So, at last we know what was in the spending review. Indeed, it turns out we’ve known for some time. Bar news of a new carbon tax buried deep in a Treasury document, there were no rabbits plucked out of hats. And as far as property was concerned, the sound of rabbits being stuffed back in was almost audible.
The lack of detail around the government moratorium on signing new leases will frustrate large swathes of the property industry. The absence of any firm announcement about disposals of government property will fuel the fires being stoked by cynics who believe that arguments at the heart of Westminster are causing unnecessary delay.
But trailing his announcements in the days leading up to his parliamentary set-piece wasn’t the only New Labour tactic used by Osborne. To justify his decisions, he also adopted the familiar tactic of name-checking independent, apolitical advisers.
Sir Philip Green was chief among them. And the chancellor pledged to take the Topshop-keeper’s recent report on government efficiency seriously, promising to use Whitehall’s “scale as effectively as possible in common areas of spending – such as procurement, property and major contracts”.
In an exclusive interview with Estates Gazette this week (p54), Green lays bare his frustration with government workings during his two months reviewing Whitehall efficiency. Data was poor he says, joined-up thinking conspicuous by its absence, and the government’s failure to use its covenant to better financial effect hugely costly – to the tune of more than £50m in just three examples he uncovered.
His central point is impossible to argue with. “Everyone keeps telling me government is different,” he tells EG.
“But if I want to rent a building, please tell me where are they different then? Why should it be different if I’m from the government or I’m from the private sector?”
He continues in incredulous, rhetorical fashion: “I don’t want the best price? What’s the difference? I don’t get it?”
If Osborne is serious about learning the lessons of the Green report – which in truth was less detailed than many that have gone before and drawn similar conclusions – he should read our interview with Green closely.
So should the property industry. Not just because property businesses should themselves be every bit as efficient as Green advocates, but because, if government does change, the property industry will have to change the way it deals with civil servants too.
Ask some in property about their dealings with the public sector and occasionally they will admit to having enjoyed “easy pickings”. As the examples in Green’s report demonstrate, some civil servants have shown a lack of sophistication in their dealings with the industry, particularly around leases. And that lack of sophistication – backed by huge budgets – has resulted in costly mistakes.
Some property professionals have undoubtedly been willing to turn a blind eye to the public interest. And, in a purist sense, they have been entitled to act in their own corporate interests. But that will have to change.
In light of past experience, Green’s report and the austere climate, a frostiness in future meetings will be inevitable.
• From January, GVA Grimley will just be GVA. It’s symbolic rather than earth-shattering news. For the firm, it signals a clean break with the past, and will, according to energetic chief executive Rob Bould, trigger a renewed focus on customer service. For the market, it could be as significant.
Like Bould and his colleagues, the firm’s backer, Lloyds Banking Group, clearly wants the firm to grow. Could a merger with another agent happen? Possibly. Will it make others in what remains a surprisingly fragmented industry think twice about their own direction? Don’t be surprised if the subject arises at a boardroom table near you soon.
damian.wild@estatesgazette.com
