405235 State Of Estate Vis5


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Annual Report on the property estate across central government. I completely changed the way the report is structured and written

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405235 State Of Estate Vis5

  1. 1. The Stateof the Estatein 2010
  2. 2. The Stateof the Estatein 2010Presented to Parliament pursuant to Section 86of the Climate Change Act 2008HM Government
  3. 3. © Crown copyright 2011You may reuse this information (not including logos)free of charge in any format or medium, under theterms of the Open Government Licence.To view this licence, go to:www.nationalarchives.gov.uk/doc/open-government-licenceor write to the Information Policy Team,The National Archives, Kew, London TW9 4DUemail: psi@nationalarchives.gsi.gov.ukIf you have an enquiry regarding this publication,please contact: 0845 000 4999servicedesk@cabinet-office.gsi.gov.ukThis publication is available for download at:www.cabinetoffice.gov.ukRef: 405235/0511
  4. 4. ContentsForeword 3Executive summary 6Chapter 1 About this report 9Chapter 2 The size of the estate 17Chapter 3 Delivering efficiencies 25Chapter 4 Sustainability 37Appendices Appendix A – Size of the mandated estate 50 Appendix B – Total cost of the estate 61 Appendix C – Benchmarked offices: efficiency data and KPIs 62 Appendix D – New administrative procurements 76 Appendix E – Climate Change Act 2008 (extract) 78Glossary 79
  5. 5. ForewordFrancis Maude, Minister for the Cabinet Officeand Paymaster General The Government Estate is a The lease moratorium we introduced in June 2010 has great national asset. We need helped to reduce the size of the central government to use it better. We can cut Civil Estate: in the first nine months, we exited over 150 costs, and reinvest the savings leasehold properties. The extension of the moratorium in public services. We can use to a broader set of property controls in March 2011 it to enable work practices will further accelerate this reduction. And the move that are more modern and of Cabinet Office staff into the Treasury building shows flexible, while helping how this vision is already being delivered at the heartgovernment to reduce its carbon footprint. of government.To deliver these benefits, we must change and we But there is much more to be done. During the nextmust change quickly. The estate we occupy is too year, we will be piloting new models of occupationbig and dispersed across too many sites. Much of it for central government’s office estate in central Londonis under used, especially in central London. Central and Bristol. Getting this right on the central Londongovernment in Bristol occupies no fewer than 100 estate alone could save up to £400 million a year indifferent addresses. We are paying too much for running costs over the next decade.leasehold properties, while not doing enough with ourfreeholds – the buildings we actually own. And we’re There will be no slow down on sustainability;paying too much to service these properties day to day, departments have stepped up to the challenge setso the quality of work environments is often below by the Prime Minister a year ago to reduce carbonmodern standards. emissions by 10% in 12 months and excellent progress has been made. This Government is onSo we need to modernise. We will co-locate, relocate track to be the greenest ever but our key challengeaway from Central London, intensify usage, upgrade for the future is to maintain this momentum. It will beour freeholds and get out of leaseholds. To drive this, challenging with less money available. But the rewardswe will manage property across the estate much more are obvious, both in terms of saving public moneystrategically. By co-locating and focusing on our core through energy efficiency, and contributing towardsbuildings, we will break down departmental silos, a sustainable, low-carbon economy for the future.drive up productivity and encourage more innovative,joined-up government with modern, flexible work The Government does not need more office space.practices enabled by modern, flexible workplaces. We need fewer, better workplaces, more intelligentlyWhere there is no need to accommodate staff in distributed and far more intensively used. The prizeexpensive central London offices, we will consider is well worth the effort. By working together, we canmoving to more price effective areas in or around not only improve the efficiency and sustainability ofLondon, with investment in modern video technology. the Government Estate, but also improve workingBy doing this, working more efficiently and lives and deliver significant benefits for the economyconsolidating into fewer buildings, we could save and public services.billions a year in running costs alone over the nextdecade. That’s billions a year we could put back intoservices like health and education. And exiting someof the leasehold properties will enable some muchneeded regeneration opportunities. Francis Maude 3
