A central property function should be formed to provide leadership and support across the whole public sector, the government’s Operational Efficiency Programme has concluded.
Nigel Burchett, of the OEP’s property work strand, outlined its recommendations at the Drivers Jonas Seminar, entitled ‘The Government Estate in Today’s Economic Turmoil’, held at The Royal Society of Medicine in the West End of London, this morning.
The OEP was launched by Yvette Cooper, the chief secretary to the Treasury, in July 2008. Its recommendations, which have been accepted by the government, were published last Tuesday.
The implementation of the OEP programme will be led by the Value for Money team at HM Treasury, and work will commence within the next six months.
‘The OEP was about holding up a mirror to the way assets are managed across government,’ said Burchett.
The OEP’s property work strand, which was led by Lord Carter of Coles, found that the public sector owns freehold assets worth a total of £390bn. This asset base grows by £30bn per year and running costs amount to £25bn a year.
‘There is no one minister running the public sector estate,’ said Burchett.
‘We found that there are numerous individual property centres, that property expertise were fairly variable and that the estate is operated in the absence of good data.
‘Some local authorities do not have asset implementation plans at all,’ he added.
The central property function recommended by the OEP extends beyond the Office of Government Commerce’s current remit to include all public sector organisations, including central government, its agencies and non-departmental public bodies, and delivery bodies such as local government, the NHS, the police and schools.
It will work to rationalise, co-ordinate and oversee property performance of the government estate, identify surplus and under-utilised property assets, provide property standards and advice, develop cross-government initiatives, and promote regional planning across the public sector.
The OEP also recommended that individual central and local government organisations identify property assets as ‘core’, and must be retained, ‘surplus’, and will be disposed of in future, or ‘intermediate’, where final decision is pending. This information must be published.
‘There is a need for good data for different asset types. The key to all of this is metrics and data,’ said Burchett.
The OEP has also identified a timetable for the delivery of savings. By 2014, cost savings of up to £1.5bn per year could be achieved across the public sector’s property estate.
Over the next ten years, there is potential for savings from improved efficiency to be around £20bn in receipts from property disposals, not including council housing.