COMMENT
Matthew Hancock MP, who chaired the Westminster Sustainable Business Forum research inquiry on public sector estate management, talks PSE through the conclusions from its landmark report.
documented. Funding to local government will be cut by 26% (£6.7bn) over the next four years. Yet at the same time, local au- thorities need to maintain services despite those cuts – not only for the benefit of resi- dents needing more support as a result of the recent recession, but also to support our vision of a stronger, bigger society.
T
So efficiency savings needs to be made, quickly – but where?
Public sector property seems a likely target. Valued at £370bn, and costing an incred- ible £25bn to run every year, local govern-
Below: Matthew Hancock MP launching the report. Bottom left: Communities Secretary Eric Pickles at the launch.
he challenge the public sector faces in reducing its spending is by now well
ment spends approximately one fifth of its annual expenditure on running its prop- erty portfolio. This vast estate may hold some answers.
As chair of the Westminster Sustainable Business Forum research inquiry on pub- lic sector estate management, I can verify that this was borne out by our findings. The recommendations made by the in- quiry were fully substantiated, based on evidence collected from oral sessions, ex- tensive in-depth interviews and written submissions, all involving a wide range of stakeholders, including business leaders and local and central government repre- sentatives. No stone was left unturned.
The end conclusion was that if that local government used its office space more efficiently and in a greener way, it could reduce space requirements by up to 30% and save up to £7bn per year in running its property.
That’s £7bn a year local authorities can ill- afford to sniff at during these times of fi- nancial austerity. Indeed, even Councillor Richard Kemp, vice-chair of the LGA and leader of the Liberal Democrats in Local Government, who has been publicly de- bating the difficulties in making cuts, wel- comed the ideas discussed in the report. Councils that tackled this issue head on found their services improved too.
So now is the time for local government to be ‘leaner and greener’ in its estate man- agement. But what exactly does ‘leaner and greener’ mean?
Well, green is not just the colour of en- vironmental efficiency, it’s the colour of money. The price of carbon is rapidly in- creasing, and today, to produce a tonne of carbon emissions costs somewhere in the range £150 to £200. The Carbon Reduction Commitment, which will be in operation from 2012 onwards, will build on this cost, charging an extra £12 per tonne emitted. Although small change in light of the initial outlay, the average cost to participant organisations will be £200,000 a year from 2012.
Moreover, continuously updated building regulations are demanding ever greater environmental efficiency; by 2018, all new public sector buildings are destined to be zero carbon. This is currently an incred- ibly ambitious target for much of local government.
But, local government can substantially lower its environmental impact and save cash by reducing emissions from its prop- erty. Through adopting environmental ef- ficiency measures such as recycling, solar panels and better insulation, our findings suggest that a standard administrative building with staff on average public sec- tor wages, can make financial savings in
16 | public sector executive Mar/Apr 11
Image: Helen Maybanks
Image: Helen Maybanks
Image: Helen Maybanks
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