The government is to set up companies to run public sector property by April 2011 as it bids to save £1.5bn in property running costs and make £2bn from central government property sales by 2013/14.

In today’s Budget, chancellor Alistair Darling announced the government would set up these strategic property vehicles by next year’s Budget to manage public sector property. This is part of the government’s target in the Operational Efficiency Programme to save £5bn a year in property running costs and make £20bn disposals by 2020.

The Property Unit – part of the Shareholder Executive in the government Department for Business, Innovation and Skills – will be tasked with coming up with the structure for these vehicles. The unit is headed by ex-Ernst & Young man John McCready.

The government is expected to make more announcements on its plans for public sector property later this week, including the results of pilot schemes in efficiency initiative Total Place.

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