Shared property services in
the public sector: a future of
collaboration?
Author:
Brian Thompson
Director, realestateworks Ltd
brian@realestateworks.co.uk
RICS Lead:
Jon Bowey
Associate Director, Property Professional Groups
jbowey@rics.org
Contributors
RICS Public Sector Group
Association of Chief Estates Surveyors
Crown copyright material is reproduced under the Open
Government Licence v3.0 for public sector information
Published by the Royal Institution of Chartered Surveyors (RICS)
RICS, Parliament Square, London SW1P 3AD
www.rics.org
The views expressed by the authors are not necessarily those of RICS nor any body
connected with RICS. Neither the authors, nor RICS accept any liability arising from
the use of this publication.
All rights reserved. No part of this publication may be reproduced or transmitted in any
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publisher.
Copyright RICS 2017
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Report for RICS
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Content s
Executive summary ...................................................................... 4
1.0 Introduction ........................................................................... 5
2.0 Evolution of trading and sharing ........................................... 6
2.1 Legislation ................................................................. 6
2.2 Other government programmes .............................. 7
2.3 Austerity .................................................................... 8
2.4 Evidence of change ................................................... 9
3.0 The questionnaire .................................................................. 10
3.1 Respondents ............................................................. 10
3.2 Questions on shared property services .................. 11
3.3 Statements ............................................................... 12
4.0 Case studies ........................................................................... 23
4.1 Richmond and Wandsworth Councils ...................... 23
4.2 Place Partnership ..................................................... 24
4.3 A five-council partnership ....................................... 25
4.4 Essentia ..................................................................... 25
5.0 Conclusions ........................................................................... 26
6.0 Acknowledgments ................................................................. 27
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Figures
Figure 1 Geography - regional distribution of responses ... 10
Figure 2 Sector distribution of responses ........................... 10
Figure 3 Awareness of shared property services ................ 11
Figure 4 Participation in shared property services ............ 11
Figure 5 Public sector ethos ................................................. 12
Figure 6 Better value for money ........................................... 13
Figure 7 Understanding issues ............................................. 14
Figure 8 Pooling resources ................................................... 15
Figure 9 Costly and time consuming .................................... 16
Figure 10 Commerciality ......................................................... 17
Figure 11 Rise in popularity .................................................... 17
Figure 12 Resistance to collaboration ....................................18
Figure 13 Selective collaboration ........................................... 19
Figure 14 Appetite to buy or sell ............................................. 20
Figure 15 Availability of resources ......................................... 20
Figure 16 Local knowledge ..................................................... 21
Figure 17 Preparedness to sell services ................................ 21
Figure 18 Appetite to learn more ............................................ 22
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Shared property services in the public sector: a future of collaboration?
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Executive summary
The days when public sector service providers worked
alone or, worse, in competition with other providers, are
thankfully no more. Whether this is because of a genuine
collaborative spirit or because they recognise their survival
depends on working with partners, the result is that
shared services have increased across the public sector.
New legislative freedoms are also partly responsible
for the rise of this model of service delivery, which
encompasses joint ventures and corporate entities.
Shared property services are now trying to catch up,
spurred on by government programmes like One Public
Estate (see section 2.2.2). At one extreme, shared
property services can involve a public sector body
supplying a resource to another on an ad hoc basis (and
often for free), which is both informal and unstructured.
But at the other end of the scale, a shared property
services arrangement might involve creating an entirely
new company to serve public sector shareholders and,
potentially, the wider market. There are of course many
variations between these two extremes.
Research
RICS commissioned a research project to understand
the pace of change of shared property services in the
public sector. To gather opinions, they published an
online questionnaire that the Association of Chief Estates
Surveyors and Property Managers in the Public Sector
(ACES) then promoted. They also spoke to various
organisations across the public sector with experience of
shared property services.
The key findings are:
• Shared services are already widespread, and we are
likely to see many more develop over time.
• Having a public service ethos, that is being
committed to the value to society that your work
provides rather than being purely motivated by
financial rewards, is an important part of delivering
shared property services, but the distinction between
the public and private sector is becoming blurred.
• It appears there is a market opportunity if working
with public sector partners is seen as providing better
value for money, particularly as public sector partners
are also seen as more likely to understand a buyer’s
issues.
• Although there is some political distaste, sharing
resources might be the best way to make sure the
public sector retains specialist skills.
• Public sector partners can potentially deliver a wide
range of property services.
• There is a clear appetite within the sector to learn
more about shared property service models – this is
even evident among people who have either bought
or sold property services.
The report also raises several points that anyone thinking
about sharing resources needs to consider:
• An exit strategy, or at least a plan to handle the
partnership being dissolved, should be put in place at
the start (even though it might be unpleasant).
• Those who provide services to others might need
to change their culture. They may need to move
away from being public servants towards becoming
commercial professional services providers.
• An effective resource-sharing strategy among
partners could be a catalyst to recruit new property
professionals into the public sector.
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1.0 Introduction
There are many examples of the public sector coming
together to share services because it wants or has to.
Back office functions have traditionally been seen as an
area for immediate positive results for integration, but this
has typically been restricted to HR, legal and financial
services.
