Why does it matter how many empty properties a council possesses?

By Policy Analyst, Jeremy Hutton.

This week sees marks the release of our latest piece of research, Hollow Highstreets, which gives a snapshot of how many council owned (non-residential) properties are lying vacant throughout the UK. Unlike our usual releases, which serve to point explicitly at examples of government waste or to advise how money might be better spent, this paper is intended to provide a resource to inform other research in the future.

This limited remit was partially caused by the poor state of the freedom of information responses received from local authorities. For example, dozens of councils on this occasion failed to produce an adequate response. An example of a poor response might have been one that gave us the insurance value of properties, rather than the annual premiums. Only a relatively small number of councils provided figures for all requested categories (those being insurance, security, maintenance and renovation). A great deal simply were unable to provide insurance figures because of group insurance policies.

Despite the range in the quality of responses however, we can still glean several important findings from this research. We can see for example, which councils own a significant number of properties that are vacant, such as Bristol, Hull and Chesterfield. And we can see those councils spending a great deal on maintaining and securing them, such as Kent and Stoke-on-Trent. But why is this a problem? From the data alone, it is difficult to arbitrarily point the finger at Chesterfield council for its high number of vacant properties without understanding the reasons behind this. Is the council inadvertently keeping properties off the market, or is it maintaining them so that they remain appealing to potential tenants?

The problem of course is that these investments come at great risk. Despite many high streets hollowing out, local authorities have spent around £800 million buying up ailing shopping centres in recent years. As admirable as their intentions may be, investing in buildings that are being deserted by their tenants is effectively gambling with taxpayers’ money and at quite long odds.

Without further research at a more granular level, it is difficult to say what the root causes of these many vacancies are for each specific council. But what we can say for sure is that something is going wrong in these areas. A vacant commercial property is nothing if not a lost opportunity. Whether it be a high-street unit like a café or a shop, a warehouse or a factory, that is a location that is not hiring employees, selling wares or creating goods. When it is in public ownership an empty property actively becomes a detriment to local taxpayers; acting like a leach on public finances, as money that should be put towards local services is spent on the upkeep of buildings that have no purpose.

On the other side of the coin though, we have been able to identify 24 local authorities which possessed no vacant commercial properties at all during this timeframe, and an additional 137 councils with less than 10. And so this begs the question, what is it that these councils do so differently to those like Dundee (115 empty properties) and Durham (111 empty properties)?

This snapshot then will perhaps act as a waking up call to those with high levels of empty properties, and paves the way for further possible research to help share best practice amongst councils.