It was always clear that the cuts regime to reduce the deficit would require savings in public sector property and facilities management. An indication of the scale of those savings became evident at the launch of central government’s Property Asset Management “profession” at the Department for Business Innovation and Skills yesterday.
“We need to save £5bn on annual operating costs of £25bn,” said John McCready as he officially took over from Tim Laurence (former Head of Defence Estates) as “head of profession”. Additionally, when the property market returns (possibly more of an if than a when), the Treasury will be looking for capital receipts of £20bn. To indicate the challenge, McCready compared this figure with the market capitalisation of Land Securities, around £45bn.
So, is there still the will and as importantly, the money, to develop the PAM profession acrossWhitehall? Tim Laurence spoke of “a significant milestone”, “massive challenge”, the need to “respond with agility”.
The Office of Government Commerce team behind the initiative has analysed the 4,000 plus people within the footprint and concluded that about 50% are “practitioners”, 34% are “qualified professionals”, 15% belong to the “wider PAM community” in finance, ICT and HR and just 1% are senior leaders, most of whom have no professional property qualifications.
BIFM, RICS and the National School of Government all supported the launch with information on education programmes and qualifications which can help to bridge the skills gap.
The diversity of backgrounds and roles across central government property management (neatly illustrated by a video featuring FMs and others describing their jobs) prompted Laurence to talk about a “community of professions” rather than a profession.
McCready, Head of the new Government Property Unit and an accountant by training, paid tribute to the work done so far but there was a shift in emphasis. OGC has been brought within the Efficiency & Reform Group of the Cabinet Office and McCready said public sector property professionals will need to reduce their footprint, cut costs and be much more commercial in their dealings with the private sector.
Citing corporate real estate practice, he recommended divorcing asset management from the underlying business. This might sound like a return to the short-lived Property Holdings model of the early 1990s but McCready rejected this interpretation.
What it may mean though, is a more rational management of government property, turning valuable assets into cash and more co-location. Occasionally, the inexorable logic of the property market may trump departmental preference.