Cabinet Office minister Matt Hancock: government to vacate 75% of sites by 2023

Government hails major savings on government estate since 2010 and sets out plans to go further - but the PCS union warns "vital local services" will be undermined

By matt.foster

03 Feb 2016

Plans to drastically reduce the size of the government estate over the next decade have been outlined by the Cabinet Office, with the total number of buildings occupied by departments set to fall from 800 to under 200 by 2023.

November's government-wide Spending Review made clear that a shrinking of the government's national footprint will play a big part in the Treasury's quest for savings, with departments pledging to sell off £4.5bn-worth of surplus land and property by the end of the decade.

The latest "State of the Estate" report from the central Government Property Unit (GPU) - set up in 2010 to oversee the state's holdings - sets out the scale of the office closures now being planned by departments in the coming years.

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Under the "Government Hubs" programme detailed by Cabinet Office minister Matt Hancock on Wednesday, the number of buildings occupied by government is set to fall by 75% by 2023, with departments increasingly expected to share office space. Unions have already warned of the potential impact on "vital local services".

Hancock said: "Departments' workforces within a locality will be accommodated in 18-22 multi-departmental hubs across the UK, allowing us to achieve economies of scale, enabling easier cross-departmental collaboration as well as having important benefits for recruitment and retention."

Meanwhile, the government's central London estate, which has already been reduced from 181 separate properties in 2010 to 54 today, is also in line for further reductions.

Detailing what the GPU has dubbed the "Whitehall Campus" project, Hancock said the state's central London presence would be reduced to "some 20 efficient, fit-for-purpose buildings by 2025, supported by smarter working".

He added: "We will retain core buildings in Whitehall, relocating civil servants to well-connected Hubs in both London and beyond, and accommodating those that remain in central London in the most cost-effective way possible, with many departments sharing buildings."

Under plans set out in last year's Spring Budget, ownership of the government estate will soon be centralised, with the Treasury charging departments market-level rents on the freehold assets they currently own in a bid to incentivise better use of land and buildings. Hancock confirmed on Wednesday that he expected this new model to be up and running by April 1, 2017, with "all in-scope central government land and property" falling under its control by the end of the current parliament.

"More we can do"

The size of the government estate has fallen by 2.4 million square metres since 2010, the GPU said, while total running costs have been reduced by 28%. According to the report, the government saved £842m last year through selling off buildings and exiting rentals. Hancock said those savings demonstrated the government's "laser focus on cutting the deficit, supporting growth and providing more houses".

The minister added: "To that end, we’re determined to release property the government no longer needs and get out of expensive rentals that aren’t offering value for money. "Today’s report shows the progress we’ve made in creating a more modern and efficient estate, with £1.8 billion already saved for taxpayers. But there is still a lot more we can do."

But the plans for further reductions have been attacked by the Public and Commercial Services union, which has already raised concerns about planned closures at HM Revenue and Customs and the Department for Business, Innovation and Skills.

General secretary Mark Serwotka said: "The fact is these aren't grey civil service offices from another era, they are jobcentres, tax offices, courts, sites providing vital local services that people will find it harder to access, particularly the more vulnerable.

"Closure plans on this scale expose the lie at the heart of Tory policies for our regional economies, whether the so-called Northern Powerhouse, the Midlands or elsewhere."

According to the GPU, the biggest year-on-year estate reduction in 2014-15 came from HMRC, which reduced its holding area by 69,905 square metres over the period, representing some 6% of its estate.

The tax authority recently unveiled plans to close the vast majority of its 170 offices over the next decade, in favour of a move to just 13 "regional hubs", a model that now looks set to be replicated across government.

While HMRC has put in place plans for temporary, transitional sites to aid relocation and says it expects 90% of current staff to continue working for the department, its proposals have drawn fire from both PCS and Scottish National Party MPs concerned that many officials will struggle to move.

Meanwhile, the Department for Business, Innovation and Skills' own plan to close its Sheffield site by 2018 has drawn fire from local MPs, with Shadow Cabinet Office minister Louise Haigh this week accusing the business secretary Sajid Javid of displaying a "lack of empathy" for those affected.

Responding to today's announcement, Dave Penman of the FDA union - representing senior officials - raised the BIS closure plan and warned ministers to ensure that the government's "rhetoric will match the reality".

He added: "Whilst the minister Cabinet Office has said that the reduction of government buildings will be ‘supported by smarter working’, those in BIS’s Sheffield office – the closure of which was announced only last week - have already been told that their employer ‘does not envisage that extensive remote working will be appropriate for most roles’

"Shrinking the estate on this scale requires careful planning across government, to ensure public services are protected and disruption to staff is kept to a minimum. If those objectives are to be delivered, then consulting the unions at the beginning would seem a good place to start."

According to the latest Whole of Government Accounts, the state still owns some £300bn worth of land and buildings. The Cabinet Office placed a moratorium on the purchase of new properties in 2010, with departments and agencies only allowed to take on new holdings if they will ultimately reduce running costs or save space.

The GPU's latest report confirmed that these measures would remain in force for the for the foreseeable future and "will be developed over the next two years".

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