Replacement of Hayes Repository - PFI Project

Report: 18
Date: 6 December 2001
By: Commissioner

Summary

This report sets out the background to the proposed replacement of the Ministry of Defence (MoD) owned Hayes Repository where the MPA stores the bulk of its non-current and semi-current records. It explains the current status of the MoD proposals to replace the facility through a PFI project.

Irrespective of whether the final offers are acceptable to the MoD, the MPA will decide independently whether to continue as a partner in the proposal with the MoD or withdraw and proceed with an independent solution.

The use of MoD facilities at Hayes is currently provided at below market prices. Consequently, regardless of the outcome of the PFI project and the eventual solution for MPA records, it is anticipated that the cost of records storage will increase. A contingency is included in the medium term financial plan to minimise or eliminate the effect of this increase on service delivery.

A. Recommendations

1. The Committee notes the current position described in this paper.
2. The MPA awaits confirmation of an acceptable proposal for service delivery and costs before entering into a firm contract with the MoD to replace the current facility through a PFI contract.

B. Supporting information

1. The MPA records management service comes under the management of the Deputy Commissioner through the Directorate of Information.

2. Records storage for the MPA is currently carried out by MPA staff operating out of the Hayes Repository, a facility in the ownership of MoD. Its use is shared by a number of other government departments and public bodies. Record management is undertaken in-house, with an annual charge levied by the MoD for space used within the building. Until now, this has been well below a true market rent.

3. The MPA occupies approximately 6% of the warehouse space (17,000 linear metres of shelving). This is used principally to store registered files (policy, serious crime cases etc) but also a number of smaller collections such as personal files of former MPA staff and officers. A review programme is applied to all records held at the repository and they are disposed of when no longer required for business or legal reasons.

4. Recent legislative changes (e.g., the Criminal Records Bureau, the Data Protection Act 1998 and the forthcoming Freedom of Information Act) will place greater importance on the need for an effective repository service, including increased need to gain access to records and avoidance of the adverse implications of any failure to manage records effectively.

5. The MoD is seeking to rationalise its property holdings and realise the market value of the Hayes site which is poorly utilised, expensive to maintain and partly derelict. As part of this process it intends to replace the current Repository with a PFI contract possibly serviced from a different location. The proposed contract (25 years) will require the contractor to take over the existing site and services, relocate the repository to a more suitable building within a prescribed period and provide a repository service. All present site users were invited to join the proposed PFI. The MoD has made it clear that users of Hayes who do not join the PFI will be required to vacate the accommodation by the time the contractor takes over. Hence there is no do nothing option.

6. The MPS has participated fully in developing service requirements and the provision of staffing details, to inform the bidders, but has not given a final commitment, pending a review of the details of the proposed contract when known, both in respect of service delivery and cost.

7. The MoD is seeking to award a contract during the second quarter of 2002 with the successful bidder taking over the Hayes site and becoming responsible for services from the autumn of 2002. This will require the MPA reaching a final decision about participation in early 2002. The MoD is aware that the time required to evaluate the bids and obtain the necessary approvals in both the MoD and customer organisations may cause slippage to this timetable. However, the MoD is seeking a written commitment from all Hayes users confirming their continued interest in the project by 31 December 2001, failing which they will issue notice to quit the site no later than when the contractor takes over, currently planned as 1 October 2002.

8. If the MPA agrees to participate, staff currently working at Hayes would be expected to transfer to the PFI contractor under TUPE. The MPA would pay a charge to the contractor, via a separate contract with the MoD, based upon both the volume of space used and the services provided. This charge is expected to be higher than the current costs, reflecting a market rate for the accommodation.

9. The cost to the MPA of joining the scheme is not known at present. Best and final offers from two bidding consortia are currently under evaluation. The charges arising will vary, depending upon the level of service activity (file movements, etc). There is also the likelihood of initial one-off cost to fund the relocation to a new building and the indexing of records passed to the contractor. The latter will be subject to the level of accountability the MPS requires of the contractor, commensurate with what is affordable.

10. If it does not prove possible to conclude a satisfactory deal under PFI, the MoD fall-back position is to develop a new facility at an alternative site through 'traditional' means. Current site users will be invited to participate. Again this will cost more than current arrangement to reflect market rates and may exceed the anticipated PFI cost levels. If the MPA does not join with the PFI, or the MoD alternative provision, it would have to set up its own facility. This would be through either the:

• conversion of existing premises within the present MPA estate should such premises become available; or
• lease or purchase of alternative premises; or
• hiring the required services from a contractor (with staff being TUPE transferred to the new provider).

11. These options are expected to be more expensive than joining a successful PFI. The time required for implementation (12-18 months) will also be problematic in view of the MoD's intention to have all non-PFI participants leave the site before the contractor takes over.

C. Financial implications

Accurate information on the likely PFI costs will not be available until the evaluation of bids is complete.

Details of the current annual MPA expenditure associated with the Hayes Repository are contained in a separate exempt report.

D. Background papers

None.

E. Contact details

Report author: Ailsa Beaton, Director of Information, MPS.

For information contact:

MPA general: 020 7202 0202
Media enquiries: 020 7202 0217/18

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