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Property Services Agency

Volume 170: debated on Friday 30 March 1990

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To ask the Secretary of State for the Environment what research he has undertaken into the benefits of the privatisation of the Property Services Agency; and if he will make a statement.

It is clear that competition will make the PSA more efficient, and privatisation will give it freedom to compete more effectively. Both processes will benefit the PSA's customers.

To ask the Secretary of State for the Environment what organisational changes he will effect the Property Services Agency from 1 April.

On 5 May 1988, my right hon. Friend the Member for Cirencester and Tewkesbury (Mr Ridley) announced that the PSA should become a commercial organisation. The PSA has made good progress towards that objective and, as from 1 April 1990, will be split into two oganisations‚ÄĒProperty Holdings and PSA Services. Of the 13,700 non-industrial staff and 7,500 industrial staff in the PSA at present, some 700 non-industrial and 1,050 industrial staff will transfer with Property Holdings to DOE(C). The rest will remain with PSA Services.

Property Holdings will perform the Government's landlord functions for the common user estate as well as other long-term Government activities. Property Holdings will become an integral part of the Department of the Environment.

PSA Services, with initial staffing of £13,000 non-industrial personnel, comprises four operating divisions and a central headquarters group. The operating divisions will deal with maintenance and property management, design and project management, provision of specialist advice and overseas work. PSA Services will operate on simplified commercial accounts from 1 April 1990 and full commercial accounts will be introduced from 1 April 1991.

PSA Services will compete with the private sector for business from other Government Departments including Property Holdings, but will also be allowed some freedom to bid for work outside Government. PSA Services will be privatised as soon as the business is ready for it, probably in the second half of 1992, and the enabling Bill is presently under consideration in another place.