Costly pursuit of office space – use and procurement of office premises in central government
(RiR 2025:17)
Summary
The Swedish National Audit Office has examined whether the supply of office premises in the central government is efficient. In its management, the Government affords agencies great freedom to determine their own needs for and procurement of office space. The Swedish National Audit Office’s overall conclusion is that both use and procurement could be more efficient.
In its management, the Government does not provide agencies with sufficient incentives to streamline office use. Government agencies’ office use is governed more by the limitations of their own budgets than by their operational needs. This leads to sluggish adjustment as needs for premises decline. Besides, procuring office premises is not organised effectively and government agencies have poor cost awareness in terms of the working hours spent on procurements.
The audit estimates that total central government office costs amount to SEK 10–15 billion annually. If government agencies used smaller office spaces in less central locations, costs could be reduced by around 25%. Lower costs can be achieved mainly through more efficient use of office space.
Remote working opportunities need to be harnessed
Since the COVID-19 pandemic, many central government employees work remotely. This has reduced the need for office space, while at the same time creating new needs for different types of workspaces. It has been difficult for government agencies to find suitable office solutions, and currently many agencies have significantly more workspaces than justified by their occupancy rates. The Swedish National Audit Office considers that there is scope to both develop more appropriate office solutions and reduce office costs at government agencies.
Government agencies currently have considerable flexibility to procure office premises that are sized and designed to match occupancy rates and remote work. Nonetheless, the potential for improving efficiency has not been harnessed and the Swedish National Audit Office therefore concludes that clearer governance is needed.
Implement a strategy for office use by government agencies
In its management, the Government aims to ensure that agencies contribute to the efficient use of office space through their actions on the office premises market. However, the audit shows that government agencies base their choices more on their own financial framework than their operational needs. The sum of the decisions taken by government agencies has therefore not led to efficient use of office space in the central government. Many government agencies use significantly more office space per employee than comparable operations. Therefore, the Swedish National Audit Office considers that a strategy with clear guidelines for government agencies’ office use is needed.
Under current governance, agencies that streamline their office use may freely utilise the funds they save. If all government agencies fully improved efficiency in their office use, significant resources would be freed up without being subject to policy prioritisation. This could result in failure to manage resources efficiently for the central government as a whole. The Government should therefore consider supplementing current governance with active decisions.
Improved coordination has the potential to reduce costs
Many government agencies sign leases for larger premises than they need for their operations. One explanation for this is that government agencies consider that it is their responsibility to allow for uncertainty about the scope of their future activities. Another explanation is uncertainty about their premises needs for their own operations – for example in the event of altered work approaches. It is the assessment of the Swedish National Audit Office that joint planning and management of uncertainty could improve efficiency in office use and reduce central government costs.
Furthermore, government agencies currently make decisions on office premises individually, which pushes up procurement costs. The audit shows that there are clear economies of scale to be achieved in office procurement processes. The assessment is that costs are very high for small government agencies. At the same time, large government agencies possess knowledge and experience that could be put to better use in streamlining office procurement processes in the central government. The Swedish National Audit Office therefore considers that there may be scope to reduce costs through coordinated procurement.
Recommendations
The Swedish National Audit Office makes the following recommendations to the Government.
- Implement a strategy for office use in the central government that clarifies guidelines for office space and location.
- Consider supplementing current budgetary control with active decisions to ensure compliance with the strategy and enable conscious policy prioritisation.
- Consider coordinated procurement of office space for government agencies in the same locality.