Talking Point

COULD PUBLIC SECTOR SERVICES REVOLUTIONISE REGENERATION?

Alexandra Houghton, Head of Public Sector at Carter Jonas, discusses localism and how some initiatives are focusing on the health sector having more of a presence in urban centres.

Alexandra Houghton is Head of Public Sector at Carter Jonas and also sits on the commercial board. She has a long history of public sector property consultancy. She leads the commercial division’s public sector consulting team, where she provides strategic advice to mainly public sector clients, focusing on the delivery of solutions to business needs through estate change. C hanges in the commercial market over recent years, particularly in the retail and office sectors, have been well documented. The loss of anchor tenants and a structural shift in the way we shop, with nearly 30% of retail transactions now taking place online, continue to make a mark. In the office sphere, survey evidence suggests there could be a five-fold increase in flexible working by 2025 compared with pre-pandemic levels. This move to increased hybrid and remote working models means that, for some businesses, offices are becoming a positive choice, not a necessity, with overall demand for offices expected to decrease as a consequence.

Whilst this decline will be partly mitigated by employment growth and perhaps the impact of the Levelling Up agenda, with increased funding announced in the budget, the focus is undoubtedly turning to quality: space for collaboration, communication and health and wellbeing being central components.

These changes are having a fundamental impact on our high streets and towns – with the loss of footfall a key issue. However, where there is change, there is opportunity.

Some initiatives are focusing on the health sector having more of a presence in urban centres – the premise being around high levels of demand for healthcare, and a significant oversupply of retail units. But why should the healthcare sector lead the charge? Could local authorities now step in and make a difference; could they be the centrepiece whilst also delivering services in a different, more effective way?

The concept of service delivery ‘all under one roof’ is not new. There are the obvious civic services that local authorities provide, but they are also instrumental in delivering community provisions, libraries, leisure, health, social care and the need to meet housing targets. Why couldn’t these be consolidated into a multifunctional space alongside the health sector in urban locations? This would represent localism at its best. There will always be examples of where the campus-style ‘county hall’ model works, but often this is not located in the heart of the community.

There is also a fundamental shift in how the public sector delivers services. They are becoming more streamlined and efficient, primarily due to financial pressures but also increased demand. There is a need to change, and this presents an opportunity to be at the centre of the regeneration agenda. The first step is to undertake a service-led review – the difficult bit – to understand who can occupy with whom and which services will benefit from towncentre locations because it might not work for everyone. There are, of course, complexities around separate tiers of Government providing different services but a unitary model lends itself well to this initiative, and One Public Estate projects prove that it can work.

There will always be a motive to move: a piecemeal estate perhaps, assets in the wrong locations, poor-quality space or the possibility to raise a capital receipt and generate revenue savings. Operational services collocating can have its challenges, but a service-led review can start to unlock it.

Local authorities often own land or sites in strategic locations which are increasingly important to regeneration and renewal. Our sense in the market is that deals are being agreed at more realistic levels than previously, so town-centre sites are becoming viable and the low borrowing rates (for now) may lead to potential opportunities for acquisition – if the business case stacks up. Significant due diligence is needed and even in stronger markets, piecing together these strategies in town centres has been lengthy and complex – not least due to the patchwork of ownerships.

Surely, though, local authorities – or even wider public sector service delivery hubs – can become an effective anchor for a scheme whilst also delivering services more effectively through collaboration, integration and modernisation – putting the public at the centre of that experience.

What this big idea needs is an organisation to take the lead, with a vested interest in bringing town centres back to life: the local authority. The need for change in service provision, the need for change in town centres and the need for us to keep up with the changing way we live, and work creates a compelling opportunity for the public sector to be at the centre of the regeneration agenda. 

www.carterjonas.co.uk