Examination of Witnesses (Questions 80-99)
DEPARTMENT FOR
CHILDREN, SCHOOLS
AND FAMILIES,
OFFICE OF
GOVERNMENT COMMERCE
& HM TREASURY
14 JANUARY 2008
Q80 Mr Mitchell: Why do you not publish
the kind of information that is in these fascinating tables, 15,
16, 17, 18? Great stuff. Why do you not publish it regularly,
collate it and publish it?
Mr Smith: Well that is precisely
what we are going to be doing as part of the benchmarking service.
Mr Burt: We have actually published.
Q81 Mr Mitchell: May I just ask the
National Audit Office? When you say you have a benchmark of private
sector costs, what is the benchmark? Is it costs all over London?
Is it people per square metre or whatever all over London? Is
it the City, is it Victoria, where is it?
Sir John Bourn: The benchmark
relates to where the government building is.
Q82 Mr Mitchell: So the area it is
in?
Sir John Bourn: Yes. It is a real
benchmark. It shows in that area what the private sector is paying,
in that area what the public sector is paying.
Q83 Mr Mitchell: If the costs are
higher for some offices than for others, it is largely a question
of where they are situated.
Sir John Bourn: Yes and all the
benchmarking brings that out.
Q84 Mr Mitchell: Does your benchmarking
include per capita usage?
Mr Davis: Yes. It provides benchmarks
against a range of different building performance measures, costs,
the way that space is utilised on a building-by-building basis
given the nature of the individual building.
Q85 Mr Mitchell: Okay. It just strikes
me, going in offices down Victoria Street, places where my kids
have worked, that they are all rammed in like battery hens and
this is the private sector which uses space much more aggressively
than government offices seem to do. Would that be the case?
Mr Davis: It is certainly the
case that space efficiency in the private sector is higher, so
occupation densities in the private sector will be lower than
in the public sector but there is a lot of evidence that you can
achieve effective space with what looks on paper to be relatively
low. Twelve square metres per person is quite reasonable.
Q86 Mr Mitchell: There is no measure
of desirability, salubriousness. The Chairman praised the education
department and when I go into the education department it is a
kind of paradise, it is like an American hotel. It has this huge
atrium, it has water, it probably has fish in there and when I
take delegations of underpaid teachers down from Grimsby, they
look around and say: "My God, look at the conditions we have
to work in compared with the conditions in there". There
is no measure of the relative desirability of buildings.
Mr Smith: I suppose no, the answer
is that there is not.
Q87 Mr Mitchell: It is more paradise
than Portcullis House.
Mr Smith: I have been in that
building and it is a very pleasant building and I know quite a
few people that work in it and they think it is a very pleasant
building. Having said that, it is at the cutting edge in terms
of private sector density and use of space. If you can get both,
well good luck to you because you have got employees that actually
want to work in that building even though they probably have half
the space they had before.
Q88 Mr Mitchell: Is it at the front
edge of private sector costs?
Mr Smith: I have to say I do not
have the specific detail on that building, but this is about density,
this is not about the cost of rental. Government actually buys
and rents its property, where it can, at a lower cost than the
private sector. If you have a look against just about every region
in the UK, our rental costs are below the private sector. You
will not find these figures in this Report but I can tell you,
I have researched it. It is not rental costs; it is use of buildings
which is the key issue.
Q89 Mr Mitchell: Let us move on.
Keith Hill developed an interesting point about the contrast between
the Foreign Office and Treasury, both in adjacent buildings, both
with a kind of mentality as though they are All Souls' College
in exile down Whitehall. There is a nice contrast between the
space per person, which in the Foreign Office is quite lavish,
as in the Treasury, and the accommodation cost per person, which
is much lower in the Foreign Office than in the Treasury. How
much has that difference in costs got to do with the Mapeley STEPS
contract?
Mr Smith: I do not have the information.
