One of the biggest changes in property over the last few years, if we discount the cataclysmic decline of traditional retail, must surely have been the way we occupy offices. Ironically, some 17 years ago when I first joined the British Property Federation the industry was under tremendous political pressure to offer more flexible occupational leases – in both office and retail – and this led to a crop of flexible leasing products which somehow or other didn’t seem to catch on. Today, it’s not just about flexible leases but about the whole approach to flexible office occupancy – driven not by political pressure but by a generational shift in the approach to work generally. And it may surprise you to know that one of the most enthusiastic proponents of this new flexible approach is the Government, working primarily through its recently established Government Property Agency.
The Government has long realised that there are considerable efficiency gains – and cost savings – to be made through the more effective use of its property. Disposal of large swathes of its portfolio have been going on for some time. Indeed, the most recent State of the Estate Report for 2017/18 records that the total size of the central Government estate has fallen by 10% in the last 5 years with a 28% reduction since 2010.
But it’s not just about reducing the portfolio. Managing the accommodation that is required for Government departments to do their business in a more efficient way involves not only making best use of space but also encouraging smarter methods of working.
The Government Property Agency (GPA), which was set up in April 2018, will gradually take over the office accommodation, both freehold and leasehold, of most Government Departments which it will then manage as a single portfolio. At the moment it has the Cabinet Office, BEIS, DfID and DExEU but by 2022 is planning to have all the major departments and a number of their Arms Length Bodies, with the exception principally of the Ministry of Defence. This will allow it not only to bring its expertise to bear on the usual property management processes of acquisitions, lease renewals, dilapidations and disposals but also to offer its departmental clients different lease lengths and the opportunity to accommodate growing or shrinking departmental populations as political needs dictate.
The GPA is also working on a programme of Government Hubs, located in major conurbations, which will allow a whole range of different departments to be accommodated in a single Government campus of one or more buildings with all the benefits of common systems and cross-fertilisation of people and ideas that that will bring. The first phase of Hubs comprises 15 different buildings, 13 of which have been led by HMRC as they exit their previous Mapeley Steps deal. They will be the principal occupiers. But there are two – 10 South Colonnade in Canary Wharf and Windsor House in Victoria Street which are already up and running and are truly multioccupied. Providing excellent quality space for 7,500 civil servants, they have allowed the GPA to trial many of the facets of smarter working and have provided considerable learning for the roll out of the next phase of the Hubs programme which is likely to cover a further 12 buildings, starting with Peterborough where planning is already well advanced.
Of course, it is Whitehall that everybody associates most with Government and the GPA is already bringing its expertise to bear on streamlining the buildings in the area to deliver a ‘Whitehall Campus’ which will by 2030 comprise just 20 good quality buildings operating as a single entity with flexible space, shared services and where possible integrated systems.
As far as smarter working is concerned, this is something that the GPA will be promoting across Government and not just in the buildings that it currently manages. It is following the principles contained in the Code of Practice on Smart Working produced by BSI in conjunction with the Cabinet Office (BSI Publicly Available Specification – PAS 3000:2015). These take a comprehensive and strategic approach to modernising working practices and cover issues as diverse as collaboration, flexible working patterns, different types of workspace and of course technology, without which such a flexible approach to space and people would simply not be possible. Smarter working is not just about saving cost. Indeed it is recognised that a modern and flexible office space that facilitates smarter working might actually be more expensive on the measure of cost per square foot than a traditional office space. But better, higher utilisation and improved, employee satisfaction and therefore productivity, will provide far better value for money in the long run.
I spent 27 years working in Government in some of what can only be described as the worst offices imaginable. Roofs leaked when it rained, the linoleum on the floor was peeling and we once had in infestation of bats! I find it both ironic, and gratifying, that it is the Government that is proving a trailblazer for efficient and effective office space and for the adoption of smarter working and flexibility in the way it uses its buildings. The Hubs might not be quite up to the gold-plated standards of a Google or indeed Bloomberg – but they are providing good quality, fit for purpose, modern, flexible space that I believe our hard-working civil servants deserve.