26 February 2013
Paul Disley-Tindell, director corporate real estate at Telereal Trillium, comments on a recent Guardian Professional article ‘Stick, sell or twist? Why feelings matter when it comes to council assets’.
The article highlights the challenges faced by councils endeavouring to reduce their cost base through the rationalisation of their property portfolios. It argues that it is difficult to disentangle assets from the locality and the fabric of community life, and that the public value benefits of regenerating an asset for new uses should be compared against the likely cash sum generated from a sale. I would endorse the views that the non-financial benefits of holding assets should be a factor in decision making and that councils need to be better at explaining why they are choosing a particular option to a sceptical public usually resistant to change.
It is also worth highlighting, however, that many local authorities have significant property investment portfolios held purely for income (helpful for keeping the council tax down) rather than for reasons of public service. These portfolios have usually been assembled over time, as a result of historic regeneration projects, abandoned road widening schemes and the like, and are not always subject to a cogent investment strategy that would maximise the value of portfolio for the benefit of the council and its residents.
Such assets can be tucked away on the balance sheet of a council and so are often not subject to the same level of scrutiny that would apply to a council's core services. Where such portfolios do exist, councillors and officers need to recognise that they are effectively running a property company as well as a council and therefore put in place appropriate investment strategies and performance metrics.
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