Thank you very much Bruce [Mann].
For the past few years Bruce and his team at the Government Property Unit have been on a mission to create a more modern and efficient government estate.
They’ve worked like Trojans – albeit with spreadsheets and tape measures instead of swords and sandals – but have done a heroic job.
Thanks to their efforts we’ve been able to exit over 1250 buildings, including over 800 freehold properties, generating £1.4 billion of income for the taxpayer – and saving running costs of over £600 million compared with 2010.
Better estate management
But it hasn’t always been easy. Public sector property management can be somewhat trying at times.
I was interested to learn how in the late 1930s, the Government Code and Cypher School – the forerunner of today’s GCHQ – was looking to move away from their headquarters in Broadway, a stone’s throw from where we are now. They knew a war was coming and needed to move out of London.
A suitable property was identified in Buckinghamshire called Bletchley Park – you may have heard of it. But the Head of the Secret Intelligence Service was not a patient man. Frustrated by the speed at which the cogs of Whitehall turned, he went ahead and bought the property out of his own pocket.
The government only cottoned onto this fact when they tried to sell Bletchley Park in the 1990s and discovered they didn’t own it in the first place.
Well, we’re no longer in the business of buying country estates; quite the opposite – we want to release property back onto the market. But this example is a small demonstration of how weak Whitehall’s oversight of its own estate has historically been.
In the absence of a comprehensive, coordinated strategy, central departments and their arms-length bodies all did their own thing. They did it without talking to each other and without thinking about their local partners.
Because no one was looking at the bigger picture, departments would take on expensive new leases when government freeholds remained under-used – or where local authority accommodation was available just down the road.
And without a holistic view – without a degree of governing rigour – the estate has been allowed to sprawl, giving rise to waste, inefficiency and duplication.
Then we ran out of money. No one in Whitehall or in local government wants to cut the frontline services, so we’ve had to look elsewhere to make savings.
The bloated property portfolio was a natural target.
Much of our work over the past 4 years has been to establish – for the first time – proper strategic oversight of the government estate.
This sort of central control over common areas of spend, such as property, is standard practice in the best businesses. Taxpayers should be able to expect the same discipline from government when it spends their money.
So I introduced tough property controls. No department can take on a new lease or pass a break-point in a significant lease without my explicit agreement, and I’m not in the habit of saying yes: I’m the minister who likes to say no.
It’s tough but it worked. We’ve been able to call time on expensive vanity leases and exit buildings that we no longer need – or that no longer meet our needs.
Admiralty Arch and the Old War Office are the most eye catching examples but there are many others. In central London we’ve more than halved our estate – shrinking the 185 office holdings we had in 2010 down to just 75.
We also conducted a strategic review of all land and property the government owns – to the best of our knowledge the first time this had ever been done. It identified assets which could be released between now and 2020, generating £5 billion for the taxpayer.
It also identified thousands of assets of limited financial value which have been acquired by over the decades but that departments are now merely stewarding. In my view it would be much better if these were released to local authorities, or other community bodies, who could put them to better use in line with local needs.
We’ve already approached a number of authorities with that aim, and I hope to see cases of imaginative reuse in the months ahead.
Our campaign against waste, inefficiency and vanity is pointing in one clear direction – fewer buildings occupied by more departments and agencies.
There are some excellent examples already, such as Temple Quay in Bristol, which I visited before the summer.
We’re also changing the face of Whitehall as departments learn to share.
At first, some departments and agencies were horrified at the prospect, but across from where we are now, 5 departments and several agencies are co-located in 1 Horseguards Road, and far from being the end of the world, they’re actually getting on rather well.
One Public Estate
We’re now on track to meet the target of 10 square metres of space per full time employee by the end of 2015 – and 8 square metres by the end of March 2018.
We believe this is the most efficient use of public sector space anywhere in the world, and yet we know more can be done.
