Property sale makes much sense
OVER the years, the States has amassed a huge property portfolio. It is so big, at over 800 individual holdings, no one really knows what it is worth.
OVER the years, the States has amassed a huge property portfolio. It is so big, at over 800 individual holdings, no one really knows what it is worth.
The Audit Commission conservatively put the value in 2004 at £1.5bn (approaching £2bn at today's prices) but that figure is still probably an under-estimate.
For instance, the government owns 2,000 houses and flats. Depending on how you do the sums, that alone could be worth anywhere between £400m. and £885m. and does beg the question of – especially given the success of the Guernsey Housing Association – why government should be the island's biggest landlord, with all the cost that implies in terms of maintenance and administration.
To some extent, it is issues like that which should be addressed as part of the Policy Council's strategic asset management plan, which was unveiled on Monday.
It grew out of a Financial Transformation Programme initiative – how to save money – and has morphed more into a process to ensure that States-owned properties are used to best effect to deliver government services.
It makes a lot of sense and, since the property portfolio has been under review for at least a decade, is actually overdue.
What is harder to understand is the reaction from some States members that, no matter what, the property should remain in public ownership.
Unless the Guernsey Electricity 'buy it, wreck it' approach is adopted, sitting on property that is not needed ties up capital and costs money to keep it in good order. Those are all funds that can and should be put to better use.
Streamlining operations so that like services are aggregated in one building is also a practical approach, but there is a significant caveat – that the process is cost-effective.
Until the Policy Council's detailed report is out later this summer, it is not clear to what degree this makes financial sense.
Releasing unwanted bricks and mortar and making more efficient use of what's left is what government should be doing, but not at any price.
Not only do the figures have to stack up, so do the peripheral benefits.
