Senate to implement cost savings of €40 million in central government premises costs

Senate Group, which is responsible for state-owned properties, will reduce the premises costs of government agencies and institutions by around €40 million. The aim is to reduce facility costs and around half of the savings will be achieved through improving the efficiency of Senate’s operations and the other half through facility modification projects carried out together with agencies and institutions.

Central government decisions on administrative productivity measures will reduce the operating expenditure appropriations of government agencies and institutions by approximately €400 million, mainly during 2025 and 2026. To support the achievement of these goals, Senate Group has improved its own productivity and, together with agencies and institutions, is preparing savings of €40 million in facility costs, which will be implemented during 2025–2026.

Central government’s gross rent model means that the leasing system covers the costs of properties and facilities. Senate launched an extensive energy saving programme in state-owned properties in autumn 2022 and a procurement development programme in summer 2023. The savings achieved will now contribute to reducing central government rents by a total of €20 million from the beginning of 2025. The implementation and allocation of rent reductions will be prepared under the guidance of the Ministry of Finance.

In addition, the ambition is to carry out facility modification projects together with government agencies and institutions, which will achieve permanent savings totalling around €20 million in facility costs. The most important way is for actors using similar office premises to move to shared central government working environments, which are being implemented across Finland. The changes will allow for high-quality, modern facilities with more efficient use of space, while at the same time reducing unnecessary energy use and emissions. Most of the savings will be achieved in 2025 and some by the end of 2026.

Since 2015, one of the key objectives of Senate, which operates under the guidance of the Ministry of Finance, has been to achieve savings in facility costs in cooperation with government customers. Senate has exceeded its targets, and facility modification projects have cumulatively resulted in savings approaching €800 million in the facility costs of agencies and institutions. In practice, most of the savings have been achieved through changes to make more efficient use of space, in line with the central government’s premises strategy, by moving from large offices to modern, activity-based environments. The savings enabled a development where almost €3 billion invested in government premises and prevented facility costs from rising for eight years from 2015 to 2022. From 2023 onwards, facility costs have been rising due to record inflation and exceptional investments in preparedness and security.

Record construction investments underway – tight cost control through careful management

Central government investment in construction is currently double the level of previous years and the record rate of construction will continue in the coming years, with significant investment in facilities for the Finnish Defence Forces, the Finnish Border Guard and the Police, among others.

In the gross rent model, investment costs affect the future rent level of the property. In order to curb government premises costs, Senate Group has developed a project management model which, together with customer agencies, pursues cost-effective and appropriate project implementation, further enhancing cost control and thus containing future increases in premises costs.

Around 10% of public premises are state-owned

State premises account for around 10% of public premises.

The state’s property portfolio totals 5 million square metres. The public sector portfolio totals around 70 million square metres: municipalities have around 55 million square metres and wellbeing services counties around 11 million square metres.

Central government premises costs in 2023 totalled around €874 million and accounted for around 7% of government operating expenses in 2023.