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Many organisations need to properly consider return on investment and value for money

Housing demands a broader view of return on investment

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Housing delivery is a long-term challenge that requires long-term planning of land and resources.

The subject has been at the top of the government’s domestic agenda for several years. This needs to continue at the national and local level, meaning it is given a continued priority, consistent long-term resourcing and leadership.

There are already freedoms and flexibilities, in part illustrated by emerging housing deals, that would allow more local authorities to take a stronger role in housing delivery, acting on their own as well as working with private sector partners. These deals should encompass planning as well as finance.

To give a specific example of cutting costs, procurement can be used to create more energy-efficient estates.

Pursuing energy efficiency requires access to specialist technical and commercial skills. Energy is a fast-moving sector where up-to-date information is essential, both on the technical solutions available and on what current suppliers and generators are offering.

Procurement based on a site or estate may not allow organisations to access the right support or the best solutions. Frameworks can deal with these complex issues and provide support throughout, from scoping opportunities to operations and contract management.

These can cover most opportunities relating to operational estates, including refitting existing buildings and assets, considering the possibilities of new development, and generation options on land and buildings.

The case for energy efficiency is emblematic of a broader approach that should focus on what is being bought, at what price.

Considering return on investment and value for money requires organisations to work within a properly commercial asset strategy where full and true costs and benefits are understood. This means bringing together those from property management and user perspectives.

While this is a basic starting point, it is still a position many organisations need to get to. Return on investment can be seen as a narrow measure, standing in the way of using assets to deliver broader organisational or social benefits. This need not be the case.

A commercial approach in the public sector doesn’t need to be just profit or surplus driven. What it does require is understanding delivery options and what the organisation may be forgoing to deliver the benefit – in other words, the return on investment.

A detailed understanding of the national picture and commercial delivery experience can ensure local authorities make best use of their limited resources and deliver their local goals.

Simon Bandy is a strategic director at Local Partnerships, a joint venture between the LGA, the Treasury and the Welsh Government, and will be chairing the Assets & Estates theatre at the Public Sector Show on 26 June, at ExCel London. Register for your free place here

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