Some might argue the importance of local knowledge
means that property services do not readily lend
themselves to integration or sharing across boundaries.
However, this might just be an excuse to try to keep their
independence.
Research gap
Property services, along with frontline services, are now
firmly in the spotlight for sharing or integration in some
form. But there does not appear to be much research into
how much these services are already shared or what the
barriers and outcomes are. The purpose of this research,
carried out with ACES, is to gauge the opinions of those
operating in the market.
Research methodology
RICS published a short online questionnaire on their
website in March and April 2017. They also carried out
face-to-face discussions and phone interviews with
people from several shared services organisations. The
findings from these are shown in the case studies in
section 4.0.
The report begins with commentary on the legislative
and policy framework surrounding the creation of trading
entities and the sharing of resources.
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2.0 Evolution of trading and sharing
The following commentary puts the findings of the
research into context. It details the frameworks the
public sector operates in that involve trading and sharing
resources, and also looks at the drip feeding of new
programmes and initiatives that encourage collaboration in
one form or another.
For decades, the public sector has traded services to
fellow organisations. The difference now is the pace and
urgency with which some organisations are building
partnerships to share services. Sharing resources is seen
by some as a must to make sure organisations can survive
and improved service delivery is a welcome by-product.
2.1 Legislation
2.1.1 The Local Government Act 1972
Section 111 of the Local Government Act 1972 gave
local authorities the power to do anything ‘which is
calculated to facilitate, or is conducive or incidental to, the
discharge of any of their functions’. Section 112 enables
local authorities to appoint officers to carry out their own
functions as well as any performed for another local
authority. And section 113 allows local authorities to make
agreements with other authorities to place its officers
at the disposal of the other authority, subject to certain
conditions.
2.1.2 The Local Authorities (Goods and
Services) Act 1970
Section 1 of the Local Authorities (Goods and Services)
Act 1970 allows a local authority to make an agreement
with another to provide them with goods and services.
This could include administrative, professional or technical
services.
2.1.3 The Local Government Act 2000
Part 1 of the Local Government Act 2000 gave principal
authorities (county councils, district councils, London
boroughs and unitary authorities) in England and
Wales the power to promote the economic, social and
environmental wellbeing of their areas. Section 20 of the
Local Government in Scotland Act 2003 introduced a
similar power in Scotland.
This helped local authorities build partnerships with
commercial, private and third sector partners, as well
as other public organisations. In theory at least, it
also allowed them to move from a naturally cautious
approach towards a more innovative one involving joint
action. However, evidence suggests they only used it
occasionally, partly because of the complex legal position.
The wellbeing power has now been repealed in England,
although it is still in force in Wales.
In 2008, the Department for Communities and Local
Government produced a report called Practical use of the
well-being power. The report concluded that:
‘…councils are not fully aware of the opportunities
provided by the power to improve well-being
introduced in 2000 to give local authorities the
statutory powers necessary to allow them to play
their full part in improving the quality of life for
local people.’
Under the Local Government Act 2000, local authorities
also became responsible for putting together a sustainable
community strategy. This strategy sets out their long-
term vision for the economic, social and environmental
wellbeing of their areas. To do this they were encouraged
to form a local strategic partnership to help find and work
with other local service providers. They would then work
together on the strategy and agree ways to put it in place
using the new wellbeing powers (among others).
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2.1.4 The Local Government Act 2003
The Local Government Act 2003 introduced a new general
power for local authorities to charge for discretionary
services. This included services they chose to provide
under the wellbeing power.
2.1.5 The Localism Act 2011
Part 1 of the Localism Act 2011 gave a general power
of competence to local authorities in England, giving
them another legal route to provide shared services.
It determined that local authorities that want to deliver
shared services by ‘trading for a commercial purpose’ (in
other words for profit), must do that through a separate
company.
This does not extend to Wales, Scotland or Northern
Ireland. Local authorities that want to use it to help with
joint working across public sector partners might run into
problems, as currently it does not apply to the NHS or to
police services.
2.2 Other government
2.2 programmes
While there have been other government programmes that
have resulted in services being shared, these were more in
the form of incentives rather than enablers.
2.2.1 Devolution deals
In 2015 and 2016, the government and local areas agreed
a number of devolution deals, mainly involving new or
planned combined authorities. Several deals included a
commitment to share services between local authorities.
For example, Greater Manchester’s devolution deal
included commitments to redesign children’s services
across the ten Greater Manchester boroughs.
2.2.2 One Public Estate
One Public Estate is a national programme jointly run by
the Government Property Unit and the Local Government
Association. The first phase was launched in 2013, and
it is now on its sixth. Over 75 per cent of local authorities
take part in it along with wider public sector partners. Its
objective is to build collaboration on asset management to
achieve various outcomes, and it allows the public sector
bodies taking part to choose the paths they want to follow.
For example, one path might involve sharing property
resources, while another could mean setting up a new
combined property vehicle.
It would be unusual today if newly created groups of public
bodies given funding by One Public Estate did not at least
look at the opportunities available to share resources.
Setting up companies to trade
commercially
Section 1(1) of the Localism Act 2011 states that
‘a local authority has power to do anything that
individuals generally may do’. As mentioned above,
section 3 says that although they can undertake
commercial activities, they must do it through a
company (but they can’t sell services they have
a statutory requirement to provide). Some local
authorities have used this provision to sell services,
which implies competing on the open market with
other commercial providers.
