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Green’s report critical of public sector property management

14 October 2010

Sir Philip Green finds much to be improved in public sector management practices particularly its property management

The publication this week of Sir Philip Greens review of government efficiency, has criticised the government for not managing its property as if it was a commercial estate. It also criticises its  procurement of printing, travel, hotels, office supplies, laptops, care hire and mobile phones.  Departmental catering also came in for criticism and he called for central purchasing of food. He states “Vending machines and staff cafés in Whitehall are operated by at least eight different facilities management companies operating 16 different contracts, one for each department. There is no consistency over very visible prices paid by staff. For example, we found the following prices for a cup of coffee from staff cafés:Highest price: £1.45Lowest price: £0.90 Differential: 38 percent. There appears to be no centralised food purchasing.”
To read the full report click here
Interviewed on BBC1 6pm and 10pm news on Monday, Mark Fox, chief executive of the Business Services Assocation said that he welcomed the report saying that reform of public sector procurement was long overdue. However, he was concerned that while the Government could use its size to reduce procurement costs,  “it should also be an example of good behaviour and pay its suppliers according to standard terms rather than, as Sir Philip Green suggested, use its ‘clout’ to to extend payment to 60 or even 120 days.”
“This is not fair,” he said, “and would be a significant deterent to SME’s engaging in business with the public sector.”
Also commenting on the report, Andrew Mawson, MD of Advanced Workplace Associates said,  “Sir Philip Green is right - property is key to government savings. He comments that £25bn a year is spent on property, but only 6 percent of the entire estate is overseen by a central team, and as much as 50 percent could be saved on property and procurement costs.This is a more stark picture than the one we painted just two months ago, when we estimated that public sector spending on property could be reduced by up to a fifth, and prime city-centre property could move from the public to private sector use, if central Government departments and local authorities adopted more flexible working practices.”
AWA’s estimates were based on changing the way that civil servants work, with the recent introduction of flexible working practices at the Home Office’s head quarters in Westminster.
“Without any loss of people, simply by adopting new ways of working and with its forward-thinking approach, the Home Office has managed to increase the number of staff using its existing headquarters by around 17 percent. This has allowed the department to dispose of four other buildings in central London, consolidate functions and reduce costs. If this model was rolled throughout central and local government the savings would be immense.”
A detailed review of working practices and adoption of new ways of working at the Home Office’s Marsham Street headquarters has allowed an extra 650 people to work in the building which has 3,800 workstations, generating considerable savings. The project found a huge discrepancy in prices paid for government accommodation per person and per square metre of space. Average rents also differ greatly between Government Office regions, from £397 in London to £63 in the South West.
Commenting on Sir Philip’s scathing attack on the government’s £38m expenditure on hotel accommodation in London alone, Andrew Mawson said: “There are huge savings to be made using video-conferencing, mobile technologies and internal social networking tools … and a more innovative approach to use of office space: one of our clients has turned part of its building into hotel accommodation for staff who need to stay in town. That’s the kind of lateral thinking that’s called for now.”

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