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Councils urged to improve property management

The Audit Commission has called on councils to ensure they have a “strategic approach” to managing assets and property after finding around £2.5bn of ‘surplus’ assets.

The Managing Council Property Assets report, which considers local authorities’ management of the land and buildings that they own, revealed that in 2012-13, the local government estate was worth an estimated £169.8bn on net book value (NBV).

Although the value of the estate has shrunk by nearly a third since 2004-05, the Audit Commission says there is around £2.5bn of ‘surplus’ assets that could be better utilised.

Jeremy Newman, Audit Commission chairman, said: “To be clear, we are neither advocating that local government starts a wholesale sell-off of their land and property nor are we suggesting councils shouldn’t spend money on buying assets or on investment to improve their existing property.

“What we are highlighting is a group of assets that do not provide immediate benefit to local communities, but still require councils to spend money on maintaining them. These assets have potential value for councils.”

The Commission has, therefore, urged councils to use the data held in the its ‘Value for Money (VFM) Profiles Tool’, such as spending on and value of land and property assets and ‘surplus’ assets.

The briefing also advocates that councils should be active and strategic managers of their estates – understanding property markets and asking questions about the properties they own or lease. It prompts councils to consider whether assets are in the right place, whether they should keep, sell, or transfer them, and how much they should invest in building, buying and maintaining property.

Newman added: “Councils should ask themselves – do we have an appropriate estate? In order to extract the most value from their assets, councils should not sit on valuable land and buildings that can be better used as a resource to support their wider service and strategic objectives.”

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