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Advisory Group June 2019

Using the power of partnerships to achieve exceptional outcomes

On Monday 24th June, Council officers from 15 local authorities  met for the 16th Public Sector Plc Advisory Group.  The meeting provided  Partners and guest Councils an opportunity to learn more about property activity across the Public Sector Plc Council network and listen to presentations from CIPFA, NetZero Buildings and Gateshead Council.  Best practice and knowledge was also high on the agenda for the day and offers the chance for officers from various Councils to share insight from their locality.

What does success look like?
During the day, examples of projects were presented by the various speakers which included a town centre regeneration project in Northwich, an industrial estate development in Winsford and a nursery and housing development in Southend-on-Sea.

Steven Hayles, Corporate Property Officer at Gateshead Council, presented how the Council’s recent Partnership with Public Sector Plc had revised a plan to provide strategic asset management of the Council owned portfolio of over 1,000 commercial properties. Back in 2017, Gateshead Council had identified a need to strategically  manage its investment portfolio but resources (people and cash) were limited. In 2018, the Partnership developed a proposal to reshape the portfolio with the objectives to:

  • Help the Council unlock additional money from investment opportunities to enable funding for vital services for Gateshead residents
  • Make the portfolio cheaper to run; generate the same, or more income and achieve a higher capital value
  • Rebalance the portfolio with poor performing assets to be sold / new assets to be acquired or developed
  • Deploy capital funding to refurbish assets and develop new where appropriate
  • Create maximum value and ‘hand back’ the rebalanced, more efficient portfolio

Through its Partnership with Public Sector Plc, the introduction of a far-reaching asset management strategy will help the Council unlock additional value from its existing non-operational estate. As a result, Gateshead Council and the Community will be able to realise significant socio-economic benefits and generate new income streams to support vital services where cuts have been made through austerity.  

A practical investment strategy

CIPFA’s Head of Property Advisory Services, Tim Reade, discussed the need for investment strategies to echo the corporate body. Looking not just at the commercialisation of schemes but also at what Councils want to achieve overall, he said a three-stage practical approach should be taken to develop an effective investment strategy. Stage one involves developing situational awareness, understanding the context and generating specific aims and objectives. Stage two then involves creating a sustainable investment framework, strategy and plan – while stage three looks at the development of a sustainable asset management process, taking into account KPIs.

A new approach to housing
At the Advisory Group, the new Public Sector Plc housing model, LetLife was launched. It aims to offer a flexible and responsive housing rental solution.  The model will help to generate revenue streams while ensuring the secure and robust delivery of housing through dedicated partnerships.

The key has been to produce quality factory-built housing that is suitable for the rental market, whilst also being highly energy efficient.  This neatly aligns with the UK’s net zero by 2050 target. In this respect, Public Sector Plc is ahead of the curve thanks to its working relationship with NetZero Buildings which uses off-site construction methods to quickly and cost-effectively deliver highly efficient buildings that generate more power than they use.  

Speaking during the session, NetZero Buildings CEO Neil Smith said: “The housing demand isn’t going away, and neither is the environmental story. But revenue streams are still important. So, for Councils looking to build new homes or schools, investing in a future-proof solution is a sensible strategy to adopt.”

Addressing local authority issues
Attendees took part in an enthusiastic group discussion on the day. Participants agreed it was important to look at things in a bespoke way and offer different options which cover a range of services. For example, there is still a real requirement for Private Public Partnerships – especially across areas such as commercialisation. However, arrangements can often be quite transactional and don’t take a holistic approach across wider objectives. As such, insourcing offers a flexible way to realise the ambitions of the public sector – giving back control while ensuring value, quality and a degree of scrutiny.

During the discussion, there was a consensus that the public sector needs to intervene in the housing market in order to stimulate delivery, address challenges such as supply constraints and to plug any gaps in the market. Otherwise, power will be centred around a few major private developers which cater only for a narrow segment of the market. The public sector can, therefore, help to understand the dynamics of the market and the types of houses needed – offering a balanced range of options which add an element of security and complement private sector activities.

We’re looking forward to the next Advisory Group in September in Warrington, if you’d like to find out more or if you’re a Council officer and would like to attend as a guest, contact Head of Marketing and Communications Mark Davis for more information mark.davis@publicsectorplc.com

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