As we live through our third national lockdown and another period of reflection, it is important for councils to focus on the opportunities that lie ahead.
COVID-19 has changed the way that we work, live and shop and proven that millions of employees can productively work from home, including hundreds of thousands of council staff.
Some of these changes will become permanent. Indeed, large scale surveys of office workers have shown that going forward almost nine in ten (87%) want to work from home at least some of the time.
As a result, the Welsh Government is making plans for 30% of the nation’s workforce to move to hybrid working, where they spend part of their week working from home and part of the week working at community-based remote working hubs.
The Welsh Government has said it wants to give workers across Wales more flexibility to work remotely and believes this has the potential to drive regeneration and economic activity in communities as well as reduce road congestion and pollution.
During lockdown many people have discovered a new appreciation for their local area. How can councils capitalise on this?
For councils, now is the time to strategically review their entire property portfolio to assess which assets could be developed or sold to help them meet the needs of their residents and the changing objectives of the council.
In our new digital world do local authorities still need all their offices, buildings, car parks and other land holdings?
Would the council and local community be better served by re-developing these assets for other uses and generating much-needed income to address the funding gap which the LGA estimated had reached £7.4bn in July last year?
Council partners we are speaking to have a number of outdated and sometimes dilapidated buildings which cost a lot to run and maintain. Savvy councils are looking to demolish buildings that are no longer fit for purpose and instead develop places which are flexible, multi-purpose and sustainable.
Another driver for councils to strategically review all their land and built environment assets has come in the shape of the Government’s proposed ‘Right to Regenerate’ which would force councils and other public organisations to sell ‘underused’ land and buildings to individuals or communities, unless there is a compelling reason not to.
There have been few better times in recent history for councils to look at their property portfolio and take considered, strategic, long-term decisions, which includes creating a rationale for all the assets they want to retain for longer-term development.
While councils will be cautious about hopes for more money from central Government, this year will offer local authorities a unique opportunity to re-shape their communities and build back better – at a time when they enjoy high levels of public support. A survey by Survation for the Association for Public Service Excellence found public satisfaction and trust in local councils was stronger than ever:
There are signs that councils are already grasping this opportunity. Local authorities borrowed £252m from the Public Works Loan Board (PWLB) in December 2020, the highest sum borrowed since April 2020.
Reviewing land and assets at this time will enable councils to take advantage of the Government’s 1% cut to PWLB interest rates to support plans for the development of land and buildings.
In October 2019, the Treasury raised the PWLB rate by one percentage point, which led to monthly borrowing dropping to £40m in November 2019.
However, after the Government cut the PWLB interest rate by 1% in November 2020 borrowing in December 2020 was six times higher than in November 2019.
There is now an additional consideration for PWLB borrowing as councils have also been told they now need to prove that their capital plans do not include any borrowing to buy assets purely to produce a yield.
This does not preclude councils from borrowing to fund housing or regeneration projects to improve their towns, cities and suburbs.
Councils which take a strategic, holistic approach to re-generating their localities following the impact of COVID-19 will create better places to live, work and visit and stronger, wealthier, and more resilient communities.
Mark Davis is Director of Partnerships at Public Sector Plc