State could save $20m by canning oversized offices: Auditor

The Auditor General estimates savings of around $20 million a year could be made if WA public sector agencies were to comply with the Government's policy on the provision of office accommodation for public servants.

A report from Acting Auditor General Colin Murphy tabled in Parliament today has found that most Government office space does not meet the mandatory policy standard of 15 sqm per person, with average space per person currently 21 sqm - some 40 per cent over the standard.

Meeting that space efficiency standard of 15 sqm would result in a reduction of office space holdings of approximately 80,000 sqm (a floor area that corresponds to almost four buildings the size of Dumas House) and when achieved generate possible savings of around $20 million per year.

Mr Murphy also found that whilst existing office accommodation policies provided a sound base for achieving efficiencies, the absence of regular monitoring of performance and policy compliance has hampered the realisation of any cost efficiencies.

Currently Government occupies over 600,000 sqm of office space at a cost of over $140 million annually - for agencies it is often the second largest single expense after staff costs.

These costs are likely to increase substantially over the course of the next 18 months, primarily due to a tightening of the market for office space.

Leases for approximately 80,000 sqm of Government office space are due to expire in 2007, when the market for office accommodation is likely to be at its tightest for 15 years, thus placing significant upward pressure on the cost of Government office space, warns Mr Murphy.

Compounding this situation is the fact that many Government-owned office buildings are ageing and will require capital investment to provide high quality and efficient workplaces in the future.

To address these emerging issues Mr Murphy recommends that the strategic planning process for Government office space at the Department of Housing and Works be enhanced.

DHW, says Mr Murphy, should gather and analyse reliable and comprehensive information on accommodation cost efficiency and, at regular intervals, assess the impact of office accommodation policy to identify and target opportunities for efficiency improvements.

Further, DHW, supported by agencies, should seek to ensure that Government office space more consistently achieves the mandatory occupancy density ratio of 15 sqm per person as this would achieve efficiencies and offset rising rent costs.

Mr Murphy also recommends that DHW should better communicate the potential effectiveness as well as the efficiency benefits of moving to open plan layouts and provide advice on key strategies to achieve this policy objective.

He, however, does sound a word of caution.

"A narrow focus on economic efficiency in this area would be short sighted," he states.

"Government should place equal importance on effectiveness, and look to achieve the better staff morale, retention, productivity and communication that can flow from good workplaces.

"This means well-designed office space, not just open plan space, but space which supports and shapes changes in how people and organisations work together to deliver high quality services."