MPs Call for Government Property Disposal

Posted on 5 September, 2012 by Neil Bird

A parliamentary committee has called on the government to sell its excess property in a bid to save £800 million a year. The Public Accounts Committee (PAC) also recommends departments sharing buildings and making unused offices available to rent to small businesses.

The government is both the UKs largest property owner and its largest tenant. Its estate is estimated to be worth in the region of £370 billion and costs £25 billion a year to run. National Health Service (NHS) and Ministry of Defence (MOD) property accounts for half of this, but it’s the government’s office buildings that the committee has identified as an area where savings can be made.

Last year the Government Property Unit set out a strategy designed to save money by ensuring its office space is used more effectively. It’s claimed that this has already saved the taxpayer £48 million. In addition the government sold over 250 freeholds generating over £640 million. The committee recognises these measures but wants to see even greater savings made.

Their report contains three major recommendations to improve property management;

  • To encourage central and local government to work more closely together
  • To centralise ownership for ease of negotiation with landlords
  • To consolidate the estate by either selling or renting unused space.

The committee described government departments as behaving like “financial silos” by hanging on to unoccupied property on its books.

PAC chairwoman Margaret Hodge said; “The unit should get on with selling buildings rather than holding on in the hope of a future rise in property prices.”

A Cabinet Office spokeswoman responded to the report by highlighting the savings already made and outlining pilot schemes currently in place. These include working with councils on public sector property projects and making unused office space available to SMEs. The government is also exploring the idea of whether other buildings could be used by schools.

However, she conceded that there are further measures that could be taken.

She said; “Taxpayers should not foot the bill for unnecessary property. There is more to do to drive out inefficiency and we will consider all of PAC’s recommendations carefully.”

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