Local government managers report quickening pace in rationalisation of estates

Almost half (45%) of local government chief executives and senior property managers have reported that the pace of rationalisation of councils' property estates has accelerated, research has revealed.

A study by Capita Symonds and the Local Government Chronicle – published earlier this month – also found:

• A third (33%) of respondents described their authority’s estate as over-sized
• More than two-thirds (69%) said it was costly to maintain, and
• The same percentage acknowledged it was not suited to modern service delivery.

Public service convergence or co-location as a method of rationalising property estates was on the agenda for 77% of respondents.

This type of arrangement was most popular with primary care trusts (87% of respondents suggested they would share with PCTs), followed by emergency services (77%). Just over half (52%) said they would be prepared to share with other registered social landlords.

The Capita Symonds survey showed there was little appetite among local authorities for leaseback options – some 79% expected to realise capital through the sale of non-operational assets, compared to 19% who believed it would be likely, or very likely, to realise capital through the sale and leaseback of operational assets.

The respondents warned that disposals would take time and resources if they were to be done properly.

Mark Norris, executive director at Capita Symonds, said: “Although the progress made to date is limited, there is clearly a serious drive from senior local authority figures to finally unlock the value and cost savings available from their property estates and services. Perhaps most importantly, there is also a greater willingness than ever before to work with the private sector in developing and delivering new property solutions in innovative partnerships.”

Mark Goodwin, Director of External Affairs at the Royal Institution of Chartered Surveyors, said the massive budget deficit had created a “burning platform” for strategic public sector asset management as a big part of the solution.

He warned: “The danger is that pressure for short-term cuts and quick disposals will not deliver real value and will deplete the pool of professionals capable of delivering the best practice that is out there.”