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Official Report (Hansard)

Session: 2008/2009

Date: 05 November 2008

COMMITTEE FOR FINANCE AND PERSONNEL

OFFICIAL REPORT

(Hansard)

Workplace 2010

05 November 2008

 

Members present for all or part of the proceedings: 
Mr Mitchel McLaughlin (Chairperson) 
Mr Simon Hamilton (Deputy Chairperson) 
Mr Fra McCann 
Mr David McNarry 
Mr Adrian McQuillan 
Mr Declan O’Loan 
Mr Ian Paisley Jnr 
Mr Peter Weir

Witnesses: 
Ms Amanda Allaway ) 
Mr Kieran Bannon ) Northern Ireland Public Service Alliance 
Mr John Corey )

Mr Mark Bailey ) 
Mr Michael Donnelly ) Department of Finance and Personnel 
Mr Philip Irwin

The Chairperson (Mr McLaughlin):

Representatives from the Northern Ireland Public Service Alliance (NIPSA) are present to talk about Workplace 2010. I refer members to the papers that NIPSA has submitted. I welcome the NIPSA officials: John Corey, who is the organisation’s general secretary; Kieran Bannon, who is the assistant general secretary; and Amanda Allaway, who is the chairperson of NIPSA’s Civil Service executive committee. How are you doing, John? It is good to see you again.

I remind the Committee and members of the public that the session is being recorded by Hansard. Mobile phones must, therefore, be turned off because they interfere with the recording.

Mr John Corey ( Northern Ireland Public Service Alliance):

Thank you for the opportunity that has, again, been afforded to us to make representations to you about the Workplace 2010 PFI project. We requested the meeting in order to urge the Committee to press the Department of Finance and Personnel (DFP) and the Minister to suspend the procurement process for reasons set out in a letter that I sent to the Committee on 30 October. We had made similar representations directly to the Department the week before. The position changed on Friday 31 October, when DFP announced the suspension of the procurement process.

We noted that, according to the Department’s statement, the process:

“will be reviewed again in January 2009.”

We are not entirely sure what that means precisely. The Committee may wish to pursue that point in order to establish what it means — whether the process will simply automatically resume in January 2009 or be reviewed in order to determine whether the suspension will be maintained.

NIPSA believes that the Department’s decision to suspend the process is a first step in the right direction. As the press release indicated, one of the factors behind that decision was the ongoing possibility that the two bidding companies could come under common ownership. We have previously raised with the Committee our concerns about that. We are aware that the Committee has also made its own representations and inquiries on the matter.

We feel strongly that the process was no longer credible, given that the two companies were bidding while, at the same time, there was a prospect of their becoming a single company. We believe that the arguments set out in our letter of 30 October further support the case for a critical and independent review of the whole project. The suspension provides the opportunity for that. We urge the Committee to press the Minister and the Department to undertake such a review of the whole project, for the following reasons.

First, as we have suggested previously to the Committee, the pilot evaluations conducted at Royston House and Clare House do not support the case for a one-size-fits-all model of Civil Service accommodation. We do not think that that would help to provide a more productive and efficient Civil Service. Those were the findings of the Clare House pilot scheme. We are not at all convinced that the response to that evaluation alters its fundamental findings. Proceeding with Workplace 2010 regardless of the findings of the evaluation entails running the risk of making the Civil Service less efficient and productive. No single model is applicable; Departments and divisions each have their particular requirements and needs. If this proceeds, it is inevitable that, in future contracts, Departments will require different solutions and have different accommodation needs and, therefore, the costs under the PFI contract will rise.

Secondly, given the current state of the finance and property market, we do not think it viable to construct an accurate final business case assessment for a PFI contract of this size. According to all commentators, that will be impossible to achieve at any time in the near future. Such an assessment is a prerequisite for the signing of any contract. Consequently, for civil servants to continue working on it is a waste of public expenditure. The procurement process should be suspended lock, stock and barrel, and we should go back to butts in considering how to provide Civil Service accommodation.

Thirdly, a major question mark now hangs over PFI generally. We have debated that question before: I will not dwell on it today. Our respective positions on that are clear. However, one has to ask fundamental questions about PFI, which is predicated on the ability of private-sector bidders to borrow money from banks. The Government is now providing money for the banks: given their role in the banking sector, it makes no sense for Government to embark on a PFI route.

Fourthly, the Bain Report on the relocation of public-sector jobs is now available. It puts forward significant policy issues to be considered and determined in relation to the future location of all public-sector jobs in Northern Ireland. Policy decisions will have to be taken with reference to the Bain Report before the Government can enter into any future contract on PFI provision for Workplace 2010. Failure to do that — proceeding with the Workplace 2010 project without having the Bain determinations in place — means running the risk of incurring further increased costs.

Fifthly, the public funding available for capital investment in Northern Ireland should now be directed and used to assist local construction companies. NIPSA believes that, in order to do that, the Northern Ireland Executive must retain full control over all and any procurement of capital projects, in whatever sector — in this case, Civil Service accommodation. Capital projects should be procured as and when required, by conventional procurement methods. That is far more likely to assist construction employers and employees in Northern Ireland at this time, rather than handing over a contract to a single private company from outside Northern Ireland to be responsible for all Civil Service accommodation for 25 years.

Those are the key points that NIPSA believes not only support the decision to suspend the process, but now make the case for a fundamental review of the contract. As well as those major points, NIPSA has provided the Committee with a report that it commissioned from the Association of Public Service Excellence (APSE) on the Workplace 2010 invitation-to-negotiate (ITN) process and the movement towards the best-and-final-offer (BAFO) process. In our letter to the Committee, we drew attention to some key points in that report. Without going into the details, those key points could come into play, particularly if DFP decides to go back to the suspended process. In essence, however, the APSE report, as well as making several specific points, poses a straight question about the efficacy and fairness of the entire procurement process, given the changes that have taken place in the contract between the ITN and BAFO stages. Some of those changes have been the subject of litigation.

The final point that NIPSA wishes to make is that the press release issued by DFP last Friday stated that the Minister of Finance and Personnel:

“continues to affirm the importance of the Workplace 2010 principles, and the NICS remains committed to creating a modern, flexible working environment”.

I wish to make it absolutely clear that NIPSA, representing Civil Service staff, wishes to see them working in modern, flexible environments. However, NIPSA has seen no evidence that the Workplace 2010 model of accommodation, or, indeed, the total property PFI route, will achieve either the establishment of modern office accommodation, or, more importantly, an efficient and productive Civil Service. NIPSA does not believe that those aims should be secured on the basis that has been proposed, nor does it believe that they should be secured at any price, especially at this time.

