Centralise negotiation to boost public property savings

31 August 2012

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2 September 2012 | Anna Reynolds

Management of the government’s estate should be centralised to make savings, rather than leaving individual departments to negotiate contracts, MPs have said.

In the report Improving the efficiency of central government office property the Committee of Public Accounts (PAC) recommend for savings to be made in the future, departments need financial incentives to work together to share space and sell excess property.

Currently central government office estate comprises over 5 million square metres of space and costs around £1.8 billion a year to run.

From 2004 to 2010, central government departments have made savings of around £100 million each year in total on the cost of offices, by moving from traditional cellular offices to open-plan spaces, and through hot-desking.

But Margaret Hodge, Labour MP and chairman of the PAC, said in a statement: “Progress has been made in recent years to drive costs down, but a more ambitious approach could deliver much bigger savings: more than £800 million a year by 2020.”

The Government Property Unit was established in 2010 to improve efficiency savings, but MPs said it has lacked the necessary leadership to deliver an effective cross-government approach. As the bulk of public sector estate belongs to local government, the Unit was advised to maximise opportunities for local authorities and the NHS and to share space with central government by working more collaboratively.

The report also criticised the government’s slow approach to fulfilling its commitment to make more properties available to small businesses. It urged the government to sell buildings rather than delay in the hope of a rise in property prices.

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