Scottish Public Finance Manual

Statement of need

This normally includes a brief background explanation of why the property is needed described in context of the existing accommodation strategy / policy then enlarges upon the proposal and provides guidance on the following matters.

Size of accommodation:

Factors influencing space requirements including the number of staff to be housed, their operational delivery needs in terms of workstyle, types of space required such as hotdesking and collaborative spaces, security requirement, storage requirements, special features such as libraries, conference rooms, and the characteristics of the preferred building such as floor space, ceiling height, etc. should be stated. Organisations must fully justify the amount of space required in relation to functions and staffing and with regard to their future workplace strategy/adoption of hybrid working/streamlining services. The SG's Property and Construction Division can advise on space and buildings standards.

Location:

Usually this includes central locations, peripheral urban locations, and locations outside the main conurbations. The option appraisal must cover a variety of locations and it is not appropriate to assume that the current location is the best solution. In some cases location may be restricted due to the nature of the business of the business area. It is prudent to alert Ministers to location issues before final decisions are taken so that they have an opportunity to make whatever input they wish to drawing up location criteria. A general area of search should be indicated and whether the specific location is of primary or secondary importance.

The Scottish Government has a policy of supporting Scotland’s town centres. Where possible, town centre properties must be considered and reasons clearly stated where they are not taken forward.

Specification:

The quality of fittings, decor, ICT requirements, services including heating, ventilation, raised floors, suspended ceilings, double glazing, air conditioning and lifts should be defined. Specific requirements such as disabled access and car parking should also be stated.  Due consideration to the balance of best value and how to meet the organisations property needs must be given in developing Heads of Terms with Landlords to get the optimal balance of length of lease, flexibility, carbon footprint and meeting policy outcomes such as increased co-location and collaboration. This might include where signing longer leases, if landlords are prepared to refurbish an existing building and improve the EPC rating, meets other policy objectives.  Advice must be taken from Property and Construction Division in advance.

Period of occupation:

The organisation should state a proposed date of entry and the length of time it anticipates that it will require the property. This may influence the decision on whether purchasing or leasing is appropriate and it may influence the quality of fit-out. If there is doubt about the length of commitment then lease breaks should be considered to reduce long term responsibilities for property which may become surplus. If the lease is for a period in excess of 5 years then consideration should be given to including break options. If a property is to be purchased, the possibility of transfer within the public sector in the longer term, or ease of resale will be important features to consider.

Changes to requirement:

During the acquisition process the amount of space required may change and any change should be notified immediately to all advisers to ensure that inappropriate property is not added to the estate. Negotiations by advisers should be on a provisional only basis so that even at a very late stage in negotiations it should be possible to withdraw or alter requirements although penalties may be incurred. Legal advice should be sought immediately. If it is anticipated that there will be changes in space requirements throughout the length of the occupation then this should be specified in an attempt to try and build in flexibility.

Definition of parameters:

Once the ideal specification is identified, then acceptable deviations from this should be clearly defined as it is rare to find an exact matching property unless a building is purpose-built. Accordingly a range of size of accommodation, car parking requirements etc. should be given.

Cost:

In order to ensure that only realistic options are identified the commissioning organisation should indicate the total resources available in advance of the property search. Resource costs could include the rent, rates, service charge, capital charge and depreciation and awareness of accounting treatment. The SG's Property and Construction Division can advise on what costs must be included.

Page Reviewed: October 2025