Government Keeps Renting While 4,000 Of Its Properties Remain Vacant
Auditor General Charles Deguara has called on the government to strengthen its estate management function as state-owned entities continue to lease property from the private sector while thousands of government-owned properties lie vacant.
In a report presented to parliament, Deguara observed that the leasing of private property by governmental entities has been on the rise over the years.
At the end of 2022, governmental entities had leased at least 260 properties from the private sector, excluding properties where leasing costs were less than €1,000 annually.
While the Lands Authority has more than 4,000 unused properties.
The auditor said a range of issues were hindering the Lands Authority from ensuring more effective and efficient estate management.
“The authority has historically experienced an acute shortage of financial, human, and technological resources.
Additionally, most of the unutilised property requires extensive refurbishment at a considerable expense,” the Auditor Office said. Thus, “Such properties cannot be made available for use by government entities in a short timeframe.”
The Office observed that the government has not developed a comprehensive strategy and a detailed action plan for the refurbishment of existing vacant buildings.
As the entity responsible for the government’s estate, the Lands Authority told the Office that one of its strategic aims was to be able to actively market government-owned properties to increase take-up and to better the use of public assets.
In 2022, the leasing cost of the 260 government-leased private properties considered in a preliminary review by the Audit Office amounted to €22 million.
In 43% of these leases, governmental entities did not carry out formal or documented needs assessment before leasing private properties. Around 9% of the 260 leases ‘diverted’ from the Procurement of Property Regulations which came into force in April 2020.
Before this, the procurement and leasing of property was exempted from the regulations. Two-thirds of the 260 government-leased private properties were used as offices.
6 of which the entities spent over €1 million on upgrading costs.
These arrangements have an average lease of 13 years.
The Audit Office said the preliminary review uncovered various governance concerns, particularly relating to compliance with the regulatory framework, economy, and effectiveness, as well as accountability and transparency.
The Office claimed it intends to carry out a detailed analysis of several leasing arrangements involved.
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