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UK Government bans new leases until 2015

Saturday 2 October 2010

The UK government will extend its ban on new government leases until 2015 to try to save more than £250m in rent and running costs.
The Cabinet Office’s Efficiency and Reform Group is expected to announce the National Property Controls freeze in the comprehensive spending review on 20 October.
The ban was introduced in May and was expected to be lifted on 31 March 2011.
The extension will put the brakes on the prospects of developers hoping to benefit from the last government’s intended relocation of up to 20,000 civil servants outside London.
Under the existing moratorium, central government departments are prevented from renewing leases and forced to take every lease break with only a few exceptions.
Departments must present a detailed businesses case for each new lease or lease extension and have it signed off by Cabinet Office secretary Francis Maude.
The current ban is expected to save the taxpayer £50m in this financial year. The Crown Prosecution Service has achieved the biggest single saving by terminating its £6m lease at Land Securities’ 50 Ludgate Hill building.
Larger savings are expected after the spending review, because departments have been asked to find budget savings of between 25% and 40%. As they begin to shrink staffnumbers, they will vacate property at a faster pace.
A government source said this would save the Exchequer at least £250m in rent and running costs over the next five years.
On 20 October, the government is also likely to reinstate the targets in Labour’s operational efficiency programme. This identified £5bn-a-year savings in public property running costs, including £1bn on the central government estate.
Arcadia boss Sir Philip Green is carrying out an independent review of how close these targets are to being met, and will report around the time of the spending review.
Last week, it emerged that the government planned to abolish up to 177 quangos to cut the public deficit.
The Efficiency and Reform Group will run the current moratorium, and the Government Property Unit will work on more radical plans to pool and jointly manage central government office space.
The Treasury is known to be encouraging departments to co-locate with local authorities and public bodies in England.
Revenue and Customs, for example, has vacated 130 tax offices in the past year, and has licensed space in 90 council buildings across the UK.

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