Poor management of State property denied

Poor management of State property is costing taxpayers more than £10 million a year in lost revenues, inefficiencies and over-payments, according to a report by IMPACT, the trade union representing property valuers in the Office of Public Works.

However, the findings of the report, which IMPACT is now submitting to the Comptroller and Auditor General, have been strongly contested by Mr Sean Benton, the OPW commissioner in charge of State property. He said he totally rejected all of the allegations.

"It is disappointing that a report which is wildly inaccurate should be surfacing at this stage, particularly since the valuers directly involved in the property section have repeatedly confirmed to me that they are happy with the way things are going," he said.

IMPACT said the report, which was compiled last year by the property valuers, was being released now because neither the OPW nor Mr Martin Cullen, its Minister of State, had responded to its central allegations or suggestions for reform.

The union's national secretary, Mr Kevin O'Driscoll, said the OPW seemed to want to ignore the report even though it raised serious matters of public interest. After exhausting every available avenue to have it discussed, it had decided to go public.

The report claims "profound organisational flaws" in the OPW. These include a "consistent failure" to involve adequately in-house qualified staff in property management decisions other than to "certify deals negotiated by career civil servants".

It complained that there was an "over-dependence" on outside consultants for property management advice while the OPW's own property valuers were "remotely located" within its engineering division rather than in the property management section.

Estimates were also given of how "substantial overspends" on State projects had cost taxpayers hundreds of thousands of pounds. In one case, according to the report, a late intervention by OPW valuers saved taxpayers at least £500,000 over five years.

"Failure to manage property in a way that has regard to maximising financial returns to the State is probably the biggest waste of taxpayers' money", IMPACT said, adding that the cost of not doing so was probably greater than all other losses combined.

Other claims made by the union were that the State had only a "notional idea" of the value of its property portfolio - estimated at £1 billion - because real valuations were not done regularly.

"A £1 billion portfolio with a 5 per cent yield should create on paper an income of £50 million per annum. Proactive management should easily be capable of increasing income considerably; even a modest 20 per cent increase in income would amount to £10 million per annum."

Commenting on the report, Mr Benton said the OPW had invested more in staff training than any other Government Department "particularly on the property side". He also said the union had been asked to substantiate its allegations and failed to do so.

OPW sources view the IMPACT report as part of a "power play" to increase its own staff significantly at the expense of seeking outside professional advice on property purchases. "There is no basis for the figures," one said. "What's driving this is a union thing."