Corruption Problems in The 1980s, and Eventual Privatisation
Evidence of corruption in PSA District Works Offices came to light in the early 1980s, and as a result the government appointed Sir Geoffrey Wardale to carry out an inquiry. The Wardale Report was published in October 1983. The PSA's then chief executive, Montague Alfred, was removed from his post because the Secretary of State concluded that Alfred's evidence to the Committee was "contrary to government policy".
These problems, combined with the government’s intention to pursue a programme of privatisation of public organisations, led in 1988 to the PSA being put on a commercial footing, and obliged to bid for project work in open competition with the private construction industry. Then on 1 April 1990 the PSA was split into two separate organisations:
- Property Holdings, which remained within government and managed the portfolio of civil estates.
- PSA Services, which operated as a commercial entity bidding for new building work from public sector organisations; equally, PSA Services was free to seek work in markets outside the public sector.
The progress towards full commercialisation was completed in 1992, when PSA Services was itself further split into three organisations:
- PSA Projects (the branch which dealt with new building projects), which was offered for sale to the private sector, and purchased by Tarmac. (Although nominally a sale, the transaction was eventually estimated by the National Audit Office to have cost the government £81.3 million).
- PSA Building Management (the branch which maintained the existing estate) was divided into five regional businesses to be sold individually.
- PSA International (which looked after the overseas diplomatic and military estates) which was closed down in 1993.
Since the break-up of the PSA many government departments have taken back responsibility for their estates management, and set up their own property management departments. The largest of these is Defence Estates, looking after the military sites and land operated by the Ministry of Defence.
Read more about this topic: Property Services Agency
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