State property costs

November 23rd, 2012 at 10:00 am by David Farrar

Jonathan Coleman announced:

State Services Minister Dr Jonathan Coleman says a new Public Service property strategy is likely to reduce the office space foot print in by the equivalent of three Reserve Bank buildings.

Dr Coleman says Cabinet has approved the start of a centralised negotiation for future public service office space in the capital with accommodation leases due to expire for five large government agencies.

The leases due to expire include the Ministries of Social Development, Health, Education and Business Innovation and Employment, and the Crown Law Office.

The Property Management Centre of Expertise based within the Ministry of Social Development has been delegated to lead the negotiation for the accommodation needs. …

A business case presented to Cabinet indicated a reduction of the office footprint in Wellington of 30 per cent will save $338 million over 20 years, which is a 20 per cent reduction in cost compared with the status quo baseline.

Sounds good to me. If that achieve that, there are benefits beyond the direct savings. The ever increasing size of the public sector in the 2000s saw office rental costs in Wellington CBD skyrocket. This imposed significant costs on private businesses. Having reduced demand from the public sector should see smaller increases in rental prices for commercial tenants.

8 Responses to “State property costs”

  1. mikenmild (23,672 comments) says:

    Instead of ‘centres of excellence’, perhaps we will just eventually go back to sensible organisations like Government Property Services and the Government Stores Board that provided sector-wide accommodation and bulk purchasing.

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  2. david (2,348 comments) says:

    Bob Jones said more than once that a Labour Government provided the best friend a commercial landlord could wish for. After this statement, re-negotiation of space and rents should be a breeze and it is likely that lower rents will become the rule rather than the exception in Wellington in particular.

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  3. scrubone (3,791 comments) says:

    Reminds me of the speach I heard one MP giving in the house in the 90’s. He dramaticlly acused the goverment of “wanting to reduce the size of the state sector”. The response was a round of enthaustic aplause from the National benches. 🙂

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  4. Mark (1,614 comments) says:

    This is the reincarnation of a failed concept that was dumped in the late eighties early 90’s The theory was fine but in practice the red tape,Beuracracy and potential for pinhead civil servant megalomania will see this wee empire fail to deliver on its promises as it did last time round.

    Where the danger lies is not in the large office procurement in Wellington but when some department wants space in Whangarei and invercargill the additional cost structures imposed by this process will become untenable.

    This is the beauty of corporate memory. As generations who have experienced the ruckus of the past move on the next generation of young geniuses come along with great ideas and make the same mistakes all over again.

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  5. Harriet (7,553 comments) says:

    This means that the government itself and it’s agents are making to a degree less of a public appearance, and that in a ‘free’ society can only be a good thing.Councils should do this too.

    Freedom in society is about the public visiting the government, not the government visiting us. The government does invade the publics privacy as public & private space is EXACTLY that – public and private – not government space. Even if rented it is still government space.

    Well done National! 😎

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  6. lastmanstanding (1,734 comments) says:

    Sir Robert J will NOT be pleased. As David said RJL sees the Socialist party as its best business friend.

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  7. Grendel (1,064 comments) says:

    this is a good thing. this govt is better (not great but better) than the last at cutting costs.

    a friend works in the finance and budget area for one of the larger ministries. they have had a reshuffle and had worked out they needed more desks. due to the size it had to go to the minister for approval, who came back saying simply “i am not going to ask cabinet for more money for desks for civil servants, find another way”.

    if it was a labour minister i could easiliy see them not only rubber stamping it, but throwing a few extra hundred K so they could have a karakea for the new desks and make sure they were top of the line.

    i did suggest that someone at the ministry spend some time on freecycle, they could be sorted within a day.

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  8. hmmokrightitis (1,919 comments) says:

    Bought an apartment in the heart of Wellington to live in many moons ago, around 1999. Used it as my base when I was o/seas a lot, just a place to crash when I was in town, and needed a bed for stray Welly girls I managed to collect 🙂

    Moved to Auckland about 12 months later, considered selling, decided to rent it out. DoL took it for a short term, 3 month rental. 9 years later they were still renting it when I sold it 🙂

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