ministry of defence floor 5 zone b main building whitehall

8/14/2019 Ministry of Defence Floor 5 Zone b Main Building Whitehall

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PARLIAMENTARY UNDER-SECRETARY OF STATE FOR DEFENCEAND MINISTER FOR VETERANS

Our ref: D/Min(Veterans)/KJ MC0555412009

MINISTRYOF DEFENCEFLOOR 5 ZONE B MAIN BUILDINGWHITEHALL LONDON S W l A 2HB

Ilephone: 0207218 9000 Switchboard)

7C9 December 2009

/I nank you for your letter of 12 Novemberenclosing a letter from Mr lan Melvin of 6North Street, Fleetwood,Lancashire about the proposedsale and leaseback ofKentigern House, Glasgow.

IFirstly, let me assure you that KentigernHouse is a core site within the "DefenceEstates DevelopmentPlan" and has an operational life. It is not surplus to Ministry ofDefence (MOD) requirementsand no jobs are being threatened by this estatemanagement initiative.Accordingly, formal Trade Union consultationwas not considered necessary,but all staffhave been kept fully informed of progress by local management, supported by DefenceEstates (DE), through a series of briefings and'open and constructivediscussions.However, whilst DE officials have been able to answer most of the local staff concerns,some of the financial details of their negotiationswith prospective landlords remaincommerciallyconfidential which may have led to your constituent making some falscassumptions,for example about the overall cost of the lease.Dispo eom k- - -owever, the Department's sales have been badly affected by the recessionandwehave had to look at other ways of maintainingadequate levels of reinvestment in theestate.The sale and leasebackof Kentigern House is one such measure being activelypursued by DE. It is a commercially accepted practiceand the strength of MOD'Scovenant as a long term secure tenant has proved to be a particularlyattractiveinvestmentopportunity. As a result, DE has received many substantial offers well inexcess of the asking price.

D; ~ i a m O ~ PHouse of CommonsLondonSW1A OAA


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its long term use by MOD, albeit under new ownership, on very favourable terms,includingminimal repairingobligations. The rent will be paid byDEand there is no -

(SPVA).The NationalAudit Office has already been consultedand, as negotiationscontinuewiththe prospectivepurchaser, I can assure you that DEofficials will do all they can toprovide further progress reports through local senior managers.

II hope this helps expalin the situation.

KEVAN JONESMP


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PARLIAMENTARY UNDER-SECRETARY OF STATE FOR DEFENCEAND MINISTER FOR VETERANS

i+.%4,-, : . : ' I.L.&:L;-;r ref: D/Min(Veterans)/KJ MC0555412009

MINISTRYOF DEFENCEFLOOR 5 ZONE B MAIN BUILDINGWHITEHALL LONDON SW1A2HBTelephone: 020 7218 9000 Switchboard)

7b9 December2009

Thank you for your letter of 12 November enclosinga letter from Mr lan Melvin of 6North Street, Fleetwood, Lancashire about the proposedsale and leasebackofKentigern House, Glasgow.Firstly, let me assure you that KentigernHouse is a core site within the "DefenceEstates DevelopmentPlan" and has an operational life. It is not surplus to Ministry ofDefence (MOD) requirementsand no jobs are being threatened by this estatemanagement initiative.

- - ,d .J .'>7&-- 7 - S . :Accordingly, formal Trade Union consultationwas not considered necessary,but all staffhave been kept fully informedof progress by local management, supported by DefenceEstates (DE), through a series of briefings and'open and constructive discussions.However, whilst DE officials have been able to answer most of the local staff concerns,some of the financial details of their negotiations with prospective landlords remaincommerciallyconfidential which may have led to your constituent making some falseassumptions, for example about the overall cost of the lease.Disposal receipts have always been an importantpart of the overall Defence budget, theC t ? r ? e y ~ M ~eing spent on key Defence priorities in support of our Service personnel.However, the Department's sales have been badly affected by the recessionand wehave had to look at other ways of maintaining adequate levels of reinvestment in theestate.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 ' ~ i a mox MPHouse of CommonsLondonSW1A OAA


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The whole building will be leased back for a minimum period ot 20 years which securesits long term use by MOD, albeit under new ownership, on very favourable terms,including minimal repairing obligations. The rent will be paid by DE and there is ng I

The NationalAudit Office has already been consulted and, as negotiations continue withthe prospective purchaser, I can assure you that officials will do all they can toprovide further progress reports through local senior managers.fI hope this helps expalin the situation.

KEVAN JONES MP

ministry of defence floor 5 zone b main building whitehall

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