Property Without Borders: Commercial Thinking in the Public Sector

In a time of mounting financial pressure and structural reform, local government is being called to rethink its approach to property. No longer just bricks and mortar, property is now a strategic asset one that can unlock value, drive transformation, and support service delivery in smarter, more sustainable ways.

In the latest episode of The Truth About Local Government podcast, I sat down with Colin Galletly, a seasoned property leader with deep experience across both corporate and public sectors. We explored how commercial thinking can reshape the way councils manage their estates, and why collaboration, realism, and innovation are essential to success.

Property as a Strategic Enabler

“Property does not sit in a bubble,” Colin began. “The only reason why a corporate real estate department exists is to run property around the services being delivered by that organisation.”

This simple but powerful statement reframes property not as a standalone function, but as a service enabler. Whether it’s libraries, adult social care centres, or youth hubs, the estate must be fit for purpose and aligned with the needs of the community.

To achieve this, Colin emphasised the importance of proactive engagement:

“You’ve got to be reaching out to the various services, stakeholders, and politicians to understand what they’re trying to deliver. Once you build that trust, you can challenge constructively and co-create viable solutions.”

Defining Commerciality in the Public Sector

Commercial thinking in local government is often misunderstood. It’s not about profit maximisation it’s about value optimisation.

“The key to commerciality,” Colin explained, “is having a real defined understanding of what you’re looking to achieve. Whether that’s delivering a service or generating income through an investment property, you need to understand the costs, the benefits, and the risks.”

This includes:

• Capital and operational costs

• Social and community benefits

• Delivery mechanisms whether in-house or via the market

• Realistic expectations from stakeholders

Colin was candid about the need for realism:

“Politicians and officers can be over-optimistic. That’s not unique to the public sector it happens everywhere. But we need to be honest and brave enough to say, ‘This won’t work like that, but here’s another way.’”

Balancing Optimism with Realism

One of the most insightful parts of our conversation was Colin’s approach to balancing ambition with grounded decision-making.

“You have to be innovative,” he said. “Let’s say you want to build supported independent living accommodation but don’t have the capital. You can leverage the value of your land in a commercial deal offer a long-term lease to a housing developer or registered provider. That commitment becomes an income stream for them and unlocks development.”

This kind of creative financing is essential in today’s climate, where councils face both budget constraints and rising demand for services.

Collaboration: The Key to Transformation

Collaboration isn’t just a buzzword it’s a necessity. Colin described a “carrot and stick” approach to engaging services in property transformation.

“The stick is the cost of property,” he said. “Every carpet tile costs money. If you can articulate that clearly, people start to understand why change is needed.”

But the carrot is just as important. By understanding how services operate when buildings are used, by whom, and for what property teams can identify opportunities for co-location, shared use, and resident-centred design.

“If you’re providing all the services in one place, it’s actually quite a good thing for the residents,” Colin noted. “They know where to go. You can follow the family through from young to teenage to older.”

Breaking Down Silos

One of the recurring themes was the need to break down silos between property and service departments.

“Property tends to sit in an ivory tower,” Colin admitted. “It’s really important to speak to people in a non-technical way and empathise with what they’re trying to achieve.”

This human-centred approach builds trust and enables cross-cutting conversations. It also helps property professionals avoid the trap of being seen as gatekeepers or cost-cutters, and instead become strategic partners in service delivery.

Facing the Challenges Ahead

Looking ahead, Colin identified several key challenges for property leaders in local government:

1. Local Government Reform (LGR): “It’s a huge job to integrate services and property functions. There’s duplication across county, district, and borough levels. But it’s also a massive opportunity.”

2. Cultural Change: “There’s a perception battle counties think they’re taking over districts, and vice versa. The reality is neither. It’s a new organisation.”

3. Debt and Legacy Investments: “Some councils are grappling with property-related debt burdens. Managing or mitigating these is critical.”

4. Operational Estate Rationalisation: “The only way to save money is to close buildings. That’s the reality. But it must be done while maintaining services.”

5. Strategic Capacity: “Business-as-usual takes up so much time. Strategic thinking often gets lost in the noise.”

The Role of External Perspective

As Colin transitions into consultancy, he reflected on the value of external insight.

“There’s something about having someone from outside take a fresh look,” he said. “Even if the same conclusion is reached, it gives assurance to elected members and senior officers that it’s the right way forward.” This resonates deeply with what I see across the sector. Many teams are near burnout. The opportunity to make a difference is there but sometimes it takes a new voice to unlock it.

Final Message: Know Your Costs, Know Your Purpose

Colin’s closing advice was both practical and profound:

“Understand what it costs you to run the portfolio not just rent and rates, but opportunity cost. Property has inherent value that can be released. Disposal receipts can pay down debt, reduce interest payments, and improve your revenue position.”

He urged councils to develop asset strategies that align with service needs, and to ask the tough questions: Do we stay or do we go?

“If you’ve built trust and can be innovative, you’d be surprised how you can save money and still maintain or even improve services.”

Conclusion: Property Without Borders

The future of property in local government is not about boundaries it’s about integration, innovation, and impact. Commercial thinking doesn’t mean abandoning public values. It means applying rigour, realism, and creativity to deliver better outcomes for residents. It means seeing property not as a cost centre, but as a strategic enabler.

As Colin reminded us, “You cannot sit in a bubble. You have to actively reach out to stakeholders and understand what they’re trying to achieve.” That’s the truth about local government and the truth about property without borders.