The Old War Office and Peace: Government Property Agency chair on offices past, present and future
In CSW’s estates and smart working special report, GPA chair Liz Peace recalled how offices across government have changed, and the need to keep improving
Liz Peace remembers the first office that she occupied as a rookie civil servant at the Ministry of Defence in the mid-seventies.
The Old War Office, which is located on the corner of Whitehall and Horse Guards Parade, is now being lined up for redevelopment as a luxury hotel. In those days, though, the building was still in a poor condition having been patched up following bomb damage in the Second World War. “It was like working in a garret. The roof leaked and water poured down the windows every time it rained,” Peace says.
“You were only entitled to carpet if you were a certain grade so if they changed the grade of who occupied the office, the carpet would be ripped up, which left a mess.”
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Then she moved to the seventh floor of the main MoD building. While this provided a great viewpoint to watch state occasions like Field Marshall Montgomery’s funeral, it was still in a sorry state.
“We didn’t moan but people are not going to put up with that now.”
Helping to make sure that today’s civil servants don’t have to endure such Dickensian working conditions is part of the mission of the Government Property Agency, which the ex-MoD insider has chaired since its establishment in April last year.
Peace herself joined the civil service as an MoD administrative trainee in 1974, after completing a history degree at Royal Holloway College, University of London.
She secured a place on the Fast Stream, which had recently been widened out to non-Oxbridge graduates. By 1979, the Birmingham grammar school girl had made grade seven, or at least she would have done had Margaret Thatcher’s election not intervened.
“I was jolly cheesed off. She put an immediate block on promotions,” she says. “I had just got a ticket to move to grade seven and couldn’t move because she said nobody was going to be promoted.”
Nevertheless, Peace flourished during the eighties at the MoD, a time which included her first exposure to the property world during a spell at Defence Estates.
Her jobs there included buying land to build a new airport at Port Stanley, which was required because the existing runway was too small to cope with the island’s enhanced defence needs in the wake of the Falklands invasion.
The military history enthusiast ended up spending 27 years in the MoD, the last 11 of which were spent at the Defence Evaluation and Research Agency.
Rising to company secretary and director of corporate affairs, she helped prepare the agency for privatisation as QinetiQ.
When that had gone through, Peace left the civil service at the end of 2001 to take up a new role as chief executive of the British Property Federation, the mouthpiece for the UK’s real estate industry.
The arm’s-length relationship between the DERA and its sponsoring department had already given her a taste of what life would be like outside government. A big part of the role at agency was to sooth often fraught relationships with the MoD, she says: “WhenI moved to the property industry, I was doing exactly the same things but just smoothing relations with a different department.”
After a dozen years leading the BPF, during which she was made a CBE in the 2008 New Year Honours, Peace retired five years ago, and since then she has become one of Whitehall’s key trouble-shooters for dealing with property-related issues.
Peace’s portfolio of non-executive roles currently includes chairing the Old Oak and Park Royal Development Corporation, which is spearheading the regeneration of a vast area of underused railway land that will accommodate the last-but-one stop on the HS2 line heading into London.
One of the many phone calls she had after leaving the BPF concerned the future of the Government Property Unit.
At the time the GPU was responsible for a mix of setting policy and some day-to-day management responsibilities. Individual departments generally handled the bulk of their own day-to-day estates management. But plans were being hatched to streamline the way the government manages its property portfolio by creating a single agency.
The three key figures driving this initiative were the Treasury’s John Kingman, civil service chief executive John Manzoni and Conservative politician Matt Hancock.
Peace recalls her first encounter with the latter, then a youthful looking Cabinet Office minister, whose portfolio covered property.
“As he opened the door, I thought he was a private secretary. It turned out that he was the minister.”
The idea was to bring the government’s property assets into one agency, enabling them to be run as a single portfolio. This included splitting out execution and strategy into separate bodies – the Office of Government Property focused on policy and on-the-ground management would lie with the Government Property Agency.
“The focus is very much on setting policy and strategy,” in the OGP, she says, “not dabbling with delivery, which is firmly in the hands of the GPA.”
And property expertise, like assigning leases, could be concentrated within the GPA, enabling departmental bosses to get rid of a “millstone” and concentrate on their core business, she says: “They are not there to run property, they are there to deliver government policy.”
And individual departments need not be tied down to leasing what may turn out to be excess space when their needs change, Peace says: “The machinery of government changes constantly which is another good reason to have a flexible, centralised asset management body that can respond and move people around.”
