I read Bob Baber’s Public Finance article, Squeezing the Assets, with considerable interest.
While it was thought provoking, I wasn’t sure it will overcome the pitfall for the efficient use of public sector assets – that of fragmented ownership. This is also one of the problems to be faced by the Capital and Asset Pathfinders.
The May 2010 election generated a rapid change in the understandings of asset management in the public sector. It wasn't that this was being done either well or poorly, but more that a number of organisations would either downsize or cease to exist. A period of rapid change in the size of the public sector estates is driving asset management up the corporate agenda.
So should asset management become a centralised function? Certainly this is the direction of travel for central government. We are seeing the reestablishment of a common user office estate in both London and Bristol. To achieve this requires the unwinding of the notion that government departments and their agencies are owners of an independent estate.
In Leeds, for example, government departments are developing an approach to rationalise and reduce their estates by establishing a joint plan. There is talk of facilities management following, using combined purchasing power better to search out further economies of scale. This all sounds very familiar since it was the approach used until the 1980s – what goes around comes around!
What, then, for local government? This is far more complex than the task for central government because of the integrated operation of administration and service delivery. In central government this was typically split out; delivery functions were often brigaded into independent agencies, allowing a simplified starting position for estate rationalisation.
Overlying this is the statutory basis by which local government operates, meaning it sits in an enclosed environment for accountability, under democratic leadership. But, even allowing that a large proportion of staff are out-stationed to where they are most effective, there remain large numbers, typically centrally based, who occupy standard offices. What are their requirements?
Discussions among council heads of property reveal these are similar in nature. There is a need to rationalise – there are fewer staff since May 2010 and they need to occupy space more intensively. Lower costs (per person) and reductions in CO2 are expected, as are various partnerships with other public sector agencies and, increasingly, the voluntary sector.
This last factor can be difficult to implement: which partner? how many staff, both now and into the future, and who will pay for what? Total Capital, Total Place, Lift, all have their merits, and will no doubt be replaced by others. They suffer from complexity, from excessively long set-up times (and thus costs) and may be at risk from future restructuring.
Each and every organisation is supported in some measure by property teams. These cover every combination; professional staff, part or unqualified, placed variously in organisational structures and with varying levels of responsibility and accountability. In-house, outsourced, Tupe'd in – and back again – with half-way house solutions as well. There would seem to be no single model better than any other.
Property, by which I mean non-specialised, common user offices, seems to be a deep-seated issue, more usually part of the problem. It is inflexible, when held in smallish lots, and difficult to replace so as to maintain operational efficiencies.
The various initiatives since May 2010 address a narrow but essential need to off-load space and to squeeze into what remains. But what they don’t achieve is any improvement to other requirements. The vexed issue of who sits next to whom is not addressed nor how shared space is to be paid for. Many organisations will continue to be ‘price takers’, both too small and perhaps inexperienced to improve on their position and secure maximum economies of scale.
So how can we do better for the many and not just the few? Perhaps the first point is to ask again why organisations should be concerned with running, owning, operating or doing clever deals for their common-user properties. Surely what they share is a need for modern, economical, efficient, well-located and sustainable accommodation? How can this be better achieved during a period of austerity?
One possibility is to look further at proposals to recreate the central government common user estate but to expand it to the whole of the public sector. None of the occupiers need to own property or hold leases to function. Instead they might pay an inclusive occupational charge – hardly revolutionary in itself since it is the essential basis for buildings funded under the private finance initiative.
Rolling the wider public sector estate into one offers the potential to drive down costs, of all types, because of its sheer size. These reductions can be passed on to occupiers. Such an arrangement provides intriguing possibilities.
Where would it sit? It could be a public body with clear targets – essentially, quality up, costs down, along with measurable improvements in sustainability. What if it had access to borrowing powers? It could find the funds for improvements and make repayments based on annual savings. How else could it be constituted? Perhaps a cooperative, or a charity, maybe modelled on the National Trust with the benefits locked into improving the taxpayers' lot.
But in the end it is the taxpayer who should be the ultimate beneficiary, not the occupiers who simply are their servants. Just working a bit smarter and harder can't get us there. Something more fundamental and radical is required.
Brian Ablett is senior project manager at Leeds City Council, although he writes in a personal capacity