We are in favour of those objectives, but the Workplace 2010 model, via a total property PFI contract, has not been the correct route. The suspension of Workplace 2010 procurement is a step in the right direction, but we must go further and have a fundamental review of the entire contract.

Ms Amanda Allaway ( Northern Ireland Public Service Alliance):

I am interested to note that the Committee is considering a review of the entire procurement process. That is timely, given the suspension of Workplace 2010 procurement. One of the issues that NIPSA has raised since the decision was made to go down the PFI route for Workplace 2010 has been the impact that it will have on small and medium-sized enterprises. That has been a key factor in our opposition to the project, notwithstanding our opposition to the delivery of public-service projects through PFI in the first place. It is right that the Committee should consider a review.

The APSE report contains some critical comments about how the decision to go down the PFI route was based on the economic climate of that time. That has changed significantly, and the report suggests that the authorities should reassess the affordability of the contract in light of the current economic climate. Those are the kind of issues that we have flagged up with the Department from the beginning. It is not just about providing Civil Service accommodation — it has a much wider impact than that. I urge the Committee to examine that closely in the current economic climate because, if the entire Civil Service property portfolio service is tied up with one contractor, it will affect the ability of the wider construction industry in Northern Ireland to bid for contracts.

Mr Kieran Bannon ( Northern Ireland Public Service Alliance):

In relation to the one-size-fits-all model, part of our role in representing our members — and we are a very sizeable trade union in Northern Ireland — has to do with social and economic issues. It is not just the effect that they have on our members, but the impact on society in Northern Ireland as a whole. We have to anticipate some of the responses or comments that the Department may make in reply to some of the points that we have raised. The Department may say that it is not going down the route of a one-size-fits-all model, and that that is not what the contract represents. We looked at the specifications before the contract went out to tender, and it specifically had a one-size-fits-all element, because it contained set parameters for accommodation standards.

The Chairperson:

Parameters that fit all?

Mr Bannon:

Yes, indeed. One of the difficulties is that that can change. However, it could change at a significant cost. That is where a private contractor could come in and start raising the unitary charge. Once it goes beyond the terms of the contract, any change can be made, but only at great cost to the Civil Service and the public purse due to the unitary charges. The Civil Service could well lose control of the contract in terms of what has happened. Look at some examples from GB scenarios, and some of the costs that have been involved, and indeed at some of the examples from Northern Ireland that we have given to the Committee, such as the Driver Vehicle Testing Agency. This is an area known to us as one where costs can significantly increase. There may be a way of getting around the one-size-fits-all element, but, from our point of view, it would be at a significant cost.

Another important factor is that the contracts which are now being signed are not two-, three- or five-year contracts. They are 20- or 25-year contracts. To enter that process, therefore, and get it wrong would linger throughout the term of the contract. We already have bad examples of contracts being signed, such as the HR Connect contract in the Northern Ireland Civil Service (NICS), which is an absolute disaster. Great costs in excess of what was anticipated have been incurred on that contract at a very early stage. We suspect that the same will happen with this contract. Previously, contracts would normally last for three to five years, and, if our experiences were bad, we could get out of the contracts at the end of that period. These contracts are not of that nature.

Mr O’Loan:

I think that you perform a very useful role in challenging this; it is a difficult arena for us as elected representatives to work out what is for the best. However, paragraph 2.2 of the APSE report states that:

“There is an inevitable and irresolvable tension between the organisational objectives of the company (to maximise profit from the arrangement) and those of the Contracting Authority (to deliver cost effective, efficient services to the public).”

That is a very important sentence. To take that as your starting point on this issue is to adopt an absolutist position. It does not leave much room for debate on how to progress. Taken at face value, it argues for a very centrally controlled economy as far as the delivery of public services is concerned.

The counter-argument is that, in a modern free state, there is a better way to operate, namely that the Government determine the objectives, and they are flexible about the mechanisms used to achieve those. In so doing, Government can enter into a procurement process with, and outsource certain parts of their activity to, the private sector. That can improve the economy and the quality of public services, from which the private and public sectors can benefit.

Mr Corey:

Paragraph 2.2 of the APSE report draws attention to the conflict. We do not see it as an absolute —

Mr O’Loan:

The words used in that paragraph, such as “inevitable” and “irresolvable”, are very strong.

Mr Corey:

There is a conflict in the situation.

Mr O’Loan:

A tension.

Mr Corey:

Yes. However, the APSE report was written to advise the trade union. The report addresses the totality of the PFI contract, which includes not just the building of the building, but all the facilities management services, or soft services, as they are known. The APSE report highlights the deficiencies in the Workplace 2010 procurement process, based on an assessment of the facilities management aspect of the contract. It also highlights the fact that there is no compelling evidence, by way of facts and figures, to suggest that outsourcing, as part of the contract, all the facilities management services, with the loss of approximately 500 NICS posts in various aspects of accommodation, will produce a more efficient public service.

The report also highlights the way in which the contract has been altered and changed throughout the process, meaning that there is a high risk that a two-tier workforce might emerge. There is a high risk that the individuals involved would be subject to poor terms and conditions in the provision of all the facilities management services, which would diminish the service. Those parts influence the whole picture.

The provision of public services by accountable public servants offers better protection for the public than the provision of public services by contract, which is, essentially, what Workplace 2010 proposes. Mr Bannon referred to the HR Connect contract, which is worth some £438 million. The Civil Service is in uproar over that contract and its impact. That is an example of the people who provide the contract seeking to maximise profits, rather than to ensure that a proper service is provided.

We have always been opposed to the PFI route being used. However, we have never suggested that anyone other than the private sector should be involved in the provision of buildings and the supply of accommodation. Those are the facts. Nevertheless, the procurement of buildings must be separated from the provision of public services. The APSE report has drawn attention to the total PFI model as against the use of PFI in certain circumstances, for example, for design and build only. Our views on that are reinforced by the current financial and property market, and they are unlikely to change.

Ms Allaway:

In the context of Workplace 2010 and the accommodation solution for the Civil Service, there is a difference between our argument about reviewing PFI and moving back to the traditional procurement route. That is why I raised the point earlier about the impact of the PFI solution on small and medium-sized enterprises and businesses in Northern Ireland.

The UK and other countries have experienced PFI projects. A classic example was when the contract for HM Customs and Excise and the Inland Revenue was awarded to a single company, Mapeley. That company was given the complete accommodation portfolio, and it made huge profits from which it was able to strike refinancing deals. The profit went to the Cayman Islands, and there was, therefore, no benefit to the UK economy from the money that had been paid out.

