4.26 Strategic management of property at a senior level within organisations, supported by the expertise of property professionals, is one of the key principles for ensuring a well-managed and efficiently used estate.17 It would also drive some of the other key principles identified, such as the availability of good data (which will in turn enable better management) and collaboration between organisations.
4.27 The efficient management of property requires engagement at a senior and strategic level so that:
• property is clearly linked to a wider business strategy and connections are made between property and other business areas, in particular information technology, productivity, sustainability and the working patterns of employees (e.g. flexible working);
• demand for property is challenged, and is informed by long-term plans for meeting forecast demand; and
• investment decisions which will lead to a more efficient estate over the longer term are given priority.
| Box 4.B: Ministry of Defence The Ministry of Defence (MOD), which has a large, diverse and highly dispersed estate, has a number of elements of good estate management. It has a discrete management function, Defence Estates (DE) responsible for managing the entire estate, separated from the customer demand for property and land, i.e. the centre of the department, the three Services (Army, Royal Air Force, Royal Navy) and the equipment procurement and logistics organisation. The MOD's estate objective is rationalisation towards fewer larger sites, and it has proactively published an Estates Development Plan setting out strategic plans to 2030 including the identification of core and surplus sites. However, DE's capacity to make and carry through strategic decisions across the whole of the estate is limited as major change programmes and investment funding are controlled centrally by MOD and are subject to competing defence priorities and resources. |
4.28 Following the Lyons review, 18 departments are producing Asset Management Strategies - for HM Treasury - and also Property Asset Management Plans, as part of the Office of Government Commerce (OGC) initiative High Performing Property (HPP).19 The HPP initiative also introduced board-level property champions in each department. Yet, a review of the asset management strategies and plans by this workstrand showed that their quality is highly variable with little evidence that they were integrated with departmental business planning or included clear implementation plans.
4.29 Importantly, the OGC's remit - and therefore the HPP initiative - does not extend to much of government's operational estate (e.g. NHS, educational facilities, armed forces accommodation, research laboratories) or local government, and it has few formal sanctions available to it. In this way initiatives like the introduction of property champions can have only limited impact, and there remains great potential for more widespread board-level engagement on property issues across the public sector.
4.30 There is limited property expertise at the right level within many public sector organisations and limited capability to act as skilled commissioners of estates expertise from outside providers. Senior management needs to be able to draw on such expertise in planning and making property decisions. A 2006 study by the University of Leeds found "good examples of property assets being managed strategically but that expertise is confined to less than 25 per cent of CCG (central civil government) organisations."20
4.31 Where good value has been achieved through a strategic approach to property management, for example through the negotiation of large PFI contracts for the property portfolios of the Department for Work and Pensions and of Her Majesty's Revenue and Customs,21 high quality expertise has played a crucial part in this success.
4.32 The benefits of senior management engagement are illustrated in Box 4.C.
| Box 4.C: Hampshire County Council In Hampshire, the Chief Executive of the County Council - who is also the lead officer for the 74 local authorities in the South East of England in respect of property improvement and efficiency - provides strong leadership for the management of the county's property portfolio of over 5000 buildings. By applying good property management practices they have been able to: • realise over £300 million from the disposal of surplus land and property, which has been reinvested in other capital projects; • put into place a rationalisation plan to cut the number of county council office locations from 64 to 12, by increasing utilisation rates as well as introducing flexible working patterns; and • in a specific case, convert a former office block and multi-story car park to allow the number of staff it accommodates to double to over 1200. This will decrease energy consumption of the building by 50 per cent and - through more intensive use of communal areas as well as increased staff accommodation - increase the utilisation by 75 per cent. |
_____________________________________________________________________________________________
17 This was advocated by Sir Michael Lyons, who called for a stronger "strategic profile" of public sector asset management. See Towards better management of public sector assets, Sir Michael Lyons, December 2004.
18 Towards better management of public sector assets, Sir Michael Lyons, 2004.
19 High Performing Property: Routemap to Asset Management Excellence, Office of Government Commerce, November 2006.
20 Improving Property Asset Management in the Central Civil Estate, University of Leeds, April 2006.
21 For further details see Accommodation Services for the Department of Work and Pensions: Transfer of property to the private sector under the expansion of the PRIME Contract, NAO, January 2005 and PFI: The STEPS deal, NAO, May 2004.