When it comes to estate rationalisation, we need rational thinking

COMMENT The recent exchange between the current and former chancellors in the House of Commons was notable for its contained fury, as Labour added more detail to its economic plans, this time around balancing the nation’s books. While the UK is plagued by divisive politics, now is not the time to shy away from some brave decisions about public sector assets. The accelerated rationalisation of the government estate, with working from home and increased pressure of using resources more efficiently, is a good move. But what assets – or even liabilities – will be put up for sale, and is it enough? Tip of the iceberg? For more than a year there have been headlines about cash-strapped councils, forced to sell £15bn of assets or some 75,000 properties. So the headlines around £500m of government sales are not even the tip of the iceberg, surely? Many central London buildings have clear, viable existing uses and for residential, hotels and leisure – and anything with listed status or historic relevance – will be more attractive, even if it will take more care to transform. There is certainly private sector appetite for these sorts of properties.  Across the wider public sector this is already well under way for many and we expect to see a significant focus on this year. The days of owning assets “just because we do” are gone and organisations across local and central government are considering the resources needed to manage an asset, the cost of improving sustainability and what the actual benefits to the public are – and making more resolute decisions than I’ve ever seen in my career. The resources needed are intense, both for reviewing assets and ensuring decisions are made based on robust forward-looking analysis of need. Doing nothing might be the easiest option but it’s becoming more evident that it’s not the right option. Most would agree, however, that wise investment in modern infrastructure, likely using both public and private sector skills and resources, is needed. Hospitals, rail, energy, education and affordable housing are all examples of where the government is highlighting the need for a pause. But these initiatives are central to social and economic progress and once this short-term hiatus is over, there should be a reaffirmed desire by Labour to kick these projects on, although likely in a different form to that envisaged under the previous government. But the sums needed to turn the undeliverable project into a deliverable one are vast and it is essential that resources are freed up from legacy portfolios, where sentiment is not a reason for continued control, especially where those controls are not proactively utilised. Public-private partnerships Is Labour being progressive enough when it comes to the use of their estate to create receipts, simplify the resources needed to manage it and benefit from the economic growth that can come from having it in the right hands with the right business plan? One way to go further, would be to bring on board more industry specialists. With James Timpson supporting Labour as prisons minister, among others, precedent has already been set for bringing in private sector expertise to support high-level public sector activity. Do we need someone similar as the property strategy minister? Someone who has passion like Timpson but can bring an impartial, unemotive approach with sector knowledge based on first-hand experience? The benefits of a slimmed-down portfolio, put to work to deliver the 1.5m new homes, new towns and major infrastructure seems to be a win-win. A clearer strategy to maximise potential value, working with industry experts and private sector partners, would certainly reinforce the sense in the new government’s approach.   Alan Harris is head of advisory at Montagu Evans