Councils can save £7bn a year in property costs, report claims

The report claims that local authorities can reduce their space requirements by 30%.

It was put together by the Westminster Sustainable Business Forum (WSBF), a ginger group comprising businesses and a group of cross-party MPs.

Mr Pickles said: “This timely report shows that every council could save millions by managing their properties better, using the money to protect frontline services or keep council tax down.”

Leaner and Greener: Delivering Effective Estate Management was produced as part of an inquiry by WSBF, chaired by Conservative MP Matthew Hancock.

The purpose of the inquiry was to investigate how the public sector could improve the sustainability of its estate management. The inquiry’s recommendations suggest that if local authorities streamline office space use, sharing it with other service providers and local authorities, they can reduce their space requirements by up to 30% and save £7bn a year in running costs. For the space that remains in use, local government can save a further £190 per sq m per year by following a suite of sustainability measures.

Mr Hancock said: “Local government owns huge amounts of our towns and cities. On investigation, we often found poor use of that property, costing money and adding to carbon emissions. What we found surprising, is that where improvements have been made, the people working there told us that they had not just saved cost and saved carbon, but also improved services as a result. This report looks at case studies where bold changes have been made, and assesses how much can be saved from improving use of the buildings that surround us.”

Case studies where these management methods have already been put into practice are cited throughout the report, including Birmingham City Council which will reduce the 55 buildings it uses for office space to eight, saving 50,000 sq m. One building in particular, the Lancaster Circus Council Building has already cut 10,000 sq m of floor space, generating savings of £3.5m a year in running costs, making a carbon reduction of 40%.

Stephen Hughes, CEO of Birmingham Council said: “Working in this manner has been a success story for us; in these times of fiscal austerity, I would urge other local councils to try the same methods.”

Cosntruction companies are well represented in the WSBF, with members including Interserve, Laing O’Rourke, Carillion, Skanska and Lafarge.

Interserve chief executive Adrian Ringrose said: “Interserve recognises that the public sector needs to maximise the return from its estate now more than ever before. We are actively involved in assisting local government organisations in identifying and delivering efficiency opportunities, and see this report as an important contribution to the debate on how best this can happen.”

The main recommendations are:

1. Local government should reduce the space it occupies by 20-30%, by following best practice examples of low cost, flexible working practices.
2. Local government should introduce a range of flexible property solutions to meet changing needs of various users and services.
3. Local government should ensure effective property management by establishing centralised control of its estate within one department. A Central Property Unit should be made responsible for centralised property decisions, including leases and the procurement of buildings.
4. Local government should incentivise efficient use of space at all levels. They should introduce techniques varying from an internal charge for the property use, to allocating a share of benefits from the sale of vacated property for their own budgetary use, to further incentivise occupied space reduction.
5. Government must emphasise the extent of savings available from decreasing energy consumption and the inclusion of the price for carbon emissions when settling future budgets to incentivise investment in more sustainable estates.
6. Local government should use both quantified environmental and economic savings to strengthen the business case of paying a premium for increased environmental efficiency.
7. Local government should cooperate with public and voluntary sector partners to identify matching property requirements. This process should involve partners on all central and local government levels as well as service providers from health, police, fire, education and the voluntary sector.
8. Local government should develop a Service Asset Strategy, to align service delivery and property requirements. The strategy should set out a forward looking vision of service requirements and be responsive to the changing needs of its customers by employing commercial targeting and profiling tools.
9. Local government should invest in asset management systems and adopt a pragmatic approach to data capture that limits the information collected to what is necessary to inform strategic decisions on the use of the estate.
10. Local government should introduce a common set of metrics to analyse the performance of its estates. Effective use and analysis of data should include overlaying essential property data to a GIS system to support effective cluster analysis and the identification of cross boundary rationalisation opportunities.
11. Local Government and its public sector partners should establish a joint centralised property management structure to improve the efficiency of property management.
12. Local government and other public sector bodies should strive towards the creation of Pooled Asset Vehicles to facilitate a joined up approach to asset utilisation and to create a platform for levering private sector investment into the public sector asset base.
13. Central government should seek the removal of legislative, taxation and governance obstacles to the creation of Pooled Asset Vehicles to facilitate public property sharing on the local level.
14. Local government should, as a priority, implement simple low cost measures to reduce energy consumption, carbon emissions and operational costs.
15. Local government and its public sector partners need to explore Spend to Save projects, prioritising the retrofitting of existing space over new build, to deliver more extensive carbon reduction of its estate. Local government should seek support from specialised funding sources, such as Salix or the London Green Fund.

 To download the full report, click here

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