27 billion in rent for housing!

Ágúst Bjarni Garðarsson, Member of Parliament, discussed in the work of the parliament the significant cost to the state that goes into renting accommodation. Last year, the rental cost to the state was 27 billion. He believes it is clear that public money could be managed better here and that greater efficiency in the use of state accommodation could be achieved.

In this context, Ágúst Bjarni has submitted to the Althing a parliamentary resolution proposal regarding the establishment of clusters of public enterprises and institutions, aiming for the state to enhance cooperation among public enterprises and institutions while promoting efficiency, reducing redundancy, and increasing shared operations of IT systems, receptions, catering, accommodation, and so forth.

“I have heard it frequently mentioned that when the state has advertised for rental accommodation for various institutions, contracts have not always been awarded to the lowest bidders. This was the occasion for a query to the then Minister of Finance and Economic Affairs at the time, in which, among other things, a request was made for a summary of how often in recent years the state had entered into contracts with parties other than the lowest bidders, broken down by years, instances, and reasons for not contracting with the lowest bidder,” said Ágúst Bjarni.

In response, the Minister of Finance and Economic Affairs confirmed “that in ten cases it had not been contracted with the lowest bidder and the reasons included once proximity to partners and nine times the lowest bidder failed to meet the criteria for the property description. Fair enough, but these are rather weak justifications when we compare this to the handling of public funds.”

“The answer was therefore the occasion for my subsequent query on the same matter where I requested further clarification on what exactly the requirements were that the lowest bidders had failed to meet, along with the amount of the lowest bidder and the bid that was then accepted. My query was not answered, and in light of what I have reviewed, I believe there is ample reason to revive it and bring to the surface what causes the state to enter into rental agreements with parties who offered higher prices,” said Ágúst Bjarni in conclusion.

Ágúst Bjarni's speech in full at the Althing:

“Honourable President. The state paid 27 billion in rent for accommodation in 2023. These are substantial figures and I believe there is room to manage public funds better and achieve greater efficiency through sharing. I was reminded of the parliamentary resolution proposal that I submitted at the time, which specifically dealt with this, on how the ideology of cluster collaboration could be utilized to enhance cooperation among public enterprises and institutions while promoting efficiency, reducing redundancy, and increasing shared operations of IT systems, receptions, catering, accommodation, and so forth. I have heard it frequently mentioned that when the state has advertised for rental accommodation for various institutions, contracts have not always been awarded to the lowest bidders. This was the occasion for a query to the then Minister of Finance and Economic Affairs at the time, in which, among other things, a request was made for a summary of how often in recent years the state had entered into contracts with parties other than the lowest bidders, broken down by years, instances, and reasons for not contracting with the lowest bidder. The response confirmed that in ten cases it had not been contracted with the lowest bidder and the reasons included once proximity to partners and nine times the lowest bidder failed to meet the criteria for the property description. Fair enough, but these are rather weak justifications when we compare this to the handling of public funds.

The response was therefore the occasion for my subsequent query on the same matter where I requested further clarification on what exactly the requirements were that the lowest bidders had failed to meet, along with the amount of the lowest bidder and the bid that was then accepted. My query was not answered, and in light of what I have reviewed, I believe there is ample reason to revive it and bring to the surface what causes the state to enter into rental agreements with parties who offered higher prices.”