Member Article

New approach to North East public sector property

A new approach to property management could save North East councils money and help them adapt to changing demands according to business advisory firm Deloitte.

Research by the audit commission shows local authorities spend 8 per cent of their budget running and maintaining their estates (excluding housing). That means North East councils are spending over £400m. This is the second biggest cost after salaries, making the benefits of savings considerable.

But cuts in the public sector are fundamentally changing the size and shape of all levels of the government. Successful estate management can not only contribute to budget savings but also contribute to smarter, more efficient delivery of public services.

In its report – Space-Based Budgeting – Deloitte outlines a series of challenges and reforms needed to improve estate management and create a leaner more flexible property portfolio.

The report highlights a number of areas where improvements can be made including: giving public sector property managers greater influence; increasing collaboration to ensure estates strategies reflect current and future workforce, IT and customer needs; better collaboration with the private sector and better use of data to inform decision making.

Nationally the public sector has £385 billion worth of property under management while nearly 440,000 square meters of space lie vacant and some departments have occupancy rates as low as 40 per cent.

Paul Thomson, public sector partner at Deloitte in the North East said: “Local authorities’ property portfolios are often a patchwork of assets and liabilities and a significant cost on council balance sheets.

“With good property management, councils can deliver value for the tax payer and ensure they’ve got a more flexible portfolio that contributes to the challenge of delivering council services with a reduced budget.”

Joby Howard, director at Drivers Jonas Deloitte in the North East said: “Getting value from private sector partners is the biggest challenge that public sector property managers face. By working more closely, councils could see significant benefits in the liquidity, innovation and efficiency that the private sector can offer.

This was posted in Bdaily's Members' News section by Deloitte .