Submitted by William Green, EC Harris, Head of Local Government and Communities
Councils were hit late last year with news of even deeper budget cuts through the latest settlement for local government, which declared a reduction of support of around 3.9% in 2013-14 and 8.6% in 2014-15. Communities secretary Eric Pickles accompanied this Christmas news with a beginners guide on "50 ways to save" in local government, which demonstrated a lack of appreciation of the sector's hard work and achievements to date, outstripping central government on both action and innovation.
Local government managers now have to return to their business plans and search further for the ways and means to minimise the impact of this additional cut. People costs may dominate internal revenue budgets, but the property estate is the second-largest expenditure and built assets still offer a route to significant efficiencies for most local authorities.
Though finding savings from your built assets may be less painful for frontline services, it does require the initial intelligent thinking to be implemented quickly and effectively because the timescale to realise those benefits takes that much longer when dealing with property.
Over the last two years there have been a series of promising initiatives across the country, using built assets spurred by the fundamental change in local government finances. Geography and the state of local property markets play a huge part in determining the options available to each council when it comes to raising money from buildings.
No one has it easy, but every authority ought to take a radical look at the potential within their existing estates. The options that councils should be considering to save their public services include revising the corporate estate, housing, land and commercial property portfolios, looking to share estates with neighbouring authorities or local public sector bodies, and finding new investors or commercial partners for the council.
Here central government is leading the way with the Bristol Transformation Hub, which will seek to bring 18 separate agencies and departments together into one location. There are a further 10 such hubs planned across the country. This is a formula that ought to see councils and other local bodies working hand in hand with national agencies – not least because the public sector commonly occupies 60% of town centre property. The hidden scope for rationalisation is huge.
Of course, 2013 will see a new round of efficiency programmes and projects to help meet savings targets. Revisiting your estate should be a key component in this work. Act now, be radical and ambitious, and back your plan with the capacity to make sure it happens fast.