Headlines: October 5th, 2010

Better management of property assets across the public sector is being increasingly recognised as a major contributor to cutting costs, without any harmful effect on service delivery. As well as reducing space to match a shrinking workforce, opportunities for developing distributed and remote working are being explored.

Property asset management in the public services is big business, but for most public bodies it has not been a strategic issue and was not discussed routinely at Board meetings. It was not integrated with business planning nor included in implementation plans. The public sector property assets have a book value of £370 billion. This represents about £6,000 worth of assets for every UK resident. The UK’s local government property, including council housing, accounts for two thirds of this total and central government and public corporations for the remaining one third.

Kent County Council’s asset management project found that it could save £280m over the next five years if it adopted a total place approach to property. Rationalising its £5bn property assets would also result in yearly revenue savings of £40m. If total place measures are introduced, public bodies in one area would be told to share more back office roles, cutting the demand for office space, and allowing disposals of surplus property.

Other property reduction plans are emerging. Birmingham City Council are progressing a 35% reduction in its 1 million sq ft back office estate and Somerset County Council have recently approved plans to vacate 40% of its office space. An asset management pilot study by the Improvement and Efficiency Partnership in the West Midlands found that there is a potential to save £640m over the next ten years.

A Capita Symonds survey confirmed that 80% of Councils are considering co-locating with other public bodies as a way of saving public property costs. “Total Place” is providing a holistic regional property review with the aim of significant rationalisation through sharing space and resources across all government funded organisations. In addition to sharing, this re-think of property provides the opportunity to look at better use of the estate by considering distributed and remote working. This involves using existing neighbourhood offices, libraries, housing centres and depots as touchdown offices.

Homeworking has only developed slowly in the public sector and with the exception of Ofsted, where over 50% of the organisation is homebased, it is not widely practised. BT has demonstrated that the office estate can be reduced by 50% over a decade, with accommodation savings from Homeworking alone amounting to over £100 million annually.

Savings on the property budget can also be made by using technology to manage the assets. Halton Borough Council has adopted Concerto Support Systems asset management software. Phil Dutton, the strategic asset manager said: “Managing the council’s properties – everything from schools to local authority buildings means that the department has a plethora of information – everything from placing orders, repairs, major contracts, deals, leases and even land registry applications have to be monitored and tracked.”