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Round table report
3rd September 2010 at 17:36:28 by Civil Service World
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Set against the massive spending reductions announced in George Osborne’s emergency Budget, a saving of £1.1bn over ten years may not sound particularly impressive. This was the possible economy set out by former Reed Elsevier boss Ian Smith in his report on relocating government services, published before Alistair Darling’s final Budget in March this year. His report did not, however, focus only on cutting costs: there are also, he argued, economic benefits to be had by creating regional centres in which government agencies cluster near private sector hubs.
At a CSW round table discussion on the future of the relocation agenda, participants from central and local government agreed that a purely tactical focus on hitting relocation targets would miss a wider strategic opportunity presented by estates reform. Opening the discussions, Martin Reeves, chief executive of Coventry City council – which sponsored the event – set out his ambition to “move away from the idea of relocation being about bricks and mortar and buildings and estates, and [make it] much more about people, and a radical redesign of services”.
Clockwise from left: Joanna Joyce-Gray, Martin Reeves, James Kemp, Simon Roberts
The coalition position
Moving staff out of expensive London offices to cheaper desks in the regions might seem appealing to a government aiming to drastically reduce public spending, but relocations are often expensive in the short term and have a long payback time, said Clive Shore, managing director of Inquira Consulting, who worked on both the Smith Review and the 2004 Lyons Review – which identified 20,000 posts that could be moved out of London and the South-East by 2010.
Shore directed fellow participants to recommendations in the Smith Review about reducing the cost of relocations, saying: “If you adopt that, and then focus the clusters of some of these relocations around different parts of the country where they facilitate competitive advantage and link in with the private sector, you can get real success.”
At the moment, however, the focus for the new administration is not on projects with a long-term payback. “The messages that we are receiving are that any programme or project that is going to go forward is likely to be required to demonstrate payback within the life of this Parliament,” said Joanna Joyce-Gray, head of the Government Property Unit (GPU) in the Department for Business, Innovation and Skills, suggesting that the focus on relocation has faded since the election: “At the moment our priority is purely about contributing to reducing the financial deficit, so we don’t have that relocation programme in government.”
This doesn’t mean effective use of property is off the agenda. In May, the Efficiency and Reform Group announced a freeze on any new leases for central government departments or quangos until 2011. “Although that doesn’t drive a relocation programme,” said Joyce-Gray, “it does drive the question of where businesses are based.” For every lease-break or expiry that needs renewing, she added, a case must be put before the minister for the Cabinet Office, who is taking a very “keen interest” in property, looking at most cases brought to him, with just a few areas of devolution down to the GPU.
Joyce-Gray’s team has identified 484 leases due to expire in central London before next March, so there is a good opportunity for effective rationalisation. “At the moment,” she says, “cases won’t be passed where we have empty or underutilised space on the estate, and that is a significant shift from where we have been over the last ten years.”
This seems to be moving back towards the centralised model of estates management which operated under the Property Services Agency (PSA) – and later Property Holdings – until 1995. James Kemp, now head of operational analysis at the Identity and Passport Service, worked at Property Holdings and felt it was a better system. Its closure, he argued, was largely linked to “the ideological small government idea”. The unit employed 500 people but, said Kemp, “it did mean empty space was used effectively – and sublet to commercial tenants where you couldn’t fill it with government tenants.”
Clockwise from left: Clive Shore, Nicola Lowit, Martin Yardley, Anna Hutchings
A new delivery model
The coalition government is willing to centralise power when it comes to driving efficiencies, but it has also set out its plans for localising power over service delivery wherever possible. This, too, will have an effect on the relocation agenda, said Reeves, who argued that relocation is not only about co-locating to save money, but using property to drive more fundamental links between local and central government – as in the Total Place pilots, which are developing place-based budgeting as a way to integrate public services. The future vision, he said, should be for “a multiskilled workforce offering a seamless service”.
“Physically, buildings can drive a system to change much quicker than cultural change over 15 or 20 years of retraining,” he said, “There’s nothing more powerful than to say: ‘You sit next to someone for six months, you learn their job and then you sit in their chair.’ That’s the kind of vision that we need to move towards.”
Anna Hutchings, head of client development at the Valuation Office Agency, agreed that pulling together different public services will be key to driving the relocation agenda forward: “If you scan this conversation nationwide it’s about pulling central and local government together. Until you get those factions starting to pull together and have the platform on which to do it – and I don’t believe that platform is there at the moment – it’s going to be a slow burner,” she said.
Slow-burning may not, however, be an option any more. “The scale of the economic challenge facing us all means the way we are working now is simply not sustainable,” said Nicola Lowit, head of strategy and programme development at the National Offender Management Service. “All of us in the public sector have to look at how we work differently, more effectively, and provide services for considerably less money. Property supports that: we need to collectively work out how we are going to make the best use of our collective assets”.
A tightly controlled efficiency drive may help push reform in central government departments, but it is harder to put in place across the wider public sector. “You have to align your property model with your operating model,” said Simon Roberts, a freelance consultant who worked on Lord Carter’s property strand in the Operational Efficiency Programme.
“The PSA was a sensible forum, but it couldn’t operate because since the early ‘50s, government has been decentralised and ‘silo-ising’ – not a word, but it makes the point. You therefore cannot have a central body trying to control something; that goes against the culture. Tesco has [a single] property unit because it has a chief executive; [local managers] jump high when he takes a decision, and the company has good data, so they know how the estate is operating.”
Left from top: Murray Quinney, Ralph Ward
Pushing the agenda
What, then, might be used to drive cross-public sector reform? Better data to share between different agencies would help, said Hutchings. “If you don’t know which buildings you’re occupying, you can’t be efficient and effective. If we’re going to encourage communities to look at what is available and decide what to keep, what to get rid of, what to share, we’ve got to have that information to start that conversation.”
