The Rt. Hon Matt Hancock MP, Minister for the Cabinet Office and Paymaster General.
The State of the Estate
A Cabinet Office transcript of the speech of The Rt. Hon Matt Hancock MP, Minister for the Cabinet Office and UK Paymaster General at Government Property 2016, introduces the Government Property Unit's new "The State of the Estate" report.
The Minister for the Cabinet Office spoke at Government Property 2016 about how government is improving the way it manages its property and buildings.
Government Property 2016: Matt Hancock speech
Good morning, and thank you all for coming.
Nearly a thousand years ago we made history in this country when William the Conqueror sent officials all over England to survey for the first time who owned how much land, property and livestock and what it was worth.
I’ve seen the Doomsday Book myself. And the logic of what he did then still holds more than a millennium later. The principle still stands, that you can only manage what you can measure. Though he may not be flattered to hear me say this, in many ways, William the Conqueror was the forefather of the modern surveyor.
But this is about more than just bricks and mortar – it’s about making sure we’re equipped with the environments and technology our people need to deliver excellent front line services. If we’re going to achieve this we need to find new ways to collaborate, new ways to make our estate work for us, and a new, more commercial mindset.
And William the Conqueror had it easy – he managed what you might call a minimalist estate and built a few castles. We want to boost jobs and growth, boost the housing supply, all the while keeping tax low.
But the opportunity is huge. We can not only make huge savings, but also make big improvements. We want more bang for our bricks. To do this we’re going to have to make some big changes, spearheaded by the efforts of the Cabinet Office’s brilliant Government Property Unit.
It will involve a wholesale change of culture within government, focusing on 3 things: collaboration, a commercial mindset, and putting our estate to work for us as a country.
First let’s talk about collaboration. Today we’re presenting the progress we’ve made in making the central estate more modern and effective. The State of the Estate report we launch today shows that last year we saved over £840 million from selling empty buildings and exiting expensive rentals – money we can spend instead on front line services like health and police. Since 2010 we’ve exited 2.4million square metres of surplus property – an area larger than Monaco.
We’re making the central estate leaner and smarter, with plans to release £5 billion in property over this Parliament, including unused airfields and barracks, surplus prisons and long-abandoned labs on which we can build the homes of the future. The average space per person in a government office building is now just 10.4 square metres – a 9% reduction in a single year. And we have an even more ambitious target to bring that down to just 8 square metres by March 2018.
The government estate is under the microscope like never before. And I don’t think any department should be given special privileges when it comes to scrutiny – especially when they’re responsible for thousands of square kilometres of land.
That’s why I can announce today that for the first time, we will be extending our reporting to include the vast Ministry of Defence estate, with the normal cross-government security considerations, making sure the same rigorous scrutiny is applied across the board and supporting the defence services in reaching their target of disposing of £1 billion of property and land over the next 5 years.
And we’ll be asking local authorities to report on the utilisation of their assets in the same way, and both central and local government will have to publish details of their surplus assets when these have been sitting unused for more than 2 years – or 6 months in the case of housing.
At a time when budgets are being squeezed more than ever, none of us can afford to hide empty rooms behind closed doors. We all need to pitch in to make our estate leaner and smarter, and to make our assets an opportunity, not a burden.
We’ve already shown what we can do when central and local government work together. Since 2013 our One Public Estate programme has supported 32 of the largest land and property owning councils in England in boosting growth and designing more integrated services by collaborating on property. Over 5 years, in partnership with the Local Government Association, we’re set to create 20,000 jobs, 9,000 homes, raise £129 million in capital receipts and save £77 million on running costs through these existing partnerships.
Like Place Partnership in the West Midlands, where 6 councils, police and fire authorities have grouped together to create the first property company of its kind. By pooling 1,000 buildings across 4 counties, they will save £110 million, as well as boosting economic growth and unlocking land that can be used for housing.
With a small investment then we can unlock so much value by working together. But this programme can deliver even more – and we announced a £31 million funding boost in December that will allow us to triple the number of partnerships benefiting from One Public Estate. We want to extend the programme to cover all local authorities in England over the course of this Parliament.
We are boosting One Public Estate. And to help local authorities more, we’ll introduce a new priority purchaser status for councils wishing to buy central government land, where there is a clear case for doing so. Giving planning permission is a transfer of value. So let’s keep the value for the taxpayer as we release this land.
