26 February 2016

The Cabinet Office is aiming to make the central estate – the Government’s properties and buildings – ’leaner and smarter‘. Ollie Hirst examines the latest data on the size and cost of the Government estate, and charts how it has changed since 2010.

Shrinking the size of the estate has been a key target for the Government in its drive for efficiency savings. For the past five years, the Cabinet Office has published an annual report – The State of the Estate – which outlines its strategy and progress in making the central estate more sustainable and cost-effective by reducing the number of buildings occupied and improving the efficiency of government properties. The most recent report was published this February. The central estate (previously referred to as the mandated estate) includes central government-owned property and some specialist property like courts, but excludes property such as museums, Royal Parks, power stations and military establishments, as well as property run by bodies such as the NHS and land outside the UK.

Three quarters of the government estate is taken up by just five departments – DWP, MoJ, BIS, HMRC and DfT.

Estate size 2015 all-in-one chart

Government departments are not only big in spending power and staff numbers, but also in the physical space they occupy. According to the most recent The State of the Estate, the core government departments took up eight million m² in 2015, with five departments – DWP, MoJ, BIS, HMRC and DfT – taking up three quarters of this space. This is mainly because these departments operate specialised buildings around the country, such as Jobcentres and courts. The rest of the government estate is taken up by smaller departments like DCMS and those departments without big frontline services, such as the Treasury.

Department estates include large amounts of public-facing space as well as office buildings.

Benchmarked and non-benchmarked size chart

Government departments not only differ in the size of their estates, but also in their use of this space. The Cabinet Office uses two terms for the parts of the estate included in the overall central estate:

  • Benchmarked estate is a subset of the central estate, and is only the office space which government takes up.
  • Non-benchmarked estate is another subset of the central estate and includes frontline estate such as courts, Jobcentres, research facilities and laboratories.

Unlike in policy-oriented departments, office space accounts for only a small proportion of the major delivery departments, which have much larger amounts of their estate in public-facing buildings (courts occupy more than one million m² of MoJ’s estate, for instance). This means that there are difficult decisions to make, not just about how much office space to cut but also in the logistical and political feasibility of reducing frontline estate.

MoJ and HMRC account for the majority of space reduction since 2011, while BIS and the Cabinet Office have seen increases in their estates.

Change in central estate size chart

Nearly all departments have significantly reduced the overall size of their estates since 2011. The latest data shows that MoJ has reduced its estate by more than 460,000 m² since 2011 (24% of its total), while HMRC’s space has decreased by around 380,000m² (27%). BIS, DCMS and the Cabinet Office are the only exceptions. These increases are mainly explained by reclassifications of government organisations (for example, the Government Procurement Service and Residual Estate moved from HMT to CO, increasing its total office space).

While we have previously been able to chart change in the benchmarked and non-benchmarked estate separately, this time we can’t:

  • The State of the Estate report does not publish the breakdown between reductions in the benchmarked and non-benchmarked estate.
  • The data in The State of the Estate is drawn from publically-available e-PIMS data – published most recently in December 2015 and May 2015, and then November and February 2014. But The State of the Estate uses e-PIMS numbers from April 2014 and 2015: these do not appear to be published in full anywhere.
  • Even if they were, precise definitions of benchmarked and non-benchmarked estate do not appear to be provided or used as categories in e-PIMS.

This is disappointing, given the long-standing commitment of the government to publishing reusable open data, reiterated by Minister for the Cabinet Office, Matt Hancock, in recent speeches.

Average space per civil servant has decreased from almost 14m² in 2010 to around 10m² in 2015.

Floorspace per FTE chart

Increasing space-efficiency – i.e. minimising the amount of space used by an average staff member – has also been central to the Government’s strategy for rationalising the estate, as set out by the Cabinet Office’s Government Property Unit (GPU). While FCO has seen a significant reduction from just under 21m² in 2010 to 13m² in 2015, it remains the department with the largest average floor space per full-time equivalent employee. In DWP, where building closures have not kept pace with substantial headcount reductions, the amount of office space per staff member has actually increased since 2010. At the other end of the spectrum, the Cabinet Office has more than halved its average space per person over the past five years, already achieving the new space target of 8m² which was set at the start of this year, and which other departments are aiming to reach by March 2018.

Matt Hancock, Minister for the Cabinet Office, recently outlined the Government’s plans to continue the upward trend in space-efficiency and downward trend in the size of the estate by further reducing the number of office buildings – from the current 800 to fewer than 200 by 2023. According to Hancock, this will primarily be achieved through developing more cost-effective regional ‘hubs’, an approach which has already led to contentious office closures in some areas of the country.

Estate running costs of the core government departments have decreased by around £333 million since 2010/11.

Operating costs chart

Central government buildings cost around £2.7 billion a year to run in 2014/15, a 10% reduction from just over £3 billion in 2010/11. Unsurprisingly, the most expensive departments are also those that take up the most space: DWP is the most expensive, at a running cost of £610 million in 2014/15. Some departments, such as BIS, are slightly cheaper to run than their size would indicate, but these are exceptions to the rule. DWP has had the biggest reduction in operating costs, accounting for £129m (39%) of the total £333 million reduction, while HMRC’s estate has reduced costs by £86m. Just two departments – DH and DECC – have experienced an increase in the running cost of their estate, with DH receiving the biggest increase (£61m).

Overall, the Government has continued to make progress on its target of reducing the size and cost of the government estate since our last analysis. But the picture across different departments is not uniform, and the sizable cost of running the estate as a proportion of government expenditure means that making further reductions and efficiencies will remain high on the agenda.

Further information

Abbreviations for government departments can be found here.