Magazine article Public Finance

R&C Property Contract Failed to Obtain 'Value for Money'

Magazine article Public Finance

R&C Property Contract Failed to Obtain 'Value for Money'

Article excerpt

Revenue and Customs has wasted more than £300m on a private sector contract to run two- thirds of its estate, according to a damning report by the National Audit Office.

In 2001. R&C transferred the ownership and leases of 591 properties, around 60% of its estate, to private contractor Mapeley in a bid to reduce running costs and save µ? to £1.2bn.

However, an NAO report published on December 3 found that R&C failed to ensure value for money on the contract because it had no long-term plan and subsequently failed to reap all the savings available.

The report said the department had not 'recognised the contract as a major strategic asset nor committed appropriate commercial skills to managing it. As a result, the total possible savings available now amount to £900m.

'To date, the contract has cost £312m more than originally forecast, as a result of fewer instances than forecast of vacating buildings, unrecoverable VAT payments, and changes in requirements;

According to the report, although R&C had now drawn up a plan to 'vacate a significant number of its buildings by 201G. …

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