  6. 6. John McCready, Managing Director,Government Property Unit The Government Property Unit During 2011/12, we will be rolling this model out in two was set up in 2010. Our role is centres, central London – where we currently occupy to improve the strategic more than 170 buildings – and Bristol. The lessons management of the learned from these pilots will then be applied across Government Estate because the country. running the estate more efficiently is a win-win – the The GPU continues to improve data collection and Government saves money, benchmarking, on everything from space utilisation towhich it can plough back into services, while our energy use, in order to drive efficiency and sustainabilitybuildings perform better and more sustainably for across the estate.staff and the public. Furthermore, we are beginning work with the MinistryThe State of the Estate in 2010 is an important report of Defence on releasing land from its operational estatefor us and that is why we are delighted to take for new house building, as announced in the 2011responsibility for its delivery. Measuring the performance Budget.data helps us to understand what we do and howwe can do it better. In the longer term, we aim to raise more than £20 billion by selling surplus properties from across the estate,The GPU has already made good progress towards again releasing property which can be used for newreductions in annual running costs through the economic activity.introduction of National Property Controls, whichinclude a moratorium on new leases, efficiency In all this work we are supported by our advisory panel,standards for new buildings and refurbishments, as made up of some of the UK’s leading property expertswell as compliance criteria for facilities management from both private and public sectors, as well as ourcontracts. property champions and property professionals groups within government.Now we are pushing ahead with our strategy to makemore effective use of the buildings the Governmentowns. That means moving people into the emptyspaces in our freeholds, using that space moreefficiently, and vacating expensive leasehold propertieswherever possible.There is a significant growth opportunity for theeconomy from doing this, as prime city centre siteswill become available for the private sector to use,helping to create new jobs and wealth. John McCready4 The State of the Estate in 2010
  7. 7. William Jordan, Chief Sustainability Officer,Efficiency and Reform Group The Prime Minister’s A key factor is the way we monitor and report our commitment to make this performance, so that staff and the public can see how the greenest government we are doing. We have moved from quarterly reports of ever has demanded a step energy use to monthly statistics available online – with change in how we approach real-time reporting in departmental HQs, so people can sustainability. follow emissions reduction day by day. Departments have been On wider sustainability issues, we are using less water,challenged to develop new, innovative ways to creating less waste and recycling more than ever before.achieve environmental targets that go beyond what We will continue to push ahead in these areas, meetingwas previously considered possible. our Greening Government commitments.By the end of December 2010, departments had risen Our key challenge for the future is to maintain thisto the challenge of meeting the Government’s ambitious momentum, and achieve our new targets for greentarget to reduce carbon emissions from the Central government, at a time when there is less moneyGovernment Office Estate by 10%. Plans were in place available for investment in new systems and technology.to meet the target and progress was on track – and This will require further innovation and resourcefulnessprogress has been maintained through 2011. from everyone in government – and more creative ways of working with our partners and suppliers.We have looked at every aspect of how our buildingsare run and have radically improved how we measureour performance in order to drive down energy useand improve the transparency of the Government’sperformance.We are making best use of green technologies such asvoltage optimisation – which adapts the mains powersupply to what appliances actually need – and combinedheat and power, to reduce energy consumption. We are William Jordanalso being smarter about heating and lighting only theareas of buildings that are being used and minimisingenergy consumption when they are not.With our facilities management partners, we are lookingat improving the efficiency of lighting, heating andcooling systems. And we are working with informationand communication technology suppliers andprocurement departments to encourage smarterbuying of equipment, from laptops to light bulbs,all of which make a small but crucial difference incutting overall emissions. 5
