Matthew Hancock MP: slash costs and carbon with better property management

| 2nd February 2011
Launching a major new report, the chair of the Westminster Sustainable Business Forum argues that local government can save £7 billion a year in running costs, cut carbon and improve services by better managing its property assets

Over the next four years, local government will bear tight budgets while facing the spiralling cost of carbon and the imperative to reduce carbon emissions by 20 per cent in less than a decade. Never has local government needed to act sustainably more than now.
In 2009, as a nation, we committed ourselves to a legally-binding EU target to cut carbon emissions by 20 per cent by 2020.  But while the Green Deal looks set to secure the energy efficiency of our homes, we now need local government to do its part too. Given the sprawling nature of its empire, and the as yet unquantified emissions from its propertym the vast and disparate local government estate is the obvious target for slashing emissions. 
Moreover, the environmental imperative is underpinned by the recent recession, and the dramatic cuts required to local government spending. Savings need to be made quickly, and again, local government property, valued at an incredible £250 billion, seems a likely top target.  Managing that property represents one fifth of local governments’ annual expenditure - downsizing such large outgoings could save significant sums.

Changing priorities

Tight budgets for both cash and carbon mean that sustainable property management should be prioritised by councils counting the pennies.
This is only more true in light of the cost of carbon, which is high and increasing. To produce a tonne of carbon emissions costs somewhere in the range £150 to £200. The Carbon Reduction Commitment will build on this cost, charging an extra £12 per tonne emitted. Although small change in light of the initial outlay, the average cost to participant organisations will be £200,000 a year from 2012. 

Meanwhile, continuously updated building regulations are demanding ever greater environmental efficiency - by 2018, all new public sector buildings are destined to be zero carbon. This is currently an incredibly ambitious target for much of local government.
So for local authorities, carbon will soon be a luxury; one they can ill afford with smaller budgets. Surely, now is the time for sustainability to be taken seriously. But is there a problem?

We’re asking local government, in facing substantial cuts, to spend less, yet to meet higher and higher environmental standards, all the while maintaining the quality of service delivery, if not improving it. Are we asking the impossible?

Not at all. As Chair of an inquiry investigating how the public sector could improve the sustainability of its estate management, I have seen that local government can in fact do more – much more – with less.
Leaner and greener

The findings of the report - Leaner and Greener: Delivering Effective Estate Management - produced by the Westminster Sustainable Business Forum, are clear. If local government follows the recommendations of the inquiry’s report, it can not only save £7 billion a year in running costs, but it can also improve environmental efficiency and improve services.
Through streamlining office space use, sharing with other service providers and local authorities, local government can reduce space requirements by up to 30 per cent, thereby diminishing carbon emissions. Operational cost savings of £7bn a year would follow, and moreover, for the space that remains in use, local government can save a further £190 per m2 per year by following a suite of sustainability measures.
Indeed, through following such estate management practices, councils throughout the UK are already experiencing the benefits. For example, Southwark Council, in consolidating and greening its office buildings, has reduced running costs by £3 million a year and cut carbon emissions by 1,781 tonnes a year. With plans to reduce CO2 emissions by 44 per cent by 2016, the Council is now planning to continue this work, driven forward by the rewards realised so far; rewards which local authorities across the UK cannot afford to ignore in these stringent times.
Importantly, service delivery can also be improved significantly by these methods. Kent County Council has brought together sixty service providers in creating a one-stop-shop of services for residents. Through working in partnership, sharing facilities, and operating sustainably, Kent CC will deliver services more effectively. Other councils, such as St Edmundsbury and Suffolk report a whole host of additional 'soft' benefits, ranging from increased staff productivity to lower sickness and turnover rates. Sustainable offices make work a nicer place to be. This is delivering more with less.
We are in a time of environmental and economic flux, which while often challenging, poses the opportunity for positive change. I urge local government to embrace this opportunity, and to start using public property in a leaner, greener way.

Matthew Hancock is Conservative MP for West Suffolk and Chair of the Westminster Sustainable Business Forum

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