Unlocking financial value through partnership

Senior director of Norse Consulting Daniella Barrow believes that joint ventures offer a model for greater commercialism.

In delivering frontline services local authority partnerships are well established as vehicles for achieving greater operational efficiency, developing external revenue streams, and maintaining a strong public service ethos.

While partnerships are not new in local government's professional property services (Norse Group currently has five such joint ventures), councils have generally been slower to embrace the partnership model.

Given the current challenges, now may be the dawning of a renewed interest in forming such arrangements, and the reasons are readily identifiable.

For several years local government finances have been under unprecedented pressure: following the years of austerity, we have experienced a pandemic, the cost of living crisis and sustained high inflation. This has led many councils to cut back their in-house resources and, as a means to saving money but still delivering projects, become commissioners of services through outsourcing.

However, together with the long-running skills shortage, this move also meant councils have lost a lot of the institutional intelligence needed to deliver a compliant, balanced property and estates portfolio, which also sweats each asset and delivers greater value – financial and social – to the communities they serve.

There now seems to be a growing appetite to bring property services back in-house, but for the reasons described above, this option is fraught with risk.

The partnership model, as opposed to traditional outsourcing, offers a way to overcome capacity problems, at the same time delivering greater control and cost-efficiency, with added social value. A partnership founded on co-ownership provides greater responsiveness and agility, meeting the evolving needs of the council while achieving better value for money. Moreover, the model engenders a commercial culture, generating external revenues and profit share.

Our local authority joint ventures have been able to leverage estate resources rather than disposing of them to raise funds, particularly important for smaller councils, who are particularly sensitive to financial burdens.

With the likelihood of continuing financial pressures, I believe the time has come for local authorities to consider partnership working as a real alternative to traditional outsourcing – and find ways of unlocking greater financial value.

Daniella Barrow is Senior Director of Norse Consulting

Norse Consulting is Norse Group's property services specialist company. The group is wholly owned by Norfolk CC, and is the UK's leading LATCo. Norse has pioneered a groundbreaking partnership model, and currently has joint ventures with more than 20 local authorities.

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