We’re just a stone’s throw from Parliament Square and I’m reminded of Winston Churchill’s remark concerning the rebuilding of the House of Commons, following its earlier destruction in the Blitz, when he said “we shape our buildings, thereafter they shape us”.
He was of course referring to role that the cramped and rectangular design of the Commons Chamber plays in creating confrontational and intense debates – and it’s true: I’ve been an MP for more years than I care to remember, but I still feel the same mix of anticipation and excitement and a bit of fear every time I rise to speak in the Commons.
But Churchill’s point is just as applicable in other places.
We’re here to discuss the future of property management in government and the wider public sector, and it’s about much more than just the bricks and mortar. It’s about the entire way we work, it’s about the kind of services we provide to the public and it’s also a reflection of the times we live in.
Five years on from the Great Recession, public spending is tight and it’s going to continue to remain tight. It’s essential that we continue our efforts to cut the cost of government and focus resources on frontline services.
And that’s why the government estate has been, and will remain, an important part of our long term economic plan.
Achievements in this Parliament
It’s worth reminding ourselves how far we’ve come over the course of the current Parliament.
Five years ago, government departments would take on expensive new leases, even though freehold properties owned by the government were lying underused just a few hundred yards away.
Now, by getting out of unnecessary leases and selling vacant buildings, we’re saving hundreds of millions in yearly running costs and we’ve generated billions in capital receipts.
Five years ago, there was quite simply no coordinated approach to government property, there wasn’t even a pretence of one.
Now, we’ve established a firm grip on the estate, with a comprehensive database of our property backed by a strong, credible and increasingly respected Government Property Profession.
And 5 years ago government was sitting on acres upon acres of vacant land that businesses and local communities were desperate to put to good use.
Now we’re releasing more and more of that land back to communities, so they can use it to stimulate regeneration and growth, and to create new homes and new jobs.
So the first thing I’d like to do is thank all those who’ve played a part in transforming the public sector estate.
This includes first and foremost the Government Property Unit, and if I could single out Bruce Mann who we asked to take on leadership of this function across government in addition to his day job as Finance Director at the Cabinet Office. He’s brought real leadership to it – energy, focus, drive – and has actually got this moving forward with great pace and purpose.
I look at the things we’ve achieved in this time and I’m proud. Property is actually one of the areas where we’ve gone further and faster than I would have thought possible.
But there have been so many other people who’ve contributed to this success as well, including committed officials from departments. When you try and do anything across government there is a pattern you observe: initial scepticism that you mean it at all; when it becomes clear that you do mean there’s then resistance; then it becomes a tired resignation; and then at some point you start to mobilise some energy and enthusiasm as people begin to see that there may be something in this after all.
We got to that point remarkably quickly, which is why we’re making so much better progress than we might have expected. Again, that’s about quiet persuasion and leadership from the centre.
So lots of officials from departments have entered into this with enthusiasm, from local authorities and public bodies who have worked across different areas to make this possible.
Those combined efforts have helped to save billions for the taxpayer.
A lot of our efficiency savings are played out in the realm of spreadsheets and budgets although they always represent real folding money savings that can be reused for the benefit of the public. But in the world of property your achievements are tangible and visible.
You can notice the difference you’ve made when you walk through a government building and see civil servants from different departments working side by side, or when you see the scaffolding and cranes appear around a former government property paving the way – sometimes literally – for new offices and new homes.
We can take pride in this, but there’s a lot more to do. Public spending isn’t going to ease up any time soon.
We’re already on track to meet our target of 10 square metres of space per full-time employee by the end of 2015. And we’ll continue to reduce the amount of office space down to an average of just 8 square metres by the end of March 2018.
We think this new target will be the most efficient space standard for the public sector anywhere in the developed world.
Consolidating government buildings has released £1.4 billion in capital receipts and has reduced annual running costs by £625 million over the Parliament.
We announced in the Autumn Statement plans to save between £5 billion and £6 billion through further disposals of buildings no longer needed between now and 2020.
I recently moved house, to downsize now all my children have left school and are increasingly leaving home. And I’ve come to realise that rationalising the government estate is a bit like clearing the attic – the deeper in you go, the more things you discover that people have hung on to down the years.
Actually there is a very good rule. If after 6 months you don’t notice that you haven’t got something you probably don’t need it.
So our future plans include the sale of landmark buildings like Sunningdale Park, the former Civil Service College, which will be on the market soon.
We will also consider the benefits and costs of the relocation of the museum collections currently housed at Blythe House in Kensington – a 5 acre site in central London – together with disused airfields and army barracks, surplus prisons and long-abandoned government laboratories where we can build the homes of the future.
