Making savings on the government estate

The government has recently published its Government Property Strategy, which aims to make savings by selling off property and making buildings more efficient. Government Business examines the strategy and how it can save the government money

The pandemic has highlighted the need for buildings to be flexible, with lockdowns leading to more people working from home and social distancing and health requirements meaning buildings need to be adaptable. The recent heatwave and drought have demonstrated the impact of global warming and underlined the need to cut carbon emissions – with such a large estate, the government is well placed to make big savings. Furthermore, the cost-of-living crisis has highlighted the need for the government to make savings to free up funds to spend elsewhere.
    
Published at the end of August, the Government Property Strategy is expected to save more than £2 billion through property sales and efficiencies.
    
The government estate is made up of hundreds of thousands of properties including prisons, courts, schools, museums, hospitals, job centres, military bases, administrative offices and much more. The estate includes 136,844 built assets, covers a floor area of 156.8 million m2 and has an annual running cost of £21.7 billion.
    
The strategy has an “achievements” section which shows the changes already made, including reducing the size of the central general purpose estate by 30 per cent since 2010 and reducing emissions by 57 per cent in 2020-2021 compared to 2009-10. An estimated 38 per cent of this reduction is due to improved management of the estate.
    
Launching the strategy, Jacob Rees-Mogg, then-Minister for Brexit Opportunities and Government Efficiency said: “The public estate is a singular resource, with a significant impact. Its location, cost and effectiveness all have a direct relationship to the quality of public services and contribute to communities and places, driving economic growth throughout the UK. This includes delivering Government’s levelling up commitments, part of which will reduce the number of Government offices in London and build a larger presence in the rest of the country.”

Property sales
Part of the strategy includes selling £1.5 billion worth of property assets over the next three years and supporting projects like Government Hubs which consolidates government staff into fewer buildings.
    
The plan also intends to make £500 million of savings by reducing operating costs, cutting spend on leases, and using modern building materials and energy sources.

Mission One
The Government Property Strategy has three missions. Mission One is to transform places and services. Mission Two is to create a smaller, better and greener public estate. Mission Three is to improve professional excellence and insight.
    
Mission One is to transform places and services. This includes the government commitment to relocate Civil Service jobs outside London and into Levelling Up areas. The strategy is linked to the Places for Growth programme, which aims to move 22,000 civil service roles out of London by 2030. As part of the programme, 7,000 jobs have already been moved out of London, including 1,389 to Yorkshire and the Humber. 500 Home Office, Ministry of Justice and Department for Health and Social Care roles have already moved.
    
Mission One also commits to maximise on opportunities to exit from properties or co-locate services within existing properties. The Government Hubs project is seeing the consolidation of government staff into fewer buildings, by bringing together those from multiple government departments into a shared location to make more efficient use of space. The hubs project is expected to make savings of up to £300 million by 2025.
    
The One Public Estate programme brings public sector partners together to make the best use of public sector land and property in order to deliver efficiencies, local economic growth and more integrated customer services. Over three years, the programme is expected to make over £400 million capital receipts, £80 million running cost savings and provide land for over 10,000 homes and around 30,000 jobs.
    
The mission also intends to improve access and interoperability across the public sector to enable space to be shared between services and organisations. The Government Hubs project has interoperable IT and AV, logical adjacencies between teams and departments, virtual workspaces and on-site meeting and conference spaces. They also have a service desk with ICT fault reporting and diagnostics and FM service desk integration. The hubs have a shared network, providing guest access via GovWiFi and access to corporate networks via virtual networking.
    
Talking about the Government Hubs project, DEFRA said: “We have found that the variety of space available enabled different types of collaboration as well as for focused independent work. We’re now much more aware of how good building design can positively impact the way we work.”
    
Mission One also includes a commitment to invest £300 million in locally led grant funding, including the Brownfield Land Release Fund, which aims to unlock smaller brownfield sites across England for housing through the One Public Estate (OPE) programme. OPE has already seen some completed projects with an old Library in Waltham Forest being regenerated so it can be used to build 67 new houses and a Family & Homes hub.
    
The mission also commits to embed flexibility in estate design and construction to future proof the public estate. This includes uncertainty about future requirements being built into design for new buildings, for example through specification of flexible space which can be used for multiple purposes, through separation of shell and core from fit out or design to allow expansion and contraction without complex redesign.
    
Success in Mission One will be measured against the Places for Growth targets, by looking at the office footprint in each region and by assessing the cost savings.

Mission Two
Mission Two is to create a smaller, better and greener estate. The aim is for a smaller, more flexible estate, which reflects the requirements of a smaller Civil Service and modern public services. The estate should be more flexible and adaptable to meet changing demands and needs for property.
    
Mission Two commits to making £500 million of cumulative resource savings from the operating costs of the estate. Departments have already been asked to make five per cent savings against their operational budgets by 2024/2025.
    
To reduce the size of the estate, organisations will take a whole portfolio view of their assets and look at the potential value to other government priorities from repurposing or disposal. Costly, poor-quality properties should be prioritised for disposal.
    
A pipeline of disposals will be developed, which aims to generate gross capital receipts of £500m per annum, to fund investment in the estate which is to be kept.
    
Further estate savings by portfolio will be identified. Portfolio strategies should be in place across the estate by March 2023 to inform planning for the next Spending Review.
    
For the estate to be fit for purpose and in a good condition to meet the needs of a modern Civil Service, organisations will develop accessible and responsive spaces which enable delivery of flexible and inclusive services in supportive workplaces, enabled by FM professionals with the required skills and capabilities, who are supported by effective standards, tools, technology and organisation.
    
The strategy commits to improve the quality of estates across a number of departments including schools and prisons.
    
Feedback will be collected from customers on the quality of public buildings and this will be acted on. Quality and condition will be embedded in budget prioritisation and property investment decisions.

Greening Government
Mission Two also commits to deliver the Greening Government Commitments and 25 Year Environment Plan goals on net zero, adaptation, natural capital and resource efficiency.
    
The Greening Government Commitments set out actions that UK government departments and their agencies will take to reduce their impact on the environment from 2021 to 2025. These include targets for reducing water consumption, reducing greenhouse gas emissions and minimising waste and promoting resource efficiency.
    
To make the estate greener, an adaptation framework will be developed and embedded to enable consistent high standards in development and use of Adaptation Risk Assessment and Action Plan methodologies. Biodiversity and natural capital guidance will be developed and embedded for estate teams including guidance to maximise the impact of interventions in constrained urban sites. Sustainability requirements and standards for the whole lifecycle of the property will be built upon, from procurement, to construction to end of life.
    
The KPIs of Mission Two will be the size and annual running cost, capital value, land disposed, exits from central London offices, utilisation targets; resource savings and capital release; estate condition and customer satisfaction. Success will also be measured against Greening Government Commitments.
    
Organisations should develop property strategies setting objectives that take into account their individual business drivers and that are informed by the principles of the Strategy. Where property asset types are used by multiple organisations, portfolio strategies will be developed, setting objectives that take into account future cross-government demand, condition, sustainability and affordability for each asset class. These portfolio strategies should be in place by March 2023.
    
Rees-Mogg said: “We will transform the public estate to enable the updating of public services. The public estate has the potential to be at the vanguard of improving society, through helping to make our streets safer, supporting the NHS and educating children and adults.”