Our argument is that reverting to the traditional procurement route in seeking an accommodation solution for the Civil Service would open up competition for local businesses and recycle money into the economy. Surely that is much more beneficial to the social infrastructure of Northern Ireland than handing it over to a single company — goodness knows where that money would go.

Mr O’Loan:

You said that one size does not fit all, because Departments have different needs. Surely that is a comment not on PFI or conventional procurement but on building specifications. Even if a more conventional route were taken, someone’s theory that a certain type of building was needed could turn out to be a mistake. However, that same mistake could occur on either the conventional procurement route or the PFI route.

Mr Corey:

Our understanding is that, in broad terms, the entire PFI contract for Workplace 2010 is predicated on a model of open-plan accommodation. That means that building warehouses in which to house civil servants would, in simplistic terms, meet everyone’s needs.

However, the evaluation of Clare House found that having open-plan accommodation resulted in a less efficient and less productive Civil Service. Various measures to address that have been proposed and, although they do not include the words “walls” and “ceilings”, to all appearances, it seems that those will be installed.

Workplace 2010 was predicated on large open-plan buildings, but that does not appear to be what is necessary. We argue that contracts should be procured building by building to meet the specific needs of identified Departments. That process should ensure that the supplied buildings meets those needs precisely — as opposed to working to a standard model from the outset as part of a contract, where any variation from that contract adds to the cost. That is our concern.

Mr Paisley Jnr:

I read your paper and listened carefully to what you said. Forgive me if I have got the wrong end of the stick, but you seem to be saying that you want no change to your workplaces; each Department to be allowed to maintain its working habits; and public lands not to be sold off. In fact, you seem to argue that nothing should be done until Bain’s report has been fully analysed and that all procurement regulations should be set aside to let the local lads have the jobs. You are in grave danger of making Trotsky look like a Conservative candidate in Chelsea. I am worried that that is what I picked up from what you have said and from what I read in your report. Am I wrong?

Mr Corey:

Yes, I would say that you are wrong . [Laughter.]

Mr McNarry:

It should be Cheltenham, not Chelsea.

Mr Corey:

NIPSA is a non-party-political organisation, so I will make no comment on Trotsky.

I will try to put the Committee’s mind at rest about what we are saying. We want modern office accommodation for Civil Service staff, and we are in favour of modern working practices, whatever that may mean. However, I must say that we are trade union officials representing civil servants, and our postboxes do not receive too many complaints from members about accommodation. In past decades, there were times when we would have had many such complaints, but they are now few and far between — as are disputes or serious issues about the standard of accommodation afforded to civil servants.

That does not mean that no Civil Service buildings are in need of modernisation. No one would deny that, for example, Dundonald House is an old building, and perhaps not the most pleasant place in which to work every day. We are not saying that nothing should change. We are saying that if the object is to supply modern office accommodation, this route towards change — this total property PFI route that has been chosen, and that has been pursued for at least three or four years — is not the correct one.

We are not saying that Departments should not sell surplus public land; if it is not being used, land can and should be sold, provided that the receipts are made available for Northern Ireland public expenditure. NIPSA has no difficulty with that. I hope that that sets the Committee’s mind at rest. What we are trying to say, and what we have been saying all along about Workplace 2010, is that the PFI total property route — signing a contract for 25 years with one company — is the wrong route. It entails a loss of control, and is subject to contract and all the associated costs.

I understand that the Bain Report addresses the issue of Workplace 2010. My interpretation of Bain is that decisions on the report are required before any contracts are signed, such as the Workplace 2010 PFI contract. That makes sense, because we have been told that the Workplace 2010 contract will accommodate Bain by incorporating flexibility clauses. I presume that that means that if a contract is entered into with a company, and then significant changes are sought from what had been projected because of a policy change about the location of Civil Service accommodation, that flexibility must be paid for through the contract process.

Mr Paisley Jnr:

Probably everyone at this meeting knows, or is related to, people who work in the public sector. Therefore, do not take anything I say as an insult to public-sector workers.

Mr Corey:

I did not.

Mr Paisley Jnr:

I have high respect for public-sector workers and the admirable job they perform. I also accept that, as in all sectors, there are some people who do not perform at their best.

On the issue of the spaces in which civil servants want to work, you ask for each new building to be tailored to users’ specific needs. It is acknowledged that the work that is being done is not rocket science. It is largely office-based. Why must each Department or sector need a bespoke building, when off-the-shelf plans that would serve the purpose of certain work by public-sector staff are readily available? That is the first point that I do not grasp. There are several issues that you must recognise, such as the extra expense of building something to the specific needs of users, with the additional costs associated with alterations and adjustments. In the present credit crunch, as you pointed out, I do not believe that that demand is as vital as you suggest.

Secondly, in your letter you say that it is:

“reckless in the extreme for the NI Executive to sell off office buildings and land at this time.”

Do you accept that the Government must lead by example when spending public money? That involves trying to inject confidence back into the market in an effort to start it moving as a result of some of those sales, which in turn encourages the financial and building markets to start moving, allowing people to see opportunities. The only way in which people can make money, in any community, is by grasping an opportunity. Opportunities must be stimulated by Government action. The private sector cannot do it all; the Government must be a driving factor and lead by example.

Finally, your letter says that:

“All public funding available to the NI Executive at this time for infrastructure investment must be used to support Northern Ireland’s construction employers and employees.”

If that could be done — all our public money spent on encouraging local companies — it would be fabulous. However, you know that that is illegal. It is against European rules; it is against the European Charter; it is against section 75 of the Northern Ireland Act 1998; it is against practically every rule and regulation that dictates how companies bid for work. Those three areas of your submission concern me, in that they are not actually realistic.

Mr Corey:

On the first point, we are not suggesting that every individual Civil Service building should be a monument to architecture and be tailored to the needs of every individual civil servant. Our point is that the one-size-fits-all model outlined in Workplace 2010 — one size of desk for every person, for example — is not a workable model. There are many Civil Service professional and technical staff who found that the Workplace 2010 desk model simply did not work.

Mr Paisley Jnr:

I am sorry to interrupt, but if that is the case then your letter is wrong. It states that:

“This confirms that each new or replacement build will have to be tailored to the specific needs of users with all the additional costs associated with alterations and adjustments.”

That is quite a high demand. My wife wants a new kitchen, but I would not settle for that demand either.

Mr Corey:

There are issues of degree in everything. The Workplace 2010 model is predicated on the notion that one model can fit everything. We are arguing that the Clare House evaluation proves that that model does not fit everything, and that adjustments will therefore have to be made.

The second point that you made concerns the comment in our letter that:

“It would be reckless in the extreme for the NI Executive to sell off office buildings and land at this time.”

