Government Policy on Office Accommodation

Current Government policy on office accommodation is outlined in Treasury Circular 04-09, Total Asset Management (TAM) - Reconfirmation, that was issued on 3 August 2004.

The circular outlined the role of the Government Asset Management Committee (GAMC) in asset and office accommodation planning and management. Specifically the GAMC's terms of reference include:

• The alignment of asset and office accommodation resources with Government's service delivery priorities.
• The appropriateness of agency asset management strategies.
• Strategic asset and accommodation issues involving more than one agency.
• Regional office accommodation strategies and plans (including Sydney CBD).
• Major investment strategies - acquisition, major refurbishments, lease pre-commitments, leasehold, and asset and property disposals.
• Benchmarks and performance standards for asset and property portfolios.

In relation to office accommodation planning and mangement, the circular states that agencies are required to:

• Reduce their average office space utilisation to the current Government target of 18m2 per employee. Recognising that this will not be achievable in all instances, new accommodation should be designed at 15m2 per employee provided an agency's functional requirements are not compromised.
• Determine their office space leasehold needs at least 12 months prior to lease expiry, and then consult wi the Department of Commerce before undertaking lease renewal or any other leasing activity in the marketplace.
• Consult with the Department of Commerce at the earliest opportunity where n accommodation (leased or owned) becomes vacant and available for disposal.
• Comply with the lease negotiation and management provisions of PM 2002-09.

On 24 February 2005 the GAMC adopted a revised average agency space use target of 17m2 per person.

PM 2002-09 announced a number of lease negotiation and lease management reforms that came into effect from 1 July 2002. In introducing these reforms Government has adopted a risk management approach and decided that agencies should use Government negotiators at a set fee, which is considered to be well below equivalent private sector fees, and in the markets where the Government is most exposed. This service is known as the Government Leasing Service. Where multiple leases exist in the same building in these markets, their management is to become part of the Crown Property Portfolio that is currently managed by the Department of Commerce on behalf of Treasury.

The markets covered by these reforms are the Sydney CBD and Fringe, Parramatta, Lower North Shore (North Sydney to Chatswood) and elsewhere where a single tenancy exceeds 1,000m2 and a multiple tenancy exceeds 4,000m2. More detailed information about the Crown Property Portfolio and the operation of the Government Leasing Service can be found at www.gamc.nsw.gov.au.

PM 2002-09 also increased the area for which a facility plan is required to obtain approval for accommodation changes from 500m2 to 1,000m2.

For all leases outside the scope of the leasing reforms approval must be obtained from the Department of Commerce prior to any approach to the market and again before a final commitment is agreed.

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