Cutbacks create Government Property Asset Management Unit

The Chancellor, George Osborne, has confirmed that a Government Property Unit has been set up and is to expand under the Spending Review.

Two Government property vehicles are to be created to take control of the Government’s property portfolios in London and Bristol.

These vehicles will act as if they are in the private sector and coordinate the occupation, sale and leasing or purchasing of Government Property.  This will coordinate all Government owned and occupied property and result in a great number of efficiency savings as well as be able to take into account the Government’s ability to use the economies of scale to drive favourable letting terms and to make appropriate strategic disposals.

Partnerships with the private sector may in some cases be set up.  If successful, this policy may be rolled out throughout the country, with Government Property Vehicles set up for each region.

The Chancellor stated that “In order to support deficit reduction, the Government will continue to look into the potential sale of other public sector assets, including property holdings, which could operate more sensibly and efficiently in, and with, the private sector.

“Central government functions will be subject to a tough new efficiency regime, monitored and supported by the new Efficiency and Reform Group in the Cabinet Office. Part of this work will address the key findings of Sir Philip Green’s Review, ensuring that the Government is using its scale as effectively as possible in common areas of spending such as procurement, property and major contracts.

“The Efficiency and Reform Group have already made good progress, their contract renegotiations are expected to deliver £800m of savings this year.”

The Government will introduce a new system of national property controls across the central civil and operational estate.

“In addition, the Government believes there could be substantial gains to be made from a more coordinated approach to property asset management in the public sector.

“It has established a Government Property Unit, which as a first step will set up property vehicles for the Central London and Bristol office estate from 2011-12.”

One of our managing Surveyors commented that ” It’s about time – the only fundamental question raised by this small section of the Spending Review is ‘Why has it taken until 2010 for the Government to have a coordinated look at its property portfolio when we have had an economy able to operate on a National basis since the 1980’s and no excuse not to be able to coordinate matters since the advent of computer network systems in the 1990’s?’

“To think of the waste over the last decade since this coordinated approach should have been implemented is shameful.”

22nd October 2010