One public estate conference

Transcript of the speech as delivered. I am particularly pleased to be able to address this conference today. I am also very grateful to …

This was published under the 2010 to 2015 Conservative and Liberal Democrat coalition government

Baroness Hanham CBE

Transcript of the speech as delivered.

I am particularly pleased to be able to address this conference today. I am also very grateful to CIPFA for taking the lead in arranging this event.

They have shown imagination and enthusiasm in advocating action on the management of publicly owned property and land.

And have played a supportive role in the joint programme my department has undertaken with the 11 Pathfinders, across England to shape the public estate to release resources and improve service delivery.

We have been working with the 11 pathfinders to co-design an approach which uses knowledge of the requirements of the local community to make better use of existing public buildings, and land.

And by public bodies working co-operatively to make capital investment in public building projects.

It is this spirit of cooperation and shared purpose which is needed if full advantage of the opportunities that a new approach to asset management can bring, is to be achieved.

From the outset of the asset management programme, I have been impressed by the energy and innovation of those who have taken part.

It has been clear that each pathfinder has seen the opportunities to be gained from local public bodies bringing together land and buildings.

The opportunities not only for releasing capital, but for improving services too. For too long those who need advice and help from our public bodies, have had to traipse round from one building to another to access them individually.

The benefit to them of being able to find all they need from housing to benefits, from health services to social services, from jobs, to police to the Inland Revenue, either all or in part, is significant.

Plenty of places are already grasping these opportunities. Herefordshire is a great example of this.

It expects to make £4.3 million savings a year (amounting to £33 million over 10 years) from the transformation of individual services to shared services between public service providers - the council, hospital trust and primary care trust (PCT).

And Hammersmith & Fulham, Kensington & Chelsea, and Westminster are collaborating to save £35 million by shining a spotlight on waste; sharing back offices; maximizing their assets; divesting services.

To give you a flavour of some of the stories you may hear later, from the Pathfinders themselves, Hull has worked with the private sector to deliver energy savings. Cambridgeshire has identified how it can use its assets to enable regeneration in a deprived area and Swindon has used assets for growth, including housing and retail development.

And Worcestershire which as well as making impressive savings has also come up with creative options for transferring multiple assets to community ownership and management which will save money and enhance services.

This all started, of course, with Hampshire, where Andrew Smith the chief executive recognised the possibilities of asset management and has not only proslytised, but inspirationally led this whole policy.

The importance of this enterprise really cannot be over emphasised.

For now, I won’t dwell on what we have done with Pathfinders over the past year or so. Their distinguished representatives are here to explain that and today’s workshops will explore the details and, I hope, answer your specific questions.

We know that the public estate is worth in the region of £385billion with estimated running costs of £25billion a year. Around two thirds of this is owned by local authorities.

It is essential, therefore, not only because of the current economic stress, but for the future, that both centrally and locally we recognise the value locked up in these assets.

So where these are underused, it will be in everybody’s interests that public bodies work together to release those resources, and redirect some of them to new uses, or jointly consider disposal options.

However, it has not all been plain sailing - one of the tasks of the pathfinders has been to identify barriers to all this ambition, one of my department’s’ has been to help knock down those barriers, such as the mismatch between various parts of government on the use of capital receipts.

The value of my department’s involvement in the programme has been the ability to bring government representatives together with the pathfinders to identify and discuss the issues, and to help find a way through them.

We will remain ready to do this, as necessary in the future.

We think that a place based approach offers opportunities to make significant savings on running costs and to cut the maintenance backlog bill currently estimated to be £40billion across the public sector.

But there are more than just financial benefits: this new approach could make a real contribution to protecting and improving front line services.

It could provide opportunities to strengthen the sustainability of the voluntary and community sector.

It could enable the release of significant amounts of capital funds for reinvestment, in other programmes, and perhaps an increase in energy efficiency and the creation of green jobs.

It could assist the delivery of much needed housing and regeneration as well as encouraging growth.

The locally based approach is a chance to develop a real paradigm shift in the way local public services work - the real prize is service transformation.

I recognise that the pressures on local authorities and other public bodies are considerable. There is no escaping this in the current financial circumstances facing the country.

But the key here is for public bodies to have freedom to decide their approach whilst being hard headed on the outcomes they want to see.

This is as much about Whitehall changing and devolving responsibilities, as it is about councils, local public sector agencies, and communities doing things differently.

Whitehall must give them the freedom to be innovative and make the right choices on behalf of, and with their communities.

There is a clear link between the work that has, and still is being done on asset management and The Local Government Group’s Place Based Productivity programme.

While The Local Productivity Programme goes much wider than asset management it aims to help local government identify and deliver short term savings to create the space to deliver longer-term transformational changes to services.

The programme has the potential to help with ideas and strategies to bridge the gap in funding, how to work more collaboratively and transform local public services. Capital and Assets management is seen as one of the 3 big wins of the programme.

We still face many challenges to achieving this ambition. As more areas grasp the new freedoms to take a comprehensive locally based approach, there will be many issues to work through.

But we share an ambition to make these approaches work, and to help local public bodies transform services.

If we can make this a benchmark for capital and asset use we will have improved efficiency, saved money and transformed services - this is a prize worth having.

I have very much enjoyed chairing the Pathfinder programme. Over the coming months I will look forward to seeing the business plans and projects coming to fruition.

I will also take an active interest in seeing this spread more widely, becoming an integral part of the planning of local areas.

I would like to say how impressed I have been throughout my involvement in the programme with the invention and hard work of the pathfinders. Equally I have been pleased with how different their proposals have been, demonstrating the breadth of vision they have on these issues.

Local government improvement and development will now take over the lead in spreading the pan public sector approach to areas beyond the 11 Pathfinders.

I am pleased that CIPFA will continue to play a leading role in this and help to embed the best practice.

I hope you have an interesting day, and that the ideas and enthusiasms which will be demonstrated to you, by the pathfinders, will stimulate public bodies across the country, to follow their lead.

Published 26 May 2011