Friday, 15 October 2010
Local authorities are used to cutting costs. That is just as well. The imminent Comprehensive Spending Review will ratchet up the pressure on them to do so even further.
But savings are not the whole answer. The government must put more pressure on the public sector to raise money too. This thinking is the lifeblood of the private property industry, but there is little pressure on the public sector to generate income.
It will be hard for the government to change, but change it must: the public sector is missing too many opportunities. These range from the obvious, such as ensuring vacant property is let, to the more innovative.
In August, environment secretary Chris Huhne gave local authorities the option to sell energy through feed-in tariffs. It was a good move, but this was just one possible area to address. The government should send a stronger message to the public sector that it is OK to be commercial.
Some forward-thinking local authorities, such as Lewisham and Southampton, have wisely taken minority stakes in their shopping centres, and will benefit from this income stream as it grows. But this is passive investment.
The diversity of assets within local authorities is immense, and this is part of the problem. Town halls and civic chambers are being rented out by some authorities for weddings and events, but the commercial promotion and marketing of these venues is often poor, so these fantastic assets are under-used.
Car parks and park-and-ride schemes may be operationally well managed, but there should also be kiosks to sell customers newspapers and coffee. Any good private sector property manager would be thinking along these lines.