I stand by that statement. The facts of the matter are that, before any final business case could be approved for the contract, a fully satisfactory value-for-money assessment would have to be carried out. It would have to be shown that the contract is in the interests of the taxpayer. If I understand anything about the current financial and property market, I am on safe ground in saying that it would be impossible to construct a viable assessment at this time.

Mr Paisley Jnr:

Yes, but ideologically you are feeding a much wider model that encourages boom and bust. The outcome of what you are saying is that we should wait until the market is at its full value again in order to receive the maximum price, because that is in the public interest. That may be so on the surface of things, but in feeding a model like that one feeds the inflation of prices to a point where it hurts, and then one becomes trapped in a downward trend, such as is occurring at the moment. There must be a level, stable and genuine growth in the market, not the boom sort of growth that your ideological remarks would actually feed.

Mr Corey:

Our concerns arose after we drew attention to the possibility that the two bidders for the contract might merge and become one bidder. The Department’s response to that concern was to try to speed up the evaluation process to get round that difficulty. Although the process has now been suspended — and there is a need to clarify what exactly that means — it is our understanding that there is still a demand to get the contract signed, so that the £175 million can be received in this financial year.

One cannot take risks with a contract of this size and scale. There are no viable pressures to justify the contract being signed to get money for other public expenditure through this route. The supply division of the Department of Finance and Personnel will have to provide a detailed, accurate assessment, and I know that the Committee has asked for an independent assessment of the value-for-money element of the contract. It would be extreme to sell the land and property involved in the contract in the current economic climate.

I accept your third point. There are legal requirements regarding the placement of contracts, but to say that all Civil Service office accommodation requirements for the next 25 years will be allocated to one company does not give even a fighting chance to Northern Ireland construction companies, large or small. Under the contract, the control has gone. There are arguments for giving Northern Ireland companies a better chance to bid for the capital construction needs and accommodation needs of the NICS. Those companies would stand a better chance by proceeding with conventional procurement as and when required.

Mr Paisley Jnr:

You have already acknowledged that what you have just said is not doable.

Mr Corey:

It is doable in this sense. Workplace 2010 involves handing a single contract for all office accommodation needs for the next 25 years to one company, and it is not going to be a Northern Ireland company. We are saying that Northern Ireland construction companies would fare better if office accommodation needs were to come up contract by contract under normal procurement arrangements, rather than signing everything out now to one single company, as proposed under this contract. That is the point that the union is making. The contracts will still have to be subject to normal procurement for any building. For example, if a decision is made tomorrow to replace Dundonald House, a single contract would be awarded subject to the market.

Mr Paisley Jnr:

You should have made that point in the document, because, unfortunately, it reads:

“All public funding available to the NI Executive ... for infrastructure investment must be used to support Northern Ireland’s construction employers and employees.”

Mr Corey:

It also says that that should be by conventional procurement.

Mr Paisley Jnr:

You said that it is:

“unthinkable at this time to hand over full responsibility of future procurement of Government Office accommodation to one private sector company.”

Mr Corey:

Yes.

Mr Paisley Jnr:

That has not happened.

Mr Corey:

It has not happened because the process has been suspended, and we are trying to urge the Committee to take steps to ensure that it will not happen.

Mr Paisley Jnr:

I agree. There will be things that we will agree on, and things that will disagree on, but if we are going to get some semblance of credibility, we must reach a fair and accurate balance. Such statements make positions appear so extreme that there is no middle ground. We must find a middle ground.

The Chairperson:

You represent a particular perspective, and that is your full entitlement.

Mr Corey:

As negotiators, we are happy to seek the middle ground.

Ms Allaway:

As a trade unionist in Northern Ireland, I make no apology for wanting to try to work with Government to achieve a solution that will be in the interests of all working people in Northern Ireland. That is where NIPSA is coming from as a trade union. We fully accept that there are procurement rules and that contracts must be advertised in the European journal, and so on. However, if the Workplace 2010 contract proceeds in its current form, there will be no competition for local companies for the next 25 years.

The issue of buildings being tailored to the requirements of their users was mentioned. Under the current specification, if a Department states that it requires a different type of building to deliver a particular function, a building will have to be tailored to that Department’s requirements. That will cost extra money under the contract, and it will not be an insignificant amount.

Mr Paisley Jnr:

Give us an example.

Ms Allaway:

Clare House, where there are professional and technical staff. You said that we are not interested in new working practices, but the staff at Clare House have demonstrated that their working practices are less efficient and productive than in their previous accommodation, which was deemed unsuitable. One size does not fit all — if a Department delivers a service in a particular functional area that requires a different type of accommodation, it should receive that accommodation. How can we expect planners and architects to work on small desks? That is happening and is having an impact on the productivity, efficiency and effectiveness of staff.

Those issues have not been addressed in any of the discussions that we have had about Workplace 2010. If a Department requires a different model of building, it will cost a lot of money. Also, those buildings will not only be used by civil servants.

The other problem with the contract is that it will lead to a rationalisation of Government accommodation, which means that there will be less public access to those services. That is a big issue and feeds back into the issues around the location of public-sector jobs and the Bain Report. That is why we are saying that this is not just about civil servants working in buildings, it is about public access to those services.

Mr F McCann:

As politicians, we have a duty to try to ensure that if we start selling off land, we receive the maximum return from that to put back into the public purse. The selling off of everything to one company does not suggest to me a maximisation of the benefits for the economy. In meetings of this Committee and others, we are constantly told that procurement is the correct road to go down. We have questioned different aspects of that policy, but we have not been told how it will impact on small and medium-sized businesses. Do you have any evidence to suggest that procurement has a detrimental impact on local employment and services?

Ms Allaway:

I do not have a report stating that procurement has a detrimental impact on local employment and services. The difficulty is that the proof of the pudding will be in the eating, and the impact will be evident afterwards. I have worked with people who work in procurement, such as the Central Procurement Directorate, and have been involved in contracting. The message from our members who work in those areas is that if one contractor holds the whole contract for 25 years, it will undoubtedly impact on local businesses, because they will be out of the picture and will not be able to pitch for the work. The social and economic impact of that on the wider community was one of our concerns, and it has not been properly addressed or evaluated. That is why the Committee should take the opportunity to carry out a critical review and, as part of that, examine all of those issues.

The Chairperson:

The Committee did consider the question of procurement earlier, and it is in our work schedule. At this meeting, we want your perspective on Workplace 2010 as it stands. The Committee is already committed to examining the broader procurement issues.

