Thu | Sep 21, 2017

Editorial: Gov’t should really spend less on rent

Published:Friday | December 18, 2015 | 12:00 AM

Given the Government's track record on this matter, few people would risk a flutter that something will really happen this time - beyond the report by the de facto information minister, Sandrea Falconer, on Wednesday on the weekly meeting of the Cabinet. Yet the administration would be acting quite sensibly if it followed through with its word.

According to Ms Falconer, government agencies are to be mandated to relocate from privately owned buildings to state-owned ones. The Simpson Miller administration is giving this directive because in 2012, the Government spent J$1.5 billion on rent, some of which it now hopes to save.

While this newspaper embraces the plan, for which it has aggressively campaigned for the better part of a decade, we have solid reasons to doubt that this policy declaration will translate into action. It's not the first time we have heard it.

More than five years ago, the then prime minister, Bruce Golding, told ministers not to move their departments to new premises under a similar property rationalisation plan and a policy to have government agencies move to downtown Kingston to help in the revitalisation of the old, gritty section of the Jamaican capital. Mr Golding's order at the time didn't seem to constrain Karl Samuda, the then commerce minister, and Olivia Grange, who had responsibility for youth and culture.

They moved some of their departments to spiffy, expensively rented properties uptown. But central government departments were not the only ones that felt that this was the best way to spend taxpayers' money. People are unlikely to have forgotten that the Planning Institute of Jamaica fled the space it rented from the Government's Urban Development Corporation (UDC) downtown for a multimillion-dollar bit of real estate it bought in New Kingston. Similarly, the Export-Import Bank scooted the old section of the capital for uptown premises. Though this would have been a change of an uptown address, happily, good sense prevailed, causing the PetroCaribe Fund to stay put at its rented property at the Development Bank of Jamaica building, rather than acting on its presumptive need for more space elsewhere.

These examples serve merely as metaphors for a deeper malaise that underpins two reasons why the Government's failure to act represents bad policy. The first is glaringly obvious. The first is the Government's rent bill, which, even if in 2012 dollars, we believe to be grossly understated. Given the fiscal constraints, the Government should robustly seek ways to be efficient in expenditure.

In this case, while it spent to let private real estate, the UDC and others had thousands of square feet of space empty in downtown buildings. One example is the perhaps 10,000 square feet of underutilised space at the Postal Corporation's Central Sorting Office downtown. So, too, the old Jamintel building, whose latest planned purpose is the headquarters of the Transport Authority, remains empty and increasingly derelict.

Fortuitously, the UDC's Oceana building, from which the Planning Institute of Jamaica scampered, was ultimately bought by private developers. We await either the UDC's planned move to the Machado Complex it acquired for its headquarters or the redevelopment of the 200,000-square-foot property it now occupies, which is part of the second point. Downtown Kingston is a great swathe of real estate, whose economic and social value the Government can help to unlock.