In the next Parliament we’re going to manage the government’s property portfolio with an even keener eye on the market value of the land and property we hold. And it’s not just about maximising the proceeds, we have to look also at the economic upside of releasing the property where others can use it more productively than the government can.
And we will work with the private sector to find the best model to dispose of those leasehold buildings in a way that gets good value for the taxpayer, but always having in mind the economic upside as well as the short term exchequer proceeds.
Right to Contest
So our efforts over the past few years have marked a permanent change in how we manage property.
It’s time to stop thinking of government and local authorities as owners of land and buildings. The true owners are the public. Departments and local authorities are really just custodians on their behalf.
Through Right to Contest](https://www.gov.uk/right-to-contest) we’ve given the public the ability to hold our feet to the fire on this, by challenging us to release land and property for sale if we cannot justify keeping hold of it.
Take Dulwich Hospital as an example – it has a long history of under-use and has apparently been closed for 20 years. Now, through Right to Contest, at long last almost all of the site has been declared surplus to requirements and will be released – why did it take 20 years?
We’ve also created a Government Property Finder website, which maps and lists assets within the government estate, making it easier for people to find details of land and property available for sale or to let, and to help them challenge us to release further sites under Right to Contest.
One Civil Service hubs scheme
We’ll also better use the property that remains in the government estate.
During the times of plenty, departments have developed a kind of territorial claim to their own buildings and offices, as if they were independent functions. It’s always worth remembering that departments of state have no legal standing at all; the only entities that have any legal standing are the secretaries of state. Departments are merely a passing administrative means and there certainly not meant to be independent fiefdoms. They’re all part of the same government. And from the public’s perspective, it doesn’t matter which department delivers a service – what matters is that the service is does what it’s meant to do in a way that’s cost effective and hassle-free.
Look at what we’ve done with the Government’s web presence…moving from over 300 different websites often given conflicting advice to a single web domain, GOV.UK. It’s award-winning and world leading. People can find what they want in once place quickly and conveniently – and with a substantial cost saving over what went before.
That’s why we’ve brought an end to expensive vanity buildings. Because separate offices can create administrative barriers as well as physical ones. People start thinking in silos and becomes more difficult to work together.
In the next Parliament, we will continue to bring departments closer physically together to encourage closer, smarter and more effective working across government.
I saw what this benefit can bring when I visited the Temple Quay Campus in Bristol in June last year. Twenty-eight different government agencies are sharing the same newly designed office space, ranging from the Insolvency Service and Care Quality Commission to Ofsted and English Heritage.
In this Parliament we have brought the number of properties in central London down from 143 in 2010 to just 71 today and we’re planning to reduce this to just 23 sometime soon after 2020.
The cost of space in Whitehall remains expensive. The Ministry of Defence’s Whitehall headquarters costs £35,000 per person compared to a £3,000 a year for a Home Office employee based in Croydon.
So we will also continue to expand the One Civil Service hubs scheme, which is already saving money and could save billions of pounds more.
The way we work
But our property reforms are about more than just saving money. It’s about changing the way we work.
Civil servants should be able to work flexibly across locations that are convenient to them and their managers and, most importantly, convenient to people using public services.
Technology has changed massively over the past few decades, but the public sector has been slow to adapt its management approach.
Companies like BT, Vodafone, Microsoft and Virgin have cast aside outdated ways of working with impressive results.
Working more flexibly, if done right, can increase productivity, bring down costs and increase staff wellbeing.
The Ministry of Justice has been experimenting with new office layouts and testing tablets and laptops, so that staff can work across different locations or respond to emails while on the move.
We’ve recently introduced new technology to the Cabinet Office and DCMS. People are able to choose their own equipment.
You’ve all heard of ministerial red box – this iPhone is now my ministerial red box. I can deal with submissions not by trying to find a key to the box or lugging this wretched steel thing around but quickly, on my iPhone.
Our mantra: technology for civil servants at least as good as the technology you use at home. It doesn’t sound that demanding does it? But my god, it is… One civil servant in the Cabinet Office said of the new technology: “For the first time I feel valued as a civil servant. Instead of the crap they normally give us, they’ve given us something really good.” I found that really heart-warming.
Too often civil servants have felt the conditions and the tools with which they work have inhibited them. Government property was too spread out, under-invested, under-maintained and too dispersed. So bringing it together with better technology, and nicer offices is about helping civil servants who want to do a good days work do just that.
We’ve also provided flexible office space within the M25 to provide alternatives for headquarters staff who would otherwise need to commute into central London.
The Ministry of Justice have already been able to reduce their London estate from 18 buildings to 4, saving £30 million a year.
The rest of government needs to do the same, which is why departments have started smarter working strategies through the Way We Work programme.
One Public Estate
For the same reasons, we will also continue to increase cooperation between central government and the wider public sector. In 2013 Cabinet Office and the Local Government Association came together to launch the One Public Estate programme.
