Ministry of Justice leads Whitehall scaledown

If they had not already realised it, public sector property heads will soon be aware that their skills are at a premium for the foreseeable future. Many of the wide-ranging cost saving plans revealed in last Wednesday's budget affect public sector property holdings. The Ministry of Justice appears to be at the forefront and announced on budget day that it will relocate 1,000 posts out of central London by 2015. The relocations, of which half will be out of the south-east, will allow the ministry to slim down its London portfolio from 18 buildings to four and will save £41m a year by 2015. The department also said it will seek more opportunities to create regional hubs. This will be the first of many relocations. The budget incorporated proposals contained in the Smith review of civil service relocation, published by the Treasury on budget day . The review proposes the relocation of 15,000 civil servants out of central London by 2015 , with a longer term plan to move 28,000. The review also proposes the creation of a central London campus. This will be assisted by the creation of new "strategic property vehicles" which the chancellor announced. They will be launched by April 2011 in order to improve management of the government estate. These vehicles will help realise savings of £5bn a year in property running costs and enable asset disposals that could yield £20bn by 2020. Dermot Finch, chief executive of the Centre for Cities thinktank, has expressed caution about the push for "civil service clusters" in cities other than London. Finch says Smith's estimate that a campus for civil service jobs in Manchester could generate an extra 3,500 jobs is "way above" anything created by previous civil service moves and says cities should avoid potentially expensive lobbying for Whitehall jobs. Other departments have also announced plans to make major savings through better estate management. HM Revenue and Customs plans to save £236m by reducing its estate by 130 offices over the next two years, vacating property by exercising its rights under Private Finance Initiative contracts. Meanwhile the Department of Work and Pensions plans to save £40m by benchmarking its use of workspace in its least efficient buildings, improving performance and increasing the use of flexible working in cases where staff are non-public facing. The DWP is also planning a joint-venture with business partners to unlock greater commercial value from the property that it does retain.