£35bn savings could be made out of public assets: Pickles

Councils and other public bodies should publish asset lists that will help to identify possibly as much as £35bn in savings by 2021, claims Communities and Local Government Secretary Eric Pickles.

The context: new data just releases shows public sector assets are worth an estimated £385bn, with almost two thirds owned by councils. A 'demo' map, published today, locates over 180,000 assets owned by almost 600 public sector bodies, including central government and 87 councils, reveals widespread public property ownership according to the Department.

As a result of the data, the Coalition says it is now committed to work with areas seeking to make savings through better property management, estimating this could potentially save £35 billion over 10 years. Pickles wants public sector organisations, including councils, to publish registers of all buildings and land owned. Local people could use the lists alongside the Localism Bill's new community rights to protect local treasures.

His argument: the public have a right to see the sheer scale and variety of public sector asset wealth, which in some cases include pubs, farms and even sports clubs.

The map shows that, among other things, Hampshire County Council owns around 2000 hectares of farm land and property leased to private tenants, over 130 cafes and restaurants, more than 100 pubs, around 60 theatres, over forty hotels including three Holiday Inns, about 20 cinemas and one airport in Southend are listed, as well as nearly 100 golf courses, almost 30 sports stadiums including Swindon Rugby Club, Swindon Town Football club and Aldershot Football Club, a handful of horse riding centres - and one sailing club.

Pickles' team says results from eleven council led pilot projects, known as capital and assets pathfinders, found that on average 20% savings could be made by "rationalising public assets or co-locating local services based on customer needs".

DCLG also claims "a recent independent report" found local government and the public sector could save up to £7bn a year in operational costs through better property management (with Treasury figures suggesting annual running costs top £25bn and the backlog of maintenance repairs has been estimated to be around £40bn).

"I want the public sector to take a good hard look at what they own. By cataloguing each and every asset councils can help Government find innovative new ways to utilise them, improve local services, keep council running costs down and save taxpayers' money," says Pickles.

"This asset information also holds huge potential for local communities, offering an at a glance way to find that new meeting place or rescue the derelict tennis court round the corner."

Examples of savings include: 

• Leicestershire councils and local public services are investigating ways to join up services and better co-ordinate asset use, with hubs being created in three of the districts, to provide cost and carbon emission reductions across the county
• Worcestershire Council discovered they were using 39 separate public buildings for public sector training and conferences. They are now looking at how to rationalise these to ensure better use
• Cambridgeshire are moving towards a single public sector approach where assets are managed locally to make savings and reduce carbon emissions. Early investigations suggest savings of up to £200million over 10 years may be possible
• Hampshire expects to reduce operating size and costs by a least a third in Winchester and Basingstoke by developing a single asset decision making hub across the local public sector. It will be overseen by a Joint Management Board of partners.

Critics have already said the system is "regionally flawed" and too "London-centric" believes Kevan Davey, managing director of Concerto Support Services.

"It's easy to see how selling off unused council buildings in London may yield a good financial return - but the same cannot be said of councils in less affluent regional locations," says the supplier.

"The commercial property market is depressed and council buildings that are already part of rationalisation programmes aren't selling - they're stood empty. Plus many of the council's assets yield steady income; if they're sold off, they generate a one-off lump sum - and at a reduced value during the recession."