In 2013, the Local Government Association published
a The General Power of Competence: Empowering
Councils to Make a Difference on the new power
confirming it was a step in the right direction.
They gave several examples of local authorities’
imaginative use of it, including one that involved
sharing an entire management team across two
authorities:
‘Several councils cited the broader definition
of the General Power compared to the
previous wellbeing powers (where it was
necessary to identify a specific link to the
economic, environmental or social wellbeing
of the area) as providing a more secure legal
basis for entering shared services or similar
arrangements. It had reduced the uncertainty
arising from previous litigation in this area.’
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2.3 Austerity
A commentary on shared services would not be complete
without mentioning austerity. Recent collaborations
between public bodies at a strategic rather than tactical
level are a direct response to financial challenges. Rather
than cutting services (and facing losing votes), local
politicians have had to work with public sector partners in a
marriage of convenience.
2.3.1 A partnership between three London
boroughs
When the landmark tri-borough partnership of Kensington
and Chelsea, Hammersmith and Fulham, and Westminster
councils was launched, the key aims were to:
• cut the number of middle and senior managers in
combined services by 50 per cent
• reduce the ‘overheads’ on direct services to the public
by 50 per cent and
• make sure that the costs for these overheads and for
middle and senior management would be a smaller
proportion of the total spend in 2014 and 2015 than
they were in 2010 and 2011.
One early indication of the potential benefits of bringing
together these aspects of asset management was the
councils entering into a ten-year total facilities management
contract with Amey in 2013. Significant progress was made
with some £43m saved across the three councils. Then in
2014, Labour regained control of Hammersmith and Fulham
after eight years of Conservative administration. Rather
than scrapping the tri-borough arrangement partnership,
the new leader said he wanted to reform it. However,
three years later, in March 2017, notice was served on
Hammersmith and Fulham council by its ‘partners’. Political
trust appeared to have been lost at the election.
The above scenario shows some of the problems caused
when a shared service agreement unravels, particularly
where resources have been brought together and pared
back, and single systems have been created instead of
independent solutions. The loss of Hammersmith and
Fulham has no doubt been sweetened by the fact that
several other London boroughs signed up to the tri-borough
facilities management framework during 2014 and 2016.
2.3.2 Shared staffing agreements
In 2016, a unique alliance was created between the London
boroughs of Richmond and Wandsworth. Under a shared
staffing arrangement, staff were merged into a single
structure in October of that year. The highly publicised aim
of this was to save up to £10m a year for each authority (see
section 4.1).
This type of arrangement arguably creates new challenges
if the parties later fall out. But current proposals in Dorset
to create two new local authorities from nine existing
ones (amalgamating the county council with districts
and boroughs) should avoid this. The two new enlarged
authorities (if created) will have the ability to establish
entirely new and dedicated organisational structures.
Redrawing the local authority map in response to funding
cuts will create more certainty in the long term, and it
might help to sustain skilled property resources within local
government.
In Scotland, there’s now one police force – Police Scotland
– after eight forces were amalgamated in 2013. In the same
year the Scottish Fire and Rescue Service was created
as a similar number of locally based public sector bodies
disappeared. And in Wales, government reform isn’t far
away. With all local authorities now guaranteed a future due
to the development of the legislative framework described
above, at least in the medium term, it’s expected that
regional working will be established across many local
government services, which could include the sharing of
resources across neighbouring local authorities. The White
Paper on reform launched in 2017 specifically identifies
asset management as a ‘specialist service’ that lends itself
to a regional approach.
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2.4 Evidence of change
It is difficult to quantify the impact of these changes
on whether public sector bodies are now acting more
commercially when collaborating with others. But the
evidence points towards a clear upward trajectory. The
following examples demonstrate the trend.
2.4.1 Commercial Councils, Localis 2015
A survey by the independent think tank Localis of 150 key
local government figures showed that:
• 94 per cent of councils currently share a service with
another council
• 91 per cent use assets (like land) in an entrepreneurial
way and
• 62 per cent run joint ventures with neighbouring
councils, 57 per cent with the private sector and 54 per
cent with the voluntary sector.
Looking forward, Localis concluded that:
‘…entrepreneurial activities make up 6% of total
council budgets at present. In five years’ time, the
weighted average of our respondents indicates that
entrepreneurial endeavours will treble and equate
to a far higher 18% of total council budgets. This
equates to a shift from around £10bn of activity to
£27.4bn by the end of the next parliament.’
2.4.2 Local Government Association shared
2.4.2 services map
For several years the Local Government Association has
used a database to produce a map of shared service
activities in local government across England. In 2015, it
reported that there were 416 shared service arrangements
between councils, with £462m of efficiency savings.
The data for 2017 shows a dramatic increase – there are
now 464 reported examples of shared services with an
estimated £640m of savings for taxpayers. The potential
savings are actually even higher than this, as more than
280 authorities stated that they couldn’t estimate what they
expected to save.
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3.0 The questionnaire
3.1 Respondents
Between March and April 2017, 43 people responded to RICS’ online questionnaire. The figures below show the
characteristics of the respondents.