What I gather from your presentation is that bearing in mind the economic downturn, and the issues that have caused what people might regard as a rational and prudent decision to suspend Workplace 2010, there is an opportunity to re-examine the concept. It behoves all those who have an interest in Workplace 2010 — either through hostility or advocacy — to use the time available to produce the arguments for an alternative approach that might address the issue. The size of the contract could be scaled down so that it would be within reach of local contractors and, at the same time, discourage the bigger companies from coming in — notwithstanding advertisements in European journals. There is an opportunity for a case to re-emerge as a result of the unforeseen circumstances that have caused this hiatus in the preparations for Workplace 2010.

Mr Corey:

Two issues are at play. There is Workplace 2010 — the accommodation model — which, in itself, would not be a matter to be brought before the Committee. We usually engage with Departments or the management side of the Civil Service on an issue to work out an appropriate accommodation model for everyone to work to. However, in this situation, that has been combined with the route of a total property PFI for all of the buildings, and a huge amount of time pressure was brought to bear to say what will happen and what contract will be signed, and everyone will have to live with that.

The Chairperson:

That is as it is. However, the challenge for —

Mr Corey:

Separation.

The Chairperson:

Yes; separation on a value-for-money basis. There is a threshold that we all have to satisfy in approaching the issue, given that there are ideological positions. We must take that approach and be able to demonstrate that there is efficacy in whatever case we present.

Mr Weir:

It has been suggested that one of the side effects of this could be the rationalisation of public buildings. I appreciate that, on one level, the public want to have access. However, do you not feel that other people do not particularly want to see public money tied up in buildings, as opposed to the delivery of services, and that the bricks-and-mortar side of the issue is not a priority? People may feel that some of that money could be freed up in the longer run. There are plenty of examples in different parts of Belfast where one sees public building beside public building beside public building. Indeed, had a more strategic view been taken of that, a lot of activity could have been combined in one building.

On the one-size-fits-all model, you referred to the problems regarding desk size on the technical staff side. Ultimately, the long-term need for large amounts of paper may, hopefully, be rationalised. However, I can understand the technical need for a different type of approach from planners and architects. That has been mentioned a couple of times. Can you give any other examples of where you feel that a different type of solution, rather than one off the shelf, would be required?

Mr Corey:

We are not looking for staff to work in grandiose public buildings; we are looking for buildings that provide decent working accommodation that meets all the needs of the staff and the health and safety requirements. The location of those buildings must be determined on a fair and equitable basis. If one were starting from a green field, many of the current Civil Service offices might not have been located where they currently stand. Nevertheless, one cannot ignore were buildings are located.

Sir George Bain has pointed out the need to look at how office buildings are located in the future, and the scope for shared buildings. He referred to clusters in the principal towns and cities that he identified as locations for the decentralisation of Civil Service jobs. There are costs associated with moving office accommodation to new sites; however, we support the principle of co-locating offices in order to meet needs and improve services.

There are degrees of difference in work needs. Workplace 2010 advocates an open-plan model and says that everyone should change to meet it. We should be seeking to meet diverse departmental and office work requirements in a reasonable way. Architects, engineers and planners are one example. However, other Civil Service offices will have differing needs; a social security office that is open to the public and deals with constant traffic is different from an office that is not open to the public, such as Castle Buildings or Dundonald House.

In addition, office requirements vary according to functionality, depending on whether workers undertake routine administration or are engaged in policy work and the degree to which they must engage in meetings in order to conduct their business. The Workplace 2010 model is predicated on so-called breakout rooms, and that has caused problems. For example, in Clare House, a breakout room was, in effect, commandeered by a particular individual and used as his or her personal office.

Rather than setting out by saying that everyone must adapt to a particular model, differing needs must be accommodated sensibly and constructively — it is a matter of degree. We are not seeking grandiose buildings.

The Workplace 2010 PFI procurement process is suspended. In order to make best use of that period of suspension, we must take the opportunity to fundamentally re-examine the contract. Given the results from two pilot evaluations and the developing position concerning private finance initiatives — private finance initiatives are attractive because they remove capital expenditure from balance sheets; however, from next April, that will change. There are big questions about going down the PFI route, particularly with regard to the scale of contract with which we were engaging.

Mr McNarry:

If the suspended process fails to meet requirements, have you considered a plan B?

Mr Corey:

We always attempt to have a plan B and a plan C; however, we make no apologies —

The Chairperson:

I thought that you were going to make a political comment.

Mr Corey:

We make no apologies for our position. From the beginning, we have campaigned against the Workplace 2010 PFI total property contract, and that explains why we have been here three times.

Mr McNarry:

I realise that. I am just attempting to tie you down to the circumstances in which we find ourselves. Although I am not a gambler, it is a fair bet that this contract will fall flat on its face, so everyone will need a plan B.

Mr Corey:

Plan B —

Mr McNarry:

Is plan B just to continue resisting? Have you something to prove?

Mr Corey:

No. Plan B is straightforward. We recognise that reasonably good office accommodation, which meets health and safety requirements, must be provided for civil servants. Consequently, we plan to proceed using normal procurement methods. Working with Departments, we identify the offices that need to be replaced. That process brings us back to the Bain report.

Mr McNarry:

That is what your plan has been all along. Do you have anything new to introduce to the process? Perhaps that is unfair, as you only found out about the announcement on Friday — as we did — but you are too skilled to just come to the Committee and say that we are where we are.

Mr Bannon:

One of our difficulties was that the Department produced the Workplace 2010 report and the proposal, but it never stuck by the process. We offered to engage with the Department and study what it considered to be the problems with the traditional procurement facilities.

If truth be told, the biggest problem is that the Government have not put money into maintaining their buildings. A situation then came about in which they said that they would have to do something. They talk about the risk transfer in this contract, but there is no risk transfer at all because the private sector will only benefit from it. We offered to sit down with the Department and study what the problems were.

Under this contract, buildings that have had large amounts of money spent on them will be handed over to the private sector. Other buildings that have not had money spent on them yet, but were due to have, have been removed from the contract. If one considers some of the earlier information about the Stormont Estate, the buildings that posed a risk to the private sector — for example, the old huts — were eliminated.

As highlighted in the APSE report, we agreed to sit down with the Civil Service, discuss the problems and come up with solutions. However, we were never afforded that opportunity. One of the best examples of that is the facilities-management aspect of the contract. From the outset of the original outline business case, it was never the intention to include facilities management in the contract. Instead, it was included some way down the line. Look at the documentation about value for money. Again, this is a point that is made in the APSE report: no other, proper alternative option was considered by the Department.

We were prepared to sit down and discuss how we could deliver facilities management to protect our members, retain the work in-house and make improvements. We would not have said no to something and simply maintained the services — we want to see improvements to the services.

