Francis Maude is the Minister for the Cabinet Office and Paymaster General
The thousands of buildings and parcels of land owned by Government are worth more than £330 billion. They cover over 1.5 per cent of the total land in England – and that’s excluding the massive amounts of land in the Ministry of Defence’s non-civil estate as well as that owned by local authorities and some other public bodies. Central Government owns everything from the historic buildings along Whitehall through to decommissioned airfields and motorway lay-bys. Some of these are used every day. Others are half-empty or even vacant.
Since the last General Election we have raised £1.3 billion for taxpayers by selling off over 800 building and chunks of land. We have exited almost two million square metres – a total size of 230 football pitches – and shrunk our office estate by 17 per cent. But there’s so much more to do – not least because by 2015 the Civil Service will be a quarter smaller than it was in 2010. As the Chancellor said earlier this week, we need to make more savings to pay down the deficit and ensure that the country can live within its means. My department’s Efficiency and Reform Group is working with colleagues across Whitehall to drive ever larger savings as part of the Government’s long-term economic plan. Cutting spend on property is just part of our wider reforms which saved taxpayers £10 billion last year alone.
Under Labour, Government departments took out expensive vanity leases at the taxpayers’ expense. Meanwhile freehold property, even in the heart of Westminster, lay underused. Departments had their own spaces and little was shared. In Bristol alone, central Government used dozens of different properties. This is changing.
In central London we have almost halved our estate – shrinking the 185 office holdings we had in 2010 down to just 97. The Treasury’s building on Horseguard’s Road now includes part of the Cabinet Office as well as the Department of Culture, Media and Sport. Marsham Street will soon take the Department for Communities and Local Government as well as the Home Office. In Bloomsbury we recently announced that we will house Sports England, the Arts Council and OFWAT alongside four other bodies all under one roof. We are not just saving money, we are making it easier for departments to work together. That’s why I am determined to keep pushing departments to see what they can do to co-locate their offices and cut their space.
Rather than half-filling freehold buildings which are expensive to maintain, secure and heat, we need to use the space we have as efficiently as possible. I have announced that by next year every department should allocate just 10 square metres per person. As part of our transparency agenda anyone can see if departments are really spending taxpayers’ money judiciously or if they are underusing the spaces they own.
Back in 2010 I introduced tough spending controls on property. No department could take on a new lease or pass a break-point in a significant lease without my explicit agreement. This sort of central control over common areas of spend, such as property, is standard practice in the best businesses. Now we have introduced it to Government.
We have made some high-profile sales. Admiralty Arch off Trafalgar Square is a beautiful landmark. But the building is no longer suitable for government. The tired and tatty warren of half-empty offices was costing taxpayers almost a million pounds a year to run and desperately needed modernisation. Rather than splurging millions on refurbishment we took the tough decision to sell a leasehold on the building. We raised £60 million and the developers will now restore the building to its former glory, ensuring the public have greater access than ever before.
How can we go further than we already have and accelerate the pace of change? Danny Alexander and I have developed a new Right to Contest. This allows anyone who sees vacant or underused property in their local area that could be better used, to challenge Government to release it. If the site isn’t vital for operational use, or there isn’t a compelling reason to keep it, we will release it on to the open market for a fair price. We will never sell off national assets like Downing Street or the British Museum, but we need to be prepared to make tough choices on other property if we are going to balance the books and pay off Labour’s deficit.
Getting out of property isn’t just about savings, it’s also about growth. We have already released land with capacity for 62,000 homes. Separately, Knight Frank estimated that by getting out of leases in central London we are generating £3 billion of economic activity. Savings, growth and greater efficiency – a happy combination.
It’s not right for Government to hold onto space it does not need. I am pleased with the progress we have made but I want everyone to challenge us to do more.