property efficiency? this time it's for real

Mark Norris, Executive Director, Capita Symonds comments on the Local Government Chronicle (LGC) / Capita Symonds survey on public sector estates rationalisation.

"The results of today’s LGC/Capita Symonds survey are fascinating. Although the progress is limited, there is clearly a serious drive from local authority chief executives to unlock the savings available from their property estates and services. More importantly, there is also a greater willingness to work with the private sector in developing new property solutions in innovative partnerships.

Our survey shows that the top three issues in terms of property are serious ones: that buildings are not suited to modern service delivery, they are costly to maintain and cannot meet sustainability targets.

Surprisingly, given the unprecedented level of public sector debt, more than half of respondents indicated that their estate remained largely unchanged from that analysed in the most recent Audit Commission report on local authority property in 2009.

There also appears to be a mismatch in the available resources for the rationalisation of property portfolios (approximately 70% of chiefs indicated that the required strategies, finance, and expertise exist in-house) and the progress made to date.

Nevertheless, the tightening of central government funding has undoubtedly brought the capital that is tied up in local authority assets into sharp relief. For example, 84% of respondents said estate rationalisation was vital, and all respondents were looking to find ways of reducing the operational cost of the estate.

But how can efficiencies be realised? Most chiefs indicated that the key lies in relocating out of redundant space and consolidating into modern and efficient property while introducing new ways of working (with potential savings of up to 40%). As a result, a willingness to ‘de-silo-ise’ historically separate organisations is increasing – 73% of local authority respondents indicated that public service convergence and co-location was on their immediate agenda.

The survey also reiterates that effective estates rationalisation using new delivery models is key – stand-alone sale and leaseback of assets by local authorities is not considered a viable solution under the current local government funding regime, whereas the release and sale of surplus nonoperational assets in combination with property services outsourcing certainly is.

Overall, it looks as though, after umpteen reports on public sector property efficiency, this time it’s for real.

This survey was carried out by LGC and was commissioned and sponsored by Capita Symonds. The report on the results was independently written by LGC and published on 08 July 2010. Visit the LGC website here