Home Office HQ will go £160m over cost

Potential bill of £70m-£100m likely for end of lease and move to new building Exclusive by Carol Millett



The Home Office's decision to build new headquarters rather than refurbish its present headquarters at Queen Anne's Gate could cost the taxpayer an extra £160 million, Contract Journal learned this week.

The Home Office's original tender called for a £60 million refurbishment of its Queen Anne's Gate offices. This would have involved a double decant of 1,500 Home Office officials to temporary quarters refurbishment took place.

But an innovative bid from a consortium led by developer Godfrey Bradman, which proposed a new building on the site of the former departments of transport and the environment at Marsham Street, prompted the Home Office in April to ask the three shortlisted bidders to start re-tendering in September. The three - Bradman, Bovis and Jarvis - are using Bradman's original proposal as a blueprint. All three are being compensated for the rebid.

Ministers and Home Office officials opposition to the prospect of a double decant under the original proposal prompted the rebid. Bradman's solution requires officials to only move once.

But Contract Journal learned this week that the new proposals will incur up to an extra £160 million in costs. The new-build project will cost £120 million, which includes the cost of demolishing the triple-tower Marsham Street building. And the Home Office will have to pay property company Land Securities, which was one of the bidders on the original proposal, between £70-100 million to get out of its existing lease on Queen Anne's Gate, which has another 18 years to run.

A source revealed: "The concern was that a double decant was too disruptive for Home Office officials who wouldn't know where to go for lunch. So instead of paying £60 million for the refurb of Queen Anne's Gate, they are now paying for a £120 million project and between £70-100 million to get out of its lease with Land Securities."

A Home Office spokeswoman said: "No decision has been taken on the future of Queen Anne's Gate. If the decision had been taken to stay in the building, it would have cost millions to maintain it and that would have been needed now. Also a double decant would cost a substantial amount on top of the £60 million. So it is not as simple as it appears."

Ian Henderson, head of Land Securities, said: "The Home Office has been negotiating a break clause in its lease." He said that these negotiations are ongoing but he could not go into any details because they were "commercially sensitive."