Don’t run down a chance to build
15 July, 2005

Warren Hatter, Head of Research, NLGN
Public Servant

An Englishman’s home, so they say, is his castle. One problem for local government is that so many local authority services are housed in ageing premises so unsuited to modern service delivery that they might as well be medieval castles.



I am exaggerating, of course. But we could all point to examples of both frontline and back office functions being run from buildings that are, frankly, not fit for purpose. This is a prime reason why local authority asset management is a topic that is moving up the list of priorities for both leaders and chief executives. This is a real factor, irrespective of current policy agendas. Yet several of these agendas are also driving up the importance of local asset management.



Highest profile among the policy agendas in play is the Gershon Review. For one thing, this reported that lack of coordination has perpetuated inefficient use of public funds at both local and national level. No wonder then, that improving asset management is one way for local authorities to achieve the expected efficiency gains. And at a national level, but less directly relevant to local government, the Lyons Report suggests that government spending can be reduced and more efficiently allocated with the transfer of 20,000 public jobs out of the more expensive South East – a reform that would provide an estimated savings of £2 billion.



Another key policy driver here is the ever-growing importance of user focus in service delivery. Speaking at a recent conference, Stephen Dance, Project Director of Partnerships UK, correctly observed: “asset management is not just about property management, but rather, delivering public services effectively”. Such management is vital to the efficient delivery of services, because users suffer when these are based in inappropriate accommodation. And increasingly, Comprehensive Performance Assessment (CPA) of local councils is a factor, with ratings becoming, in part, dependent upon the efficiency of public property management.



Aside from these public policy agendas and the problem of ageing, unsuitable accommodation, the third factor driving up the importance of asset management is an encouraging one. This is the fact that recent achievements of local government show the local government community as now understanding what needs to be done. It is significant because, frankly, asset management has been until recently a ‘Cinderella service’, not on the radar of Cabinet or the Chief Executive.



So what has changed? First, many authorities have shown that they can turn a Cinderella service into something that has real corporate ownership at the highest level, and make vital strategic decisions on it. The case in point is procurement. Many authorities have become capable of making strategic procurement decisions that would have been unthinkable five years ago. There is no reason to think that we cannot mainstream strategic asset management in the same way. In fact, there is progress already and, as Mike Burt, Director of Government Relocation and Asset Management in the Office of Government Commerce has noted, “In terms of asset management, local authorities are ahead of central government”.



Another way in which local authorities have made progress is by being more open to genuine options appraisal. This has gone hand in hand with the development of a genuine partnership culture, where the private sector is involved in delivering the best deal for citizens. Options appraisal is only effective if a non-ideological approach is taken. We are also seeing an increasing focus on outcomes – and not just inputs and outputs – in partnerships. This is good news when it comes to tackling local authority asset management.



Of course, as some Beacon authorities have shown, not all effective approaches to strategic local asset management will involve the private sector. Many however, will and this poses a challenge to the private sector to develop offers that are sufficiently outcome focused and aligned with local objectives. There is certainly interest from a number of credible private sector organisations is widening private sector involvement, and a recent PwC/Land Securities Trillium study Asset Management Solutions for Local Government and the role of Strategic Property Partnerships* has highlighted some of the approaches that can be taken and the issues raised.



The reason why local authorities should be excited about this agenda, and not simply feel that it is something they need to get round to, is the opportunities it offers. Get this right and services will be better, because of being housed in better accommodation. But there will also be buildings freed up that could be used to pump-prime regeneration or provide social housing. Efficiency gains will be made that can fund local priorities and/or boost front-line service delivery. And there can be lower long-term accommodation costs.



There is now some discussion about whether the ODPM’s Innovation Forum of ‘excellent’ local authorities could engage with this agenda. So this could be all about local government gaining more financial room for manoeuvre and, in effect, greater autonomy. That is reason enough for New Localists and others to take an active interest. We can make sure that Cinderella goes to the ball and then lives happily ever after – although maybe not in a castle.



*Further details on Asset Management Solutions for Local Government and the role of Strategic Property Partnerships are available from cat.ley@lstrillium.com