The Confederation of British Industry said the government should make big cuts to its property cuts over the next five years to help reduce the impact of tax rises.

In a new policy report called Time for Action: Reforming Public Services and Balancing the Budget, the CBI gives far-reaching proposals on making public sector savings. They include a two year pay freeze, sharing more back-office services, and “better management of the government estate”.

It said the public sector should cut its property costs £2bn in total by 2015-16 by managing its estate better.

The report also says sharing corporate services, such as finance and HR,
procurement, facilities management and estate management, could end up to saving the government £18bn by 2016.

CBI director-general Richard Lambert (pictured) said: “We have a new government with a determination to get a grip on the public finances and the political will to do it.

“Experience suggests that the best way of bringing down a substantial deficit without damaging growth is through spending restraint rather than raising taxes.

“With a public sector squeeze looming, the new government must also do everything it can to create the right conditions for the private sector to sustain and create new jobs.

The report draws on Glasgow City Council’s flexible working and property rationalisation partnership with Serco as an example of best practice.

It says up to £500m could be saved if the 150 biggest councils copied Glasgow.

On property, the document says: “The public sector owns and manages large estates across the UK. Some are well managed but there are still glaring examples of where estates could be managed more effectively and at lower cost.

“Too many staff are located in expensive locations not essential to the operational effectiveness of the service. While savings are not immediate as it takes time to relocate, considerable savings can be made in the longer term.

“In many localities public sector organisations could come together straight away to share offices and save on basic overheads, from photocopying to energy consumption.”

To read the report in full, click here: Time for Action

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