Mr McNarry:

I understand that, because I have read your document and you have made your case. I am only trying to point out that we are here now, and it looks like there is potential for new circumstances. In light of what happened, will you go back to the drawing board or will you stick with where you are? I should like to hear your analysis of what could be improved if the circumstances in which we find ourselves change and we have to study the whole thing all over again.

I do not you to narrow it down to you saying, “We told you so-and-so and we said so-and-so.” What can you introduce? There needs to be a balanced view. The people who are in trouble here will be before the Committee after you. I want to hear what their thinking is, but I want to know whether you will go away and think about what could be introduced to the discussion that has to take place, and of which you will be a part. What can you bring to the table that is new? If you stick where you are, that is fine, but I would prefer to hear new thinking.

Mr Corey:

The whole object of Workplace 2010 is to provide modern office accommodation and modern working practices. That was to be done by using a total property PFI route. We are opposed to the total property PFI route and all that that would entail. That procurement has now been suspended. We still want to provide modern office accommodation for civil servants, but we have to do that within the available finance. We cannot say that we will provide every civil servant with a new office by a particular date. It must be tailored to finance, need and the Bain Report.

We would like to see procurement by conventional public expenditure. In other circumstances, we have lived with the implementation of PFI for the design and build of buildings, but not for their operation. If we were in a situation in which civil servants were in serious need of new accommodation and public money was not available for its provision, we would live with a PFI venture, but that does not mean that we like it. The Invest Northern Ireland building is a case in point; it is a PFI-procured building, but I think that there are issues in relation to the cost of that building. In the past, we have lived with design and build for specific areas, but not the total property PFI route that was proposed in this case.

NIPSA is ready to sit down with the Department of Finance and Personnel and engage in a serious discussion to plan what office accommodation changes are required for the NICS for the future. There are other factors to that. I am aware that a Committee is considering the number of Government Departments. That could have a major impact on the accommodation needs of the Civil Service.

We are willing to engage in our normal process. If we were doing that — and if the total property PFI route was not in play and conventional procurement was being used to secure buildings — there would be no need for us to be here, and this issue would not be occupying the Committee. We are justified in occupying the Committee, because we think that the proposition for a total property PFI route will cost the Northern Ireland taxpayer more in the long run.

Ms Allaway:

Workplace 2010 came about as a result of the strategic development plan, which was produced a number of years ago. In view of the changes in circumstances — the economic changes, the potential restructuring of Departments, the Bain Report on the location of public-sector jobs — we should, perhaps, revisit the strategic development plan. It encompasses all of those areas, and it could be the basis for going back to the drawing board with regard to where the buildings will be and how they will be delivered, if that is what we need to do.

Mr McNarry:

All budgets need to be revisited; they are down the chute. I do not think that anyone can work to a budget that was compiled six months ago. In one sense, I share the view of many and am against selling the family silver — in this case, the bricks and mortar — even if it is to move people around, release or re-let. We have committed to doing some of that, however, and there is a chance that our budget and expectations will be dramatically affected, because there are other deserving cases scored and underscored for that.

I want to be sure that NIPSA would not be obstructive, in that sense, just for the hell of it. I use that term quite advisedly; I know that you do not do anything for the hell of it, but people think sometimes that you do. Other things need to be addressed, and I hope that you will tell me that you are aware of those issues. I hope that there will not be any unnecessary obstructions put in place to hinder, for instance, the flogging of some assets to maintain the budget in some formal shape as to where it should be. People will not admit that there is a black hole, but there is.

Mr Corey:

I understand the concern that you are raising. We recognise that the Programme for Government and the Budget were predicated on the sale of the Government office estate and the receipt of £175 million. The Government was due to receive £175 million, but that now stands suspended. That should remain suspended, and we are conscious that that £175 million will not be received and that that will have public-expenditure implications.

Mr McNarry:

Can you loan any of your money to the Executive? [Laughter.]

Mr Corey:

Well, we do not have —

The Chairperson:

It might take longer to get money from NIPSA than for the Workplace 2010 programme to be completed.

Mr Corey:

We accept that the suspension of the programme will have wider implications, but proceeding with the contract would have had even wider implications, because it would have involved more public expenditure in the long run. That must be balanced up. As I said earlier, NIPSA will not set out obstruct the sale of surplus land or property, wherever that can be achieved.

Mr McQuillan:

You said that there is no problem with the design-and-build aspect of the procurement; the problem is with the operation. Even if the procurement was done on an individual basis, why is that the case?

Mr Corey:

In the past, we have accepted that, in order to meet capital investment needs, a design-and-build arrangement for PFI could be made. However, the operational side of that is based on the principle that we believe that civil servants and public servants should provide public services. Part of the provision of those public services is the ability to provide a reception in buildings, including the people that one meets when arriving at a building, the people that provide services for the building and the ability of those people to interact with the public. Those people should all be accountable public servants, and, therefore, we are opposed to the use of the design-build-and-operate route.

Mr McQuillan:

Does it matter to someone who comes into a building whether those people are public servants or whether they work for someone else? It matters that the public are able to do their business, rather than who employs those people.

Mr Corey:

It matters to the people who are doing the work. Standards must be provided so that people are treated equitably and equally in all respects. We believe that the way to do that is through the operational route. As Mr Bannon said, the Civil Service has embarked on a route of operation through the HR Connect contract, which is causing uproar in the Civil Service and costing millions and millions of pounds. For example, it seeks to privatise functions and services that should be provided by Civil Service staff, and that is not working. At some stage, the Committee will need to engage in the matter of the HR Connect contract.

The Chairperson:

Thank you. As usual, your contribution has been stimulating and interesting, and it has run longer than the time for which we had budgeted. It is always helpful to hear your comments, and it is always good to see you at the Committee.

We will now be addressed by the Department of Finance and Personnel. We are joined by Philip Irwin, head of properties division; Michael Donnelly, strategic advisor to the Workplace 2010 programme; and Mark Bailey from the Workplace 2010 programme. You are all very welcome. I remind you and others that Hansard is recording the session, so any mobile phones should be switched off. I apologise for the delay in coming to your part of the meeting.

Mr Philip Irwin (Department of Finance and Personnel):

We have sent the Committee a brief note to set out the developments in Workplace 2010 procurement since members were last updated, on 18 June. I will expand on some of the key elements of that.

The two remaining bidders for the contract, Land Securities Trillium (LST) and Telereal, submitted their best and final offers to the Department on 2 June. At that time, the Committee expressed interest in the potential sale of LST and the fact that the parent company of Telereal was a potential purchaser. The Department became aware of that situation in late April and, in response, established measures to ensure that the procurement process remained competitive. In June, we conducted a prompt and focused bid evaluation and ensured that both bidders signed legal agreements in order to protect the confidentiality of the tender information. David Orr and I updated the Committee on that in June.

