Addressing the Financial Crisis in Local Authorities: The Role of Real Estate and Asset Management

As we move into the Autumn with a new government, a key concern for many will be the status of Local Authority finances. As has been well documented, around 40% of Councils in England are at risk of financial failure over the next five years. Budget cuts, increased costs, and a higher demand for key services like social care, housing, and special educational needs have placed the sector in a precarious financial position. It is no secret that many local authorities face a funding “black hole” that may or may not be filled by the central government.

This has led many Councils across the country to consider their investment portfolios and real estate ownership. It is estimated that London Local Authorities own or manage around one-fifth of the land in the City. In 2021, the government suggested that public sector property assets across the country were worth an estimated £500 billion. Whilst that figure may well be different today, it is a significant possible source of additional revenue which may help to address the current financial position.

However, this issue is much more nuanced than a simple case of selling of public sector assets to raise quick funding. Many public buildings are significantly underutilised following the pandemic. Others may well have experienced value decline (or gain) as a result of recent market forces or now present a clear redevelopment opportunity. Without the resources to filter, assess and scrutinise these assets, many opportunities to maximise value could be missed. Indeed, ensuring that these buildings function for the good of the wider community and deliver social value is a core requirement for public sector ownership.

Understanding the public sector, as well as its requirements and considerations, is at the core of what we do. We are uniquely placed to mobilise expertise across our business to assess assets, identify opportunities, and deliver positive solutions that allow local authorities to focus on the delivery of core services.

We have created our “RESCUE” concept, which leverages expertise from across our business to provide one suite of services to tackle a range of opportunities and problems. This ranges from the macro/portfolio level to asset-specific advice”.

You can learn more in the PDF below 👇