Property Asset Management in Central Government

13 November 2012

Property Asset Management in Central Government

Report to the Northern Ireland Assembly by the Comptroller and Auditor General

A Report published today by the Comptroller and Auditor General, Kieran Donnelly, examines the management of Northern Ireland’s central government property assets. The report follows on from a survey conducted by NIAO and published in June 2011 which found that Northern Ireland lags behind England and Wales in relation to estate management.

Mr Donnelly said: “Central Government owns or occupies a significant number of properties. Since I published the results of my survey in June 2011, significant progress is now being made to gather the basic information needed to enable central government to critically assess how it manages and uses its properties.  However, it is some way from maximising value for money.  Achieving this will require a step change in thinking, particularly around how departments and public bodies can work collaboratively to deliver public services and having a structured and strategic approach to property asset management.”

Main Findings

There is a need for central property controls

In our view there is a need for ambitious strategic targets and controls across the whole of the central government property estate.  There are substantial gains to be made from a co-ordinated approach to property asset management through the introduction of central property controls.  The Asset Management Unit, within the Strategic Investment Board, is well placed to provide strategic leadership and support to enable departments and public bodies to take a more co-ordinated approach to managing the estate; on the need for early planning of future lease breaks; and for departments and public bodies to work more closely together to plan their future estate needs, promote co-location and maximise efficiency.

Information on property assets and the setting of property asset targets and benchmarks

Collection of information on property assets at a departmental and strategic (regional) level needs to be better.  The use of computerised asset registers such as ePIMS has been mandated by the Executive and will enable information to be collected in a consistent format and enable appropriate targets to be set and performance to be benchmarked across departments; against other UK regions; and against the private sector.

At a strategic level, mechanisms should be introduced to enable departmental performance to be transparent and reported to the Assembly.  Recent developments, including the establishment of the cross-departmental Asset Management Forum, should support the Asset Management Unit in preparing an annual “State of the Estate” report on the efficiency and sustainability of the central government estate.

On Department of Finance and Personnel (DFP) Properties Division Office Estate

DFP Properties Division manages over half of the floorspace of the central government office estate comprising 153 properties occupied by 18,750 staff.  In 2010-11 the management of those properties cost over £73 million.  Properties Division has identified efficiencies, reducing floorspace by 26,000 m2, resulting in an overall annual savings of £4 million on rent, rates and service charges.  However, the average space efficiency of the Properties Division office estate is 19.8 m2 per full time equivalent (FTE) member of staff which is 50 per cent higher than the English civil estate offices.  

In our view further significant financial and environmental savings can be made by setting ambitious targets to further reduce the overall footprint of the estate and increasing the number of staff occupying buildings.  To illustrate the potential for efficiencies, if a five per cent reduction in floorspace was achieved each year over the next five years, for Properties Division alone, this could potentially reduce the floor space required by 80,000 m2, equating to potential average gross annual savings of close to £3.4 million in each of the next five years. The report records DFP’s disagreement with NIAO’s analysis.

Departments and central government bodies must critically challenge their use of property assets

The best way to incentivise and secure efficiencies from government property is through centralised control of property assets with departments and public bodies paying the resource costs of what they use.  However, it is important that departments work together and with Properties Division to: review occupancy levels; make better use of the space available; exploit co-location opportunities; and exit leases and reduce running costs.  

Notes for Editors

  • The Comptroller and Auditor General is Head of the Northern Ireland Audit Office (the Audit Office). He and the NIAO are totally independent of Government. He certifies the accounts of Government Departments and a range of other public sector bodies. He has statutory authority to report to the Assembly on the economy, efficiency and effectiveness with which departments and public bodies use their resources. His reports are published as Assembly papers.
  • This report is available from the Stationery Office throughout the United Kingdom. It is also available on the Audit Office website at www.niauditoffice.gov.uk. The report is embargoed until 00.01 hrs on 13 November 2012.
  • The results of the NIAO survey published in June 2011 can be found on the NIAO website.
  • Background briefing can be obtained from the Audit Office by contacting Brandon McMaster(028 9025 1077) or Sean Beattie (028 9025 1091).