The idea is simple. If government departments can get out of their silos and work together to share property, save money, improve services and release land for redevelopment by working more closely together, then surely central and local government can do the same?
We’ve already shown that this has massive potential.
In the first year of the pilot, projected savings in running costs are £21 million, with £88 million in capital receipts. Worth getting out of bed for.
We forecast that the land and property released for new uses will lead to the creation of 5,000 jobs and the building of around 7,500 new homes over the next 5 years, with total benefit to local economies estimated at £40 million.
In the next Parliament, our projection is that this programme could save up to £160 million in running costs and bring in up to £700 million in capital receipts, as well as £320 million in further long term benefits to local economies, potentially releasing land for 60,000 new homes and create 44,000 new jobs.
This is significant. There is benefit on all sides from doing this and we need to go for it with energy and drive and enthusiasm.
And of course every pound saved is a pound that can be invested back in front line services. So in Hull for instance, the city council were able to reduce the number of properties they owned from 43 to 29. They then used the savings to pay for a new Customer Service Centre.
That’s allowing different parts of government to work more closely together – and the result is more comprehensive, more convenient services for the public.
In Ellesmere Port, for instance, they are seeking to locate DWP’s Job Centre alongside other local customer services within a council building.
The Government Property Unit has also been working closely with 6 public sector partners across the West Midlands as they look to form of a joint property management company, the first of its kind in the UK.
The One Public Estate Programme has been created to deliver a more cost efficient and customer-focused public estate and the work in the West Midlands is a perfect example of how this aspiration can be realised. I look forward to seeing the programme gather momentum and provide an example for others to take forward.
This work is also helping local authorities to release land back to the community.
I’m told there are several examples – Bromsgrove and elsewhere – where our mapping has shown that some two-thirds of town centre property is in the hands of the public sector.
We can’t allow a lack of coordination within the public sector to hold local economies back. It doesn’t need to be like this. The state can help, rather than hinder, economic growth.
In Leeds, the One Public Estate programme made possible a city centre regeneration for the Victoria Gate retail scheme which created nearly 1,000 new jobs, and included the largest John Lewis store in the north of England.
We estimate that the total land released through our disposals programme and the One Public Estate programme is enough to build 100,000 homes. A big contribution to meeting our housing shortage.
The pilot involved 12 local authority areas but September last year, I announced a further 20 areas were joining the programme.
In the next Parliament we’re going to extend it to all local authorities who wish to participate, so together we can deliver greater savings, more new homes and more new jobs.
Today I’d like to invite local authorities with great ideas for how central and local government can work together to the benefit of the taxpayer to get in touch with us at the Government Property Unit.
Government Property Profession
Now in order to bring about this scale of transformation, we must ensure we have the necessary capability in government, both in terms of structures and people.
We’ve already brought together over 100 previously separate property management teams into 8 clusters, centred on a coordinating department.
That means they can share purchasing power and specialist skills providing a better and more cost effective service. It’s a tighter model that will cut the cost of property management and help us to work more closely together.
But we’ve also got to get better at managing talented people, so we can direct their expertise to where it is needed most.
Since it was established in 2010, the Government Property Profession has been working to improve the capability of property professionals working in government, providing a consistent approach to professional standards, recruitment and career management across government.
It’s part of our wider work to strengthen Whitehall’s corporate centre by embedding strong functional leadership, in property and in other cross-government professions like commercial, digital, HR, communications, major projects, finance and internal audit.
Our goal is to be a leading organisation in the eyes of property professions in both the public and private sectors.
As of April 2015, continuing professional development will be mandatory. Through strong links with the Royal Institute of Chartered Surveyors and the British Institute of Facilities Management, we are able to provide excellent training and development opportunities.
Through these actions we’re delivering a clear signal. We’re saying that property is a profession that we take seriously in government. We value these skills, we need these skills, and if you have the qualities we need then are fantastic career opportunities available for you in government.
We’re never going to be competitive in terms of what we pay compared to what people could earn in the private sector. What we can do is provide the opportunity to be part of historic change.
So in conclusion, we can be proud of the changes we’ve made to property management.
We’ve literally changed the face of Whitehall, reshaping the government estate to be more cost-effective for the future, saving millions for the taxpayer.
We’re creating flexible, modern workplaces that help public servants do their jobs in the best way possible.
And in doing so, we’ve set off a wave of redevelopment, giving rise to new offices and new homes, and to more jobs and stronger growth.
But there’s more to do. There always will be. This will always be a work in progress. Because this is more than a one-off exercise to save money.
It’s an exciting opportunity to contribute to the creation of more integrated and unified public services, more focused towards the needs and expectations of the people who use them – and that’s what matters most of all.