The deal has delivered benefits and more are expected

5  Before STEPS, the Departments employed approximately 300 staff on estate management. By late 2003, this number had been reduced to 160 and is expected to fall further as the contract beds in. Contract management has also been rationalised and consolidated. Instead of dealing with numerous service providers, the Departments now deal just with Mapeley STEPS and with a small number of service providers for the parts of the estate that were not transferred under the STEPS deal. As is often the case in the early months of such complex contracts, there were problems with service delivery. These problems were compounded by the fact that Mapeley STEPS was a new company and the Departments added a number of new properties early on. In response, Mapeley STEPS re-organised its regional structure and appointed a new service director in October 2001.

6  Unlike conventional property leases, the contract allows the Departments to vacate a certain proportion of the estate over the duration of the contract, without incurring further costs in the year of vacation. This flexibility can be applied irrespective of the residual lease terms on properties vacated. As the cost of providing this level of flexibility has been transferred to Mapeley STEPS, maximum value for money depends on the Departments making appropriate use of the available flexibility. A change mechanism built in to the contract also allows the Departments to obtain additional space if needed. To cope with extra demand for office space, over 30 additional buildings and other facilities have been acquired by Mapeley STEPS since the contract went live in April 2001. In addition some 300 projects have been completed by the contractor. These include provision of buildings for new call centres, removal of asbestos and provision of new lighting.

7  STEPS also puts the Departments in a strong position to react to Government-wide initiatives such as the recent review of public sector relocation (the Lyons review). The Departments now have the flexibility to relocate without having to meet the in-year costs of breaking leases or finding alternative tenants and could bring other Departments into new or existing buildings managed under the STEPS contract.

8  There are wider benefits available to the Departments as a result of the STEPS deal. To support the implementation of Government policies such as the "One Stop Shop" initiative (aimed at providing the public with as many Government services as possible from one location), Mapeley STEPS have permitted the Departments to establish two sublets to local authorities with the option to negotiate others on an individual basis. Staff from both Departments have worked on the STEPS procurement team and the Estates and Contract Management Unit and are examples of the benefits of closer working across Departments. The deal has also encouraged wider joint working between the Departments' internal audit teams, with joint reporting on the STEPS deal.