Unlocking value: The art of effective estate asset management

Local authorities are facing unprecedented financial pressures. According to a Local Government Association survey, 85% of councils will still need to implement cost saving measures to balance their 2024/2025 budget, despite extra government funding. Over half (52%) of all respondent councils anticipate making costs reductions within at least three different neighbourhood services.

The combination of increased demand for public services, rising costs, and reduced funding has left many councils in a difficult position. Effective asset management has become a crucial strategy for authorities to remain resilient through these challenges, whilst maintaining service delivery and community support.

Understanding the role of asset management in local government

Asset management is the strategic planning, acquisition, use, and disposal of physical assets such as buildings, land, vehicles, and equipment. For local authorities, these assets are central to effective service delivery and community infrastructure.

Effective asset management ensures that resources are used efficiently, costs are controlled, and assets are maintained in a way that supports long-term sustainability.

Key principles of effective asset management

Focussing on several key principles local authorities can effectively look to manage their assets in a logical way:

• Asset inventory and assessment: Local authorities need to have a comprehensive inventory of all their assets, including their condition, usage, and costs. This assessment allows for informed decision-making on which assets to maintain, repurpose, or dispose of to achieve maximum value.
• Whole lifecycle cost analysis: Considering the lifecycle of an asset is important, from acquisition to disposal. A lifecycle cost analysis helps local authorities to identify the most cost-effective strategies for maintaining assets over time, this reduces the risk of costly surprises due to lapsed maintenance or unexpected repairs.
• Data-driven decision-making: Leveraging data and analysis, local authorities can inform their asset management strategies. This includes technology to track asset performance, analyse trends and identify opportunities for cost savings.
• Community engagement: Effective asset management involves engaging with the community to understand their needs and priorities. This helps ensure that asset decisions align with the community’s expectations and contribute to their wellbeing.

Strategies to achieve the principles

• Effective partnerships: Strategic partnerships provide additional resources and expertise to access innovative solutions and share the financial burden of maintaining and upgrading assets.
• Long-term planning and investment: Sensible asset management requires a long-term perspective. Local authorities should think about developing comprehensive asset management plans that consider future needs, growth, and emerging trends. Investing in preventative maintenance and upgrading critical infrastructure can prevent costly repairs and disruptions.
• Energy efficiency and sustainability: Investing in energy-efficient technologies and sustainable practices can reduce operational costs and contribute to net zero goals. For example, smart buildings can provide comprehensive data and real-world insights, revolutionising how local authorities manage spaces, reduce carbon emissions and maximise space efficiency.
• Asset optimisation: Local authorities should regularly evaluate their assets to identify those that are underutilised or no longer serving the purpose they were intended to. Disposing of these assets or redeveloping them for other uses can generate revenue and reduce maintenance costs.

Conclusion

Effective asset management is critical for local authorities that face budget constraints. By adopting key principles, leveraging data-driven decision-making, and implementing innovative strategies, councils can navigate financial pressures whilst maintaining essential services for a more resilient future.

Read more about our approach to providing resilient estates or contact me at Phillip.Bishop@capita.com to discuss how we can help you to unlock value with effective estate asset management.