Figure 1: Geography - regional distribution of responses
42%
2%
England
Scotland
Wales
Figure 2: Sector distribution of responses
65%
9%
7%
5%
12%
Local government
Health
Emergency
Other public sector
Self-employed
Central government
56%
2%
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3.2 Questions on shared property services
Once the respondent’s main work location and employment were established, they were asked questions to check their
awareness of shared property services.
3.2.1 ‘Are you aware of any shared property services ventures?’
The responses show that a high level of awareness of shared property services exists across the public sector.
91%
9%
Yes
No
Figure 3: Awareness of shared property services
3.2.2 ‘Do you participate or have you participated in a shared property services venture?’
Given the relatively wide definition of shared property services used (from informal arrangements where services are
provided for free or on a cost-recovery basis, to formally constituted entities specifically set up to trade), it might be
surprising that 40 per cent of respondents do not take part in any form of sharing.
Yes
No
60%
40%
Figure 4: Participation in shared property services
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3.3 Statements
A range of statements was then set out. Respondents were asked to give their view on each one, ranging from ‘Strongly
agree’ to ‘Strongly disagree’.
3.3.1 ‘Resources accessed from partners via a shared service arrangement will possess a
critical public sector ethos’
This proposition was looking to understand whether procuring services from a public sector partner guarantees that
services are coming from those with a public sector ethos. While 72 per cent of respondents agreed with this (without
any definition of what a public sector ethos actually means today), 23 per cent claimed they didn’t know the answer to
the question. Does this indicate that people no longer understand the classical interpretation of the public sector ethos –
working to make a difference rather than just to make a living?
Critics of outsourcing often identify private sector suppliers’ lack of understanding of the public sector and the absence of
a relevant ethos as reasons why it should be resisted. But how different are the drivers behind the two sectors? It is wrong
to claim that public sector employees have a vocation while private sector employees seek profit above all else. But there
is no doubt that a blurring of the sectors has been caused in part by the impact of efficiency and commercialisation on the
public sector – saving costs and making money.
No answer
Strongly disagree
Disagree
Don’t know
Agree
Strongly agree
Figure 5: Public sector ethos
0% 10% 20% 30% 40% 50% 60%
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3.3.2 ‘Better value for money will be obtained through shared services compared with
employing commercial advisers’
Despite there being no definition given for the term ‘value for money’, 60 per cent of respondents agreed with this
proposition. It is safe to assume that respondents consider the term to include aspects of both price and quality. With 95
per cent of respondents working in the public sector, this might at first glance be a surprising result. On the other hand, it
perhaps reflects the recognised shortage of skills across the sector.
Over a quarter of respondents said they didn’t know the answer to the question. This might have been a pragmatic
response as services potentially available from one public sector partner might be vastly different to those from another. But
rather surprisingly, 73 per cent of those who didn’t know the answer were currently either providing or receiving services
to or from a public sector partner. This could point towards a lack of transparency in agreements, an absence of clear
specifications or poor performance monitoring of the outcomes.
There is no doubt that shared property services arrangements must in future be able to transparently demonstrate value for
money to all parties, otherwise they will remain open to criticism and more susceptible to political influence.
No answer
Strongly disagree
Disagree
Don’t know
Agree
Strongly agree
Figure 6: Better value for money
0% 10% 20% 30% 40% 50%
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3.3.3 ‘Resources procured from partners are more likely to understand the issues facing the
purchaser’
This statement explores a similar issue to the one on ‘ethos’ (section 3.3.1). While a clear majority agreed with it, 16 per
cent didn’t know and almost 10 per cent said that partners wouldn’t necessarily understand their issues. Interestingly, half
of these respondents were from the emergency services sector, which highlights the perceived importance of partners
understanding your core business. In practice, are some services not sufficiently generic that they can be provided across
sectors – e.g. valuation, rating, building surveying and day-to-day property management?
The issues of whether skills can be transferred across subsectors is explored in more detail in section 3.3.4.
No answer
Strongly disagree
Disagree
Don’t know
Agree
Strongly agree
0% 10% 20% 30% 40% 50%
Figure 7: Understanding issues
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3.3.4 ‘Through “pooling”, specialist resources can be shared and therefore sustained across
public sector partners’
For many years, the public sector has found it hard to recruit and keep property professionals. There is a lot of anecdotal
evidence pointing to challenges to this across the public sector, supported by hard evidence in research and reports:
• Progress on government estate agency: ‘The Ministry of Defence established a central property function, but found
practical skills shortages.’
• NHS estates: Review of the evidence: ‘The identification of skills shortages in strategic estates management in the
public sector make the need to develop in-house capacity clear. This capacity can be developed but can also be built
by capitalising on available skills and mechanisms for sharing and disseminating expertise.’
• NHS estates: Review of the evidence: ‘One Public Estate is a central initiative, organised on a regional basis.
Stakeholders in local government-led, place-based approaches have capitalised heavily on the wider skills available,
e.g. planning, procurement, housing management.’
• a review of Private Finance Initiative and other projects concluded that public sector organisations (including the NHS)
often do not have the skills to make decisions on complex projects. This can put the public sector at a disadvantage
when negotiating with the private sector, and jeopardise the realisation of benefits. The review also found that the
public sector can lack the contract management skills needed to handle complex issues when they come up.
