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Government Estate

Volume 567: debated on Wednesday 4 September 2013

1. What progress the Government have made in response to the 2010 report on use of the Government estate. (900026)

We are committed to saving money by, among other things, cutting our occupancy of property in London and elsewhere. We are consolidating into freehold space wherever practical. Since the general election, the central civil estate in London has been reduced by about 22%. Across the country we have cut estate costs by nearly £500 million and we are on track to deliver a further £80 million by the end of the current financial year.

I thank the Minister for that answer. The Smith report identified that 15,000 jobs could be moved from London to the English regions by 2015. That would first of all save money, but also correct the spending imbalance by which London has the highest current spending per head of any English region. Is there more we can do to make swifter progress?

The Smith recommendations were, so far as I can see, made on an assumption of stable public sector employment. Owing to the size of the public sector deficit that the coalition Government inherited, public sector employment has been falling since then by more than 400,000, and the size of the civil service is down by about 73,000 since the election, so the priority has been to reduce the amount of property we occupy, rather than moving employment from one part of the country to another.

The problems with finding savings from the Government estate are that many Departments are finding it difficult to surrender leaseholds early and to find private sector businesses to take up surplus accommodation, and are even having problems with selling freeholds because of the state of the property market, meaning that it is very unlikely that the full potential savings of £830 million will be met before 2020.

I do not think the hon. Gentleman is right on that. Actually, vacant space in the central Government estate is running at about 2.5%, compared with the national average of over 10% across the public and private sectors, so in fact Government Departments and agencies are not finding it impossible to surrender leases—they are doing so very effectively—or to sell properties where that makes sense, although our preference is to occupy the freeholds and get out of the leaseholds.

What does the Minister expect the footprint of the Government estate to be by the end of the present Parliament compared with May 2010?

Certainly, so far as the central Government estate in London is concerned, it will be down by well over a quarter, but that is only the beginning, because obviously property disposals and vacancies take time, for some of the reasons that the hon. Member for Denton and Reddish (Andrew Gwynne) just referred to; that cannot be done literally overnight. We have made considerable progress already, however, as it is down by nearly a quarter and there will be much more to come.

I am glad that my hon. Friend the Member for Kettering (Mr Hollobone) did not have the nerve to suggest that Government should relocate to Kettering, because he knows the place to come to is 50 minutes from London and it is Wellingborough. Will the Minister encourage Departments to move to Wellingborough, especially the Office of the Deputy Prime Minister?

I can imagine that no relocation destination would be more popular with my right hon. Friend the Deputy Prime Minister than my hon. Friend’s constituency—or failing that, perhaps the constituency of my hon. Friend the Member for Kettering (Mr Hollobone).