So increasingly, we’re adopting the same approach beyond the core central government property portfolio in the wider public sector estate.
It’s absolutely right that local and central government pool their efforts to ensure this is managed with maximum efficiency, which is why the Cabinet Office and the Local Government Association came together a year ago to launch the One Public Estate Programme.
Twelve local authorities stepped forward to take part, and I’m pleased to see many of you represented here today.
While the Government Property Unit and the Local Government Association have provided funding and support, it’s a partnership. Local authorities have been in the driving seat and it’s their initiatives that are cutting costs.
The first year’s results have been outstanding.
Hard work at local level, helped by £750,000 funding from central government, has generated substantial savings for local taxpayers.
Not just a bit here and a bit there, but £21 million in reduced running costs and £88 million in capital receipts.
And every pound saved is a pound that can be invested back in front-line services.
Hull City Council, for instance, consolidated the number of properties they owned from 43 to 29. The savings that this generated paid for a customer service centre in the centre of Hull.
And by bringing local and national bodies together, the programme is helping develop greater integration in the delivery of local services.
So, for example, we’re seeing job centres being located alongside other customer services within council buildings.
From the perspective of the public, it shouldn’t matter whether the service they’re looking for is delivered by central or local government. What matters is that it’s convenient to use and it meets their expectations.
So when local authorities start to examine their property holdings it’s an opportunity to design better services.
In Worcestershire, the police and fire services came together to build a new joint headquarters in Bromsgrove.
It replaces 2 old police and fire stations which required extensive refurbishment, were expensive to run and would incur increasing costs in the future to maintain.
The new site will save 25% of the running costs but it will also help the police and fire services work more closely together. Whether responding to arson or floods, they frequently work hand-in-hand, so sharing the same headquarters makes operational sense as well as financial sense.
But getting out of property isn’t just about savings, or better services, it’s also about growth – helping to rebalance the economy by creating opportunities for the private sector. When public bodies do their own thing, it can have a really negative impact locally.
I’m told there are several examples – Droitwich and elsewhere – where our mapping has shown that some 2 thirds of town centre property is in the hands of the public sector, freezing out local businesses.
We can’t allow a lack of coordination within the public sector to hold local economies back. And it doesn’t need to be like this.
In Leeds, the One Public Estate programme made it possible for the City Council to work with West Yorkshire Police to help relocate their divisional HQ from the city centre to a new edge of town site. This freed up space for city centre regeneration for the Victoria Gate retail scheme which created 990 new jobs.
In Staines, moving public sector organisations to new locations will free up sites for the development of 340 new homes. This has been possible because the programme has brought the key players – central government departments, NHS, borough and county councils, around the same table in order in to find a plan that matches local priorities.
These results show what can be achieved when central and local government work as one.
Local ambitions can leave the drawing board and become a reality.
The first round of One Public Estate could bring £40 million worth of benefits to local economies and the possible creation of 5,500 new jobs and 7,500 new homes over the next 5 years.
But there is much more we can do, which is why we announced the decision to extend the programme to 20 more local authorities.
It’s great that you applied and were successful in joining the partnership.
This approach is here to stay – and with your involvement, we can continue to build on the great foundations already set in place.
Today is an opportunity to learn from each other and develop stronger links – because by working together, government and local authorities can deliver more savings, new innovations and stronger local growth.
So in conclusion, the One Public Estate programme is changing the mindset of how we manage property in the public sector. From an approach that was chaotic and fractured to one which is coordinated and coherent.
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. And that places a duty on those of us who work in the public sector to ensure our property portfolio offers taxpayers the very best deal.
The One Public Estate Programme is helping us to just that by reducing running costs and raising income from sales. But it’s also improving services and spurring economic growth.
This is what reform should be about. Not just saving money, but actually finding new and better ways of doing things.
It’s an exciting opportunity to contribute to the creation of more integrated and unified public services, more focused toward the needs and expectations of the people who use them – and that’s what matters most of all.