Belfast Telegraph

Making space work in the office

By John Simpson

Government and government agencies are the largest users of office space in Northern Ireland. In 2011-12, the annual cost of the office space within the public sector, now assessed as benchmarked office space, was £97,384,385.

After wages and salary costs of the public sector, office space costs are the next largest single item of expenditure, estimated to be 7.9% of the direct running costs of all central government assets.

The Strategic Investment Board (SIB) has taken the first critical steps in bringing some coherence and structural reform to the way that public services office space is monitored by creating a central management strategy to replace what has often been the stand-alone decision making of separate departments and agencies.

The public sector office estate is large: 561,441m2 to be found in 308 separate holdings which occupy 286 buildings. There are 35,069 workstations (which might be called 'desks') accommodating 29,531 full-time equivalent employees.

Underlying the SIB study there is a search for performance measures to test how the use of office space might be made more efficient, more cost effective, and brought into a strategy for a disposal and renewal programme.

Some interesting questions are answered in a recent SIB publication, The State of the Estate Report 2012.

Does the public service offer, on average, generous or limited space for each employee? How much spare space is there?

The overall assessment is that there are 5,539 spare workstations -- about 16% of the total. In terms of space, the vacancy level is about 3% and this compares closely to the average in England and Wales. These are averages and individual locations vary.

The SIB has also ventured some approximate estimates of the cost of office space comparing the public and private sectors. Because of the statistical difficulties in collecting evidence for comparisons, the SIB has made the comparisons between the public and private sector only in the Belfast region. The SIB has also introduced the further differentiation between premises that are freehold and leasehold.

The study offers interesting averages in terms of space per full-time employee.

The public sector in Belfast in freehold property has 73% more space than in the private sector and is using 59% more than in comparable English properties. The public sector, where leasehold property is used, has 36% more space than in the private sector and 40% more than in England.

When the measure is in terms of cost per2m, the relativities are more constrained.

The public sector spends, on average, 12% less for freehold estate, on a yardstick of £120/m2.

Leasehold property is slightly higher by 2.5%.

Perhaps, for the specialists in office property development, the analysis which explores the maximum and minimum prices for the different types of property leases offers a better insight. In every category, the average results are alongside a wide range of answers.

There is enough spare capacity to allow the SIB to point to scope for some further rationalisation.

A programme of rationalisation will depend on many other factors alongside the existence of space places. The potential cost of holding spare capacity is estimated at £11m pa.

The SIB is leaning towards a policy which would reduce the amount of leased property whenever leases end or may be renewed.

The scope for savings if tenancies are not renewed is shown to be considerable if other vacant space is available.

However, as an early indication of policy implications, the SIB has not yet offered any evaluation of the options of different arrangements.

When older buildings reach the end of their useful life, replacement with PPP, leasing or direct ownership must be assessed.

For those who remember the recent Workplace 2010 proposal to vacate Dundonald House and retain a PPP contract for its replacement, there is no news of what next for that (now listed) building.

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