Government bodies are liable for up to £70m in dilapidation fees following a ban on signing new leases and lease extensions without Treasury approval.

Dilapidation consultants expect to cash in on the ban, which was revealed by PublicPropertyUK.com on Monday. It lasts until at least April 2011 and could affect up to 3.5m sq ft of central government and quango-occupied floorspace across the UK.

“We’re waiting to find out the full list of leases that aren’t being renewed, but we expect to pick up substantial work from this,” said Anthony Lorenz, founder of dilapidations adviser Dilaps UK.

The measures will be driven by the Efficiency and Reform Group, which was jointly launched by the Cabinet Office and the Treasury on Monday with the aim of saving £47m in rent, as part of the Treasury’s £6.2bn cuts to public spending.

Of the 644 leases that fall under the rules, 450 are in buildings that are used for back-office functions.

Landlords are expected to claim up to £70m in dilapidation costs from the government. However, it says the measure will help it to achieve its long-term aim of cutting property from 13 sq m per person to 10 sq m.

There have already been property controls in place for central government, but only central London and south-east departments had to consult with the Office of Government Commerce before signing new leases.

The new group’s board will be chaired jointly by the chief secretary to the Treasury, David Laws, and Francis Maude, who is minister for the Cabinet Office and paymaster general.

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