Stephen Foot, director at public sector consultant, Concerto Consulting, argues the government may be wrong to think about selling off property in this market. He says buying up the buildings it occupies could be a better long-term solution to the deficit.

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Should the government focus on reducing the gap between public spending and taxation, or on reducing the wider debt burden?

The Government occupies about 200 properties in the five most expensive postcodes in central London.  These are a mixture of leasehold, freehold and private finance initiative properties.

With new new flexible working and government-set space use standards, demand for space should drop by 20% as a minimum.

If the Ian Smith review, which called for relocation of 15,000 public sector workers, brings a dramatic reduction in staffing levels, then the surplus is much greater.

Disposing of the freeholds in this distressed market is hardly an attractive proposition in the short term, and may be the wrong thing in the long term.

It may have a role in reducing the debt burden we face, but would do very little to reduce the ongoing deficit itself.

The first solution is ending leases.

Exiting existing leaseholds, where there are break clauses, must be a priority. The government has to implement its ban on new leases, announced last month.

To make this happen, a single body needs to have executive authority to manage the overall estate (at the very least on a regional basis) and  force departments to move and share space to meet the available supply.   No longer can we afford departmental silos.  As an aside, by forcing departments to share space, we can use the property to leverage real change in the way that our public sector bodies work with each other.

But even after issuing breaks on any leases or PFI buildings, there is likely to still be a surplus of property.

Rather than dumping freeholds on a flat market, now is the time to consider alternative usage for the excess space.  This at least would bring in some revenue in the short or medium term to help reduce the deficit.

Ironically, the quickest way to reduce the deficit arising from the estate, would be to buy out some of the long leases and PFI deals, on the assumption that the government can still borrow money for less than the landlords can.

With our AAA rating still intact, this is still possible, although it wont help the debt mountain.

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