A supporter of the Crown Commercial Service EPS framework.
GVA is one of the leading providers of estates professional services to Central Government and the wider Public Sector. The firm is also a strategic partner on the Crown Commercial Service framework RM928 through which it has been appointment on multiple direct awards on a national basis. We’re: Ranked No 1 (by • fees) by the Estate Gazette within our peer group in advising Central Government departments backed by the Government Transparency Agenda; and
• Ranked No 1 for favourability and repeat business by Public Sector respondents to the Sharps Brand Acritas Survey.
GVA has 12 UK offices providing multidisciplinary advice to the public and private sectors and our Client’s include DIO, MoJ, DCLG, DfE, HM Land Registry and HMRC as well as Birmingham and Manchester City Councils and multiple London Boroughs amongst others.
At GVA our dedicated teams exploit options to enable property to contribute to business strategy. Savings here can have a direct impact on the bottom line and opportunities include:
1. Lease restructuring
Certain properties will be considered core to the business, even in a downturn. An early renewal should generate a rent free or capital contribution. Maximising your Public Sector covenant that suits your operational needs can generate a positive result.
2. Break options
These can be a very cost effective way of reducing cash burn. However, plan early for them because many breaks have onerous conditions, and landlords might fight hard to frustrate you exercising your break options. A looming break option has a depressing effect on a landlord’s investment value. If the premises are core, consider ‘selling’ the break to the landlord for a rent free period or cash contribution.
3. Lease expiry
Exiting on lease expiries is an extremely cost effective way of reducing cash burn, but, again, plan well in advance in order to reduce the operational impact on your business. Dilapidation claims should be strongly challenged.
4. Surplus or underused assets
An accurate portfolio assessment will also allow you to properly assess the merits of potential deals on surplus space; be that assignment, subletting or surrender. Co-locating together can have a positive effect on the overall cost saving that can be achieved. MOTOs can help provide flexibility and certainty for all parties.
5. Assets sales
It’s important to have a realistic expectation of price, and knowing the local markets is essential. It’s also worth considering a revised planning zoning/consent to enhance value depending on how ‘time critical’ the generation of a capital receipt might be. Always consider the long term impact of such activity against the short term benefits of cash injection.
6. Property cost audit
Many organisations do not have a clear overview of their property costs because payments come from different budgets but the core areas are:
Rates
Challenging the current assessment with a view to securing a rate refund and reduced future payments needs to be considered for every property, including checking transition relief calculations and other relief. Many occupiers employ GVA rating surveyors to negotiate reduced assessments and this is a great way of generating cash quickly at no net cost.
Forensic Rates Audit
Reviewing historic information and payments in a forensic manner can often yield discrepancies that can be discussed. GVA has saved over £500m.
Service charges
Thoroughly questioning budgets and reconciliations provided by landlords frequently yields cash savings. That should include revisiting historic service charges to check for errors which may lead to cash reimbursement.
Energy/utility use audits
Are your buildings and services running as efficiently as they should and are you paying the lowest price? Thinking, acting and ‘going green’ can and will save you money and minimise the impact of pending and future energy related taxation/charging.
Portfolio analysis and data management
Tactical decisions need to be informed by quality data and sound analysis of the relevant benefits when site by site tactics are being considered. Comprehensive property data is unfortunately often lacking. This forms the springboard for analysing the portfolio to identify savings.
Cost-in-use analysis
A relative comparison of each of your facilities will quickly highlight those that are most expensive on a price per head, price per unit of production or any other business metric relevant to your organisation. This will demonstrate where the greatest savings can be achieved.
Space utilisation audit
How efficiently you use your space – or remodel the business through any restructuring – will be key to freeing up more space for your own use (or that of the wider public sector) or for disposal. By clearly understanding your internal key drivers will either reduce your occupational running costs of generate a capital receipt for potential re-investment.
On the Crown Commercial Services framework RM928, GVA acts across all mandatory and non mandatory services without the need to sub contract. We are therefore able to provide a holistic and comprehensive service to existing and new clients particularly where GPU interaction is needed to reduce costs and further rationalise an estate to deliver efficiency savings and/or capital receipts.
For more information on how GVA can assist, please contact Nicholas Freeston (Nicholas.freeston@gva.co.uk or on 0121 609 8867) or Adam Williams (Adam.williams@gva.co.uk or on 0121 609 8809) within their Government and Public Sector Services Team.
Nicholas Freeston
Director – Central Government and Public Sector
GVA
Tel: 08449 02 03 04
