When the Cabinet Office released details of the government's enormous property portfolio in 2012 it revealed that the state owned 16.4m sq metres of land and more than 13,900 buildings across the length of the UK. Analysis of the estate in 2009 valued it at £370bn, with running costs of more than £20bn, making it the government's second more expensive administrative cost after salaries.
The sheer scale of the estate - and the fact that public-sector staff enjoy more space per person than those in private sector offices - made it a prime target for efficiency savings. Yet while millions of pounds have been saved in recent years by cutting down the estate, ensuring that the changes do not affect an organisation's operations is a balancing act.
Attendees at a recent Guardian roundtable discussion debated how the state can best use and reduce its property portfolio. The event was sponsored by EC Harris, which recently produced a report on the need to improve public servants' workplaces.
Selling assets and reducing space is simple, warned Roger Tayor, a director at UK Shared Business Services, but the hard part is managing side-effects - reduced productivity and increased absenteeism. "Taking 40% off the cost of a property is remarkably easy," Taylor said. "But not adding 45% to the operating cost of the business is a bit more of a challenge."
One of the common changes made to save space in government offices has been the cutting back on office space for staff such as traffic wardens and social workers - those who spend much of their day outside of the office. "Do traffic wardens really need space of their own when they are in and out in half an hour, and their space is vacant for the rest of the day," asked Westminster council's Guy Slocombe.
This idea was taken up by Oldham council's Heather McManus. "They may need somewhere to come in, communicate, have a discussion, but they do not need a desk and an office," she said.
Selling buildings and shrinking offices saves money, but Stephen Jacobs from the One Public Estate Programme warned against overlooking the less tangible, but harmful side-effects of a narrow focus on money saved. "If your parking meter guy has been abused a bit, he may want somewhere to sit - even if that's not for eight hours a day," he said.
The relocation of central Manchester back-office workers to Oldham, among other places, has given the area a boost, said McManus, with the influx of public sector staff helping the struggling local economy.
However, relocating from areas with weaker economies could be a major blow to them, said Jacobs, and possible savings should be weighed against the economic impact of removing employees from an area in desperate need of them.
"We might be inefficient in some areas just because we actually want 30 or 40 workers to shop there," Jacobs said.
One way to provide savings is to absorb smaller offices into larger ones, as seen this year when the government's communities department moved into the same building as the Home Office. But attendees feared that similar moves, driven purely by cost savings, could backfire. "There's a danger that we will end up in five years' time saying:"Hang on, why have we grouped these organisations in this layer cake of a building?" said Mark Langdale, a partner at EC Harris. "The masterplan isn't there."
PSNGB director Neil Mellor took up this point: "The opportunity here is not just about saving cash, its how you can better deliver public services."
Yet communicating the benefits of these changes is a job at which government often fails, said Joseph Harrington, a partner at the Innovation Unit. This is particularly problematic for more controversial decisions, such as closing hospitals or libraries. Chris Ager, a director at iDEA said:"People aren't prepared to be on the front foot with the good news. They wait for the stones to get thrown and then respond." Slocombe agreed that this was a problem: "We don't describe what is going to be in place of that hospital - we're generally not very good at describing that vision."
One of the simplest ways to save office space is to allow more staff to work from home. The big increase in home working and its impact on office space has been valuable for the government and has helped huge numbers of staff work more flexibly, managing their day around childcare commitments. It has also reduced commuter congestion.
Some organisaions have attempted to make all staff work from home on set days. However, Dr Valerie Vaughan-Dick of the Royal College of GPs, said that this prescriptive approach is fraught with problems, and warned that not all staff are able to do so.
"A handful of people will say they haven't got anywhere to work from at home," she said. "I speak to people who are not middle-class; who don't own a home and have all the technology; where there are five people in a two-bed house with dependents and children - we've got to address that as well."
Slocombe said: "We've got to move away from working from home," and argued that a range of smaller, local hubs instead of giant headquarters would be a better option. "It's a place where the traffic warden can take their welfare time, where the social worker can drop in and where people who don't want to work from home can do so without heading all the way into head office."
But managing staff from the other side of the office is far easier than managing staff from the other side of the city. "You've got to empower your people and have good quality managers," said Roger Taylor. "That's where a lot of this stuff falls down: the managers."
One reason behind the public sector's comparative lack of progress when it comes to using its property efficiently is a shortage of leadership skills, said Ginny Gibson of Henley Business School. The corporate world, she explained, invests in their employees' development. "The property profession has not invested," she said.
"In the corporate world, individuals climb the corporate ladder because they come out of marketing, HR or whatever and at some stage they go on leadership-development courses, such as an MBA," Gibson said. "You have to be savvy not just a property developer, but also a business strategist."
The discussion was held on the day it was revealed that senior civil servants were being asked to find ways to save a further £30bn after the next general election. Those present agreed that as cuts continue to pile up and more services go online, there was still more to be done.
"My kids wouldn't dream of going to access a public service from a building," said Vaughan-Dick. "Public services don't need to be delivered from buildings because of this change in attitude and because of technology."
Slocombe, who racked up 25 years' experience in the private sector before joining Westminster council, said the public sector had been complacent in its use of its buildings. "We haven't really thought particularly significantly about how to use [buildings] effectively and efficiently," he said. "We are playing catch-up, but that expertise is now coming to the fore."
iDEA's Ager echoed this sentiment: "If i'm really honest, in the past 25 years I have probably seen more innovation in the Department for Education in the past year than I have working with the likes of BP and the BBC".
- Jane Dudman (Chair) - Editor, Guardian Public Leaders Network
- Chris Ager - Director, iDEA
- Ginny Gibson - Professor of corporate real estate and deputy dean, Henley Business School
- Joseph Harrington - Partner and co-head, service design at the Innovation Unit
- Stephen Jacobs - Senior programme manager, One Public Estate Programme, Local Government Association
- Guy Slocombe - Head of investment and corporate property, Westminster Council
- Roger Taylor - Property asset management director, UK Shared Business Services
- Mark Langdale - Partner for central government, EC Harris
- Heather McManus - Assistant executive director, corporate property, Oldham Metropolitan Borough Council
- Neil Mellor - Director, PSNGB
- Dr Valerie Vaughan-Dick - Executive director, planning and resources, Royal College of General Practitioners
Published 26th November 2014