“The roof leaked and water poured down the windows every time it rained. We didn’t moan but people are not going to put up with that now“
Bruce Mann, the then executive director of the GPU, was already developing the idea of rationalising the government estate by creating government hubs, housing a number of departments under one roof rather than scattered across several buildings as happens in many cities. “In one centre you can get a degree of cohesion with a common IT system and save a huge amount of money on leases,” she says.
The agency has been set a target of saving the taxpayer £6.3bn worth of efficiency savings over 20 years.
Not all government property can be transferred into the new agency, notably operational land, like military firing ranges and prisons, Peace says: “It’s no good having an operational prison and leasing out a spare wing.”
But this leaves the government’s “sprawling” office estate, much of which remains in a “variable” condition.
When budgets are tight, delaying refurbishment is often the “easy” option, she says: “A lot of the government estate is in a pretty poor condition because capital spending has been absolutely minimal.”
The GPA’s establishment hit a hitch when David Cameron was replaced as PM by Theresa May.
The aspiration for the GPA was to set it up as a government company, but this would have required legislation, which could have been achieved by inserting a line into a MHCLG bill.
But this gambit fell victim to the new PM’s desire to strip out anything that looked like spare fat from government legislation, says Peace.
Instead, it became an executive agency, the establishment of which involved what Peace describes as “endless discussions” with the Treasury about financial freedoms and flexibilities. After around two years of discussion, the GPA was set up on a shadow basis in 2017 before fully going live.
“Personally, on day one, I felt we didn’t have enough [powers] but I believe in taking what’s on offer and living to fight another day rather than getting on your high horse.”
Even when the new agency was up and running, Peace recognised that getting departments to play ball would be tough.
“I understood what we were going to be up against,” she says, having been involved in an attempt to undertake a similar initiative at the MoD during the 1990s, which had “never quite worked”.
“The heads of service had direct access to the PM and they saw holding land as a power. They saw themselves as guardians of the estate in the future,” Peace says, recalling a “heated discussion” with the Flag Officer at Gibraltar about disposing of the navy’s private residence in the territory.
“He didn’t want to go down as the admiral who had let the beautiful residence on the side of the hill go.”
The GPA has to persuade individual departments to hand over their property, she says: “The civil service tends not to work by mandate but by consensus and coming together. Nobody is mandating property assets to be put into the GPA so we have to win them over.
“If they have a lease coming up for renewal it may be better to move into a hub but we have to prove it to them.”
Wining over the departmental finance directors general is key, given how much sway they tend to have over estate issues.
“The civil service tends not to work by mandate but by consensus and coming together. Nobody is mandating property assets to be put into the GPA so we have to win them over”
What hasn’t been a problem so far is persuading civil servants to embrace more flexible working patterns, Peace says: “They are surprisingly flexible, partly because civil servants move around so much that it’s not worth getting attached to one room.”
So far the properties of DfID, MHCLG, the Cabinet Office and BEIS have all transferred to the GPA’s balance sheet, she says, while negotiations are ongoing with the Home Office.
The agency is also preparing to “on-board” the cluster of departmental properties currently run by the MoJ.
The really big remaining prize in Peace’s eyes is Defra, which has hit a hitch after originally being due to on board in March this year.
She understands why, given the situation it now finds itself in, the department has not engaged more with her agency.
“They’re very preoccupied with Brexit so it’s been difficult to get their attention focused on it. The pitch is that we can take away property problems so they can focus on Brexit.”
However, the hope is that progress will be swifter now that the GPA has its own dedicated chief executive, Steven Boyd, who took over last month.
Finding a new chief executive took longer than anticipated. Mike Parsons, who is also director general of government property at the Cabinet Office, had been doubling up in the role on an interim basis for more than a year.
But, as ex-estates director at HMRC, which has spearheaded the hubs programme, Boyd’s appointment was a “natural fit”, says Peace: “The fact that we’ve hired the guy whose been running it should be helpful.”
Another factor behind the property shake-up was Manzoni’s push to improve the quality of the civil service professions, she says: “The new property model wasn’t just about the efficiency of the portfolio but how to support the concept of the smart civil service and smarter working, taking old office portfolios and making a better offering.”
With a clear nod to that first office all those years ago, she says: “You can’t have brilliant civil servants working in terrible old buildings where the roof leaks.”
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