PROPERTY JOURNAL

What's influencing public sector asset management?

In challenging times it is not just austerity that's influencing public-sector asset management – collaboration and technology are prompting new approaches as well

Author: Neil Webster

19 July 2019

Changes in public-sector asset management over the past decade have been thought by many to be a straightforward response to austerity. This may in part be true, but there is also a range of initiatives responding to service need or to shifting priorities, or seeking efficiency measures more generally.

Collaboration has been the key word for public organisations in this time. Examples include local government's work with central agencies, as seen for instance in Public Health Englands (PHE's) office consolidation; other health bodies such as NHS Property Services and major trusts looking to dispose of surplus assets for housing sites; multi-agency working in or beyond the One Public Estate (OPE) programme; or simply local authorities collaborating to share service provision.

Programmes for change

The main programmes for health property are the 44 sustainability and transformation partnerships (STPs) across the country. While these focus on services, estates form one of three workstreams for these organisations, along with digital and workforce. Each STP has a local flavour with some even led by senior management from local government. The latest Government Estate Strategy commits to even closer working between national government and the private sector and local government, including engaging with councils earlier when departments plan property sales.

On top of these is the national OPE programme run by the Cabinet Office and the Local Government Association. Authorities bid for money to support the three key objectives of creating economic growth, ensuring more integrated customer-focused services and making operations more efficient, using capital receipts from disposal of surplus or underused property and reduced running costs. The programme claims that by 2019/20 it will have generated 44,000 jobs, releasing land for 25,000 homes, raising £615m in capital receipts from sales, and cutting running costs by £158m.

Recent awards by the Association of Chief Estates Surveyors and Property Managers in the Public Sector (ACES) have acknowledged achievements in collaborative asset management. Since the development of its new Parkside building, for instance, Melton Borough Council now hosts 16 separate organisations providing services to customers from the site. The ACES Excellence award recognised the project for "achieving an exemplary outcome to provide a multi-service local facility".

"Melton Borough Council now hosts 16 separate organisations"

PHE also won the same ACES award in 2016 through its office rationalisation, which has enabled Essex, Lancashire and Worcestershire County Councils, as well as Fareham Borough Council, Liverpool City Council, South Hams District Council and the City of York Council to provide co-location opportunities for PHE and save more than £1m. Other similar partnerships are set to be announced soon as this model's effectiveness becomes understood.

The 2017 RICS insight paper Shared property services in the public sector: a future of collaboration? concludes that "shared services are already widespread and we are likely to see many more develop over time". Even so the paper shows that the market is evolving, with some of the examples having grown and others shrunk.

One of the key factors in a successful shared service or private-sector outsourcing is robust, intelligent client and contract management. The contract does not run itself, and the best have strong governance arrangements and clearly defined roles for the client body and supplier. Alongside this there should still be a strong partnership working ethos with common objectives.

Technology role

As we need to continue to respond to change, there is an increasingly central role for data and digital platforms to play in asset management. Technical skills in property housing and regeneration are important but in an age of big data, surveyors in the public sector need to be able to work beyond the traditional boundaries of geography and governance. Collaboration plus quality data plus digital tools equals even greater value.

Neil Webster is a director of Cyclo Consulting and business manager for ACES cycloconsulting@gmail.com

Related competencies include: Asset management

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