Better buildings save £8bn

16 November 2011

A report showing how the public sector can raise the productivity of its workforce by £8bn a year, just by using buildings differently, was launched by Eric Pickles MP.

“Leaner and Greener II: Putting Buildings to Work” is the result of an eight month parliamentary inquiry, chaired by Matthew Hancock MP and conducted by the Westminster Sustainable Business Forum.

The final report’s findings suggest that if the public sector rationalises its property portfolio, works in partnerships and improves workplace conditions by championing practices such as flexible working, it can improve the productivity of its workforce between 5% and 15%. A 5% increase alone would equate to £8bn’s worth of staff time.

Eric Pickles MP, Secretary of State for Communities and Local Government, said: “Taxpayers have the right to expect public servants to be ruthless in the pursuit of good value - and utterly unforgiving of bureaucracy. “The best councils are doing everything in their power to make taxpayers’ money go further. Cutting out waste, sharing back offices and redesigning services. This report clearly shows how it is possible to deliver real savings and other benefits. The expertise is there, the experience is there. Time to get on and do it”.

Additionally, the report suggests that a well run property energy efficiency programme can deliver energy cost savings of approximately 15%, in return for an investment typically paid back in two years as well as cutting carbon emission.

Matthew Hancock MP, Chair of the Inquiry said: “This work shows the vast scale of the prize when Councils and other public bodies like the police and fire services work together. The very best are already doing this, but much more can be done. If the best was replicated across the country, not only can £7bn be saved from property costs, but this report shows how £8bn can be generated in better staff productivity and better services. In this age of tight budgets, it would be a colossal waste not to make these savings, and take pressure off the hard pressed taxpayer.”

The report provides public sector authorities practical solutions to the economic and environmental challenges they face, with clear case studies of best practice and recommendations of what they can do immediately to unlock savings. The recommendations are directed towards central government, local government and the wider public sector, and together, provide a roadmap for the public sector jointly to put people and property to better use.

Case studies where these methods are being put into practice are cited throughout the report. For example:

· In Hampshire public sector organisations found that they can achieve a 36% reduction in public floor space alongside improvements in service delivery through pan-public sector property working. Such practice across Hampshire could deliver savings of up to £324 million. This would reduce operational costs for the assets involved of up to 50%, as well as a 50% carbon reduction.

· In Cambridgeshire the joint management and use of property, leading to rationalisation of the estate and lower running costs, is expected to deliver a 20% increase in disposals over five years and a 20% revenue saving. At the same time, the residual estate will be greener and services improved through co-delivery, producing tangible community benefits.

· Following an investment of £1.2 million in 11 initiatives, Barts and The London NHS Trust had, as of April 2011, generated annual financial savings of £800,000, leading to a combined payback of 18 months on the initial investment. The annual energy spend of the Trust has been lowered from £7.2 million to £5.8 million over four years, reducing total annual carbon emissions by 5,977 tonnes.

The findings of “Leaner and Greener II: Putting Buildings To Work” build upon those of another inquiry, conducted earlier this year, which highlighted the £7bn of savings Local Authorities could make through reducing unnecessary space and combining purchasing power across organisations.

The report has cross-party support and backing from the public and private sectors.