It is worth reminding the Committee of the evaluation process that is set out in the evaluation strategy for the contract. After the receipt of bids, there are three distinct phases to the process: an initial evaluation and clarification of the bids; a negotiation phase and signing of commitment letters by both bidders; and a final evaluation and scoring process that results in the selection of a preferred bidder.

The Department received the bids on 2 June, and the evaluation team completed the first part of that process — the initial clarification and evaluation — within four weeks. The subsequent negotiation phase lasted from July until early October. Also during the summer period, Sir George Bain completed his report on the location of public-sector jobs, and it was published on 30 September. Members will be aware that the Workplace 2010 contract needed to be sufficiently flexible to take account of ministerial decisions taken after publication of the Bain Report.

As part of the negotiation process, the Department asked both bidders to prepare final pricing against a slightly modified requirement aimed at improving value for money and incorporating additional flexibility to allow the incorporation of implications that arose from the outworking of the Bain report. In recent months, various developments outside the Department’s control have impacted on the Workplace 2010 procurement. In particular, speculation has intensified that Telereal’s takeover of LST is likely to be successful. Moreover, throughout the negotiation period, the property market has encountered turbulence and the financial markets have experienced unprecedented volatility.

After recent meetings with the bidders, it has become clear that it will be difficult — if not impossible — to proceed with the procurement process under the current conditions. As a result, the decision was taken on 31 October to suspend the Workplace 2010 procurement process until early 2009. That delay should allow the possible merger of the two bidders to be resolved and, additionally, give the authority time to consider its position given the changes in the financial and property markets.

Because of the delay, the £175 million capital receipt projected to result from the Workplace 2010 contract will not occur in this financial year. Throughout the summer, the programme team liaised closely with colleagues in the central expenditure division, and the December monitoring will reflect the implications of that slippage. The Department will use the delay to consider the suitability of the current procurement structure in light of the changes in the property and financial markets. Furthermore, it will allow us to develop alternative plans to hold in reserve in the event that the procurement does not proceed. I am disappointed that I cannot report more positive progress. However, given the current financial circumstances, I am convinced that the Department has made the correct decision. I am hopeful that, following the review period, I will be able to report positive progress in early 2009.

It is important to distinguish the objectives of Workplace 2010 from the procurement process that is being undertaken to achieve those objectives. Although the procurement process has been suspended, the NICS remains committed to the principles underpinning Workplace 2010 and will continue to work towards creating a modern, flexible working environment that can facilitate the delivery of better public services.

The Chairperson:

Let me just say that, as Chairperson of the Committee, I have endorsed the suspension of Workplace 2010 because of the circumstances that you have outlined.

Mr McNarry:

How close was the evaluation process to identifying a preferred appointment?

Mr P Irwin:

The situation remains competitive, even though Workplace 2010 has been suspended. If the merger does not happen, it is possible that we will proceed with the two bids that are on the table. This is a public forum, and we cannot divulge the details of those bids. I have to be careful in what I say about what stage the negotiations had reached.

Mr McNarry:

I am asking you a direct question. You had narrowed the process down to two bids — which of those bids is the preferred choice?

The Chairperson:

We appreciate that you cannot divulge commercial and confidential information. However, I presume that Mr McNarry’s question refers to the original timeline.

Mr McNarry:

Are you telling me that you did not have a clue what the preferred bid was when Workplace 2010 was suspended on 31 October?

Mr P Irwin:

As I explained earlier, the evaluation process had three phases after we received the bids. We completed the first phase quickly — as we had planned to do — and moved onto the negotiation phase. We were not in a position to appoint either of those bids as the preferred option at that stage. We continue to work with both bidders on issues regarding their bids.

Mr McNarry:

Are those issues separate to the possible merger and the property market situation?

Mr P Irwin:

That is correct. We were not yet at the stage of being able to obtain our commitment letters and appoint a preferred bidder.

Mr McNarry:

Were you close to identifying a preferred bidder?

Mr P Irwin:

How close is close? We were not in a position to appoint a preferred bidder.

Mr McNarry:

You may not have been in a position to appoint a preferred bidder even when the appropriate time came around. Does the Department have a plan B if the suspension of Workplace 2010 causes the process to come up short?

Mr P Irwin:

Yes. We examined, in the outline business case, about half a dozen options for how to move forward, from simply doing nothing to the total property PFI. We can use the time that we now have to go back and consider those options and ascertain what our plan B will be if our preferred option falls away in January. That will have to be re-evaluated in light of current conditions.

Mr McNarry:

I appreciate that. Can the Committee be appraised on that information when it becomes available? I assume that that information is not confidential.

Mr P Irwin:

I am sure that we can return to the Committee with an assessment of the different options.

Mr McNarry:

That is important, because I would like to see how the process is being progressed. Given that £175 million will be lost in the current financial year, what pressure are you under to get the process moving?

Mr P Irwin:

Our overriding priority is to provide value for money throughout the process. It is a major problem that £175 million that has been budgeted in the current financial year will be lost. We have liaised closely with our colleagues in central expenditure division, who were responsible for managing the total budget throughout the summer, which is when the project’s problems began to emerge. However, value for money on the contract is our overriding driver.

Mr McNarry:

Before the plug was pulled — and let us not say who pulled it — was that £175 million still realisable, or would there have been an adjustment?

Mr P Irwin:

There was £175 million in the Budget —

Mr McNarry:

I know that.

Mr P Irwin:

We have always said that a decision on the size of the actual capital receipt associated with the project would be taken as part of the assessment and negotiations on the contract. Again, we view value for money as our overriding driver. As the timescale moved to the right, our ability to realise £175 million in this financial year was becoming restricted. It is probably still credible —

Mr McNarry:

Can you realise it in the next financial year?

Mr P Irwin:

If the contract goes ahead, it will certainly be realisable in the next financial year.

Mr McNarry:

Thank you, that is very good.

Mr Weir:

You did not mention the Bain Report as being one of the key issues that might contribute to delay or suspension. Therefore, can I assume that you have been able to build in Bain implications, and that they will not be particular factors in the continued suspension, or abandonment, of the project?

Mr P Irwin:

That is correct. As part of the process, we have always been aware that the contract had to be able to deal with the outworking of the Bain review. We had already included some flexibility provisions. When we saw the actual report, we made some modifications to the requirement to enable us to deal with that. Therefore, the Bain review itself should not be a factor in deciding where we go in January.

