A poor understanding of space

Too much unused space, not enough information and a disappointing record for delivering capital projects on time and to budget are the key criticisms levelled at the Foreign and Commonwealth Office's handling of its £1.6bn portfolio of property. The Commons' public accounts committee (PAC) published a report last week that said the FCO has a poor understanding of its estate, which is spread throughout 279 countries, accommodates 13,000 staff and on which the FCO spent £269m in 2008-09. According to the report, such is the paucity of information that surveyor Alan Croney, the FCO's new(ish) estates director, who was appointed in July 2009, doesn't have the details necessary to do his job. The report follows on the heels of a survey by the National Audit Office in February that made similar criticism of the FCO's lack of a clear strategy for its overseas property. About a third of the FCO respondents in the survey did not use the FCO's property database and most only update the system twice a year. The NAO also found 63 locations with spare space and found that the FCO exceeds the government's space-per-person aspiration by more than half in 71% of the overseas properties for which data was available. Echoing the call for co-location that is resounding around government departments at home, the MPs' report said one answer could be to let vacant space to other government departments. "When other UK government organisations overseas are paying for office space in the same city in which the FCO has empty office capacity, it is clear that the taxpayers' interests are not being served," said Edward Leigh, who chairs the PAC. But the FCO is caught in a dichotomy. When the FCO's highly secure spare space is priced at its full economic cost in accordance with Treasury rules, it is often cheaper for other departments to lease premises elsewhere. So among other recommendations, the committee says that the Treasury should develop a method of charging that more fairly reflects the actual cost to the FCO. The committee also wants other departments to justify themselves to the Treasury when they don't locate in available FCO space. A further solution would be to let spare space to other nations, as the FCO has done in Baghdad and Dar-es-Salaam, says the report. Meanwhile, rigorous risk assessment is one of the key considerations when planning future new projects according to the committee. Of 42 FCO construction projects completed since 2002, 29 were delivered late and 14 exceeded their budget by more than 10%, causing a cost overrun of £57m. Although 40% of this overspend was attributable to buildings in hotspots such as Baghdad, Basra and Harare, poor capital spending controls and the need in some cases to use UK contractors were also blamed, along with exchange rate fluctuations.