Against this background, this statement explored the views of respondents on the potential for sharing property services to
enable them to survive.
Almost 80 per cent of respondents agreed that sharing was a way to sustain resources within the public sector. One Public
Estate opens the door for collaboration on many fronts – from assets, through data to the use of services. In fact, the
initiative was the inspiration behind the creation of Place Partnership, a public–public company with a mission to deliver
property-related services to its ‘founding fathers’ and others in the public sector (see section 4.2).
There is an argument for specialisation and the sharing of those specialist resources since each public body simply cannot
afford its own internal resource pool. The nurturing of more specialists capable of successfully walking the corridors of
government in the widest sense of the term, and acting as intelligent clients, can only be a good thing for those seeking a
career path in the public sector.
Perhaps surprisingly, 9 per cent of respondents disagreed with the proposition. One reason for this might relate to the
statement in section 3.3.5.
0% 10% 20% 30% 40% 50% 60%
No answer
Strongly disagree
Disagree
Don’t know
Agree
Strongly agree
Figure 8: Pooling resources
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3.3.5 ‘It is costly and time consuming to set up a shared services venture’
Despite an introductory comment stating that shared property services include informal arrangements where services are
provided at no charge by one body to another, 42 per cent of respondents said it was expensive and time consuming to
set up a shared services venture. This might have been because the term ‘venture’ indicated a more formal arrangement.
Of those sharing this view, 44 per cent said they had not taken part in a shared property services venture. This might point
towards institutional bias based on the experience of creating companies or partnerships within the public sector. There is
certainly little publicly available data on the range of costs and timescales that people stepping into this territory might incur.
0% 5% 10% 15% 20% 25% 30% 35%
No answer
Strongly disagree
Disagree
Don’t know
Agree
Strongly agree
Figure 9: Costly and time consuming
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3.3.6 ‘Shared service resources will lack the necessary commerciality’
Respondents delivered a vote of confidence in the commerciality of public sector property professionals: 52 per cent
disagreed with the statement even though very few had taken part in a shared services arrangement. In contrast, 25 per
cent of respondents agreed with it, three quarters having participated in a shared services arrangement.
In the final analysis, the level of commerciality will depend on various factors, including the service specification, the
expectations of the parties, and the contract management processes to make sure you get what you pay for.
0% 10% 20% 30% 40% 50%
No answer
Strongly disagree
Disagree
Don’t know
Agree
Strongly agree
Figure 10: Commerciality
3.3.7 ‘The sharing of property expertise is likely to become more common over time’
There was widespread agreement that the practice of sharing resources will become more common. But 5 per cent of
respondents disagreed with the proposition, even though they had all previously said that sharing provides better value for
money.
In section 2.0, there is a summary of trends and events that have combined to support and encourage parties to join
forces. It is difficult to see this reversing or even slowing down in the next decade – survival for some will rely on meaningful
collaboration.
No answer
Strongly disagree
Disagree
Don’t know
Agree
Strongly agree
Figure 11: Rise in popularity
0% 10% 20% 30% 40% 50% 60%
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3.3.8 ‘Some public bodies will resist buying from or selling to others for local political reasons’
The day-to-day realities of life in local government are evident in the response to this statement. Most of the respondents
agreed that local politics can, in effect, trump rational decision-making. For example, there is anecdotal evidence that some
local authorities have not applied for One Public Estate funding because the programme originated in a Conservative-
led coalition government. Respondents who agreed with the proposition were from both local government and central
government, the health sector and emergency services.
We can work it out: the human hurdles to collaboration in local government highlights the absence of trust we sometimes
find within organisations we expect to be reliable:
‘As local authorities come under pressure to reduce their spending, collaboration is one way to protect
public services from cuts. The government is encouraging councils to explore opportunities to work with
one another, and with the private and voluntary sectors. But there are some very human obstacles that
prevent collaboration happening as smoothly as it might.’
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One respondent commented that ‘sovereignty…is a roadblock to general shared property management services’. The
implication is that ceding the management of property to another authority is politically unacceptable – yet many authorities
cede the management of their estates to the private sector. If there are fundamental concerns around political interference
by another authority, or concerns about service quality, continuity and assurance, these can arguably be taken care of
through an appropriate service contract. On the other hand, if the concerns are founded more on emotion than economics,
the tightest contractual arrangement will still not resolve these issues.
A further issue may relate to split loyalties: can a property investment adviser employed by one authority, for example,
provide investment advice to another authority? The answer must be ‘yes’ since no public sector body could successfully
seek exclusivity from its private sector property agent or adviser commissioned to bring forward investment opportunities
or advise on the buying, selling or letting of space. The answer to this potential dilemma is to construct a clear service
specification and confirm at the outset how potential conflicts will be dealt with. In other words, act in a commercial
manner.
