Changing working practices 'could raise public sector productivity by £8bn'

7 Nov 11
The public sector could increase the productivity of its workforce by £8bn a year by using its buildings differently, according to a report being launched today by Communities Secretary Eric Pickles.

By Nick Mann | 7 November 2011

The public sector could increase the productivity of its workforce by £8bn a year by using its buildings differently, according to a report being launched today by Communities Secretary Eric Pickles.

Improving workplace conditions, introducing flexible working and reinvesting money saved by rationalising property portfolios could all help to increase productivity by between 5% and 15%, says the report, published by the Westminster Sustainable Business Forum. A 5% increase would equate to £8bn worth of staff time.

The report says introducing flexible working, for example, could lower space requirements and thereby reduce property costs and carbon emissions. It is also associated with reduced sickness absence, lower staff turnover and improved services.

In Leaner and greener II: puttingbuildings to work, the forum, which brings together MPs, government agencies and businesses, also calls on public sector organisations to form partnerships at a local level to pool their property portfolios.

This, the report explains, could lower operational costs and also save money through sharing front and back-office services.

And it says the government should create a single point of contact to ensure it fully participates, such as the Government Property Unit, which manages the government’s property portfolio.

Ahead of the report launch, Pickles said: ‘Taxpayers have the right to expect public servants to be ruthless in the pursuit of good value - and utterly unforgiving of bureaucracy.

‘The best councils are doing everything in their power to make taxpayers’ money go further.  Cutting out waste, sharing back offices and redesigning services. This report clearly shows how it is possible to deliver real savings and other benefits. The expertise is there, the experience is there. Time to get on and do it.’

The report is the result of an eight-month parliamentary inquiry held by the forum. It builds on a study it published in February, which concluded that public sector organisations could save £7bn by reducing unnecessary space and by working together on property-related procurement.

Matthew Hancock, the MP who chaired the forum’s latest inquiry, said: ‘This work shows the vast scale of the prize when councils and other public bodies like the police and fire services work together.

‘The very best are already doing this, but much more can be done. If the best was replicated across the country, not only can £7bn be saved from property costs, but this report shows how £8bn can be generated in better staff productivity and better services.

‘In this age of tight budgets, it would be a colossal waste not to make these savings, and take pressure off the hard-pressed taxpayer.’

Speaking at the launch of the report, Pickles praised that had made a ‘strong start’ on examining their use of property, such as Hull and Cambridgeshire. But he called on other councils to do more, starting with working out exactly what property they own.

He added: ‘This report drives home the message that properly managed properties can remove a huge burden. I don’t want it just to be read, I want to make this happen.

‘Let’s keep up the momentum, already councils are learning from each other. The expertise and understanding is here, it’s time to get on and time to do it.’

Meanwhile, Hancock told Public Finance that while the £8bn increase in productivity cited in the report was ‘achievable’, it would need strong leadership to make it happen.

‘All councils are looking at how they can save money but the success comes down to leadership from chief executives and leaders,’ he said.

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