Five ways to cut Britain’s £163bn deficit

7/05/10 2:55 pm By Nick Johnstone

Today, the new government begins work cutting the country’s huge budget shortfall. Here, five public sector experts tell Nick Johnstone what they would do:

Look for a pools win

Alex Plant, chief executive,Cambridgeshire Horizons

In Cambridgeshire, we could do better with our public sector assets if we pool them all into a single, centrally managed vehicle.

By bringing assets together, you can find loads of benefits. At present, property management is costly, because there are lots of different estate managers working separately. You could have fewer staff managing more effectively if this was centralised.

You can also rationalise the size of the estate more easily. So you may have two half-used depots occupied by two agencies that can be combined into one.

Through pooling the investment estate, local authorities can also identify overlaps. By combining different agencies’ assets, you can raise more revenue than disposing of them separately.

For example, a primary care trust might be decommissioning an old hospital that may have access issues. But the issues may be eliminated if the local authority has the land and you use them together, which could add, say, 20% to their combined value.

If you pool your estate, it also becomes a lot easier to run shared services. City council and police matters could combine more easily, for example.

But the first step is to pool the assets across an area.

The idea is: “Let’s chuck our assets into a vehicle and run it for the common good.”

High time for high tech

Chris Gomersall, head of property, Leeds City Council
Quite simply, councils must get staff working in new ways with better technology in modern workplaces. That helps to provide better services, more efficiently.

In Leeds, we want to cut our city centre offices from 14 down to six, through flexible working and new mobile technology. We announced this in our Changing the Workplace plan in February, and we’re drafting a full business case for consideration this summer.

Across the public sector, these initiatives mean better productivity, less staff absence and lower overheads. These basic corporate ways of saving money are our big idea for helping to cut the deficit.

Cut to the quick

Peter Bennett, City surveyor, City of London
The public sector can contribute to cutting the deficit but it is likely to be patchy and marginal across the country. Ultimately, it boils down to good property asset management.

There are some quick wins, though. Councils need to review the assets they have got. If job cuts come through, there is going to be less need for property. A review would help you establish where savings can be made.

Next, reduce energy consumption. By turning off lights and air conditioning, we have saved 10% on our £13m energy bill.

Rewarding local authorities that save money and spreading the word on best practice are the most effective options.

Get yourselves together

Andrew Rowson, director, Local Partnerships — a joint venture between the Local Government Association and Partnerships UK
Public agencies need to collaborate more on property across large areas.

The West Midlands Property Alliance, for example, is promoting efficiency savings and improved use of the estate across the whole of the West Midlands through joined-up procurement, use of common tools, improved data and sharing functions and facilities.

The East of England Regional Improvement and Efficiency Partnership has adopted a similar approach.

Councils should also be reviewing their strategic asset management. Lewisham, Thurrock, and Liverpool have all adopted this process because they are ambitious local authorities that want to optimise their assets.

Property over people

Tony Dolphin, senior economist, Institute of Public Policy Research

Property will come near the top of any government’s savings agenda.

As an economist, I would expect it to focus on increasing productivity.

Unlike Trident, ID cards or new computer systems, you don’t affect your policy aims with cuts to property.

It gives the government a free lunch in a way, because it’s almost as pure an efficiency saving as you can get.

It might be as simple as saying, “We’ve got two quangos in Coventry and we can put them together in one building to save on property.”

It’s far better to vacate a building than to cut 10,000 jobs. Any government will leap at that.

Don't miss the Public Property Summit - 1-2 November 2010

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One Comment »

  • Paul Allsopp said:

    Property may be the catalyst and provide the initial impetus, creating revenue and capital receipts from space-saving but the true benefits to the organisation are ensuring that property change does not harm, indeed hopefully will create a more effective, efficient and productive organisation.

    Its good to see that Public Sector property teams are looking closely at efficiency and disposal plans through their strategic space needs, but to do this they first have to understand and assess what these needs are. This involves not only knowing the estate, the property market and the supply chain but more importantly proactively getting closer to the core organisation and its objectives, financial capability, service plans, investment programmes, and resourcing etc. At the same time property teams should be much more than a post box for departmental plans. They should add value in terms of challenging needs and presenting innovative solutions.

    Another key focus is to ensure that user Departments in the public sector understand the value and cost to their service of their occupation and the property they consume.

    An “Internal space/property charging” regime based on use of space which appears “below the line” of Departments is definitely the right direction to go to engender the right behaviours. This will not only move away from departmental silo mentality helping with de-duplication, TotalPlace and shared service but it will ensure that management at all levels in Departments will understand the value of property/ space to their business or service. It will better inform business decisions in terms of needs, utilisation, costs in use, and investment. It will also provide impetus and commitment to better utilisation and agile working initiatives.

    We should not forget that Property is also about people not just buildings. Engagement, communication and partnerships will therefore be key elements in the property managers toolkit.

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