Looking at council properties to make savings

February 02, 2011 2:02 PM

An independent report out later this afternoon (from the Westminster Sustainable Business Forum) will detail how local government can save money and improve services by looking at how they manage their properties.   Of the £370 billion of property owned by government and costing £25 billion a year to run, £250 billion is owned by local government.  “Leaner and Greener: Delivering Effective Estate Management” has cross-party support and backing from the public and private sectors.  A serious examination of estate management at local government level is long overdue.  With all local councils looking at how they will make savings in the coming years it is crucial that they consider ways to improve the value of the buildings they own.  My colleague John O'Connell recently met officials at Birmingham council, where they have achieved savings with a project to vacate leased buildings occupied by back office departments.
The report shows that local government can and should occupy less space than it does now and that many buildings are being used inefficiently.   One problem is that the public sector is not subject to the same financial pressures as the private sector, in terms of being efficient in its estate management.  Until now many councils might not have considered selling off buildings as they haven’t needed the money.  However, with all the associated running and ongoing costs (even for unused buildings) each property owned by a council is now viewed by many as a strain on the public purse.  Continued ownership of each building must be justified.

It is clear that councils can and should save taxpayers’ money by selling off buildings that they do not need.   Many services could be merged into one building, not only saving money but also making it easier for residents to access those services.  There is no getting round the fact that merging services and adapting buildings to suit other purposes will need an initial outlay, however this small spend in order to save should not deter them from acting.  The problem is that some councils seem to think that consolidating their estate into one building is an excuse to splash the cash.  Newham was criticised earlier this year for its claim that spending £111m was justified as it would save money, but it turned out that many of the buildings it was supposed to replace were still in use.  Moving offices or services isn’t an excuse to buy flashy new furniture or the latest gadgets, it’s a cost saving exercise and should be done as cheaply as possible.  It should be planned and managed carefully to ensure that it does save taxpayers money and it should not be undertaken before arrangements for disposal of other properties have been secured.  All of this should be common sense.

Selling off council property might not provide cash this year for struggling councils but lower expenditure on running costs will ease the burden on council’s wallets.  In some cases it can be instant: today’s report cites Suffolk, where immediate efficiency savings of £1.6 million were achieved.  The capital sums coming in will be one offs but the reductions in running costs gained by merging services into fewer buildings will represent an ongoing saving.  Let’s hope that local authorities look seriously at the proposals contained within this report, and see how they could work in other areas.  The potential savings that can be achieved and the efficiency of streamlining those services into one building is a promising new direction for delivering value for taxpayers’ money.An independent report out later this afternoon (from the Westminster Sustainable Business Forum) will detail how local government can save money and improve services by looking at how they manage their properties.   Of the £370 billion of property owned by government and costing £25 billion a year to run, £250 billion is owned by local government.  “Leaner and Greener: Delivering Effective Estate Management” has cross-party support and backing from the public and private sectors.  A serious examination of estate management at local government level is long overdue.  With all local councils looking at how they will make savings in the coming years it is crucial that they consider ways to improve the value of the buildings they own.  My colleague John O'Connell recently met officials at Birmingham council, where they have achieved savings with a project to vacate leased buildings occupied by back office departments.
The report shows that local government can and should occupy less space than it does now and that many buildings are being used inefficiently.   One problem is that the public sector is not subject to the same financial pressures as the private sector, in terms of being efficient in its estate management.  Until now many councils might not have considered selling off buildings as they haven’t needed the money.  However, with all the associated running and ongoing costs (even for unused buildings) each property owned by a council is now viewed by many as a strain on the public purse.  Continued ownership of each building must be justified.

It is clear that councils can and should save taxpayers’ money by selling off buildings that they do not need.   Many services could be merged into one building, not only saving money but also making it easier for residents to access those services.  There is no getting round the fact that merging services and adapting buildings to suit other purposes will need an initial outlay, however this small spend in order to save should not deter them from acting.  The problem is that some councils seem to think that consolidating their estate into one building is an excuse to splash the cash.  Newham was criticised earlier this year for its claim that spending £111m was justified as it would save money, but it turned out that many of the buildings it was supposed to replace were still in use.  Moving offices or services isn’t an excuse to buy flashy new furniture or the latest gadgets, it’s a cost saving exercise and should be done as cheaply as possible.  It should be planned and managed carefully to ensure that it does save taxpayers money and it should not be undertaken before arrangements for disposal of other properties have been secured.  All of this should be common sense.

Selling off council property might not provide cash this year for struggling councils but lower expenditure on running costs will ease the burden on council’s wallets.  In some cases it can be instant: today’s report cites Suffolk, where immediate efficiency savings of £1.6 million were achieved.  The capital sums coming in will be one offs but the reductions in running costs gained by merging services into fewer buildings will represent an ongoing saving.  Let’s hope that local authorities look seriously at the proposals contained within this report, and see how they could work in other areas.  The potential savings that can be achieved and the efficiency of streamlining those services into one building is a promising new direction for delivering value for taxpayers’ money.

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