  8. 8. Executive summaryThe State of the Estate in 2010 assesses progressmade in improving the efficiency andenvironmental sustainability of the Government’sCivil Estate. It is the third annual report toParliament required under the Climate Change Act2008 and is based on data drawn from a mix ofcentral databases, as well as information providedand verified by government departments.The report identifies improvements made during 2010,including reducing the size and cost of the estate andmeeting ambitious new targets for CO2 emissions andexisting targets for waste and recycling earlier thanplanned. Progress is measured against targets, keyperformance indicators (KPIs) and, where appropriate,trend analysis against previous years.Government Property UnitThe new Government Property Unit (GPU) has beenestablished to take a strategic cross-government to reduce space with cost reductions set to continueapproach to the management of property, beginning throughout 2011.with central government. Working with departments,it will help to accelerate the delivery of cost savings Cost and space efficiencythrough strategic leadership and help to identifysurplus and under utilised property assets. The overall efficiency of the government’s office estate remains on a par with the private sector at a cost perThe size of the estate full-time equivalent employee (FTE) of £4,454 for the financial year 2009/10, and 56% of benchmarked officeThe Civil Estate is complex and diverse in size, age of space is below private sector averages. Almost 40% ofbuildings and types of tenure. For example, 50% of all benchmarked offices reported either a reduction or noholdings are small (500 m2 or less), whereas only 2% are change in overall efficiency.very large (at over 10,000 m2). During 2010, the overallsize of the mandated estate (refer to Figure A1, page 10) Cost of spacefell from 10,722,000 m2 to 10,239,000 m2, a reduction The average cost of office space at £342/m2 is 16% lessof 4.5%. The number of holdings fell from 7,213 to expensive than the private sector average. London6,700, a 7% reduction. offices account for 25% of total space and around 41% of total annual costs. At an average cost of £636/m2,Running costs it is less expensive than comparable private sector officeThe total running costs of the estate during the financial space in London (in terms of type and location).year 2009/10 based on reported and estimated costs However, in terms of cost per person, the efficiency ofwas £3.58 billion. Adjusted for inflation, this represents the central London estate is worse than the privatea saving of £120 million over the year. While this reflects sector. Although the cost/FTE improved by 3% ina continued trend towards making better use of existing 2009/10, relative to benchmark, central London remainsspace, effective implementation of space standards the least efficient aggregated area within the estate,remains challenging. However, emerging data towards 15% above the private sector average.the latter half of 2010 suggests an accelerated drive6 The State of the Estate in 2010
  9. 9. Space efficiencyOverall space efficiency has stabilised at 13.0 m²/FTE Driving change(compared with 13.1 m²/FTE reported in 2008/09).This is the result of a strategic focus on space combined The Prime Minister’s targets are drivingwith a reduction of the government space standards for improvements, including:new and refurbished offices from 10 m2 to 8 m2/FTE – • fewer administrative buildings acquiredthe most efficient 20% of office space is now at this (20 in 2010, compared with 25 in 2009), and astandard. However, the modest size of the latest 21% increase in compliance with the mandatereductions suggest that, without wider restructuring of to procure buildings from within the topthe estate and increased collaboration, further efficiencies quartile of energy performance (65% upwill be hard to realise. Freehold space remains the least from 44%)well utilised within the benchmarked office estate and • the Department for Work and Pensions (DWP)so offers significant scope for improvement. using real-time display to reduce energy use in Caxton House by 22% in one monthA more sustainable estate • new targets issued by the Department for Environment, Food and Rural Affairs (DEFRA) toSince 2002, government has been measuring and stretch departments’ approach to sustainability,improving the sustainability impacts of its central estate mainstreaming it into their policy development,through the Framework for Sustainable Development operations and procurement.on the Government Estate and later the SustainableOperations on the Government Estate targets. Thesetargets have driven a reduction in carbon of 17.1%. their core data (up from 95% in 2009). This highlightsIn May 2010, the Prime Minister announced a an increasing focus by departments on the performancecommitment for the Coalition Government to be of their estates and an understanding of thethe greenest government ever. This would require contribution that good information can make to itsthe following: efficient management.• A step change in the rate and scale of the carbon reductions from government operations, with a target of 10% in 12 months.• Real-time display energy data published online for departmental HQ buildings and monthly consumption data published for departmental operations (over 3,000 buildings), providing transparent information.Data collectionAll of these results reinforce the importance of robustperformance and management data to allowcomparison of the performance of departments, andbetween public and private sectors. Governmentdepartments and their arm’s length bodies areresponsible for providing and maintaining informationabout the property that they own or occupy. They arealso required to verify that data held is accurate andup to date. They are supported in this by the GPU,established in June 2010, and for their sustainabilityperformance by the Centre of Expertise in SustainableProcurement (CESP).In 2010, there has been increased attention todata quality with 56,525 updates to records(a 32% increase from the previous year) and 99%of organisations completing annual verification of 7
