More than £1bn can be saved on government offices even though some departments have been slow to act, MPs have been told.

Office of Government Commerce (OGC) chief executive Nigel Smith defended the aims of the organisation’s ‘high performance property initiative’ when he was quizzed on progress so far by the Commons public accounts committee on Monday.

Chairman Edward Leigh suggested that the £1bn to £1.5bn to be saved by 2013, as set out when the initiative was launched more than a year ago, was a “back of the fag packet” idea.

But Smith, while accepting that it had been an “aspirational” figure, insisted that detailed plans would be produced over the next 10 months following initial delays. “I see no reason why £1bn to £1.5bn is not achievable”, he told the committee.

A report from the National Audit Office, published in November, showed wide variations between departments, with costs per person ranging from £2,592 at the former education department to £12,041 at the Treasury.

Space allocations also varied, from 13.3 sq m per person at the former Department of Constitutional Affairs to a high of 21.9 sq m, again at the Treasury. All departments were higher than the OGC’s proposed space standard of 12 sq m.

Although departments have been more proactive since the report was published – the Treasury’s density has improved by 20 per cent and it has saved itself £3m per year - Leigh said such variations were a real concern.

Trailing the private sector

He also said it was “just not good enough” that government properties were performing 14 to 50 per cent worse than the private sector benchmark.

While Smith said such differences between departments were to be expected in such a large and varied estate as the government, he also accepted that there was “a long way to go”.

He said successes so far included the introduction of property boards and property champions in each department, and the increasing use of the OGC’s e-PIMS property database, with 90 per cent of departments listing their buildings on it.

Mike Burt, OGC’s director of government relocation and asset management, said the introduction of champion’s had encouraged the sharing of best-practice. The OGC was also developing tools such as its ‘integrator’, to be available in a few months time, to allow departments to see how they were doing “across the piece”.

The OGC’s bench marking programme, which already compares 631 government buildings to equivalent private sector properties, was also set to become mandatory in April, the pair told MPs.

This exercise would be vital to the success of the entire property initiative, Smith said, and was what would set it apart from earlier attempts to rationalise property holdings.

There had not before been “a robust data collection across government”, Smith said. “We have that now.”

Lacking in detail

There were, though, serious delays in getting the departments to produce the asset management plans, Smith said, which were necessary in order to “look at the true detail”.

Just five had completed the plans in time for the December deadline. Most had only managed to put together an asset management strategy and were struggling to produce the more detailed plan.

Although Burt told the committee that they expected all departments to have completed the work by September, he admitted that this represented “some slippage”.

MPs including Austin Mitchell and Alan Williams asked whether the OGC could take a more interventionist approach.

But Smith believed the “controlled decentralisation” of the current model was the right one to follow, while Burt said interventions were a last resort. “Experience shows that departments are working very hard without our intervention,” he explained.

The best method, Smith added, was for the OGC to incentivise departments by making sure they understood the benefits that can be reaped from rationalising their accommodation.