The Government believes that there are substantial gains to be made from a co-ordinated approach to Property Asset Management (PAM) and a regime of National Property Controls has been put in place across the Civil Estate.
In his May 2010 Spending Review, the Chancellor of the Exchequer announced details of new spending controls to support delivery of £6 billion of spending cuts in the financial year 2010/11. As part of this, a moratorium on new property leases and lease extensions was introduced with immediate effect. This was planned to reduce both the size and cost of running the estate, helping to accelerate the work that departments had already begun.
Other controls include approvals on capital asset disposals, new criteria for facilities management contracts, and a space standard of 8m2/FTE with a desk-sharing ratio of 10 FTE per 8 workspaces for new and refurbished offices.
The GPU is working with departments and HMT to co-ordinate central management of leases and report where, for operational requirements, a new lease or lease extension was proposed.
The lease moratorium, which prohibits any new or renewed leases of property by government without approval, has helped Departments to deliver savings of £90 million within its first year. The moratorium applies to all government departments and their arm’s length bodies, including new leases, extensions, breaks and expiries, property acquisitions and new builds, including non-office property. The Olympics, overseas property and the MOD military estate are excluded. Departments ar not permitted to sign new leases (including extensions to existing leases) or acquire freeholds; the expectation being that all breaks and lease expiries will be exercised.
The controls were further strengthened in October 2010, when the Minister for the Cabinet Office required greater savings at lease breaks and renewals on existing property. Upward-only rent reviews are to be avoided and the sale of freehold properties is restricted without clearance from the GPU – in particular where there are opportunities for re-use elsewhere in government.