However the picture is much bleaker for capital. Labour was planning to reduce capital spending by 17.5% per annum in real terms over the next spending review period whereas in the previous decade it had grown by 13.6% per annum. To push the mountain analogy, capital spend is about to plunge into a crevasse. Clearly, we will get a new set of numbers in the new Budget.
The Institute for Fiscal Studies (IFS) produced a report just before the Election saying that none of the parties was being honest about the scale of spending cuts required. These next few slides are taken from their report.
be tough, even for priority services and very, very tough for those services deemed to be low priority. We will know more in July. Some organisations have already started to prepare for the problem by reducing staffing levels and by cutting jobs. Again, there are various numbers being thrown around.
The Chartered Institute of Personnel and Development (CIPD) has predicted a 10% cut over 5 years. This is equivalent to 500,000 public sector jobs. And there will have to be at least the same reduction in office property holdings, but with the demand for further efficiencies and changes in working practices, I would expect the reduction in office space to be significantly greater than 10%. And these are reductions that will generally be in addition to what you may have been planning anyway through your Asset Management Plans and Office Accommodation Strategies.
The IFS forecasts that departmental spending will have to reduce by between 11 and 15% over the next 4 years. With a Conservative led government, I assume that we will lean towards 15%. This is equivalent to between £43 and £59 billion. Again we can expect it to be towards the upper end.
So much for services efficiencies and efficiencies from managing property better. There are also expectations about what we deliver. I think it is now accepted that in the relatively good times of the last decade, not enough was done to transform public services and address some of the structural problems. Now the challenge is that structural change is an imperative but the context is very difficult. We will need to change service delivery and to change it radically and, for example, the public sector will stop doing some things. We will also see, as set out in the diagram, an acceleration of the E Government agenda, an acceleration of the outsourcing of significant parts of public service delivery as public sector bodies increasingly become commissioners of services rather than deliverers. And we will see an acceleration in the trend for different public sector bodies to work more closely together, with more joint operation, more sharing of services and more sharing of property.
This shows how expenditure has run ahead of the tax take over recent years. The striking thing to me is the steepness of the decline in expenditure forecast. Again, it is historically unprecedented. And as the IFS said, the rate of decline is not really about which party is in government.
Clearly, events are now moving on politically. The General Election campaign discussions were vague about which services would be prioritised but it is clear to me that life will
24 John Keyes
The implications of these service changes for public sector property are immense and the challenge is so much greater because change needs to be delivered in a very, very hostile environment. For example
● Property teams and resources will themselves be under pressure
● Staff will be asked to work differently and in new ways
● Finance will be difficult, revenue will be a problem, capital will very scarce.
ASSET - Liverpool-10
Page 1 |
Page 2 |
Page 3 |
Page 4 |
Page 5 |
Page 6 |
Page 7 |
Page 8 |
Page 9 |
Page 10 |
Page 11 |
Page 12 |
Page 13 |
Page 14 |
Page 15 |
Page 16 |
Page 17 |
Page 18 |
Page 19 |
Page 20 |
Page 21 |
Page 22 |
Page 23 |
Page 24 |
Page 25 |
Page 26 |
Page 27 |
Page 28 |
Page 29 |
Page 30 |
Page 31 |
Page 32 |
Page 33 |
Page 34 |
Page 35 |
Page 36 |
Page 37 |
Page 38 |
Page 39 |
Page 40 |
Page 41 |
Page 42 |
Page 43 |
Page 44 |
Page 45 |
Page 46 |
Page 47 |
Page 48 |
Page 49 |
Page 50 |
Page 51 |
Page 52 |
Page 53 |
Page 54 |
Page 55 |
Page 56 |
Page 57 |
Page 58 |
Page 59 |
Page 60 |
Page 61 |
Page 62 |
Page 63 |
Page 64 |
Page 65 |
Page 66 |
Page 67 |
Page 68