Creating the Government property assets of the future

Making sense of a public estates strategy with real local control

Andrew Smith, Chief ExecutiveHampshire County Council

Why now?

• £128bn current book value for local government property

• £15bn p.a. capital spend• Unprecedented financial pressure• Lack of co-ordinated estates strategy and delivery

approach• Strong desire for a local demand-led approach• Appetite for real reform – government is ready to

remove barriers

£ benefits

Time

0 Elapsed time

Commissioning

approach

2-5%Construction,

procurement

Source:

SE IEP

10-15%Construction,

procurement

Source:

HCC

Care Home

case study

20%+Reduced need

Construction,

procurement,

Source:

SE IEP

/Reading

BC estimate

Opportunities• Understand need• Shared services• Assets and capital

assessed• Driver for strategic

procurement programme which could include greening agenda SMEs and apprentices

Opportunities• Economic

development• Inter authority

collaboration

Opportunities• Better

delivery• Predictability

Government has recognised the wider public sector opportunity - the coordination of both capital and assets through a commissioning-based approach will maximise efficiencies, deliver improved services and other opportunities such as job creation

The SE IEP estimate that a 20% saving on capital costs could be achieved through smarter procurement including the use of existing assets.

In addition, a comprehensive approach to assets could generate £35bn in capital receipts over 10 years in addition to savings in revenue.

Total of £370bn worth of assets

£35bn in capital receipts could be raised over

10 years

Joined up programme (multi projects)

One off project

3

Hampshire County CouncilHeadquarters Refurbishment

A local demand-led approach could significantly rationalise the public estate whilst maximising other benefits such as job creation and improved energy performance through retro-fitting

Fewer buildings,

better used, higher

performing and more

sustainable

£370bn existing

buildings, one third of

all non domestic

stock

• 75% more staff accommodated• 30% more space efficient• 4500m2 reduction in council’s use of

office space• £200,000 per annum saving on

running costs• 50% reduction in energy costs

Case Study:

Jobs in construction and supply chain; skills created for

retrofit work

Co

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issi

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ap

pro

ach

gen

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od

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isat

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/ ra

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isat

ion

pla

ns

Efficiencies + some surplus assets

recycled as capital

£30 billion per annum in new capital investment

4

• Co-ordination of local government and integral part of Capital and Assets Pathfinders

• Procure once on behalf of many• Get collaboration and aggregation benefits• Build national leadership – further leverage• Leave local choice in place• Sponsored by CLG

The Big Idea – how the NIEP can support this approach

How to do it?

The Barriers

• Council sovereignty• ‘not invented here’• Local capacity• Fragmented budgets• Collaborative arrangements do not exist

The obstacles are not technical. Local government can now address some of the most complicated asset management challenges in government.

Opportunities

• Benefits of joint working• Reshape the market• Savings / efficiency• Demonstrating local government leadership • Local choice• Cross departmental and organisational working /

geography• Improving the customer experience