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What now for public sector office buildings?

With the move to working from home, what will become of public sector office buildings? Amy Entwistle looks at the position in Scotland.

The sudden shift to working from home since early last year left many public sector office buildings empty – and it is looking increasingly unlikely that these once busy spaces will return to their former use where their functions can be carried out by staff from home either full time or some of the time.

With only 4% of public sector workers expecting to return to exclusively office based working in the future, and 37% seeing permanent home working as the way forward, there is set to be a significant shift in just how much space is required for the sector’s employees. Indeed, with the public sector’s trade union support, and an increased focus on employee well-being, we can expect that working from home will remain the default position as long as there is call for it.

But as the sector is under pressure to show best value for the public purse, vacant space – whether that’s owned, or leased on a long-term lease – must be put to best use. So as demand on workspace is likely to remain significantly lower than pre-pandemic levels, how should underused surplus office space be managed? And how should the public sector consider building for a post-pandemic future?

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There are a number of ways in which the public sector looks to manage any property that is no longer required. In the first instance, the owners or tenants of the space must consider ‘recycling’ it elsewhere within the public sector. Surplus buildings should be internally advertised on a central system, known in some parts of the sector as the ‘Trawl’, which allows other departments or agencies that require space to take on the property.

Alternatively, a public body must try to dispose of the surplus building in the private sector for market value. The exception to this market value requirement is when there are wider public benefits that will be considered as also offering best value. This can include a disposal to a community group.

There is a now a duty on most public sector bodies to list their surplus assets publicly. Under recent Scottish Community Empowerment legislation, following a review of the register of a Relevant Authority, a Community Body could identify a property and then submit an Asset Transfer Request to buy or lease unused buildings and re-purpose the property for community benefit. The Relevant Authority has to agree to the request unless they have reasonable grounds for refusal. Current community right to buy legislation affords much less extensive rights in England and Wales.

However, the very nature of many of the sector’s jobs means that some services simply cannot be replicated from home, so some physical workplace must remain. Obvious examples are within social services - working with the homeless will require office space and meeting potential foster parents via video call is simply not the same as conducting a face-to-face meeting. As a result, it is not as straightforward as simply disposing of empty offices, as varying demand for some physical space will remain even with the huge increase in remote working.

Is it time, therefore, for public sector bodies to rethink the space they occupy? As they do so, it is not just value for money that should be considered, but again the community value comes into play too. With society changing, the spaces we occupy for work and services need to change as well. We have already seen demand for space suddenly shift with the need for vaccination centres. And we can expect the growing desire for community hubs to continue as the public fills a void of human interaction while working from home. Public sector space could perhaps meet that demand for community focused spaces as we come together again.   

Another key driver is that these hubs and spaces should be local - there is an increased interest - both politically and within our working population - in the idea of the 20-minute neighbourhood. The ability to meet all needs - including work - within an area accessible on foot or by bike using local green space and reducing emissions caused by a commute. 

Could departments merge to free up floors that could be used to create a community hub? And could space be reconfigured to support the changing needs of a semi-remote workforce, with access to touch down working space with reliable WiFi and the other support found in a traditional office space? These are questions that we should ask for any new public sector ‘offices’ being fitted out now or in the future.

In today’s world, space must be fit to adapt and cater to an ever-evolving society. Futureproofing a building for wide-ranging possible uses is a challenging ask. But to ensure both relevance and purpose for public sector property, the trick will be to strike the balance between community value and value for money for its primary function. Done right, public sector buildings could play an invaluable role – one that supports the public’s social and practical needs to foster a healthy and functional society for the modern era.

Amy Entwistle is a partner and public sector expert on Morton Fraser’s Real Estate team.

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