BCA to Propose Flexible Voucher Scheme

"The business center/serviced office industry is a critical resource for the UK in providing flexible space," Jonathan Price said.

Former Business Centre Association (BCA) Chairman and current Managing Director of Evans Easyspace Tom Stokes recently outlined a scheme in Property Week that the UK-based BCA will be presenting to the government. "The development of managed Workspace centres should be the responsibility of the private sector," Stokes writes.  

The flexible voucher scheme comes from the BCA's belief that despite local authorities' claims, it is actually because of local authority centers that there is market failure. Throughout Europe, it is widely recognized that the public sectors offers office space to start-up companies and new businesses at rates far below market value. 

"The problem worsens as several of such companies stay for much longer periods of time than these publicly financed facilities were designed for," Stokes writes. "Therefore, these buildings do not fulfil the task for which they were originally intended: to support a flow of new businesses."

The plan features three benefits: it provides a solution to the rising number of small and medium-sized enterprises (SMEs) that do not have flexible workspace in which to grow; it removes from the government the financial burden of developing flexible workspace; and it helps local authorities to bring up to standard around 300 local authority buildings that offer managed workspace.

This critical voucher scheme proposes that in lieu of the public sector managing and developing business centers to meet demand, BCA members would provide office space for start-up and growing companies. SMEs would be entitled to receive BCA-accredited office or workspace accommodation for an initial one-year period at no cost and then at a reduced rate for two more years.

The scheme further proposes that the vouchers would be funded through profit-share management agreements between local authorities and private sector operators, or from the sale of local authority-run business centers.

"It is very important that this campaign by the BCA receives the support it deserves. The business center/serviced office industry is a critical resource for the UK in providing flexible space to start-ups and small and medium sized enterprises as well as non-core space for larger organizations," Officing Today's Finance Editor, Jonathan Price, commented. "It is neither necessary nor appropriate for a local authority to distort the market by providing space itself. It should instead encourage an existing company, preferably a BCA member, to open up a center where there is demand for flexible space. The market failure justification for direct action no longer holds true."