Local authorities in the Midlands should push ahead with improving its ageing building stock to improve issues like staff productivity, according to a new report.
In the recently-published research by DTZ - which polled 86 local authorities - Birmingham and Sandwell stated that the majority of stock within their portfolios is more than 20 years old. When considering the standard of accommodation, whether it meets operational needs and is fit for purpose, Birmingham considers its stock to be generally poor whereas Sandwell believes the condition of its estate to be generally good.
When considering what is driving change in property portfolios, the desire to kick-start regeneration has been one of the lowest priorities, with only about 40 per cent of respondents rating this as important or very important. This compares with operational efficiency, cost reduction and building condition, all at more than 90 per cent.
Mark Scoot, director in DTZ’s regeneration and development team, said: “Birmingham rated cost reduction and wider regeneration initiatives as very important as a key driver for change. Interestingly, the condition of the portfolio was not considered important and operational efficiency was considered of low importance.
“DTZ’s experience is 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.”
The survey, which also included a representative sample of all categories of local authority including 25 per cent of London boroughs and 40 per cent of County Councils, revealed that nearly two-thirds of local authorities have sold off offices in order to save money. In Birmingham a consolidation programme is under way, which will rationalise the city’s 2m sq ft portfolio and is being coordinated by Telereal. It is estimated that the programme will save the Council £100m over 25 years.
The Council recently won cabinet approval to submit a planning application for an environmentally-friendly 180,000 sq ft office building to be developed on Woodcock Street in Aston. The regeneration project is set to house about 2,000 staff but has already sparked some negative comment about the suitability of the location.
According to the report, the pace of change within local authority property portfolios appears to be accelerating, with about 43 per cent of all respondents reporting significant change in the past five years and 65 per cent saying that they have change initiatives planned, from refurbishments to consolidations.
Half of councils say that change projects in their property portfolios have significantly contributed to improvements in staff performance.
Birmingham considers that it has made significant progress in achieving improved sustainability credentials, increased flexible working, a reduction in space per full-time employee, a reduction in desk per staff ratio and, most importantly, an improvement in staff performance.
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.
Mark Scoot added: “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.
“The general age of the building stock suggests there’s still a lot to do and while 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.”