By Tim Byles and Mike Bennett
First published in The MJ on 24 Feb 2021
While not much is certain in this world, we can be sure that the future financing of local government will not resemble the land of plenty. As evidenced by the Spending Review, Government is reluctant to plan ahead for any sensible length of time, and nothing in the state of central/local atmospherics suggest that significant constitutional improvements are on the horizon. This is not where we want to be; this is where we are. This stark reality means that councils will need to rely on their intrinsic sense of innovation, redoubtable resilience and dependable values to face up to the unprecedented complexity of public policy problems which are plain to see.
While some have compared navigating these problems to a modern-day version of Scylla and Charybdis we, like Odysseus, think that councils can ‘baffle death’ by avoiding the abominable tentacles of financial failure and resist the siren calls to break themselves on the rocky headland of unmet public need.
In our work in and with councils, we are seeing how committed and creative chief executives and their colleagues are reimagining their finances and their approach to place, by focusing on public assets which are often under-appreciated, under used and under-valued.
For more than ten years we have been supporting councils to operate more strategically and release the value inherent in their assets. It is especially important that councils take a combined approach to soft and hard infrastructure. Hard infrastructure is the physical assets and tangible facilities owned by the council. Soft infrastructure is the people, culture and narrative in an organisation that animates the hard assets to meet challenges. Bringing these two dimensions together is the most effective way for councils to release value from their assets and put them to better use in the interests of residents and service users.
Looking forward, in our experience there is a great opportunity for councils to do a lot more of the following to navigate the narrow path to success:
Effective local economic, social and environmental development post-Covid: This will often mean re-imagining town centres in the COVID era through bold leadership that brings together communities to revive and restructure local places where residents and businesses can meet, shop, experience and learn. Councils we are working with are reconsidering the location of their civic centre HQs, looking to re-anchor their presence and identity in town centres and high streets with local commercial and community centres in need of footfall. This requires both soft infrastructure of partnership working and place narrative, as well as tangible changes to hard asset use.
Winning more grant funding: Over recent years, central government has made increasing use of dedicated grants to fund priorities. Maximising grant income from these national pots is therefore a major strategic opportunity for local governments with ambitious projects. As an example, working with Central Bedfordshire Council, we have recently supported them in securing £69.5M Housing Infrastructure Fund (HIF) funding to enable over 3000 homes and commercial growth through the provision of critical power, transport and education infrastructure. None of that would have been possible if the council had taken a traditional approach to funding. Again this requires a twin track approach to soft and hard infrastructure.
Value for money and effectiveness dividends through co-location and joint working between social care and health: Combining assets to drive joint working productivity and culture change is a trend that we expect to see continue to grow in coming years. While central government does not make it easy by running different accounting regimes for local government and NHS assets, including national clawback that can frustrate local progress, there is already scope to do much more. Imaginative deal structures are releasing significant cash value, at the same time enabling seamless services that are better tuned to the needs of local people. We believe that a rising proportion of councils will begin moving asset integration in even more meaningful ways into the operational frameworks of Integrated Care Systems. Here the softer culture change and harder asset sharing are integrated from top to bottom.
Getting serious about surplus assets: Releasing value from surplus assets is not straightforward and can face challenges from the technical to the political. But the truth is that the UK public sector holdings land and buildings – are significant and represent a valuable, largely untapped, resource. These assets could be better managed either in terms of greater social value to communities, service users and residents. Or they could be sold or developed commercially to produce one-off cash or recurring revenue that would help cover to the growing hole in public finances. This is not about selling off the family silver. Assets that are in use or still have strategic value ought to be retained and maximised. But anyone who has worked closely with public bodies will have examples of locally held assets that are under used – or entirely unused – that are costing money and losing value – when they could be better managed, sold or developed to the benefit of public purpose and the public purse.
Even the most imaginative and experienced chief executives will be stretched when facing problems of post pandemic public spending. Our advice is to take a systematic approach to the inherited value of local assets, understanding that hardware of infrastructure is worthless without the software of people, culture and narrative. Using this holistic and strategic approach, local government’s ship can resist the temptation to swerve one way or other and keep a balanced course to sail safely through the treacherous waters ahead.
Mike Bennett is associate director of Cornerstone Assets and is a former director of Solace Tim Byles CBE is executive chairman of Cornerstone Assets, former chair of Solace and a former chief executive of Norfolk CC
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