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Cabinet set to consider new approach to use of assets

Date published: 2020-12-02 | Category: Finance


Cabinet set to consider new approach to use of assets

Securing income for council services, more homes and tackling the climate and ecological emergency have been set out as key criteria for a review of the Bath & North East Somerset Council’s £500m property estate.

In a cabinet report, Bath & North East Somerset councillors are being updated on the key impacts of Covid-19 on council income from its commercial estate- with £6.6m less income than expected received from April-October 2020 as a result of the pandemic, and commercial estate “voids” increasing to 7.6% in the same period.

The council’s cabinet is being advised of the need to “rebalance” its property holdings in the light of changes in the wake of the pandemic. It is also being advised that rent arrears have increased and that Covid-19 has accelerated change in areas such as online shopping and home working.

Fresh thinking recommended includes exploring the move of redundant retail space to residential uses to promote city centre living, and making sure assets contribute to the council’s climate and ecological emergency declarations and to its regeneration role.

The report also highlights the “Preparing for the Future” programme which recognises that the council will need less office space as a result of Covid-19, with many staff continuing to work flexibly.  Over 1,200 staff moved to homeworking arrangements in March 2020 and income will be gained from letting office space no longer required in Bath, with two floors of Lewis House already let. Keynsham Civic Centre and the Guildhall are being used by a small number of staff operating under Covid-Secure rules. In the medium-term, more staff will be based at Keynsham Civic Centre.

The cabinet has appointed Montagu Evans as specialist advisers to bring forward more detailed proposals for how the council should manage its estate in the light of these changes.

Councillor Richard Samuel, cabinet member for Resources, said: “The council has extensive property holdings, both for commercial income and for operational purposes such as depots. We must make sure these assets are put to good use, whether that is securing reliable revenue streams to support services or providing much-needed new homes. I welcome this new approach to managing our assets and will consider this report carefully. As an important and responsible property owner we must also use out assets to ensure our areas thrive and to tackle the climate an ecological emergency. So I am particularly pleased to see that new development or major refurbishment of buildings will put in place measures to support carbon reduction targets.”

The report recommends the development of a new Corporate Estate Strategy and changes to the council’s estates, maintenance and construction functions, as well as engagement with the Policy Development and Scrutiny Panel in the emerging Corporate Estates Strategy. The final report on the commercial estate is expected in January/February 2021.

Link to report

https://democracy.bathnes.gov.uk/documents/s63758/E3244%20Property%20Services%20Service%20Review.pdf

Notes to Editors

The council is custodian of 1,200 properties with an asset value of approximately £500 million split across the operational and commercial estates.

  • The Operational Estate. This comprises property assets used by the council in the delivery of its services. As of 1 April 2028, this has been valued at £200 million
  • The Commercial Estate.  The Council owns a large and influential portfolio of investment property and land assets.  A significant proportion of these assets are retail premises in the centre of Bath. In addition, the council portfolio comprises key sites for regeneration and strategic development. As of 1 April 2018, the capital value of this estate was estimated at £295 million.

 

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