One observation I would make, and it is shown in the NAO Report,
is that the unitary charge is included.
Q90 Mr Mitchell: Is Mapeley STEPS
making it dearer for the Treasury than it is for the FCO which
has not got that contract?
Mr Burt: Treasury have not outsourced
their building through the Mapeley STEPS contract, that is HMRC.
Q91 Mr Mitchell: Who did up the Treasury
building then? Was that not another private finance initiative?
Ms Tulett: The Treasury building
was a PFI deal.
Q92 Mr Mitchell: Was that responsible
for the increasing costs?
Ms Tulett: No. It is to an extent,
because the full costs of the PFI and the unitary payment including
the capital element are shown in the Treasury figures whereas
if I read the footnotes—and the auditors will talk to this
better than I—the FCO figures are actually modified because
they only include one building out of the five and they do not
include the full costs. It might be apples and pears in the stats
in the Report.
Q93 Mr Mitchell: Just let me make
a point about the Treasury. I go past it most days and I look
down into those gloomy basements to see if human life is still
extant down there and I have not actually seen much of it. There
are empty desks, there are tables, there is occasionally an overcoat
hanging from a hat stand or something, but people no. Is there
still a waste of space in the Treasury?
Ms Tulett: The Treasury's costs
per square metre are consistent with the average for London but
the Treasury's usage of the building is lower than average. Yes,
there is still spare capacity that we can exploit within the Horse
Guards building.
Q94 Mr Mitchell: Why can departments
not compete to bring in partners? The Report speaks about families
coming together. Why can families related to each other not be
crammed into the same buildings? You have done that with one.
Ms Tulett: We have done that with
OGC and that is quite fresh. We did that towards the end of last
calendar year. It is now our intention to look at the spare space
that we have elsewhere. We are currently in varying degrees of
negotiation with other government departments to see whether they
could take up the spare space.
Q95 Mr Mitchell: On the question
of moving people from London, when I came into Parliament 13 years
ago there was a report which talked of moving 30,000 civil servants
out of London. We never seem to get them moved out of London and
yet there are lots of desirable properties and offices in Grimsby.
How far do you actively seek out properties? If you can run a
major service from a call centre in Bangalore you can run a government
department from Grimsby, can you not? How far do you actually
seek out office accommodation in the north?
Mr Smith: I do not really want
to evade your question, but, to be honest, relocation is a matter
of policy. What we are doing as part of OGC is that we do have
the right with property controls in London and the south-east
where a business case has to be made, in terms of a lease break,
for a role staying in London. I am not sure I have been to Grimsby
too many times, but I am a Geordie and I have certainly been in
the north-east.
Q96 Mr Mitchell: The north-east is
cheap but we are cheaper still.
Mr Smith: You are cheaper still,
yes.
Mr Burt: You have actually had
40 relocations going into Greater Grimsby, so it is not as though
you have been ignored totally.
Chairman: I think it would do the grandees
of the Foreign Office a great deal of good to be relocated to
Grimsby.
Q97 Mr Bacon: I would like to start
with a piece of clarification from Mr Davis of the NAO, if I may.
On page 23 figure 16 puts the Treasury as the most expensive and
in the bar chart it indicates that the Treasury is 12,000. In
the briefing we have, the figure is given as £12,041 per
person. I cannot find anywhere in the Report where that number
is used. Are there numbers somewhere in the Report that correspond
to those shapes in the bar chart or not?
Mr Davis: The raw data behind
the bar charts?
Q98 Mr Bacon: Yes. If not, could
we have the actual numbers?
Mr Davis: We can certainly provide
them.
Q99 Mr Bacon: Presumably it is also
the case that if you multiply that by the number of people, you
get to the total cost. In other words, accommodation cost per
person multiplied by the number of people gets you to the total
accommodation cost?
Mr Davis: It may not always be
quite as straightforward as that because we have had to use median
averages to get to these figures, so it may not always work.
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