  10. 10. 8 The State of the Estate in 2010
  11. 11. Chapter 1 About this report Chapter 1About this reportThis report provides an assessment of progress (MOD) military estate, the privatised rail entities orbeing made towards improving the efficiency public corporations.and environmental sustainability of theCivil Estate during 2010 as required under the Figure A2 on pages 12–13 shows the familyClimate Change Act 2008. relationships of organisations that own property on the Civil Estate and how these vary in complexityThe report concentrates on the four main priorities and size.identified in the Act, which are: Property management on the estate• to reduce the overall size of the estate In central government, departments and their arm‘s• to increase the efficiency of administrative offices length bodies – including executive agencies and on the estate NDPBs – are accountable, as principals, for the property they own or occupy and are specifically responsible for:• to improve the environmental sustainability of buildings on the estate • resources spent in providing this accommodation• to ensure that building acquisitions made during • establishing appropriate departmental governance the year fall within the top quartile of energy and accountability performance. • managing property estates as a strategic resource, including the quality of data used in decision making.The reporting period The operating model may differ depending on theThis report is primarily focused on the calendar year nature of the organisation. For example, some may be1 January to 31 December 2010. It includes commentary funded externally through trading and some arm’son trends over this period and, where appropriate, length bodies operate independently from governmentrelates to baselines set out in The State of the Estate as part of their function. In some instances, the extentin 2008. However, data relating to the cost of running of individual arm’s length bodies’ property holdingsthe estate and the cost and space efficiency of offices far exceeds that of their parent department.is on a financial year basis. This is also the case for theSustainable Operations on the Government Estate The importance of effective property asset management(SOGE) data (refer to Chapter 4). The most recent (PAM) in this varied landscape has become betterfinancial year for which data is available is 2009/10. understood in recent years with the widespread appointment of board-level property champions inThe Civil Estate departments accountable to permanent secretaries for PAM across the department and its arm’s length bodies.The report focuses on the Civil Estate as established in PAM boards are now well established with responsibility1996 following the full decentralisation of all for leading integrated strategic management of thegovernment property holdings to occupying total department property portfolio.organisations. The Civil Estate is defined as workspace,offices and other property (land and buildings) used to Measuring performancedeliver departments’ activities which are owned, leasedor occupied by a government body, including ministerial Efficient property management depends on havingand non-ministerial departments, executive agencies, good information available and being able to interpretexecutive non-departmental public bodies (NDPBs) and it meaningfully and use it effectively. Crucial to this isspecial health authorities in England. It does not include the development of appropriate metrics, which enablethe operational NHS estate, the prisons estate, the performance to be compared with other organisationsForeign and Commonwealth Office (FCO) overseas in both the public and private sectors.estate, the DEFRA rural estate, the Ministry of Defence 9
  12. 12. Figure A1 ‘Estates’ comprising the public sector Mandated Property owned, leased or occupied by: estate • Government departments • Executive agencies • Executive NDPBs* • Special health authorities* • Government offices Also includes: • FCO estate in the UK • English Heritage (EH) administrative estate* • Defence administrative estate • Her Majesty’s Courts Service (HMCS) courts • Laboratories The Civil Specialist facilities Infrastructure, including: Estate owned, leased • Flood agencies*‡ and occupied by • Roads*‡ departments, agencies and NDPBs, including: • Canals*‡ • Museums • Railways*‡ • Galleries Also includes: • Power stations • EH heritage estate* • Port facilities • Historic Royal Palaces* Central • Defence military estate** Government • Prisons estate** Estate • NHS estate (e.g. hospitals) • DEFRA rural estate (e.g. farms) • FCO and Home Office (HO) overseas estate Public sector • GP surgeries and clinics • Local government estate • Schools estate • Higher/further • Devolved assemblies education • Parliament’s estate • Police • The Crown Estate • Fire and rescue • Public corporations Central government general property * Not typically in scope for SOGE (sustainability) reporting ** In scope for SOGE (sustainability) reporting Central government specialist property ‡ Owned, leased and occupied by central departments, agencies and NDPBs10 The State of the Estate in 2010
