High Quality
Open the downloaded document, and select print from the file menu (PDF reader required).
PARLIAMENTARY UNDER-SECRETARY OF STATE
FOR
DEFENCEAND MINISTER FOR VETERANS
Ourref:D/Min(Veterans)/KJMC0555412009
MINISTRY
OF DEFENCEFLOOR
5
ZONE B MAIN BUILDING
WHITEHALL
LONDON
SWlA
2HB
Ilephone:
020
7218
9000
Switchboard)
7C
9
December2009
/
I
nankyouforyourletter of12NovemberenclosingaletterfromMrlanMelvinof
6
NorthStreet,Fleetwood,Lancashireabouttheproposedsaleandleasebackof
KentigernHouse,Glasgow.
I
Firstly,letmeassureyouthatKentigernHouseisacoresitewithinthe"Defence
EstatesDevelopmentPlan"andhasanoperationallife.ItisnotsurplustoMinistryof
Defence(MOD)requirementsandno jobsarebeingthreatenedbythisestate
managementinitiative.Accordingly,formalTradeUnionconsultationwasnotconsiderednecessary,butallstaff
havebeenkeptfullyinformedofprogressbylocalmanagement,supportedbyDefence
Estates(DE),throughaseriesofbriefingsand'openandconstructivediscussions.
However,whilstDEofficialshavebeenabletoanswermostofthelocalstaffconcerns,
someofthefinancialdetailsoftheirnegotiationswithprospectivelandlordsremain
commerciallyconfidentialwhichmayhaveledtoyourconstituentmakingsomefalsc
assumptions,forexampleabouttheoverallcostofthelease.
Dispoe
-
om
k--
-
owever,theDepartment'ssaleshavebeenbadlyaffectedbytherecessionand
we
havehadtolookatotherwaysof maintainingadequatelevelsofreinvestmentinthe
estate.ThesaleandleasebackofKentigernHouseisonesuchmeasurebeingactively
pursuedbyDE. ItisacommerciallyacceptedpracticeandthestrengthofMOD'S
covenantasalongtermsecuretenanthasprovedtobeaparticularlyattractive
investmentopportunity.Asaresult,DEhasreceived manysubstantialofferswellin
excessoftheaskingprice.
D;
~iam
O~
PHouse of CommonsLondonSW1A
OAA
itslongtermuse
by
MOD,albeitundernewownership,onveryfavourableterms,
includingminimalrepairingobligations.Therentwillbepaidby
DE
andthereisno
-
(S
PVA)
.
TheNationalAuditOfficehasalreadybeenconsultedand,asnegotiationscontinuewith
theprospectivepurchaser,
I
canassureyouthatDEofficialswilldoalltheycanto
providefurtherprogressreportsthroughlocalseniormanagers.
I
I
hopethishelpsexpalinthesituation.
KEVAN
JONES
MP
PARLIAMENTARY UNDER-SECRETARY OF STATE FOR DEFENCEAND MINISTER
FOR
VETERANS
i+.%4,-,
:
.
:
'
I
.
L.&
:L;-;
rref:D/Min(Veterans)/KJMC0555412009
MINISTRYOFDEFENCEFLOOR
5
ZONEBMAINBUILDING
WHITEHALLLONDON
SW1A2HB
Telephone:
020 7218 9000
Switchboard)
7b
9
December
2009
Thankyouforyour letterof12NovemberenclosingaletterfromMrlanMelvinof
6
NorthStreet, Fleetwood,Lancashireabouttheproposedsaleandleasebackof
KentigernHouse,Glasgow.Firstly,letmeassureyouthatKentigernHouseisacoresitewithinthe"Defence
EstatesDevelopmentPlan"andhasanoperationallife.ItisnotsurplustoMinistryof
Defence(MOD)requirementsandnojobsarebeingthreatenedbythisestate
management initiative.
--
,d.J
.'>7&-
-
7-S.:
Accordingly, formalTradeUnionconsultationwasnotconsiderednecessary,butallstaff
havebeenkeptfullyinformedofprogressbylocalmanagement,supportedbyDefence
Estates(DE),throughaseriesofbriefings and'openandconstructivediscussions.
However,whilstDEofficialshavebeenabletoanswermostofthelocalstaffconcerns,
someofthefinancialdetailsoftheirnegotiations withprospectivelandlordsremain
commerciallyconfidentialwhichmayhaveledtoyourconstituentmakingsomefalse
assumptions,forexampleabouttheoverallcostofthelease.
DisposalreceiptshavealwaysbeenanimportantpartoftheoverallDefencebudget,the
C
C
t?r?ey~M~
eingspentonkeyDefenceprioritiesinsupportofourServicepersonnel.
However,theDepartment'ssaleshavebeenbadlyaffectedbytherecessionandwe
havehadtolookatotherwaysof maintainingadequatelevelsofreinvestmentinthe
estate.The sale and leaseback of Kentigern House is one such measure being activelypursued by DE. It is a commercially accepted practice and the strength of MOD'Scovenant as a long term secure tenant has proved to be a particularly attractiveinvestment opportunity. As a result, DE has received many substantial offers well inexcess of the asking price.~r'~iamox MPHouse of CommonsLondon
SW1A
OAA
Add a Comment