0% 10% 20% 30% 40% 50% 60%
No answer
Strongly disagree
Disagree
Don’t know
Agree
Strongly agree
Figure 12: Resistance to collaboration
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3.3.9 ‘Sharing resources will only work for specific property services’
The field was almost evenly split on this issue. Respondents who agreed or strongly agreed with the proposition were
asked to identify services that could be ‘traded’. While some referred to only one or two specific services, the range
mentioned overall was fairly broad. It covered:
• day-to-day asset management
• valuation
• acquisition and disposals
• condition surveys
• procurement support and
• facilities management.
One respondent with a negative view on the potential for greater sharing commented:
‘A substantial amount of local knowledge is required for a number of property services that is unlikely to
be delivered by a partner.’
While it is true that local knowledge can carry added weight, it can also arguably be gained or learned relatively quickly and
simply. Over time, barriers put up by those with specialist local knowledge will inevitably become easier to overcome.
Echoing earlier comments on political resistance to sharing property services, another respondent said:
‘Sovereignty, or its perception, is a roadblock to general shared property management services.’
This begs a fundamental question about the role of local politicians in asset management – are they owners or custodians?
No answer
Strongly disagree
Disagree
Don’t know
Agree
Strongly agree
Figure 13: Selective collaboration
0% 10% 20% 30% 40% 50%
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3.3.10 ‘I would consider buying in property services from, or selling services to, public sector
partners’
Without any pre-conditions, this simple two-part statement sought feedback on how many respondents would buy or
sell property services to public sector partners. Over 80 per cent said they would, but somewhat surprisingly, 10 per cent
were undecided – perhaps because they needed to understand the conditions under which they could buy or sell services
before agreeing or disagreeing.
On the face of it, the result indicates there is a clear appetite to trade property services within the public sector.
0% 10% 20% 30% 40% 50% 60% 70% 80%
No answer
Strongly disagree
Disagree
Don’t know
Agree
Strongly agree
Figure 14: Appetite to buy or sell
3.3.11 ‘There are insufficient resources at my disposal to deploy across various partners’
Although the appetite to trade services might exist in theory, there are constraints in real life. One of these is the resource
pool available.
While most respondents agreed with the statement, 20 per cent did not. This implies they have resources that could be
used across other public sector partners. Of these, 75 per cent were from local government and all but one confirmed they
would be prepared to trade resources with other partners.
The above findings suggest that there might be a hidden pool of resources available for sharing across the public sector.
But only if the right arrangements are put in place, alongside the political will.
0% 10% 20% 30% 40% 50% 60%
No answer
Strongly disagree
Disagree
Don’t know
Agree
Strongly agree
Figure 15: Availability of resources
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21
3.3.12 ‘I need resources with local knowledge and my partner(s) might not be able to provide
this’
For those who already feel that local knowledge is not the overriding factor when procuring resources from a public sector
partner, the findings in relation to the above statement may bring reassurance.
Respondents who disagreed with the statement might actually be disagreeing with the point about needing resources with
local knowledge, or the ability of public sector partners to bring this. Potentially, 40 per cent of respondents do not see
local knowledge as particularly important, or they feel their public sector partners can bring this. Either way, it suggests that
barriers to entry might not be very high.
On the other hand, almost half the respondents said they need resources with local knowledge, and that their partners
might not be able to meet this.
A wider debate about the importance of local knowledge, and how this can be supplied by partners (with or without
external expertise), will help in making choices on resourcing strategies.
No answer
Strongly disagree
Disagree
Don’t know
Agree
Strongly agree
Figure 16: Local knowledge
3.3.13 ‘I would consider selling services to other partners, subject to internal needs being met
as a priority’
The above statement is very specific on the conditions to be met before surplus resources are sold to other parties. Some
might say, why wouldn’t you consider selling if your needs are met? But 16 per cent of respondents were not able to agree
with the statement. Perhaps the existence of surplus resources might threaten their existence – or maybe the respondents
know the political reality only too well in their organisations.
0% 10% 20% 30% 40% 50% 60% 70% 80%
No answer
Strongly disagree
Disagree
Don’t know
Agree
Strongly agree
Figure 17: Preparedness to sell services
0% 5% 10% 15% 20% 25% 30% 35% 40%
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3.3.14 ‘I want to understand more about the alternative structures, cost and benefits for
buying in or selling services’
Little previous research into the items referred to in this statement became evident during the course of producing this
paper. One reason may be that commercial and confidential arrangements have been put in place to govern the buying and
selling of property services. It is acknowledged that some high-profile case studies exist about creating new legal entities.
But what about the less formal approaches to sharing resources covering resource management, costing of services and
quality and performance management?
The vast majority of respondents said they wanted to learn more about sharing services. While 11 per cent of respondents
apparently don’t want to learn more, they all claimed to have experience of buying or selling property services.
Returning to the sample who claimed to have experience buying or selling property services (see section 3.2.2), almost half
wanted to learn more.
No answer
Strongly disagree
Disagree
Don’t know
Agree
Strongly agree
Figure 18: Appetite to learn more
0% 10% 20% 30% 40% 50% 60% 70% 80%
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4.0 Case studies
4.1 Richmond and Wandsworth
4.1 Councils
Like many local authorities, the two councils were
predicting substantial reductions in funding from two key
sources: Revenue Support Grant and Retained Business
Rates. Between 2015/16 and 2019/20, Richmond Council
assumed that income from these sources would reduce
by 66 per cent while Wandsworth Council was basing
its financial strategy on a reduction amounting to 22 per
cent. In cash terms, the total sum to be secured through
savings and/or additional income streams to recover these
‘losses’ amounted to more than £110m.
