doubled from £4.5m to £7.95m. The cost of floorspace per member of Treasury staff has now risen to an eye-watering £6,200 each. The Treasury’s problems appear to be
largely the result of the PFI deals developed in the 1990s. The Treasury’s 35-year deal with Exchequer Partnership to refurbish 1m sq ft of Whitehall floorspace was agreed in 2000.
Biggest obstacles Recent decisions to move both the Cabinet Office and Northern Ireland Office into 1 Horse Guards Road have helped make the PFI deal more bearable for government, but according to one source who spoke to Estates Gazette, the Treasury, Home Office and MoD PFI deals are some of the biggest obstacles to efficient use of government office space. Some unofficial estimates suggest
mpty Official figures show that the cost of
the Treasury’s 215,200 sq ft floorspace rocketed over the past year, rising from £20.62 per sq ft in the third quarter of 2011-12, to £36.93 per sq ft in the first quarter of 2012-13 (see graphic, right). This means the Treasury pays nearly
six times as much for its office space as the frugal tax collectors at HM Revenue and Customs, where floorspace is just £6.22 per sq ft. Total Treasury office costs have nearly
there could be as much as 100,000 sq ft vacant – the equivalent of 1,000 empty desks – most of it in the three PFI buildings (see box, p86). Speaking in November, the executive
director of the Government Property Unit, Bruce Mann, appeared to agree that PFI buildings posed a problem. He said that Whitehall’s PFI offices cost three times as much per desk as freehold offices, and that the financial arrangements were “extraordinary”. In a statement to EG, the Government
Property Unit said: “We are under contractual obligations in the PFIs. However, we will always look at future options, including ‘no cost’ break-out clauses or the best ways in which we can make more efficient use of these properties to save money for the taxpayer.
“This includes getting as many people
into these buildings as possible and therefore freeing up other property.” EG understands that the basis of a deal
with PFI landlords is being prepared for the Treasury and Home Office buildings. James Leaver, head of public sector consultancy at Knight Frank, says that
13 April 2013
Ministry of Defence: at least 89,000 sq ft is lying empty
despite impressive efforts to cut waste in the Whitehall estate, there is still a long road ahead.
“The knotty hard cases, in a property sense, remain to be resolved. They have managed the low-hanging fruit so far. The core freeholds owned by the government – the Cabinet Office, Old War Office, Old Admiralty – are historic and impressive buildings, but in those properties it is going to be challenging to reach the £8-£10 per sq m [£0.74-£0.93 per sq ft] per employee, which is the target.“ Tackling the PFI properties will be
even harder. Says Leaver: “Government can be fleet of foot when it is in control of its own properties, but that is more challenging if you have long-term commitments like PFI.” In the meantime, changes to civil
£36.92 £31.12
per sq ft per sq ft
£20.67 £6.22
per sq ft per sq ft
COST OF TREASURY FLOORSPACE Q1 2012-13
Q4 2011-12
Q3 2011-12
the lowest departmental cost per sq ft, recorded by HMRC
Source: Departmental Quarterly Data Summaries; Taxpayers’ Alliance
www.estatesgazette.com 85
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