From sunken costs to strategic assets – a positive view to support communities
Property assets are imperative for the success of public sector bodies. They act as the foundations for achieving corporate objectives and fulfilling regional aspirations.
However, it can be easy for councils and other public sector bodies to fall short when it comes to unlocking the true potential of their estates. By not adjusting how they consider their asset use and overlooking the opportunities these assets offer for driving innovation, economic growth, and community development, they risk failing to maximise the value of their properties.
Public sector entities therefore would do well to rethink their management of their portfolios, viewing them not just as operational necessities but as strategic assets capable of transforming the lives of the communities who rely on them.
Understanding current portfolios to identify latent value
The first essential step for any council or other public sector body is to thoroughly understand their current assets and estates. This involves a detailed assessment of all properties, including their condition, usage, and potential value.
Comprehensive data collection and analysis are key in this phase. For instance, mapping out underutilised spaces or identifying properties that could be repurposed can uncover hidden opportunities such as creating community centres, developing affordable housing, or establishing urban gardens. It is key that assets are considered at both portfolio level and at an individual level, with considerations made based on potential capital value versus potential return to the organisation. Utilising tools such as Building Information Modelling (BIM) and Geographic Information Systems (GIS) enables public sector bodies to visualise and evaluate their assets in innovative ways, ensuring that every square metre of property is optimised for its highest and best use. By gaining a clear picture of what is owned and how it is currently used, they can make informed decisions about future use and investment.
Furthermore, a proactive asset management strategy, where councils not only react to current conditions but also anticipate future needs and opportunities, is crucial. This forward-thinking approach can lead to substantial cost savings and improved service delivery. For example, through predictive maintenance and strategic repurposing of underused properties, councils can significantly reduce operational costs and increase revenue. Repurposed space can be used to meet specific community needs; Lambeth Council has championed this approach by investing £1.4m to renovate the Brixton Sports and Social Club to become a self-sustaining community hub. By gaining a clear picture of what is owned and how it is currently used, councils can make informed decisions.
Aligning assets to corporate and community objectives
The next step is to align these assets with the organisation’s broader corporate objectives. Different approaches to estate management can significantly advance goals in a wide range of areas.
Property assets can be powerful tools for stimulating local economic growth and innovation. For example, a council might identify underutilised buildings that could be converted into business incubators or co-working spaces like Preston City Council, who last year announced plans to revamp a former magistrates’ court to deliver 6,400 sq. ft of office space. Such initiatives can attract startups and small businesses, creating jobs and fostering innovation within the community. In another instance, a council might partner with private developers to redevelop vacant land into mixed-use developments, blending residential, commercial, and recreational spaces to create vibrant community hubs.
Sustainability goals can also be supported through strategic property asset management. Councils can retrofit existing buildings to improve energy efficiency, reducing both carbon footprints and operational costs. Additionally, surplus land could be used for renewable energy projects, such as solar farms or wind turbines, providing a sustainable energy source for the community. Bristol City Council has demonstrated how this can be successful by transforming old industrial sites into green spaces and renewable energy hubs, setting a benchmark for sustainability in urban environments.
Enhancing public services through property assets involves creating spaces that better serve the community’s needs. For example, surplus buildings could be repurposed into community centres, libraries, or healthcare facilities. Mansfield District Council transformed a former office building into a multi-service hub offering health, social, and community services under one roof, which not only improved service accessibility for residents but also optimised the use of council property.
Moreover, as urban space becomes increasingly scarce, there's a growing recognition of the potential above our heads. Over-station developments represent a forward-thinking approach to maximise the utility of public assets. By leveraging airspace above railway lines for residential or commercial use, councils can not only address housing shortages but also generate sustainable revenue streams. Transport for London's initiative to develop residential units above stations like Southwark demonstrates how such projects can integrate seamlessly with existing urban infrastructure while meeting the high demand for housing in metropolitan areas.
Establishing a plan
Having identified opportunities, it’s then necessary to establish a clear plan and ensure that all teams are aligned with the same goals. This involves setting specific, measurable objectives and timelines for achieving them. By taking a ‘one-public-estate’ approach and partnering with various stakeholders, including other public bodies, non-profits, and community organisations, councils can gain a holistic view of community needs and available resources. This collaborative effort not only facilitates a deeper understanding of asset usage but also opens avenues for collective repurposing.
This engagement is critical for making sure that any asset strategy delivers for local people and meets immediate and future needs. For example, councils might collaborate with housing associations to develop affordable housing on surplus land. The London Borough of Hammersmith and Fulham showcased this when it partnered with housing association A2Dominion on a development of 204 homes, of which 52% are affordable for local residents. The key is to build strong, collaborative relationships that leverage the expertise and resources of all parties involved, with a clear focus on delivering outstanding results that benefit local communities.
Transforming how the public sector considers its property assets demands a comprehensive, forward-thinking approach. By shifting focus from sunken costs and traditional uses to thoroughly understanding current portfolios and aligning assets with broader objectives, councils and public sector bodies can unlock the true potential of their estates while delivering for the people who rely upon them most.