With a history of joint working with a range of boroughs
across London, the councils decided to embark on
a ground-breaking proposal through the mechanism
of a Shared Staffing Arrangement (SSA). The SSA
serves a population of approximately 500,000 which,
for comparison, is not far short of the population of
Manchester. Under the SSA, each Borough retains their
independence but services are delivered through a single
staffing structure with a single Chief Executive and one
Service Director for each service area. Preparations
began in 2015 and went live on 1 October 2016. Staff
were transferred into the new SSA with adjustments
made to align terms and conditions to ensure consistency
in relation to issues such as holiday allowances,
performance-related pay, overtime payments and car
allowances.
It was predicted that the creation of single Chief Officer
team would alone save more than £1.6m per annum. This
would make a significant dent on the projected £10m per
annum financial benefit each council would secure from
the operation of the SSA.
Within the Housing and Regeneration Directorate, a
new post of Assistant Director (Property Services) was
created bringing together the property functions of the
two councils, formerly operating very different business
models. Wandsworth Council favoured a multi-disciplinary
in-house team and Richmond Council pursued an
outsourcing model. The extent of overlap and duplication
of roles could have been much more significant were it
not for the divergent approaches to running an estates
function.
With the councils retaining their sovereignty, including key
democratic and governance procedures, the SSA requires
the newly integrated team of 120 or so property, project
management, design and FM professionals to serve two
masters, although some sections within the Property
Services directorate operate trading accounts.
The creation of a single Property Services team created
an initial saving of around £200,000 per annum and it is
expected that there will be further savings by a series of
joint procurements. A range of services are in the process
of being jointly let including cleaning, some hard FM
services, commercial estate management and agency.
Over time, the team could potentially deliver services to
other public bodies but growth into this market does not
feature in the immediate plan for the team.
‘Establishing the SSA and running services for
two boroughs is a huge challenge. However, there
has been considerable mutual learning from staff
who worked for each Borough and adopting best
practice from both. It has also given the service a
critical mass which has created opportunities for
staff development in the broad range of work the
service covers.’
Andy Algar, Assistant Director, Property Services for
Richmond and Wandsworth Councils
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4.2 Place Partnership
Place Partnership (PP) is a limited company wholly owned
by a number of public sector bodies, namely:
• Hereford & Worcester Fire Authority
• Redditch Borough Council
• Warwickshire Police
• West Mercia Police
• Worcester City Council and
• Worcestershire Borough Council.
It is the first multi-agency asset management company
of its kind in the UK and provides property services to a
core portfolio of some 1,400 assets across four counties.
PP owes its origin to One Public Estate (OPE), the joint
Cabinet Office and the Local Government Association
programme aimed at delivering a range of asset and
service-related outcomes through collaboration across
public sector partners. In the vast majority of instances,
OPE has originated or facilitated tangible projects. In
this instance, a unique entity was created to support
integrated asset management across the partners.
With approximately 180 employees based in Worcester,
PP provides a range of advice and support to its ‘home
team’ of partners in areas such as tactical and strategic
asset management, capital projects, FM, and energy
procurement/management. Since its inception in 2013,
PP has recruited from the public and private sectors
to enhance its capabilities. It has also widened its
customer base to include public sector bodies outside its
geographic boundaries. In time, the strategy for growth
could see PP opening up offices in other parts of the
country. While the Teckal exemption effectively limits
the extent of PP’s growth into the wider market to 20%
of turnover, this leaves ample room for growth into this
market as it currently turns over approximately £25m.
The quantum of external business can increase as the
quantum of the ‘home team’ business increases, which
could include increasing the number of shareholders in the
partnership.
The vision of the partners is embedded in a series of
shared objectives. While a formal common estate strategy
was not documented on day one, this can be seen as
both a strength and a weakness: flexibility on the one
hand, as opposed to challenges in prioritising strategic
objectives in view of the demand for services that the new
joint vehicle has created.
The construct is undoubtedly unique and, being the first
of its kind, it is subject to scrutiny. Some in the public
sector are watching from a distance while others are
actively engaged in discussions to learn from this new
development. Having been awarded ‘Property Newcomer
of the Year’ in the 2017 Property Awards, expectations
have been raised that the new company will deliver
demonstrable performance above and beyond that which
could otherwise have been achieved.
‘Place Partnership is at the very forefront of
facilitating change in public service delivery.
Whilst multi-agency collaboration is undoubtedly
challenging, the benefits can be seen in
the creation of significant capital value and
operational savings, which will realise so many
tangible benefits for the public estate and those
whom it serves.’
Andrew Pollard, Managing Director, Place Partnership
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4.3 A five-council partnership
South Oxfordshire District Council and the Vale of White
Horse District Council have a history of working together.
In 2006, they signed a contract with Capita to outsource
their revenues and benefits services and exchequer
functions. As the contract came close to expiring, the two
councils agreed to extend it by joining forces with other
councils whose contracts with Capita were also about to
expire. Together they created a five-councils partnership
with Hart District Council, Havant Borough Council and
Mendip District Council.