  13. 13. This report is focused around a dashboard of KPIs and will consequently exclude certain buildings that About this report Chapter 1which measure: are operational in nature – for example, a snow-plough shed or some aircraft hangars. Also, a ‘building’ is• reductions in the overall area of the Civil Estate (m2) part of the Civil Estate if: and in the total cost of the estate• improvements to workspace efficiency in offices • it is used for the purposes of central government expressed as £/FTE, calculated based on the £/m2 administration; or (rent, rates and other occupation costs) and the • at the passing of the Act, the Minister for the number of employees based in the buildings Cabinet Office had responsibility for that building• the use of occupied space expressed as m2/FTE, in relation to efficiency and sustainability. based on space allocation per workspace and the ratio of FTEs to each workspace Datasets used in this report Size: Information about size, distribution and ownership• compliance with the commitment to procure is generated from a snapshot of e-PIMSTM showing the buildings in the top quartile of energy performance mandated estate as recorded on 31 December 2010.• Display Energy Certificate (DEC) ratings This is compared with the position at 31 December 2009. This dataset is explored in Chapter 2 and detailed• sustainability performance against targets for at Appendix A. CO2 emissions from offices, waste arising, waste recycled and water consumption. Cost: Departments have provided, from their financial accounts, the actual net cost recorded for running theirData coverage and collection estate for the financial year 2009/10. This total property cost dataset is used in Chapter 2 and detailed atThe Government has established e-PIMSTM – Electronic Appendix B.Property Information Mapping Service – as its centraldatabase for the Civil Estate. This allows departments Efficiency: Efficiency performance is derived from dataand their arm’s length bodies to record and collect the for office occupations over 500 m2 submitted throughkey information for all their property holdings. This the Property Benchmarking Service. This data specificallyincludes details of landlords, leases and a wide range of relates to the occupation, rather than ownership, ofbuilding performance data. It also provides the precise offices. Office cost data is a subset of the total estatelocations of properties, holdings and occupations running costs and relates to the financial year 2009/10,(including vacant space) on computerised mapping. and where appropriate as at 31 March 2010. This dataset is used in Chapter 3 and detailed at Appendix C.The mandated estateAll central government organisations are required by Sustainability: Sustainability data is drawn fromHM Treasury (HMT) to record and maintain up-to-date performance against SOGE targets, DEC informationdetails – including sustainability and benchmarking and in-year top quartile energy performance deriveddata – for their core property holdings on the e-PIMSTM from data held nationally on Energy Performancesystem. This is termed the ‘mandated estate’. Use of the Certificates (EPCs). The scope of these datasets is widersystem is increasingly expanding to non-mandated than the administrative estate covered in Chapters 2property types and land held elsewhere in the public and 3 of this report and includes prisons and the MODsector but which are outside the scope of this report. military estate. These datasets are used in Chapter 4 and Appendix D.Figure A1 illustrates where the Civil Estate (bothmandated and non-mandated) sits within the widercentral government and public sector estates.Buildings in the mandated estateThe mandated Civil Estate includes a subset of thosebuildings primarily used for administrative purposes.As defined by the Climate Change Act 2008: ‘Building’in this context means a building that uses energy forheating or cooling the whole or any part of its interior 11
  14. 14. Figure A2 Departments with mandated estates over 10,000 m2 and their families Medical Research Council BUSINESS, INNOvATION Science and Technology CABINET OFFICE AND SKILLS Facilities Council Biotechnology and Biological Sciences 133,905 m2 CO 189,376 m2 48,344 m2 Research Council 204,137 m2 National School of Government 12,321 m2 Skills Funding Agency Central Office 34,938 m2 of Information 11,033 m2 Companies House Insolvency Service 35,066 m2 34,268 m2 BIS National Physical Intellectual Property Office 84,275 m2 48,422 m2 Laboratory UK STATISTICS ONS 20,980 m2 AUTHORITY 67,995 m2 Student Loans Company Ltd Learning and 21,104 m 2 Skills Council 24,741 m2 North West Development Agency ENvIRONMENT, FOOD AND 10,819 m2 94,646 m 2 UK Atomic Energy RURAL AFFAIRS Authority Natural Environment 132,332 m2 Forestry Commission England Research