Dialogue due on BBC property U-turn

BECTU has called for urgent talks with the BBC and Land Securities Trillium over the sudden collapse of a joint property contract.

Land Securities (LST) and the BBC announced late last week that a 30-year contract for the provision of property management services to the BBC would be terminated in March 2006. A new provider would be sought by the BBC, but Land Securities would not be in the running for the new contract.

The union is concerned that this could threaten the jobs of hundreds of security, maintenance, cleaning, and catering staff, employed either by LST, or by its subcontractors.

Many of these employees are BECTU members, and officials hope to press the BBC into agreeing that the new contract would be offered for tender on the basis that any company replacing LST would TUPE-transfer existing staff onto their books, avoiding the risk of redundancy.

Meetings are also being sought with LST following a briefing for the union from senior company executives on May 12, the day that the termination of its contract was announced.

Many staff in LST and its sub-contractors are BECTU members, and the union has had formal recognition for many of them since the BBC gave the company responsibility for property services in London and Scotland in 2001.

The contract between the BBC and LST was founded on a property project in which new buildings would be developed at White City and Portland Place in London, and Pacific Quay in Glasgow, funded partly by off-balance sheet debt raised by joint-venture special-purpose vehicles.

As part of the deal, LST became a 50% owner of the new accommodation, and was given a fixed-price 30-year contract to service the buildings.

The first new buildings completed under the contract were at White City in West London, where two state-of-the-art blocks opened in 2003. A high-tech broadcast playout centre was occupied in October that year, followed by the Media Centre, the BBC's corporate HQ, in December.

Contrary to the plans, though, the BBC has remained the only tenant on the site, and two other buildings due to be rented out to commercial tenants remained empty.

In February this year, the BBC bought out LST's share of the Media Village in White City for £250m, raising the cash through a bond issue that took its off-balance sheet debt to nearly £1.2 billion.

At the time of the sale, LST insisted that its role in providing property services for BBC buildings would remained unchanged.

However, a joint statement issued by LST and the BBC on May 12 indicated that Land Securities did not want to remain in a deal where it provided only a facilities management service, without any capital interest in the buildings.

Although the early termination of LST's contract was widely reported as if the BBC had dispensed with an allegedly inefficient service provider, insiders say that it was actually Land Securities that prompted the move.

Negotiations on a re-write of the BBC's contract with LST, codenamed "Project Prospect" had been underway for several months, and it appears that the Corporation was beginning to lay down demands that Land Securities was unwilling, or unable, to accept.