It has been a pretty remarkable year so far for those of us who work closely with the public sector. We’d kind of expected it based on the reports and pieces of legislation we knew were set to emerge in the first half of 2008, but nobody could really have predicted that building design would feature so prominently in the Chancellor’s budget speech nor the way that interior design would become a serious political issue.
Each of the two main elements of governmental interest in the built environment crystallised in the spring of this year. In March the government latched on to the idea that buildings are responsible for around half of the UK’s energy consumption and carbon emissions, prompting it to launch an inquiry into the environmental performance of non-domestic properties. Never one to miss the chance to announce a new target, the Chancellor used his budget speech in mid-March to proclaim that by 2019 he would like all commercial buildings to be carbon neutral.
His speech was of its time, coming as it did in the midst of the on-going debate about the environment, fuelled by imminent changes to the BREEAM assessment method, the Energy Performance of Buildings Directive (EPBD) and the Energy Performance Certificates (EPCs) that are its most widely talked about element.
More recently, the Office of Government Commerce (OGC) ignited a debate about the design and management of the public sector’s enormous estate. The OGC is part of the Treasury and describes itself as ‘responsible for improving value for money by driving up standards and capability in procurement, from commodities-buying to the delivery of major capital projects, maximising the effective use of 60 per cent of government spending and a £30bn property estate’.
It isn’t kidding. The report it produced in the spring alongside property specialist IPD, Efficiency Standards for Office Space, led to the OGC producing some pretty jaw-dropping recommendations. It said that the entire estate should be subject to an overhaul in the way it used space, with the ultimate aim of saving about £1.25bn of the annual £6bn running cost. What was particularly intriguing was that it saw the key factor in driving this saving as interior design and, specifically, changes to the way that space is allocated in its office buildings.
As of 1 April,2008, the space standard that the OGC wants public sector organisations to adopt is 10 square metres per person (of net internal area) for all new projects and major refurbishments and 12sq m/person for all other projects. It also announced that use of the Property Benchmarking Service was to become mandatory across the central government estate at the same time.
Now, this sort of space standard (coupled with an eye on what represents best practice in similar organisations) is fairly typical in the private sector where the profit motive rules. The motivations in the public sector are slightly different but are similarly based on the need to cut costs.
Just how seriously the government now takes the design and management of its building stock can be measured by the tone of a heated meeting of the Public Sector Accounts Committee at the end of May, where it was revealed that central government property is up to 50 per cent less efficient than that of the private sector. This conclusion was based on a report, ‘Improving the Efficiency of Gentral Government’s use of Office Property’, which showed how a failure to understand “A lack of understanding of how buildings could operate better caused about £326m of inefficiences in central government… The worst offender is the Treasury” how buildings could operate better was the root cause of about £326m of inefficiencies in central government.
Ironically, the worst-performing department was revealed to be the Treasury, with a cost per square metre of £529 or £12,041 per person per year. This compared unfavourably to the Department for Children, Schools and Families which in 2006 achieved a cost per square metre of £123 and a cost per person of £2,592.
While there are some mitigating circumstances, not least the legacy of old and listed buildings, there are also entrenched cultures within the public sector itself that contribute to this. Nevertheless, there is a great deal of scope for the public sector to transform the way it uses space across an enormous real-estate portfolio.
What is heartening in the light of the OGC’s announcements this year is that this is largely a matter of education and approach. We should never underestimate the challenges in supplanting entrenched ideas, but at least the underlying argument has already been won – partly in the private sector but, increasingly, in a greater awareness generated by the reports of the OGC and others.
What will be interesting to see now is how these issues are resolved in the longer term. This will certainly require a more sophisticated approach from buyers and suppliers alike. Not least because we now understand very well how environmental objectives are intertwined with procurement decisions, building design, facilities management and space planning. At the very least, we should welcome the end of the commoditisation of product and service that has proved to be such a false economy for too long.
David Rand
