Features: May 27th, 2009

Better property asset management has the potential to deliver efficiency savings greater than all the other strands of the Treasury’s Operational Efficiency Programme put together. Publicnet provides an overview of the Programme.

Property asset management across the public services is big business, but for most public bodies it is not a strategic issue and is not discussed routinely at Board meetings. The result is that accommodation is generally provided rather than managed. Property asset management is not integrated with business planning nor included in implementation plans.

The public sector property assets have a book value of £370 billion. This represents about £6,000 worth of assets for every UK resident. The UK’s local government property, including council housing, accounts for two thirds of this total and central government and public corporations for the remaining one third.

The Operational Efficiency Programme found that over the next 10-year period the potential for savings from improved property asset managment will probably be around £20 billion in receipts from property disposals, excluding council housing, and savings in running costs of up to £5 billion a year by the end of the period. Savings from the other strands of the Programme amounting to some £13b will come from Shared Services, Collaborative Procurement, and Total Place,
which brings together elements of central government and local agencies within a place.

Major economies can be made throughout the public services by reducing the area of space provided because the ratio of people to area is lavish compared to commercial standards. A 30 per cent reduction in central government office accommodation could be made by reducing space occupancy from 14.5 to 10 square metres or better for each full time employee This would involve emulating the best practice in the private sector, including desk sharing and would produce a saving of some £1b per year. A similar reduction could be made across all public bodies. A further £0.5 billion a year could be saved from collaborative procurement of facilities management.

To achieve effective property asset management the Treasury report recommends that at the most senior and strategic level, management should provide effective challenge to their organisation’s use of and demand for property. Top management should be supported by appropriate expertise and given good data and guidance to allow the costs and use of property to be quantified and understood.

Where operations are dispersed across the country, “hubs” at regional and local level should be created so that different parts of the public sector could share property and maximise its efficient use.

There is also a recommendation to create a new central property function to help drive effective property asset management across the whole of the public sector, to facilitate investment in property transformation and to secure action to achieve change among local authorities and their partners.