£342m on rents for fire brigade sites which will stand empty

Total spend on the scrapped FireControl call centres scheme will be more than half a billion More than half a billion pounds of taxpayers’ money has been committed to providing the fire service with eight empty buildings that will never be used for their intended purpose. FireControl, a private finance initiative to replace England’s 46 emergency call centres with nine regional sites, became mired in technical problems that proved fatal to the scheme. The eight sites outside London have been cancelled, although the London site will go ahead. But, in spite of the scheme’s partial demise last year, the Observer has established that £342m of taxpayers’ money is committed to paying rent on the empty sites that will never be used to house the new system. Because the properties were purpose-built, it is unclear how they could be converted to an alternative use. Several of the empty properties are owned by anonymous trusts and companies, two of which are based in the tax haven of Jersey. The rent commitments mean the taxpayer is now paying £1.4m each month on the empty buildings at a time when the government is implementing swingeing cuts. Coming amid the financial crisis gripping the Southern Cross care homes, the debacle is likely to raise fresh questions about the merits of bringing in the private sector to help run vital services. Sources close to the trusts have confirmed privately that there is nothing the government can do to extricate itself from the deals and that it will be obliged to pay the rents for the entirety of the contracts, which range from 20 to 25 years. The £342m commitment is in addition to the £40m that the government has been forced to write off on the IT systems for FireControl. A further £140m in “project management costs” that went to civil servants and consultants takes the total amount spent on the failed system to £522m. The project was largely scrapped in December, although it will continue to be rolled out across London ahead of the Olympics at an estimated cost of £60m. The Observer has established that five of the empty buildings – in Wolverhampton, Wakefield, Durham, Cambridge and Castle Donington – are controlled by Control Centre General Partner (CGCP), an offshore company based in Jersey and owned by a City investment bank, Evans Randall. CGCP is an investment vehicle established by Evans Randall on behalf of clients seeking a stable return on their investments. The company has raised tens of millions of pounds from wealthy investors in the Middle East in the past, although it declined to say who has invested in CGCP. Another empty building, in Warrington, is owned by AAIM Warrington Unit Trust, also based in Jersey. The pensions firm Canada Life owns another in Kite’s Croft, Hampshire, while a private lettings company, Leafrange, based in Leytonstone, east London, owns one in Taunton. Aviva, the financial services company, owns the remaining building in London, which is still intended for its original use. At a time when trade unions warn that the fire service is facing massive cuts, the wasted money is likely to be a huge concern to ministers. The figures involved dwarf the revelation last month that the NHS is spending £2.8m a year on empty buildings. “This is a public scandal when frontline fire services are being decimated because of budget cuts,” said the Fire Brigades Union’s general secretary, Matt Wrack. “The frontline is being slashed, while offshore property speculators are raking in millions of pounds for empty buildings, which will never be used for the purpose they were built.” The rent commitments massively exceed the costs of constructing the buildings. The empty Durham property cost only £12.4m to build, but will cost the taxpayer £31m over the next 20 years. The cost of equipping the buildings has also raised eyebrows. Brian Coleman, chairman of the London Fire Brigade, told parliament’s local government select committee that a £25,000 coffee machine had been installed in the London centre. The National Audit Office is due to publish a report on FireControl in July that is expected to be strongly critical of the way the deal was structured. A spokesman for the Department for Communities and Local Government said it would offer the purpose-built buildings to other tenants if the fire service did not use them. “Our aim is to be fair to fire and rescue services and achieve the best possible value for money for the taxpayer,” he said. Even if this proposal is successful, the income generated is unlikely to match even a fraction of the rent commitments on the properties agreed by the previous Labour government. Firefighters Public sector cuts Jamie Doward guardian.co.uk

Posted by on June 11, 2011. Filed under News, Politics, World News. You can follow any responses to this entry through the RSS 2.0. You can skip to the end and leave a response. Pinging is currently not allowed.