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The Department for Education is moving into the historic Old Admiralty Building as part of government efforts to reduce estate costs.
The move will save more than £19 million a year for the taxpayer, including an annual saving of more than £8.5million for the Department for Education (DfE). The Grade II listed building will also be transformed into a modern workplace.
The freehold Old Admiralty Building (OAB) is the largest of the Admiralty Buildings in Whitehall and has been home to the Foreign and Commonwealth Office (FCO) since the 1960s. However, DfE intends to move into the building in September 2017 following the FCO’s decision to leave the building and consolidate its London staff into one HQ in the King Charles Street.
The DfE will release its leasehold accommodation at Sanctuary Buildings as part of the government’s ongoing work to streamline its property estate. Moving to a freehold property provides excellent value for money as it means the DfE will not have to renegotiate a lease and it will be much cheaper to run in the future.
Refurbishment of OAB will see the building transformed into a more modern working environment with nearly double the number of workstations, while preserving the site’s heritage. It is hoped that the re-development will involve greater public access to this historic building.
The proposed move is the latest step by DfE to reduce the cost of its property estate. Since May 2010 it has reduced the annual cost of its buildings by £17 million. DfE will save another £2.5million in 2014 through moving out of buildings in Guildford, Cambridge and central London.
Modernising the government estate
The move is a direct result of the Cabinet Office’s programme to consolidate and modernise the government estate. By moving staff to alternative locations, encouraging departments to share office space and developing more flexible ways of working, the government has been able to sell unnecessary freeholds and exploit break clauses in under-used leaseholds. So far, over 1,000 leasehold properties have been vacated and over £1 billion raised for the taxpayer by selling more than 770 buildings and land we no longer need.
Minister for the Cabinet Office Francis Maude said:
As part of our long term economic plan, we’re getting more value from our property by letting go of properties that no longer suit our needs and reaping maximum benefit for both the taxpayer and the wider economy.
This work saved hard working taxpayers £620 million last year alone but we’re determined to go further and this is a great example of a deal that not only releases property elsewhere in our portfolio but delivers a modern office building that is needed if we want to become the most effective civil service in the world.
Education Minister Michael Gove said:
By moving into the Old Admiralty Building we will be saving the taxpayer millions and freeing up money that was being spent on rent so it can be reinvested back into the department’s budget.
This decision makes sense financially and shows how the government is getting the most benefit possible for every square metre of property we own and every pound of taxpayers’ money we spend.
The move follows the announcement of a restoration project that will see Admiralty Arch turned into a publicly accessible landmark hotel. The 99 year lease agreement signed between the government and Prime Investors Capital in October 2012 will raise an additional £60 million from the sale of Admiralty Arch’s leasehold, as well as creating jobs within the restoration project.