Property sharing delivering big savings, says LGA report

The vast majority of councils taking part in a pilot initiative to encourage the sharing of property with other public service partners say the initiative has been effective, according to new research.
The study, carried out on behalf of the Local Government Association, interviewed 29 of the 34 participants in the Capital and Asset Pathfinders programme, launched in 2010.
83 per cent of respondents agreed the programme was effective, with two thirds saying they would appreciate further support from the LGA on asset management.
The study said: “This positive response from the pathfinders was largely due to the fact that their participation in the national programme had raised the profile of asset management within their organisation.
“The experience of the early pathfinders is that co-location generally results in reduced running costs and allows many services to operate from one location to the benefit of customers.”
The survey showed that 91 per cent of wave one and two pathfinders reported increased capital receipts as a result of the initiative, with 95 per cent saying premises running costs had been reduced. Another 82 per cent reported reduced management overhead costs. For example, Surrey County Council’s rationalisation of its office estate has delivered savings in excess of £6 million per annum from the closure of a number of leasehold buildings, according to the study. However, only 60 per cent said that integration had been achieved between services moving into the same building.
Few (18 per cent) of the pathfinders had set up a legally constituted joint venture company, such as a local asset-backed vehicle joint venture with private and/or third and public sector partners.
It said that this could be due to councils being able to access cheaper borrowing through the Public Works Loan Board, and because they would lock up their assets.
The programme highlighted six factors required to help make property sharing initiatives reach their potential:
– Strong corporate leadership from local public agencies to bring in partners
– Vision and commitment from senior managers and councillors to look beyond organisational boundaries
– Sharing knowledge and data about customers, services and property assets between local public agencies
– Undertaking multi-agency property review workshops and programmes
– Being proactive and innovative when opportunities arise
– Creating organisational capacity to deliver projects
However, the report said that although many of the participants exhibited most of these features, no single pathfinder was fully effective in all of them.
It said: “Even if the lead local public body performed well on many of these measures, there is often at least one partner body that struggles to fully engage in collaborative and place-based asset rationalisation in the local area.
“For example, some areas experience positive engagement with central government departments while others experience a lack of collaboration which creates barriers to progress.”
Sometimes the hurdles related to central government policy, controls and regulation governing departments delivering local services.
The report also said that many of those involved identified limited resources as a barrier to maintaining an asset rationalisation programme, with extra pressure often placed on property services departments.
“Many pathfinders emphasised the need for upfront investment in additional capacity, skills, systems and processes,” the report said.
The 34 pathfinders were launched in three waves that started in consecutive years.
The first two waves focused on place-based and collaborative asset management, while the third targeted economic growth from their property portfolios.
The latter group received a £20,000 match-funded grant to kickstart their work, but the report said that it was too early to assess the extent to which measureable outcomes have made an impact on local economies within this group.