Local authority partnerships are well established in the delivery of frontline services, offering greater efficiency, external revenue streams, and pairing a commercial culture with public service ethos.
The partnership model is not new in professional property services (Norse Group currently has five such joint ventures), but councils have generally been slower to embrace it.
Given the current challenges faced by local government, we may be seeing the dawning of renewed interest in forming such arrangements. For several years council finances have been under unprecedented pressure: following the years of austerity, we have experienced a pandemic, the cost-of-living crisis and sustained high inflation. This has led many local authorities to cut back their in-house resources and, as a means to saving money but still delivering projects, become commissioners of services through outsourcing.
However, as a result, councils have lost a lot of the institutional intelligence needed to deliver a compliant, balanced property and estates portfolio, which also sweats assets and delivers greater value – financial and social – to the communities they serve.
There now seems to be a growing appetite to bring property services back inhouse, but, without the necessary resources and knowledge, this option is fraught with risk.
The partnership model, as opposed to traditional outsourcing, offers a way to overcome capacity problems, at the same time delivering greater control and cost-efficiency, with added social value. A joint venture founded on co-ownership provides greater responsiveness and agility, meeting the evolving needs of the council while achieving better value for money. Moreover, the model engenders a commercial culture, generating external revenues and profit share.
Our local authority joint ventures have been able to leverage property resources rather than disposing of them to raise funds, particularly important for smaller councils, who are more exposed to financial burdens.
With the likelihood of continuing financial pressures, I believe that the time has come for local authorities to consider partnership working as a real alternative to traditional outsourcing – and find ways of unlocking greater financial value.
