Private property advice could drop “sharply”
Property consultants have an anxious wait on their hands. If the Conservatives are elected on 6 May, their pledge to “cut fast and cut deep” will lead the government to procure less work from consultants. Similarly, last Monday, Labour pledged to “sharply” reduce spending on consultants.
However, the skills shortage in the public sector may limit how far the government can cut property consultants. Public sector bosses say they need private expertise to help them make the property savings promised under the government’s operational efficiency programme. In 2008/9, central government departments spent £186.6m on property and construction consultants (download figures below).
The fear for consultants is whether the government will cut that figure, or continue to use these services to make more savings.
At present, departments spend more on property and construction advice than any other consultancy sector besides management consultancy (see graph, attached below).
All three parties have refused to be drawn on how badly property advisers would be affected, but a spokesperson for the Conservatives says: “There are savings to be made there. We’ve identified these areas of wasteful spending.”
Parties will wait for a spending review after the election before deciding where the central government axe will fall.
In the wider public sector, bosses say a slump in property advisers’ workload is likely during the summer, but demand will pick up.
Brian Thompson, head of strategic property advice to the public sector at Drivers Jonas Deloitte, says the public sector has relied on private advisers to avoid responsibility for decision-making.
“Under either government, the private workload will drop eventually,” he says. “Public sector workers need to say: ‘I, as the public sector guardian of the estate, should be responsible for decision-making.’ ”
Bob Perry, president of the Association of Chief Estates Surveyors, says any plans to cut quickly would damage public property savings in the long term.
“Expertise should be brought in that can be hired and fired when the public sector needs it,” he says. “If councils need to drive their property harder, there’s got to be a way of doing that. We don’t have the skills or capacity in house for this.”
NHS organisations are already taking the scalpel to estates consultancy. They expect a 25% cut in spending by 2015. However, NHS chief executive David Nicholson recently warned them against cutting their 2010 property and facilities budgets.
Keith Sammonds, managing director of the Healthcare Facilities Consortium, which represents facilities and estates workers, says some organisations are failing to take Nicholson’s advice.
“Wise NHS organisations will invest this year ahead of cuts to come in following years,” he says. “The government is talking about merging different NHS organisations’ buildings. If you cut the number of buildings available, you’ll damage frontline services.”
To see tables of government spend on procurement, click here: Central Government Procurement Stats OGC
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