Councils have cut spending on property services and facilities management by almost 20% in the past three years, data obtained by Estates Gazette reveals.
Around two-thirds of the 178 councils that responded to a freedom of information request said they had cut spending on the management of property services and FM by an average of 18.4% between 1 April 2009 and 31 March 2012.
The figures, which exclude spending on housing and education, illustrate the effect of Whitehall cuts, which were implemented in the October 2010 spending review.
Gerry Hughes, GVA’s head of strategy and delivery, said local authorities had scrambled to deal with a reduction in central government funding, suggesting the savings achieved so far were just the beginning.
“Most authorities are still considering how to consolidate and find efficiencies, so the implications of that have largely not yet been felt,” he said.
“Once they complete that analysis and implement it, the amount of spending is likely to drop even further,” he added.
Comparing spending across councils is difficult owing to the range of approaches used in collating budget data; however, the responses revealed a variety of approaches to making savings.
Several large authorities, including Essex and Oxfordshire county councils, have moved to a “total FM” approach, whereby all property and facilities functions are carried out by a single private sector provider.
For Essex this has resulted in spending cuts of more than £12m across its property services and FM budget.
Bill Green, EC Harris’s head of public sector, said: “Councils have had to react radically and projects which alter how they deliver, be that by reorganising, re-specifying or re-procuring, are being used by many as a catalyst to drive change.”
Of the 61 authorities that reported a rise in spending, many cited reorganisation or rationalisation programmes for the rise in costs.
In Wokingham, spending rose from £21,356 to £53,913 owing to one-off fees associated with the disposal of assets.
James Grierson, DTZ’s senior director and public sector head, said efficiency drives were likely to lead to a surge in work for private sector companies.
“There is scope for huge increases in efficiency through further outsourcing, shared services and initiatives such as total facilities management,” he said.
The findings come as Cabinet Office minister Francis Maude revealed that spending on central government property had been reduced by £200m in 2011-12.
Who are the big savers?
Cornwall county council has reduced its spending on all property, including housing and education, from £12.2m to £7.1m as it moves towards a commissioning model.
East Riding of Yorkshire cut spending on property services and hard FM by more than £5m to £9.5m in the period.
Kent county council cut almost £3.5m, 25%, as part of a review of its options ahead of an overhaul of estates management.
Haringey, Peterborough and Stockton have also made cuts of well over 20%.
jack.sidders@estatesgazette.com
