Local government 'could save billions by selling its property'

2 Feb 11
Councils could save billions of pounds a year by selling off property they own or rent and sharing buildings with other organisations, according to a report published today.

By Lucy Phillips

2 February 2011

Councils could save billions of pounds a year by selling off property they own or rent and sharing buildings with other organisations, according to a report published today.

An independent investigation by the Westminster Sustainable Business Forum found that local government could save £7bn a year in running costs by managing their property assets more efficiently and sharing space with other public and voluntary organisations.

At the same time, councils would cut carbon emissions and improve services, the inquiry, chaired by Conservative MP Matthew Hancock, claims.

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 they had not just saved cost and saved carbon, but also improved services as a result.’    

According to the report, streamlining and sharing local government office space could reduce building requirements by up to 30%. Councils would need to match property use requirements with other organisations as well as introduce more flexible working practices for their own staff.

Measures to cut office energy consumption in the remaining space could save a further £190 per square metre.  

The report, Leanerand greener: delivering effective estate management,includes case studies. It shows that Birmingham City Council, for example, will save more than £100m by reducing its core office portfolio from 55 to 8 buildings.

It also recommends establishing central control over local government property management to maximise efficiency. A Central Property Unit would be responsible for decisions on leases and procurement of buildings.

Local Government Secretary Eric Pickles, who is due to attend the launch of the report today, 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.’

Richard Kemp, vice chair of the Local Government Association and leader of the local government Liberal Democrats, welcomed the ‘broad thrust’ of the report but said it threw up a number of questions for Pickles. ‘As he is frontloading the cuts to the council’s budgets and making us take the biggest cuts in government spending of any sector, where are we supposed to get the necessary capital from to implement this activity,’ he asked.

Kemp also criticised Whitehall for moving at ‘a snail’s pace’ in steps towards community budgeting, claiming this slowness would not help the push to rationalise public sector buildings.

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