Blog by Bill Green, Head of Local Government & Communities, EC Harris
Better management of public sector property and built assets has rightly come under the spotlight during the local government cutbacks. Estimates vary on what the local authority estate could be worth, with recent reports putting a value on it of circa £250 billion. Whether or not agreement can be reached on the exact figure, this is a very big number, and clearly a significant area of opportunity.
A recent report by the Westminster Sustainable Business Forum suggested that local government could reduce the space that it occupies by 20-30%, and the running costs by up to £7 billion. This level of saving is not going to be achieved by trimming running costs and selling off a few old office blocks alone. Instead, local authorities need to be bold and in some cases ‘spend to save’. And here comes the rub… spending money on ‘new council offices’ or even technology to enhance efficiency is prone to grab the headlines for all the wrong reasons…
However, the fact remains that many local authorities operate from a dispersed property portfolio which does not make the best use of their estate, and does not necessarily meet all their operational needs. A more effective use of these built assets could generate significant efficiency savings whilst unlocking wider benefits for local communities, by catalysing regeneration and growth.
The local elections in May gave the Conservatives a firm hold on local government in many parts of the country. This could be used to their advantage if councils are to push through cuts at the local level to deliver against the national government agenda. But with national policies coming under ever greater scrutiny, decisive action is needed in the early part of councils’ electoral terms if local authority property savings are to be fully realised.
What is clear is that the time to act is now, before the political and social will to make difficult decisions wanes. By the next term of local elections we may see a swing back to a large number of councils having an alternative controlling party, which, coupled with hopefully a more buoyant economy, will make transformational decisions about council property use less common.
Being efficient in the use of property assets should not be a political issue, but in reality there is a shrinking window of opportunity to achieve savings. Local authorities that make bold decisions now are likely to be in a stronger position when that time comes.