Yet while common ground for discussions is important, said Roberts: “There’s enough data to make progress – for God’s sake don’t let’s worry too much about data; it’s finding the political will.”
While there are examples of good practice – particularly of joint working through Total Place pilots – several participants mentioned the need for larger-scale, practical examples of co-location to push the agenda forward and help to create political pressure change. “If it’s an incredibly powerful thing that [politicians] see – a co-location, a genuine service hub – then they will buy into that,” said Reeves. “So what we’ve got to do is show, in different areas with different political control across the country, things that are really working.”
To support this scaling-up of good work, said Murray Quinney, head of estates at the communities department, there should be greater engagement between the Government Property Unity and local authority surveyors. “The obvious barrier is that departments of state and local authorities are separate legal personalities, and sharing property occupations therefore needs to be done on a legal footing,” he said; the creation and dissemination of a model, standardised lease agreement, he added, could “lubricate the process of co-location”.
The time has come
Despite the legal and cultural barriers presented by silos within government, the scale of change and depth of cuts needed across government create an opportunity to drive forward relocation. “I think we’re at the so-called ‘tipping point’ because of the depth of the challenge that we’re facing,” said Reeves. “But I think the window of opportunity is only open for about another two months or so of the spending review and immediately afterwards.”
This presents another challenge for those keen to drive the relocation agenda: the window of opportunity is also a time of uncertainty. People are holding back on property decisions, said Joyce-Gray, until the CSR has been finalised, because you “can’t make those estates decisions until you know how many people you’re accommodating”.
Ward sounded another note of caution, saying: “One thing which I haven’t got in my mind is a model that makes this work. It’s not a property thing – I think we’re all trying to work out what this new relationship between central and local will be. Unless we have a clear idea about that, it makes no sense to spend any money creating a different structure if we don’t really feel it’s got legs: organisational legs and delivery legs, as opposed to political legs.”
And opportunity alone will not be enough to drive reform, said Roberts, who has seen chances to change track missed in the past: “I fear I’ve been around for too long to think circumstances will drive that [change], because over the 30 years I’ve been involved in public sector property there have been at least half a dozen occasions where logically property should have been thought about differently.” In order for leaders within organisations to take on the challenge of lengthy relocations or estate rationalisations, he argued, there must be support from the very top.
All participants agreed that reform is bound to come in government estates: cost and public service reforms will enforce change. But will the relocation agenda be a tactical reduction of office space and people in London, or a strategic coalescence into shared service centres? In the end, said Reeves, it will be the politicians – both central and local – who decide.
“Who is going to drive it? It’s actually quite simple,” he said. “If it becomes a very key political agenda driven through on the back of localism etc, then I think we can get some grip on it. If it doesn’t, then we won’t.”
In search of the relocation catalyst
Participants – listed below with their full job titles – were asked to suggest one change that could move the relocation agenda forward. Their answers, in order of the seating around the table, were:
Joanna Joyce-Gray, government property unit, Department for Business, Innovation and Skills: “We are starting to see some progress driving efficiency in central government; we need to do some accelerated thinking across to the wider public sector. That’s where some really big savings can be driven out of property: when it’s across all the boundaries.”
Ralph Ward, planning and regeneration adviser, Thames Gateway and Olympics, Department for Communities and Local Government: “We’ve developed an East London Legacy Board, including all the government departments and Olympic host boroughs, to support our ambition of working closely together to achieve more effective regeneration. That provides us with a bit of machinery to explore what might work with the local authority and could be a model of government involvement: exploiting the network we’ve already got.”
Martin Reeves, chief executive, Coventry City Council: “If this is about leadership to make a difference, it starts and stops with people like us around this table. My idea would be to provide an online platform where we can go a bit deeper into some of these conversations and start challenging people to make some of this happen.”
Nicola Lowit, head of strategy and programme development, National Offender Management Service: “For me fundamentally it’s about leadership. It’s about having a group really leading this agenda: giving that thought leadership to empower people to be able to make slightly riskier decisions than they might otherwise have done.”
James Kemp, head of operational analysis, Identity and Passport Service: “One of the practical opportunities coming up is the government offices being broken up; they all have very local-facing teams as well as theme-based teams, so maybe there’s an opportunity to co-locate and merge them with the local authorities that they notionally sponsor or assist.”
Simon Roberts, freelance consultant: “To have a property use index by department so that they cannot hide from the problem. It would be very easy to produce an approximate property efficiency test – and therefore lots of jumpy politicians, both centrally and locally.”
Martin Yardley, director of city services and development, Coventry City Council: “There needs to be a realisation that the public sees [the public sector] as one organisation. That’s how we’re seen, but that’s not how we act. If you could turn that round, you’re going to make a huge difference”.
Murray Quinney, head of estates, Department for Communities and Local Government: “There will always have to be separate accounting entities, at least in the medium term, and separate legal personalities; but as a surveyor, my contribution would be to look at ways that central and local government can share property more easily and conveniently.”
Anna Hutchings, head of client development, Valuation Office Agency:
“Create a single property entity that doesn’t belong to the government or an agency from the government. There would then be much better transparency: if you wanted to create a radical cut you’d be in a better position to do it, because you’d know exactly what it was you were cutting, and where the best savings could be made.”
Clive Shore, managing director, Inquira Consulting: “There was a lot in the Ian Smith Review that I’m disappointed isn’t part of the debate any more: to what extent can relocation be encouraged to build regional competitive advantage and to create clusters around the country, building in with the local private sector in those areas to create competitive advantage?”