Conference report

Citation

Plimmer, F. (1998), "Conference report", Property Management, Vol. 16 No. 2. https://doi.org/10.1108/pm.1998.11316baa.001

Conference report

This is the second "themed" issue of Property Management. On 11 October 1996, Napier University hosted the Local Authority Property Management conference, three papers from which formed the contents of Vol. 15 No. 4 and we are delighted to present three more in the current issue of Property Management. Once again, Property Management is grateful to both the authors and the conference organisers for their co-operation and support in this collaboration.

Conference report

The conference covered four main themes:

1. 1.

   the development of local authority property management since the publication of the Audit Commission's report and the CIPFA's requirements;

2. 2.

   initiatives based on the Audit Commission's report and the CIPFA's requirements;

3. 3.

   strategies developed to implement the Audit Commission's report and the CIPFA's requirements; and

4. 4.

   reorganisation and reform of property management in local authorities.

The conference dealt with technical matters associated with the valuation initiatives, non-operational properties and CCT, lessons learned from other sectors and issues facing local authorities following reorganisation.

Alex Baird of South Lanarkshire Council, in his presentation on Integrated Property Management, said that local authority property management is significantly different from property management in other sectors. It has specialisations which do not exist outside the public sector. Property accounts for 20 per cent of the running revenue budget, £6 million per week for South Lanarkshire whose property portfolio has a capital value of over £5 billion.

He continued that the Unitary Authority portfolio has provided the opportunity to unify the property management services but it is the duty of property professionals to analyse how colleagues are using property and to lead the debate.

The conference included a presentation on the Scottish Land Information Service (ScotLIS) which, based on BS 7666, will create a national land information system (NLIS) which will include Land Registry Information. BS7666 provided an integrated referencing framework for all the basic types of spatial information used by local authorities. Supported by the Department of the Environment, the Ordnance Survey let the initiative develop an over-arching framework to facilitate the dissemination and integration of spatial information. The ensuing discussion revealed that local authorities have a statutory obligation to provide the resource, but that there is no apparent source other than their own finances. Lack of money may mean that the NLIS will be a long-term process.

Nick French presented a paper based on the debate over value in use or value in exchange. He identified the driving force behind the valuation of local authority assets as the Audit Commission's report and considered the role of the RICS's "Red Book" for local authority purposes. He identified the provision of the asset's worth to the councillors and the impact of an internal asset rent as the main reasons why assets should be valued for property management purposes. He queried the use of depreciated replacement cost (DRC) as the basis of an asset's rent because most valuations are on a market value basis i.e. value in exchange. The question must be what is the true rent of a specialised property?

There is, he continued, a great danger in putting valuations on absolutely everything and in making decisions based solely on those valuations. We must, he advocated, explain to the financial decision-makers what those figures mean, because the best thing to do with the assets may be to sell them and provide no service. Yet the overall objective seems to be to produce the service and therefore perhaps it is not good to get hidebound by the value.

We have, he concluded, a duty to advise our client that short-term gains are not necessarily to the client's benefit. How property management and valuation fit into the process is something which property professionals need to explain, but they must be explained within the context of the needs of the client.

One of the speakers to raise the issue of the serious underfunding of local authorities was Ian Stewart, former Director of Finance and Deputy Chief Executive, Dumfries and Galloway Regional Council. He considers local property taxes to be the most suitable for local government and that the return of the uniform business rate to local control would need to be accompanied by significant safeguards. He predicted that the demand for services would continue to exceed resources and that property management is absolutely vital.

The keynote address was by Richard Lay (who provided the editorial for Vol. 15 No. 4). He highlighted the wealth of property held in the public sector and the fact that corporates (such as banks, industrial companies, supermarket chains) hold the bulk of property assets in the UK. Of these corporations' assets, half are held in property, and yet only 40 per cent of UK corporations have Estates Departments and that in UK companies, only 2 per cent of corporate staff are employed in managing the company's properties, i.e. 50 per cent of the company's assets.

Property is an envelope within which a process is undertaken. It is a tool to be a used and, in the context of local authority property, to be used in the public interest, which is best served when property is managed effectively.

As Richard Lay said in his editorial (Vol. 15 No. 4, p. 214) "...property management ... is about the creation of added value by ensuring that property is used efficiently and profitably, both by the owner and the occupier". The importance of the efficient and profitable management of the public property portfolio cannot be underestimated in a climate of financial constraint and the quest for optimisation of value for money in our public services.

Local authority property management is responsible for vast amounts of the nation's wealth and for the provision of the nation's public services. The message from those involved is that property management is there to serve the community. It is exciting and it always has been.

Frances Plimmer

Readers may be interested to know that the full proceedings from the conference are being published in August 1998 as: Local Authority Property Management: Initiatives, Strategies, Reorganisation and Reform. Mark Deakin (Editor), Ashgate Press, UK.