Public spending cuts will create opportunities for contractors to refit and renovate state-owned buildings, according to the Government’s property tsar.
John McCready told delegates at the property industry’s Movers and Shakers breakfast club last week that public sector clients would have to reduce their estates and use what was left better.
He said: “This is not a binary decision between holding onto buildings and selling them. There is another route – and a key route to GDP growth – which is about the better utilisation of built environment assets. There is a lot the private sector can do to help.”
Mr McCready said options available to clients included selling off public buildings for conversion into commercial and residential property.
However, he said that large scale relocation of public sector staff from London to new offices in the regions was unlikely due to the cost involved.
Land Securities chief executive Francis Salway told attendees that the drive to make buildings more efficient would make clients more willing to invest in refurbishment. He said: “Efficiency will come through great density of occupation. A ministerial building we worked on recently saw the desired density increasing throughout the project.”
Mr McCready, a senior partner at Ernst & Young, was appointed the head of the property unit within the Government’s Shareholder Executive at the end of last year. He is leading a review of the Government’s real estate assets, including offices, hospitals, Ministry of Defence estate, and council buildings.
Speaking at the same event, Jon Rouse, chief executive of Croydon Council, condemned the cancellation of the Building Schools for the Future programme as the coalition government’s first big mistake.
“I have been supportive on the big decisions the coalition government has taken so far in terms of financial necessity but BSF is the first one that’s made me pause.”
Mr Rouse said Croydon council was committed to protecting its capital spending programme, despite fears of widespread cuts in local government investment.
“For me, it can act as a bridge that could help alleviate any risk of public sector cuts pushing the economy into a double dip recession. Capital expenditure of infrastructure and site assembly is one of the most enabling things a council can do for the economy.”
He also called on councils and other public sector bodies to work with the property and construction industry to develop under-used public buildings.