The Future of Property Services and Rationalisation in Local Government

Many public sector organisations are successfully rationalising their property estate in terms of surplus property and corporate HQ accommodation. However recent figures suggest that there are still around £380 billion of publicly held assets in the UK, of which more than two thirds are held by local authorities.  The next step in further rationalisation and re-designing the property portfolio of the public sector will be more demanding of the value from the public estate is to be realised.

A great example of the future opportunity is the One Public Estate (OPE) Programme. The programme will shortly be announcing a final round of funding to be awarded in Autumn 2016. Over 100 authorities have already signed up to the programme and been awarded funding, this final round gives those authorities that have not yet put forward a business case the opportunity to do so and attract some significant investment. Several unitary authorities have attracted funding of over £400k.

The progress report on year one of the OPE initiative recently published, shows revenue savings of £21m a year and capital receipts exceeding £80m, it also shows the creation of 5,500 jobs and 7,500 new homes. The emergent theme from many of the case studies is that the OPE initiative is much more than a property review, it is a wide ranging transformational programme. Property can only support change so far; to gain the full benefits of an OPE programme it needs to support, and be combined with, a wider organisational change programme and support service delivery.

With Councils facing increasing financial challenges, services are being re-designed to meet future needs within an affordability envelope. The strategic rationalisation opportunity is substantial but the public sector needs to create a revised property strategy to support the change in service delivery and the joining up of services across public sector boundaries as the OPE programme has shown.

Strategic Opportunity

There are three strategic levels of opportunity for the public sector:

  1. Support services in their re-design of service delivery and transformation over the next 5 years and beyond
  2. Move the organisation to a Corporate Landlord model whereby all related property matters are delivered through an integrated strategy
  3. In line with OPE, develop a cross sector property strategy beyond the organisation itself and engage with Wider partners such as the NHS, Emergency services, third sector and the private sector where appropriate.

The key benefits that can be derived from this approach include:

  • Further revenue savings, increased income and greater capital receipts
  • Consider full trading and commercialisation opportunities
  • Deliver more integrated and focused customer services
  • Create economic growth
  • Support service re-design within your organisation and your external partners.

To be successful, the One Public Estate programme rightfully identifies key success criteria:

  • Commitment from the leadership team
  • Identified and mapped deliverables
  • Effective internal and external stakeholder engagement
  • Robust project management and governance arrangements
  • Demonstrable value and ROI
  • Linked in with broader strategy.

Approaching Strategic Property Rationalisation & One Public Estate

Stakeholder Engagement: Securing buy in from senior council officers, councillors and partners is essential. Without effective stakeholder management the programme will struggle to gain traction and make any progress. Communicating the potentially significant benefits and returns for each partner in the programme will secure the initial buy in, the real challenge is maintaining this support and buy in throughout the programme. The first step is the creation of a corporate vision and overarching strategy, that all stakeholders can get behind and understand how it relates to them.

Partnerships: Combining Local Authorities assets with that of their partners’, such as all of those belonging to health, blue light services and central government creates a very significant portfolio. It is essential to have a methodology for identifying and prioritising opportunities, ensuring the greatest return on investment in terms of both time and resources. This needs to be done on an area and service need based approach. This will involve the creation of TAPs (Town Asset Plans) or LAPs (Locality Asset Plans) in the case of metropolitan authorities.

Town Asset Plans: TAPs/LAPs are a way to holistically review all assets in a town or locality and to ensure that no opportunities for shared working are missed. The TAPs/LAPs would include all of the authority’s buildings, those of police, fire, health and where appropriate, third sector and private/business owned assets and acts as the asset map for further discussions. From each asset plan a ‘hitlist’ is then created identifying the key opportunities, which are then discussed with partners.

Service Delivery Strategies: When discussions start, it’s important to consider the service delivery strategies, the way services are delivered has changed significantly in the past few years and shows no sign of slowing down. We don’t want to be putting solutions in place that are only valid for a few years, they need to be future proofed. This is often a point of failure and is the main reason it is essential that the detail of services along with future requirements are understood and can be catered for.  ,

Corporate Landlord: Establishing a corporate landlord approach brings together all related services under one banner and can generate substantial savings and provide a better service to staff and customers. Services are constantly changing and without a corporate landlord, the estate can become inefficient again in a short period. Corporate Landlord ensures continuous improvement and that councils and partners are always getting best value from their assets. Read more on Corporate Landlord here.

Service Transformation: Transforming your estate provides the opportunity to support wider service transformation, by using property as the enabler.  Co-location of relevant services creates synergies and opportunities for a more integrated approach to working. A strong operational understanding of services and knowledge of best practice needs allows opportunities to be identified that can then be fed into the estates strategy via the town and locality asset plans.

Key Opportunities

The current focus for many Councils of successful property rationalisation – providing a smaller, better quality council accommodation portfolio – creates immediate financial benefits. This includes selling off old, expensive buildings with high maintenance cost that are no longer fit for purpose and re-providing or refurbishing buildings to better meet the needs of the organisation.

However, the wider cross-sector and service re-design needs to be considered otherwise assets may be sold that could be used to create greater value if utilised differently.


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