Press Release - Improving the efficiency of central
government's office property
28 November 2007
Some departments are on their way towards having a structured
and strategic approach to property asset management. But central
government departments are still a long way from achieving full
value for money from their office accommodation, according to the
National Audit Office.
In a report out today, the government’s spending watchdog found
that departments could reduce gross annual expenditure on offices
by around £330 million by bringing the cost performance of
individual buildings in line with private sector benchmark
buildings.
Government’s civil property estate costs the taxpayer around £6
billion a year. Almost £1 billion of this is spent by central
government departments on office property alone. Today’s report
looked at whether departments are effectively managing and
achieving value for money from their own office space.
The report found wide variations in the amount departments pay
per square metre for office space. Median costs in 2005-06 (the
latest year for which data was available when the National Audit
Office carried out its work) ranged from £123 per square metre paid
by the (then) Department for Education and Skills to £636 paid by
the Department for Culture, Media and Sport, although since 2005 06
the Department for Culture, Media and Sport has rationalised its
estate by vacating buildings and providing more open plan office
accommodation. The Department for Culture Media and Sport estimates
that once this rationalisation exercise is complete, its
accommodation costs per square metre will reduce from £636 to
£469.
Departmental buildings in London had the highest accommodation
cost per square metre at £507 and the North East the lowest at £133
per square metre.
Departments vary in the amount of building space allocated per
person. This ranged from 13.3 square metres at the (then)
Department of Constitutional Affairs to 21.9 square metres at the
Treasury. The Office of Government Commerce (OGC) is currently
consulting departments on the introduction of a space ‘standard’ of
12 square metres per person which will encourage departments to
work towards improving their occupation density.
Variations were also reported in accommodation costs per person,
in part accounted for by the nature and type of building occupied.
The highest reported cost in 2005-06 was from the Treasury at
£12,041 per person while the (then) Department for Education and
Skills was operating at £2,592. The Treasury is aware of the
potential for better space utilisation and improved cost per person
and has since accommodated the staff from the Office of Government
Commerce into the main Treasury building and disposed of, or
re-assigned the leases for, two vacated buildings.
The report also found that departments are not yet on top of
sustainability issues. Departments were not able to supply
information on the amount of energy consumed in 2005-06 for 265 out
of 877 buildings reviewed; the proportion of energy from renewable
sources for 300 buildings; or the presence of a recycling scheme
for 544 buildings.
The Office of Government Commerce (OGC) is looking to improve
efficiency from government’s civil property estate and achieve £1.5
billion of annual efficiency savings by 2013. The report concludes
that OGC and departments have made good progress in the early
stages of implementing OGC’s High Performing Property initiative to
make further gains on efficiencies. Both OGC and departments have
met the early milestiones: departments have nominated property
champions, property asset management boards are being put in place
and benchmarking of all buildings has recently become
mandatory.
The NAO recommends that departments improve their understanding
of the factors that feature in improving building efficiency.
Specifically, they need an accurate and up-to-date understanding of
the number of people, the occupation level, the number of work
stations, accommodation costs and the environmental performance of
the building.
Other recommendations include that departments actively engage
with the OGC’s High Performing Property benchmarking project,
improve space utilisation and address existing office property
costs by fully exploring options for locating to cheaper regions
while still meeting departments’ business needs.
Sir John Bourn said today:
“Government departments have a challenging time ahead in
addressing the efficiency of their office accommodation. There are
positive signs of departments beginning to engage with the issue,
but there is still a vast amount of change required. Government is
still a long way from achieving full value from its office
estate.”
Notes for Editors:
- The Office of Government Commerce’s High Performing Property
initiative was launched in 2006 and sets out high level milestones
to transform the government estate. The high level milestones have
since been supplemented by a detailed implementation plan which
sets out the actions that the centre of government and all
government organisations need to undertake to deliver High
Performing Property. In addition, the OGC has mandated the use of
its property database, the electronic property Information mapping
service (e-PIMS), and, from April 2008, the use of its Property
Benchmarking Service.
- Press notices and reports are available from the date of
publication on the NAO website, which is at www.nao.org.uk. Hard
copies can be obtained from The Stationery Office on 0845 702
3474.
- The Comptroller and Auditor General, Sir John Bourn, is the
head of the National Audit Office which employs some 850 staff. He
and the NAO are totally independent of Government. He certifies the
accounts of all Government departments and a wide range of other
public sector bodies; and he has statutory authority to report to
Parliament on the economy, efficiency and effectiveness with which
departments and other bodies have used their resources.
Press Notice 54/07
All enquiries to Donna Watson,
NAO Press Office: Tel: 020 7798 7038
Mobile: 07917 555 388