Transforming local authority estate and solving the funding crisis

Local Government owns £250B of property with an estimated one fifth of revenue expenditure going into managing that property. This was a fact that made me sit up in my seat when I attended an event on Local Authority Estate Transformation in Manchester the other day.

A recent report 'Leaner and greener: Delivering Effective Estate Management' identified that a reduction of 30% in occupied space would realise potential operational cost savings of £7B. For cash strapped authorities across the country facing service cuts and making staff redundant this potential alternative cannot be ignored. APSE will certainly be looking closely at this opportunity for local government.

Heather McManus, Deputy Chief Executive at Lancaster City Council suggested that her own authority have already made great strides in pursuing this agenda. Politicians clearly want to protect frontline services by making savings elsewhere; she cautioned however that it is vitally important that citizens are fully engaged in any property rationalisation programme as they often have cultural attachments to certain buildings that are not immediately apparent. Lancaster has reduced their space usage over the last 3 years by between 20 and 30% saving over £6.6m in the process.

Some of the consultants present claimed that the public sector could reduce its property holdings by almost 50%, I take the thrust of the point but I wonder what would happen if all this surplus capacity property appeared on the market at the one time? Just for clarity the consultant also stated that the private sectors utilisation of space is just as bad with between 30 and 50% of space wasted.

Whilst I have blogged a lot about renewable energy the emphasis at this event was on carbon reduction and some of the figures were startling. Energy prices are likely to rise between 80 and 100% by the end of the decade and the cost of carbon is likely to be £300 per tonne come 2020. On the plus side 30% of savings could easily be made from existing premises by promoting sustainable behaviour change. My way of looking at it is if you were generating your own energy you would avoid the carbon cost and get paid for doing so through the feed in tariffs. Hopefully, some food for thought.