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Creating the Government property assets of the future Making sense of a public estates strategy

Creating the Government property assets of the future Making sense of a public estates strategy with real local control Andrew Smith, Chief Executive Hampshire County Council. Why now?. £128bn current book value for local government property £15bn p.a. capital spend

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Creating the Government property assets of the future Making sense of a public estates strategy

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  1. Creating the Government property assets of the future Making sense of a public estates strategy with real local control Andrew Smith, Chief Executive Hampshire County Council

  2. 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

  3. 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 £ benefits • Opportunities • Understand need • Shared services • Assets and capital assessed • Driver for strategic procurement programme which could include greening agenda SMEs and apprentices 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. 20%+ Reduced need Construction, procurement, Source: SE IEP /Reading BC estimate Commissioning approach • Opportunities • Economic development • Inter authority collaboration 10-15% Construction, procurement Source: HCC Care Home case study £35bn in capital receipts could be raised over 10 years Joined up programme (multi projects) 2-5% Construction, procurement Source: SE IEP Total of £370bn worth of assets • Opportunities • Better delivery • Predictability One off project 0 Elapsed time 3 Time

  4. 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 Efficiencies + some surplus assets recycled as capital Hampshire County Council Headquarters Refurbishment Commissioning approach generate modernisation / rationalisation plans Case Study: £370bn existing buildings, one third of all non domestic stock Fewer buildings, better used, higher performing and more sustainable £30 billion per annum in new capital investment Jobs in construction and supply chain; skills created for retrofit work • 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 4

  5. The Big Idea – how the NIEP can support this approach • 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

  6. How to do it?

  7. 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.

  8. 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

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