC slams contibutions agency deal

PAC slams contibutions agency deal

The government has been strongly criticised over a 'sloppy' deal to secure new accommodation for contributions agency staff in Newcastle.

The House of Commons Public Accounts Committee this week said the agreement in 1998 between the Department of Social Security and Newcastle Estate Partnerships, consortium led by AMEC plc, was ‘fundamentally flawed’.

The contract requires NEP to provide office accommodation over 31 years, however no comparison with the public sector alternative was done, the PAC said that ‘the value for money of the deal is uncertain’.

In addition it provides space for only 10,700 staff, much less than before, and considerably less than current estimates of the final total required.

As a result the Inland Revenue (which has taken over the agency) will either have to go to NEP for another building or obtain office space in the commercial market.

The PAC said departments undertaking similar PFI deals should learn lessons from the project and think through their accommodation strategy before commencing procurement or appointing a preferred bidder.

Committee chairman David Davis said: ‘There are strong reasons to doubt the value for money of this deal. The appraisal on which it was based was fundamentally flawed and the Department of Social Security failed subsequently to justify their approach.’

The PFI project will cost more than conventional procurement and, alarmingly, is unlikely to meet the Department’s accommodation needs.

Related Articles

Is inefficiency stealing your time and money?

Accounting Firms Is inefficiency stealing your time and money?

6m Emma Smith, Managing Editor
CIMA elects new president

Institutes CIMA elects new president

6m Emma Smith, Managing Editor
Transparent currency trade: How to achieve costs visibility

Governance Transparent currency trade: How to achieve costs visibility

6m Emma Smith, Managing Editor
Introduction to KPMG UK’s new leadership team

Accounting Firms Introduction to KPMG UK’s new leadership team

6m Emma Smith, Managing Editor
EY appoints head of UK Infrastructure Asset Intelligence practice

Accounting Firms EY appoints head of UK Infrastructure Asset Intelligence practice

8m Emma Smith, Managing Editor
FRP Advisory expands operation with new office, partner appointments

Accounting Firms FRP Advisory expands operation with new office, partner appointments

10m Emma Smith, Managing Editor
Magma Group announces merger, partner promotions

Accounting Firms Magma Group announces merger, partner promotions

10m Emma Smith, Managing Editor
MHA MacIntyre Hudson advises on management buy-out

Accounting Firms MHA MacIntyre Hudson advises on management buy-out

10m Emma Smith, Managing Editor