Council 67,064 m2 19 others 15,055 m2 Advisory, Conciliation and Arbitration Service 11,141 m2Driving Standards TRANSPORT DEFRA 4 others Agency 49,332 m2 322,432 m2 13,353 m2 vehicle and Operator 124,243 m2 Services Agency DFT HM TREASURY GROUP 56,763 m2 199,661 m 2 HMT Maritime and 30,093 m2 60,294 m 2 Coastguard Agency Environment 195,377 m2 Agency Highways Agency Residual Estate 2 others 24,456 m2 7,244 m2 2 others 92,241 m2 Driver and vehicle 7,613 m2 Licensing Agency 92,241 m2 EXPORT CREDITS GUARANTEE DEPARTMENT 10,494 m2 National PolicingIdentity and Passport Service 69,475 m2 93,684 m2 Improvement Agency valuation Office Agency 56,931 m2 HOME OFFICE HO HM REvENUE 72,847 m2 10 others AND CUSTOMS 26,798 m2 271,706 m2 Home Office Scientific Development Branch 30,064 m2 UK Border Agency HMRC 1,526,208 m2 EDUCATION 7 others Ofsted 27,499 m2 16,541 m2 DFE 48,235 m2 Qualifications and Curriculum Children and Family Court Development Agency Advisory and Support Service 13,991 m2 23,344 m2 12 The State of the Estate in 2010
  15. 15. FOOD STANDARDS AGENCY ENERGY AND CLIMATE CHANGE About this report Chapter 1 14,326 m2 JUSTICE Nuclear Decommissioning Authority INTERNATIONAL DFID DEvELOPMENT 55,671 m2 Land Registry 207,561 m 2 70,918 m2 1 otherThe National 6,398 m2 Archives 65,355 m2 DECC 90,351 m2 Tribunals Service 13,992 m2 OFFICE OF FAIR TRADING Legal Services 11,423 m2 Commission 19,501 m2 MoJ 59,692 m2 Met Office 26,361 m2 DEFENCE 5 others 18,525 m2 369,334 m2 National Offender Management Service (non-custodial) MOD 411,719 m2 FOREIGN AND COMMONWEALTH OFFICE 1,156,696 m2 Her Majesty’s Courts Service FCO British Council 98,320 m2 16,573 m2 ROYAL MINT 32,091 m2 1 other 2,326 m2 LAW OFFICERS’ DEPARTMENTS NATIONAL SAvINGS AND NS&I Crown Prosecution INvESTMENTS 89,848 m2 123,025 m2 Service COMMUNITIES AND LOCAL GOvERNMENT Treasury Solicitor 44,701 m2 Fire Service College 3 others 9,502 m2 13,917 m2 Homes and Communities Ordnance Survey 51,201 m2 Agency CULTURE, MEDIA AND SPORT 19,902 m2 Arts Council England Big Lottery Fund 14,601 m2 Government Office DCLG 19,507 m2 Residual Estate 58,737 m2 31,427 m2 DCMS 13,249 m2 Queen Elizabeth II Conference Centre 12 others English Heritage 10 others 16,560 m2 26,937 m2 18,311 m2 12,901 m2 Planning Inspectorate 13,161 m2 WORK AND PENSIONS Health and Safety Executive OFFICE OF GAS AND ELECTRICITY MARKETS 12,174 m2 75,842 m2 Medicines and Healthcare Products Regulatory Agency 14,244 m2 Health Protection Agency 95,164 m2 3 others NHS Business 13,290 m2 Services Authority 55,153 m2 9 others DH 23,662 m2 74,883 m2 DWP 1,767,700 m2 NHS Connecting Care Quality for Health Commission 10,608 m2 12,761 m2 134,092 m2 NHS Blood & HEALTH Transplant 13
  16. 16. The GovernmentProperty UnitThe new GPU was established in 2010 to take The GPU’s next focus is the introduction of a propertya strategic cross-government approach to the vehicle to manage the office estate collectively as amanagement of property, beginning with central strategic asset. This will rebalance the management ofgovernment. property assets, moving away from a demand-led approach towards a more commercial focus on makingPart of the Efficiency and Reform Group, but managed the assets that are retained as a core estate work harder,within the Shareholder Executive in the Department while disposing of surplus. It should also promotefor Business, Innovation and Skills (BIS), the GPU’s economies of scale and innovation in the way thatfour objectives are: government provides itself with appropriate accommodation. vehicles are being piloted in London• to support departments in delivering their and Bristol from April 2011. Spending Review settlements by delivering substantial efficiency savings The GPU will help the government estate to meet• to provide new models of occupancy important challenges during a time of adversity: to realign the balance between public and private sector;• to drive jobs and economic growth to build lasting partnerships; to drive change; and to• to improve the delivery of government services. improve the usage and quality of the built environment.The GPU will work with departments to help accelerate Spending controlsthe delivery of cost savings and sustainability targets.It will provide strategic leadership and support, for In May 2010, the Chancellor of the Exchequerexample by helping departments to identify their surplus announced details of new spending controls to supportand under utilised property assets. It will also help delivery of £6 billion of spending cuts in the financialorganisations across the public sector to manage their year 2010/11. As part of this, a moratorium on newproperty more efficiently, supporting them to develop property leases and lease extensions was introducedstrategic property plans and helping with complex with immediate effect. This was planned to reduceprojects and procurements. both the size and cost of running the estate, helping to accelerate the work that departments had alreadyProperty asset management begun. The GPU worked with departments andThe Government believes that there are substantial HMT to co-ordinate central management of leasesgains to be made from a co-ordinated approach to and