‘Modest progress’ is the conclusion of the Audit Commission’s latest research into local government asset management. The report 'Room for improvement: a review of strategic asset management in local government', is a follow-up to the last major study published by the Audit Commission in 2000.

The research reveals how few councils are managing their assets strategically, as assessed through auditors’ Use of Resources (UoR). With the changing economic conditions, councils will need to raise their game significantly if they are to meet future savings targets.

Central government is also criticised in the report, for sending mixed messages to councils.

Nine years after its last examination of asset management, the Audit Commission finds that few councils are managing strategically their £250 billion of assets. In 'Room for improvement', the Audit Commission reveals that:

• councils have spent £1.2 billion more on buying or refurbishing their offices than they have raked in from sales
• only one in 14 (7 per cent) of councils is an exemplary manager of its assets
• in 2007/08, while 65 improved, the performance of 46 councils on asset management deteriorated (based on their UoR scores)
• a third do not yet share assets with other public services

The Audit Commission warns that, in the current economic climate, councils will need to do far better, if councils are to achieve expected savings and maintain services in the coming years.

The report also calls on central government to give a clear steer on the priority for local government: should councils seek to dispose of assets to maximise receipts, or enhance estates to deliver better public services.

Audit Commission Deputy Chairman Bharat Shah said:

“The recession is a good time for councils to plan how to use the property they own more efficiently and possibly even to acquire assets for the future. While some councils have reaped the benefits of good asset management, many lack the capacity or even the basic information to support strategic planning. This leaves them badly placed to deal with tougher times ahead and the new, stricter strategic asset management standards set in Comprehensive Area Assessment.”

Access the full report - 'Room for improvement: a review of strategic asset management in local government' (PDF file, 104 pages, 2 MB).

Case studies

Examples of good practice in asset management are taken from the following authorities:

• Wandsworth Borough Council
• Sevenoaks District Council
• Lancashire County Council
• East Riding of Yorkshire Council
• Wychaven District Council
• Hampshire County Council

Access the case studies in: 'Good practice in strategic asset management' (PDF file, 28 pages, 592 KB).

Briefing for elected members

This briefing explains how elected members can ensure that their council manages its property more efficiently and effectively. It is aimed at all councillors, although those in cabinet, or with scrutiny or audit responsibilities, will be particularly interested. The briefing explores some of the themes from the main report, which are of particular relevance for elected members and includes a checklist of questions to help them assess how well their council is performing.

 Access the briefing for elected members (PDF file, 16 pages, 389 KB).