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Private Finance Initiative

Work and Pensions written question – answered on 20th July 2001.

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Photo of Austin Mitchell Austin Mitchell Labour, Great Grimsby

To ask the Secretary of State for Work and Pensions how many (a) PFI and (b) PPP contracts have been agreed by his Department over the last five years; how many have been satisfactorily completed; and in how many has compensation been (i) paid and (ii) claimed for performance failure.

Photo of Ian McCartney Ian McCartney Minister for pensions, Department for Work and Pensions

The information is as follows:

(a) The Department for Work and Pensions has awarded eight PFI contracts over the last five years. Of these five were awarded by the Department of Social Security (DSS) and three by the Employment Service (ES) as an Executive Agency of Department for Education and Employment. Details are:

1. PRIME (Private Sector Resource Initiative for the Management of the Estate). A 20-year PFI partnership deal competitively awarded by DSS to Trillium on 1 April 1998. Trillium were recently acquired by Land Securities, the UK's largest property company, and are now called Land Securities Trillium.

2. A series of contracts awarded by DSS under the ACCORD (Access to Corporate Data) framework. The DSS established the ACCORD framework to secure the full range of IS/IT systems needed to underpin the Department's modernisation strategy, and Government's ambitions for Welfare Reform. Overarching contracts were awarded to three major consortia in 1999, Affinity, lead by EDS, Arcway, lead by BT, and 1Accord, lead by ICL. Within this framework three PFI contracts were awarded for IS/IT services:

(i) Strategic Outsourcing—a 10 year contract awarded to Affinity on 8 August 2000;

(ii) to underpin Child Support Reforms—a 10 year contract awarded to Affinity 8 August 2000; and

(iii) to deliver new Wide Area Network (WAN) services—a five year contract awarded to Arcway in November 2000.

Other contracts will be agreed with service providers over the life of the ACCORD framework.

3. The Benefit Payment Card Project formed part of the BA/POCL Horizon Automation Project, which was a PFI project to automate post offices and benefit payments. The Benefit Payment Card Project, introduced in October 1996, was cancelled in May 1999.

4. The Employment Service (ES) has entered into two IT related and one other PFI deal over the last five years:

(i) The Escom contract with Siemens Business Services (SBS) began in February 1998 and is due for completion February 2003.

(ii) ES went into Partnership with Electronic Data Systems (EDS) in August 1998 for provision of IT and Telephony services. This contract is ongoing until July 2008.

(iii) In February 1999 ES awarded Rebus Human Resources Services and Norwich Systems Accounting a 10 year partnership for the delivery of ES' Human Resources Services.

(b) The Department has two PPP agreements:

1. A Lead Service Provider agreement made by DSS with Affinity in September 2000 under the ACCORD framework; and

2. a Network and Office Service Provider agreement made by DSS with Arcway in November 2000, also under ACCORD.

All the above, apart from the cancelled benefit payment card, are long-term service agreements and as such none has yet been completed.

The Department has not claimed compensation under any PFI/PPP contract to date.

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