DTZ said that well over half of the buildings owned by UK local authorities are in poor condition and impacting council costs and productivity.
Its survey revealed that more than 40% of local authorities rated their property portfolios as being in either poor or very poor condition while 90% had buildings that were more than 20 years old. The survey also revealed that nearly two thirds of local authorities have sold off offices in order to save money.
DTZ said that local authorities are rationalising and upgrading their property portfolios primarily to improve operational effectiveness and to reduce costs.
It said: ‘When considering what is driving change in property portfolios, the desire to kick-start regeneration has been one of the lowest priorities, with only around 40% rating this as important or very important. This compares with operational efficiency, cost reduction and building condition, all at over 90%.’
Richard Grass, director of corporate real estate consulting at DTZ, said: ‘This bears out DTZ’s own experience that regeneration benefits are quite location specific. They are usually a spin-off benefit of a major consolidation, such as the release of surplus council assets for redevelopment, rather than a key driver.’
Grass said the pace of change within local authority property portfolios appears to be accelerating, with around 43% reporting significant change over the past five years and 65% saying that they currently have change initiatives planned, including a range of measures from refurbishments to consolidations.
The main reason cited by those few local authorities not making any improvements to their buildings was difficulty in proving an economic business case for change.
‘Authorities need to focus on capturing the productivity benefits of major workplace change. It will strengthen future business cases and give the wider local government community the confidence to press ahead with projects where the economic case appears marginal,’ said Grass.
‘The general age of the building stock suggests there’s still a lot to do and whilst current market conditions may delay or defer projects that were relying on capital receipts from asset disposals in the near term, we wouldn’t expect them to prevent medium to longer-term projects moving forward.’