report where, for operational requirements,PAM. A regime of National Property Controls is already a new lease or lease extension was proposed.in place across the Civil Estate. Announced in the 2010Spending Review, the first of these controls – the lease Lease moratoriummoratorium which prohibits any new or renewed leases The moratorium applied to all government departmentsof property by government without approval – has and their arm’s length bodies, including new leases,delivered savings of £50 million within its first year. The extensions, breaks and expiries, property acquisitionsother controls include limits on capital asset disposals, and new builds, including non-office property. Thenew criteria for facilities management contracts, Olympics, overseas property and the MOD militaryand a space standard of 8 m2/FTE with a desk-sharing estate were excluded. Departments were not permittedratio of 10 FTE per 8 workspaces for new and to sign new leases (including extensions to existingrefurbished offices. leases) or acquire freeholds; the expectation being that all breaks and lease expiries would be exercised.14 The State of the Estate in 2010
  17. 17. About this report Chapter 1However, with normal lease notice periods being clearance from the GPU – in particular where there werebetween 6 and 12 months, the opportunities to opportunities for reuse elsewhere in government.influence decisions during 2010 were limited. Although the controls were not designed to accelerateBusiness cases for new leases, while permitted sales of freehold property, where good operational,under these arrangements, needed to demonstrate commercial or value-for-money reasons were apparent,unequivocal value for money and were subject the GPU has supported departments in disposing ofto challenge by both the GPU and HMT. more than 40 holdings and securing more thanAdditionally, the expectation was that any case put £81.2 million in capital receipts in 2010.forward for office space would need to comply withthe government workspace standard of 10 m2/FTE.The spending controls later reduced the workspace The controls have resulted in the:standard to 8 m2/FTE at a desk-sharing ratio of 10 FTE • vacation of more than 150 holdingsper 8 workspaces for new and refurbished offices. • reduction in the size of the estate byThe controls were further strengthened in October 200,000 m22010, when the Minister for the Cabinet Office required • reduction in the cost of the estate bygreater savings at lease breaks and renewals on existing £50 million.property. Upward-only rent reviews were to be avoidedand the sale of freehold properties restricted without 15
  18. 18. 16 The State of the Estate in 2010
  19. 19. Chapter 2The size of the estateThe year saw significant reductions in the overall Figure B1 shows the changes each year, based on a The size of the estate Chapter 2size and running costs of the estate, while the ‘snapshot’ of the estate taken at midnight on 1 January.number of holdings also fell. The percentageof vacant space was well below the privatesector average. Key achievements • The total area of the central governmentArea of the mandated estate mandated Civil Estate fell by 4.5% in 2010 • The total cost of running the estate in 2009/10The total area recorded for the central government was £3.58 billion, a saving of £120 millionmandated Civil Estate reduced by 4.5% in 2010to 10,239,000 m2, a reduction of 484,000 m2. • The total number of holdings at 31 December 2010 was 6,700, a reduction of 7%The continuing trend towards reducing the size • vacant space amounts to 3% of total areaof the estate reflects the desire of departments to compared to the national average of 11.9%reduce costs and environmental footprint throughestate rationalisation. The lease moratoriumimplemented in 2010 has reinforced this trend, withlease disposals accounting for 40% of the reduction. The number of holdingsChanges in the size of the mandated estate, recorded The total number of holdings registered to thethrough e-PIMSTM, can be tracked in real time as mandated Civil Estate at 31 December 2010 wasdepartments amend the data to reflect disposals, 6,700, a reduction of 7%. This reduction reflectssub-lettings, acquisitions and other changes. the continuing trend to rationalise and consolidate the Civil Estate.Figure B1 Total size of the estate Figure B2 Total number of holdingsas at 1/1/2011 as at 1/1/2011 15 8,500 12,054,516 7,935 11,382,197 10,722,166 8,000m2 (millions) 10,238,889 10 7,500 7,213 7,000 5 6,700* 6,500 0 6,000 09 1 10 08 09 11 10 1 20 20 20 20 20 20 20 Floor area m2 Total number of holdingsSource: e-PIMSTM Source: e-PIMSTM *Includes 17 holdings located overseas related to border and customs activities. 17