The newly created partnership then signed a nine-year
contract with Capita and Vinci for various services,
including property management. The property
management service was delivered by Arcadis under a
subcontract with Vinci. It covers 40 separate services
including:
• providing a management system
• day-to-day property management
• acquisitions and disposals
• lettings
• development consultancy
• building maintenance
• statutory compliance and
• strategic property advice.
This range of services gives the councils the flexibility
to choose a combination of services that suit their
circumstances
The contract for South Oxfordshire District Council and
Vale of White Horse District Council started in August
2017, and will start for the other councils in late 2017 when
their current contracts with Capita expire. Around ten
estates professionals are expected to transfer to Arcadis,
and it is anticipated they will provide services across
council boundaries from one of two operational hubs. To
help achieve this strategy, the partners can access a wide
pool of resources within Arcadis at agreed rates.
One of the main reasons for creating this five-council
partnership was to give the councils the ability to buy
goods and services together – something that could save
an estimated £50m. And the councils are already looking
at joining forces with another council in the north of
England for valuation services, which will give them even
more buying power.
4.4 Essentia
Guy’s and St Thomas’ NHS Foundation Trust Hospital
created the Essentia brand and organisation. It was
designed to deliver property and facilities management
services to the Trust with a workforce of 1,800 employees.
In 2013, they created Essentia Trading Limited, a new legal
entity described as Essentia’s commercial arm. It employs
50 people who provide multi-disciplinary consultancy
services to both the Trust and wider market. Its core
services include:
• strategic asset planning
• capital project management
• healthcare planning
• sustainability advice
• IT solutions and
• procurement.
While most of Essentia Trading’s business comes from
clients in the health sector, it has also provided strategic
estates advice to local authorities. This might reflect
the inevitable merging of health and social care service
delivery taking place within communities.
Essentia Trading wins new business in competition with
others, but also through links and relationships that
already exist across the health sector. One of its USPs
is that, unlike commercial competitors, its profits are
recycled back into the Trust.
With a turnover of £6.5m, the business plans to expand
its current national and international customer base. It
has already given specialist healthcare planning advice to
clients in Australia, Qatar and the Republic of Ireland.
When the company was established in 2013, it was made
up of less than ten people. Most of the new recruits over
the last four or so years have come from the private sector.
They generally have track records advising health sector
clients on property asset management and healthcare
planning.
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5.0 Conclusions
Legislation has paved the way for more imaginative
ventures to be created within the local public sector. This
has undoubtedly had some impact on the pace of change,
but a greater stimulus for change has perhaps been the
‘carrot and stick’ approach:
• provide incentives in the form of more devolved
responsibility in exchange for driving through
efficiencies, or hard cash to test and implement asset
management initiatives like shared property services
or
• squeeze local authorities and others to the point
where collaboration and alliances (or forced
marriages) become the best options.
Whatever the causal factors, the sharing of services is
here to stay.
Results
The survey aimed to understand how strongly RICS
practitioners feel about shared property services. Sharing
can take many forms in practice, as shown by the case
studies in section 4.0, which were put together after face-
to-face meetings and phone interviews.
The dangers of jumping to conclusions on the back of
survey results are well known. This report treads carefully
and identifies the following tentative conclusions:
• Shared services are widespread, and we are likely to
see many more develop over time.
• Public sector ethos is an important factor in delivering
shared property services – but the distinction
between the public and private sectors is becoming
blurred.
• If working with public sector partners is seen as
better value for money, a market opportunity appears
to exist, particularly as public sector partners are seen
as more likely to understand buyers’ issues.
• Despite some political distaste, sharing resources
might be the best way to keep specialist skills within
the public sector.
• The retention or protection of sovereignty can act as
a constraint – but is contracting for the delivery of
day to day property management services to another
public body so different from contracting with a
private sector supplier?
• A wide range of property services is believed to be
potentially deliverable by public sector partners.
• There is a clear appetite within the sector to learn
more about shared property service models. This is
even evident among people who have already bought
or sold property services to partners.
The survey and research undertaken to inform this report
also raise a number of points:
• Exit strategies, or at least a strategy to handle a
partnership being dissolved, should be considered at
the start, even though it might be unpleasant.
• A cultural shift away from public servant towards
commercial professional services provider might
be needed for some. This is deliberately simplistic
but points to the need for a new toolkit including
customer relationship management, competitive
pricing strategies, time recording and quality
management.
• Can an effective resource-sharing strategy among
partners provide a catalyst to recruit new property
professionals into the public sector? If the strategy
is founded on a strong relationship and high level of
trust between partners, the business case could be
very solid. And if the employer is a separate company
shielded from day-to-day political decisions, risks to
prospective employees are reduced.
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27
6.0 Acknowledgments
Thank you to the following for their valuable insights and
contributions to this research:
• Andy Algar (Richmond and Wandsworth Councils)
• Andrew Pollard (Place Partnership)
• Neil O’Connor (Luton Borough Council)
• Peter Beer (5 Council’s Partnership)
• Neil Palmer (Fieldfisher)
• Stephen Edgar (Essentia)
• Dave Pedersen (Suffolk Fire and Rescue)
• Richard Baker (Welsh Government).
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