Government flags savings as estate continues to shrink
Cabinet Office reports 2% reduction in floorspace and £750m generated from site disposals
The new hub at 10 South Colonnade in Canary Wharf: Government Property Unit
Central government’s property holdings shrank by 2% in the year to April while some £750m was generated from the disposal of more than 400 sites, according to a new Cabinet Office report.
The State of the Estate update proclaimed a year of continued progress with reshaping the government’s diverse property portfolio, often consolidating operations to new hubs with staff from multiple departments. It said the size of the government estate contracted by 156,000 sqm to a total of 1.7m sqm during the year, a space cut in the last year that the Cabinet Office said was equivalent to “13 Trafalgar Squares”.
Reducing the size of the government estate and its running costs has been a long-term objective of successive governments. The Cabinet Office said 2017-18’s 2% space reduction contributed to a 10% reduction since 2015 and a 28% reduction since 2010. The government said that more than £700m in running costs had been saved over the same period.
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The Department for Work and Pensions has the biggest slice of the central government estate, with around 1.6m sqm, representing 20.4% of the total floorspace. Next is the Ministry of Justice, then the Department for Business, Energy and Industrial Strategy, and then HM Revenue & Customs. Between them, the four departments account for just over 60% of the estate.
The new report focuses on core properties owned, leased or otherwise occupied by government organisations – departments, non-ministerial departments, executive agencies and executive non-departmental public bodies. It excludes so-called specialist properties such as museums, ports and prisons.
Despite the downsizing in 2017-18, the Cabinet Office said running costs for the estate had still increased from £2.57m to £2.60m compared with the previous year. However the report insisted that the real-terms running costs had decreased by £22m.
It said the new government hub in Canary Wharf’s South Colonnade, which officially opened in October, would save £24m a year compared with the office space it replaced. The building – which used to house Barclays Bank staff – will be the base for around 6,000 civil servants from a range of organisations, including HMRC, the Ministry of Justice and regulator Ofgem. The tax agency and the Government Property Agency secured a 14-and-a-half year lease on the 10-storey building, which was originally built in the late 1980s.
Other key findings in the State of the Estate report were a reduction in vacant space to just 1.4% of the central government estate, a 10% drop on the previous year and a reduction of more than 50% on the 2010 level. Nevertheless, the report said the estate still had 105,696 sqm of vacant space in the year to April – equivalent to nearly nine “Trafalgar Squares”, by the Cabinet Office’s earlier metric.
Civil servants will also find themselves with less individual space than they previously enjoyed – either because of smart working or more densely-occupied offices. The report said the amount of space per person in government offices had reduced to 9.4 sqm , down from 11.4 sqm five years ago. The report said the GPA expected to achieve an average of 8 sqm per person by 2021. It said the private sector average was currently 10.7 sqm.
More positively for the planet, the report said that since 2010, the environmental performance of government buildings across the country has seen emissions cut by almost 40%, as well as paper consumption and general waste reduced by 55% and 40% respectively.
Cabinet Office minister Oliver Dowden said that in addition to reducing the size of the government estate by almost one-third since 2010, the departments had saved around £760m in running costs over the period and reduced vacant space by two thirds.
“Our average property cost is £486 per sqm, against a private sector average of £560 per sqm,” he said.
“These numbers represent a considerable achievement and show that government is not only making better use of space than the private sector, but has achieved these efficiencies despite the number of employees working in the civil service rising since June 2016.
“This progress has provided us with the opportunity to reinvest a further £750m in capital receipts from the sale of over 400 sites into supporting government’s wider commitments – from delivering better public services to delivering more surplus land for housing.
“I am proud of what the property function has already achieved in making the government estate more modern and efficient. I look forward to seeing the numerous benefits realised as we deliver on the commitments of the government.”
Separately, the GPA this week began recruiting for a permanent chief executive to succeed Mike Parsons, who is director general of government property at the Cabinet Office and serving as interim GPA chief.
The job specification calls for a “very experienced transformational leader” and offers a salary of “circa £180,000” for the right candidate. It is graded at Senior Civil Service pay band 3.
The GPA is due to relocate its headquarters to Birmingham by 2021. The role specification says the successful candidate could be based in either London or Birmingham initially.
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