  20. 20. Figure B3 Total area by department 2,207,501 Justice 2,002,842 1,985,431 1,933,292 Work and Pensions 1,878,485 1,856,832 1,679,693 HM Revenue and Customs 1,598,900 1,388,623 1,247,051 Business, Innovation and Skills 1,209,662 1,149,803 766,840 Transport 611,471 590,145 613,943 Home Office 546,006 561,919 614,673Environment, Food and Rural Affairs 575,071 546,218 604,999 Defence 615,032 438,080 426,566 Health 409,999 420,004 282,340Communities and Local Government 261,771 248,618 171,995 Attorney Generals Office 170,124 146,444 117,042 Foreign and Commonwealth Office 116,700 144,105 150,779 Education 143,371 129,611 106,611 Culture, Media and Sport 99,983 92,605 12,269 Energy and Climate Change 48,106 91,707 76,364 National Savings and Investments 76,364 89,848 69,025 UK Statistics Authority 68,608 67,995 72,334 HM Treasury Group 60,864 60,516 57,320 International Development 57,320 55,671 49,431 Cabinet Office 49,962 48,345 32,091 Royal Mint 32,091 32,091 23,114 Other CO agencies 23,354 23,354 0 500,000 1,000,000 1,500,000 2,000,000 2,500,000 Area m 2 31/12/2008 31/12/2009 31/12/201018 The State of the Estate in 2010
  21. 21. A ‘holding’ is a property asset or assets for which a Total area by department/regiondepartment has legal responsibility under a singlelegal title. This may comprise several buildings or only Figure B3 shows the aggregated area of property ownedpart of a building, and there can be several different by each department within the mandated Civil Estate,organisations occupying the holding under licence including its family of agencies and NDPBs, and showsfrom the title holder. Alternatively, an organisation may the huge disparity in size of departments’ estates.occupy a building or buildings as one but under several The four largest make up more than 60% of the total:different legal titles – this would mean several holdings the MoJ owns 19%; DWP 18%; HM Revenue andwithin one occupation. Property only leaves the Civil Customs (HMRC) 13% and BIS 11%. The otherEstate when the legal title holding is disposed of or departments occupy less than 6% each.expires and is not renewed. In trying to reduce the size The size of the estate Chapter 2of the estate, the aim is to release holdings for disposal. Departments vary considerably in the number of holdings they own, irrespective of the total areaThe total cost of running the estate of their estate. For example, the Department for Transport (DfT) has an area recorded on e-PIMSTM ofThe total cost of running the mandated Civil Estate in approximately 600,000 m2, made up of 1,171 holdings;the financial year 2009/10 was £3.58 billion. Adjusted BIS has a larger estate (over 1 million m2) but hasfor inflation, this represents a saving of £120 million only 334 holdings to manage.(3.38%) on the total cost in 2008/09. Figure B4 shows that the majority of space in theData has been provided by departments, including arm’s mandated Civil Estate is in the London area, with alength and sponsored bodies. Where information was total of 2,028,000 m2. This is a reduction of 17% sincenot available, the cost has been estimated using the 1 January 2009. London’s share of the total estatee-PIMSTM data available. Total property operational has also fallen by 1.2% from 21% to 19.8%. The nextcosts are broken down into a number of cost headings largest regions are the South East (excluding London)and offset by receipts and income. and the North West at 14% and 13% respectively.Appendix B contains the total cost data for each By contrast only 11% of holdings are in London,department together with the definitions of cost indicating a much larger proportion of largerheading. holdings in London, as would be expected due to the concentration of HQ buildings around Whitehall.Figure B4 Regional distribution as at 1/1/2011 2,452,266 2,275,928 2,027,668 2,500,000 1,500,793 1,424,249 2,000,000 1,432,430 1,400,837 1,345,676 1,327,517 1,100,548 1,083,070 1,500,000m2 973,577 818,048 804,563 798,186 774,229 774,639 765,521 752,903 738,291 677,935 648,378 610,029 616,125 600,446 606,381 601,088 591,299 584,337 566,572 560,903 1,000,000 503,888 481,406 500,000 41,214 39,147 31,166 0 nd n st t t s r es d nd s st es es nd be nd do an Ea Ea al la W W la um la la n W gl Ire ot h th Lo id id th h En ut H Sc ut or tM M rn or So e So of N e N th st es th Ea st W d or Ea an N re i sh rk Yo 01/01/2009 01/01/2010 01/01/2011Source: e-PIMSTM 19
  22. 22. Figure B5 Number of holdings in each region as at 1/1/2011 549 327 63 881 568 408 567 569 462 714 837 738 = 100 holdingsFigure B5 shows that the regions with the largestnumbers of holdings are the North West and the Figure B6 Number of holdings/office buildingsSouth East (excluding London), which have 13% each. by size band as at 1/1/2010In addition, there are 17 holdings located overseasrelated to borders and customs activities. 4,000 3,343Size, age and tenure distribution 3,000The office building stock on the mandated Civil Estate 2,000 1,409varies considerably in size and age. In addition to 1,170 1,314conventional office buildings, there is a wide range of 1,000 607 655 510other building types such as laboratories, courts and 366 219 151 144 96coastguards’ stations. 0 0 0 0 0 00 00 50 50 00 00 0 0 0– 2, 5, 0, 0, 1, 1– 1– –1 >1The sizes of holdings on the estate vary enormously. 1– 00 50 1 50 00 1, 2,The distribution of holdings into size bands is shown 5,at Figure B6. Around half of office space is held in the Size bands (m2)250 largest buildings. There are around 1,400 buildingsof less than 500 m2 each, making up approximately Number of holdings Number of office buildings5% of the total office area. Source: e-PIMSTM20 The State of the Estate in 2010