We all have to pull our weight. And to build an estate that works for us and is fit to deliver excellent public services that meet today’s demands, we need to take every opportunity to harness ingenuity, be dynamic and be open to constant improvement. I want us all to be part of this effort regardless of your sector or background, striving to make our country better as a common purpose.
And we’re not ducking our own responsibilities in central government – through our Right to Contest and Government Property Finder website we’re inviting you all to challenge us. We’re not hiding away in our ivory towers and vanity buildings, you’re the experts and we want to hear from you – if there’s a site or a property you think is underused or surplus to requirements, we want you to tell us. If someone is blocking it, I want to know.
Putting our estate to work
We want departments to work closer together, but this isn’t just about reducing space – it’s about creating workspaces and an environment that facilitates discussion, collaboration and the delivery of excellent front line services.
So through our government hubs, we’ll provide the Civil Service with more cost-effective and higher quality workplaces, and reduce our 800 office buildings to less than 200 by 2023, saving £2 billion over 10 years. In central London, where some of our most expensive buildings are located, we’ve already slimmed down the estate from 181 properties in 2010 to 54 now. We want to take this figure down even further to fewer than 20 efficient, fit for purpose buildings by 2025, supported by the latest in smart working technology.
We’re going to be looking all over the country for strategic sites where we can build these hubs – If you think you’ve got a site that makes the grade, at a price we’ll find attractive, now’s the time to let us know about it.
This programme will enable departments to break down silos and boost productivity, and attract and retain the best talent, all while boosting regeneration and economic growth by freeing up unneeded land throughout the country so others can put it to use for homes and jobs.
I make no apology for putting technology at the heart of this reform through our smart working programme – The Way We Work. We’re right at the start of a revolution in the way people connect to one another. We can use new technology to do the old things for less money, sure. But we must also use it to completely redesign how we serve citizens, delivering faster, more accessible and more secure services. This agenda isn’t just about property, it’s about changing the whole way our people do their jobs.
We’ll keep the historic core estate, but we’ve got no intention of keeping gems as the exclusive domains of civil servants. Take Blythe House in West Kensington – itself made famous in espionage circles as the MI6 headquarters in Tinker, Tailor, Soldier, Spy. By moving out we can release a fabulous site in prime London, with great potential for much needed housing, and open up the collections of the Victoria & Albert, Science and British Museums to the public once more.
Or Admiralty Arch, no longer home to the presence of admirals, but to hotel guests from around the world. You’ll recognise it from the films Children of Men and Howard’s End – leasing it out has raised £60 million for the taxpayer and opened up a historic landmark to be brushed up and reopened to the public. We’re putting the crown jewels of public property on public display so that the public they belong to can enjoy them.
It’s all part of our drive to make our estate work for us. Henry VIII is said to have rented out part of the modern-day Cabinet Office, now used for my private office, for use as tennis courts. We might not have an awful lot in common, but this is one area where we see eye-to-eye.
Creating a commercial mindset
So that’s how we want to collaborate more with our public and private sector partners, and how we plan to get the best possible value out of the estate. But we also need to up our game and be more commercial about our approach to property if we’re going to build an estate that’s right for the 21st century.
To this end, we announced in the latest Autumn Statement that in 2017 we’ll be setting up a new central body to take ownership of all relevant government land and property. Not only will this new property model support departments’ operational and business needs, but it’ll allow us to take a more commercial, cross-government approach to managing our portfolio. It will incentivise departments to be as efficient as possible, and help us to see all the opportunities for alternative use and extracting value for taxpayers.
We want to change the mindset from seeing property as an asset to seeing space as a running cost. And with this birds-eye view of the whole government estate we’ll be able to do even more to identify surplus sites, boost economic growth and release land for housing. We’ll also be drawing on the best and brightest from the public and private spheres – as a fine example of this we’re delighted that Liz Peace has agreed to be Shadow Chair of the new organisation.
This is an agenda with huge potential. But we can’t do this alone. We can only lay out a blueprint for the future; to achieve our goals we need to be collaborating with all of you sitting here today.
Times are moving forward. Gone are the days of William the Conqueror, and we’re doing away with departmental fiefdoms operating only within their silos. You can already notice the difference walking through government buildings and seeing colleagues from different departments working together. We do all this, in service of our country. Through collaboration, a commercial mindset and a cost-effective estate, we can achieve so much more.