Mr Weir:

I would like clarification of the term “suspension”. It is ambiguous, and I want to be 100% clear about what is meant. For instance, plan B was mentioned, and “suspension” implies that the project is on ice at present and that it may or may not go ahead in the future, and, therefore, the option of abandoning it — or of taking a completely different route — could, potentially, be put on the table. Alternatively, you have referred several times to the “delay” of the process. If “suspension” simply means “delay” and, no matter what, the project will go ahead at some stage, then that is, arguably, a different type of suspension. Do the answers that you gave to Mr McNarry indicate that, although the Department clearly hopes that it goes ahead, all options are on the table and a potential end result is the abandonment of Workplace 2010 and its replacement by something else?

Mr P Irwin:

That is correct. We will come back to the matter in January and examine the climate at that time and the outworking —

Mr Weir:

Just to clarify, are you saying that the reassessment is such that, in January, it will not just be a question of deciding whether to go ahead at that stage? You could, potentially, be faced with the question of whether to go ahead at all or look at something completely different?

Mr P Irwin:

Yes. We will be asking what the preferred option is, moving forward.

Mr O’Loan:

There are two problems: the potential lack of competitive tension and the volatility of the property market. Would each of those, separately and independently, be capable of justifying suspension?

Mr P Irwin:

The trigger for the suspension was the potential merger. There has been increased speculation around the potential merger of the two bidders. The issues of the property market and the volatility of the financial markets would have been assessed as part of our final business case, anyway, after the preferred-bidder announcement. The time to have asked that question would have been when we had the commitment letters signed and in place.

Mr O’Loan:

That being the case, when you spoke to the Committee in June, you seemed to have remedied the potential lack of competitive tension through timetabling. Nothing you said then appears to have altered materially. Why did your remedy not work?

Mr P Irwin:

We accelerated the first of the three strands of the process. That is what we said we would do when we spoke to the Committee in June. We successfully moved on to stage two. The negotiation phase presented difficulties for us; we were unable to get to a point where the bids had developed sufficiently for us to get commitment letters and preferred bidders. The negotiations took longer than we had hoped or anticipated. The general climate in the financial and property markets in the summer and early autumn may well have had a bearing on that.

Mr O’Loan:

Your press statement says that the bidders are content. Can you elaborate on that?

Mr P Irwin:

The bidders take the view that, given the uncertainty as to the ownership of one of the companies, and the uncertainty in the financial and property markets, their preferred solution is to take advantage of the window of delay. They agree with our decision.

Mr O’Loan:

I come to the conclusion that, leaving aside the issue of the takeover of one bidder by another, narrowing down the competition to two bidders is always a risky procedure when trying to maintain competitive tension.

Mr P Irwin:

There will always be risks in this sort of competition.

Mr O’Loan:

I suggest that narrowing the field down to two was always going to be a very risky process.

Mr P Irwin:

There is a trade-off between the amount of time, effort and commitment one asks of bidders and the Department in preparing and assessing bids, and the risk that bidders will drop out.

Mr O’Loan:

I will leave it there.

The Chairperson:

The question that arises from that is whether, in the context of continuing speculation, uncertainty and lack of confidence, the process can proceed. Is the Department now vulnerable to a re-emergence of legal challenges from companies which previously had an interest in this competition?

Mr P Irwin:

Throughout the process, we have taken legal advice on our decisions and the risks of procurement challenge. In all the documentation, from the start of the process, we have reserved the right not to proceed with the contract. There is a risk of legal challenge in anything that anyone does, but we feel that we have taken all relevant advice and acted on it.

Mr McQuillan:

We heard earlier on that if the procurement exercise continues, it will be of no benefit to Northern Ireland construction companies. Do you agree?

Mr P Irwin:

I must be careful: I cannot talk about the specifics of individual bids. Local construction and service partners are teamed with both the lead bidders. We talk about the Telereal and LST bids, but the great bulk of the work on the ground — if not all the construction and service delivery work — will be undertaken by local companies.

Mr McQuillan:

So, it will be of benefit to the local economy?

Mr Michael Donnelly (Department of Finance and Personnel):

Our instructions to bidders requested that they comply with Central Procurement Directorate guidance on social considerations in public procurement in order that we could do all that we could within the legal confines to encourage consideration of those matters.

Mr McQuillan:

So, it is not a case of somebody else taking the money and running with it?

Mr Donnelly:

Absolutely not.

The Chairperson:

That seems to be all for now.

Mr McNarry:

Is there no way that the two bidders would be allowed to review their bids if they sought to?

Mr P Irwin:

In what sense?

Mr McNarry:

Well, you have talked about the downturn in the property market. If you will not tell me what their bid was, then you will not tell me who is in the frame. So, to work backwards, there are two bidders whose bids must be close — that is why you have opted for them. If a bidder was to put in a bid for, say £100 million, and now sees that the market price is £50 million. They would be caught having offered £100 million. They could see an opportunity, a window, in this suspension — can they get in there now and review their bid? I think that somebody would certainly ask that question.

Mr P Irwin:

Again, we have to be careful in that we are still in a competitive process and I cannot discuss details. There may be circumstances whereby we would want bidders to review parts of their bid. It is a negotiated process, and those negotiations involve our trying to find better value for money in elements of the bid. We are still within the negotiation part of that process.

Mr McNarry:

We have an eminent lawyer coming to see us. He will probably drive a horse and cart through what you have just said, in terms of his concerns. On the back of what the Chairperson has said about the legal process, I wonder how, commercially, people were excluded in order to allow people, commercially, to remain included? Is there now a suggestion that you may be tinkering with the two preferred bidders? Some people may feel that they have been unfairly treated because they are not part of that process. It sounds difficult to me.

Mr P Irwin:

Throughout the process, we have taken procurement advice on any changes that we have made, and we have acted on that advice.

The Chairperson:

One way of dealing with the vulnerability would be to submit a recommendation that we abandon the project.

Mr P Irwin:

I think that that would be premature.

The Chairperson:

I am not making that recommendation, I am just —

Mr McNarry:

And go back and make sure your advice is blooming good.

Mr Paisley Jnr:

Or even just good.

Mr Mark Bailey (Department of Finance and Personnel):

I realise that we are talking about abandoning Workplace 2010, but we are still firmly committed to the principles of a modern, open-plan environment. It is worth reminding Committee members of that. We should not lump the two things together; it is just the procurement process that we are talking about suspending.

The Chairperson:

We did not want to get into that area of discussion. We could have examined what attitudes the workforce had to the responses of the Department, to the health check and so on, in relation to Clare House. There may be a need to examine that as well. I accept that there are two aspects to this, and that we are only looking at one in particular.

Thank you very much. I apologise once again for the delay in getting to you this morning.

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