Consultations, commitment and confidence

Back in January 2007, I attended one of the first large-scale consultation workshops run by Defra on the proposed Carbon Reduction Commitment, then over three years away.

Representatives from large energy users in retail, industry, healthcare and other sectors heard how the scheme would work, including the important feature that it would be “revenue neutral”. All the income from selling carbon allowances would be ‘recycled’ back to participants according to a performance “league table”.

BIFM’s CEO and I heard more about the CRC in mid-April that year in a meeting with the team at Defra working on the detail.

In the intervening period, before the start of the introductory phase this April, the finer workings of the CRC have been adjusted but revenue neutrality remained a core principle.

This was clearly not to be a new tax. That changed last week with the coalition government’s comprehensive spending review. Tucked away in paragraph 2.108 is this statement: “Revenues from allowance sales totalling £1 billion a year by 2014-15 will be used to support the public finances, including spending on the environment, rather than recycled to participants.”

At a stroke of the Chancellor’s pen a core principle of the CRC scheme has been removed.

Now, there has been a change of government and debate rages over the state of the public finances and the speed with which they need to be repaired, but governments should be careful about moving the goalposts like this. Businesses bought into the idea of the CRC as an environmental measure. They expended time during the consultation phase and since – contributing their experience and preparing their organisations.

This decision, like that on Home Information Packs before it, will make business and professionals wary of government consultations.

The last cappuccino in Whitehall?

Given the headlines it’s generated, it comes as something of a surprise to find that Sir Philip Green’s ‘Efficiency Review’ of government spending comprises just 33 “slides”. It’s actually more of a PowerPoint presentation than a report.

Given his straight-talking approach and the fact that he was only appointed in mid-August, perhaps I shouldn’t be surprised that he hasn’t produced a 300 page report. I’m all for brevity and Green is certainly to the point. The language is robust – procurement data is “shocking”; the use and management of space is “wholly inefficient”.

Green was asked to look specifically at three things, commodity procurement, property and major contracts. His conclusions are generalised but damning – government is not joined up; there is no motivation to save money; budget processes are inadequate; commercial acumen is not widespread.

Although Green does not put a figure on the level of waste or the total potential savings it’s clear that he believes there is huge scope to reduce the bill for space, utilities, products and services.

One of the rare examples of good practice cited in the report is commodity procurement. Over the last four years, three quarters of Government electricity and gas has been bought by an expert team, saving £500m.

His recommendations include a call for more central purchasing. Now, older readers could be excused a wry smile at this as they remember the Property Services Agency and its offshoot, the Crown Suppliers, both broken up in the interests of decentralisation and privatisation. Green’s call for more central control does seem to run counter to the coalition’s localism mantra.

There are some other interesting features of the Green report. Over the last couple of decades, civil servants and public workers have gradually been given workplaces and services of a standard that the private sector takes for granted.

Tucked away in the report is this bulleted recommendation: ‘Managing down demand and specifications’.  We might be at the beginning of a gradual retrenchment in public sector FM. Out could go careful assessment of needs and the design of workspace for specific groups and departments. In could come vanilla flavoured office space, centrally purchased furniture, basic catering and remote FM.

Some of the sharpest criticisms in the report are levelled at the way government leases, occupies and manages property. John McCready’s new Government Property Unit (a descendant of the PSA, via Property Holdings and PACE) hasn’t had a chance to make a real impact yet but the pressure to effect real change has just increased.