Unlocking Value: A Strategic Property Approach to Tackling Local Government Debt

Introduction: A Crisis and an Opportunity

We in local government are facing one of the most complex and demanding periods in recent memory. Financial pressures are intensifying across the board driven by rising demand for services, inflation, and years of constrained funding. At the same time, we are undergoing a significant structural transformation through local government reorganisation. While this reform is intended to streamline governance and improve outcomes, it also brings with it a daunting challenge: the risk of inheriting unsustainable levels of debt and fragmented, underperforming property portfolios.

In this environment, the levers available to us to reduce debt and generate sustainable income are limited. Traditional funding routes are drying up, and many councils are already operating at the edge of financial viability. Yet, amid this turbulence, there is a powerful and often overlooked opportunity our public estate. Across the UK, councils collectively own billions of pounds worth of property assets. These include everything from office buildings and retail units to depots, leisure centres, and community hubs. If we manage these assets strategically, they can become a cornerstone of financial resilience and a catalyst for transformation. But too often, they are treated as static holdings an afterthought rather than a strategic tool.

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In a recent episode of Truth About Local Government, I had the opportunity to speak with Charles Maxlow-Tomlinson, a leading expert in public sector asset strategy. Charles brings a wealth of experience and a clear, practical vision for how we can unlock the latent value in our property portfolios. His message was both urgent and hopeful: property is not just a technical function it’s a strategic enabler. It can help us reduce debt, stabilise budgets, and support long-term reform if we choose to act.

This blog sets out the key insights from that conversation. It is written for those of us in local government who are responsible for property, and for our colleagues in central government who have the power to enable the legislative and policy changes needed to make this approach work. Together, we have a chance to rethink how we view and use public assets not as burdens, but as opportunities to build a more sustainable and resilient future for local government.

Why Property Is Underutilised

“Just like a car, a building needs regular upkeep to hold its value.” Charles Maxlow-Tomlinson

Despite the vast scale of the public estate we collectively manage, we often fall short in unlocking its full potential. Many of us in local government inherited property portfolios that were acquired with good intentions sometimes as a response to funding shortfalls, sometimes as part of regeneration ambitions. But too often, these assets have been left without the active, commercial management they require to thrive. One of the core issues is that we frequently lack the in-house commercial property expertise needed to manage these assets effectively. We may not have enough professionally qualified asset managers or chartered surveyors on staff. And even when we do, the strategic focus on property as a financial tool is often missing from our broader organisational thinking.

This isn’t about blame. In many cases, we’ve been let down by poor external advice particularly during the era of easy borrowing through the Public Works Loan Board (PWLB). Councils were encouraged to invest in commercial property without the necessary asset management strategies in place. As a result, we’ve missed out on rental income, suffered capital value losses, and allowed valuable assets to underperform. But the good news is this: our portfolios still hold huge untapped potential. With the right approach, we can turn these underutilised assets into a powerful lever for financial resilience and transformation.

The First Steps: Know What We Own

“Step one is actually knowing exactly what you own, and you'd be surprised how many councils don't.” Charles Maxlow-Tomlinson

Before we can unlock the value of our estates, we must begin with the fundamentals. That means taking a long, hard look at what we actually own and understanding it in detail.

Here are the essential first steps we need to take:

• Maintain an up-to-date asset register that accurately reflects our holdings

• List tenancy schedules, lease events, and critical dates to manage income and risk

• Engage proactively with tenants to reduce voids and secure long-term income

• Develop a business plan for each asset, outlining its purpose, performance, and future strategy

Every property in our portfolio should be assessed through a commercial lens. If an asset is performing well, we should look at how to enhance its value. If it’s underperforming, we need to ask whether it still serves a strategic purpose. And if it doesn’t, we must be willing to consider disposal and reinvestment. This isn’t about selling off the family silver. It’s about owning with purpose making sure every asset we hold contributes to our financial sustainability and public value. Strategic ownership is not a luxury; it’s a necessity.

Balancing Short-Term Pressures with Long-Term Strategy

“Effective long-term asset management actually solves the short-term pressures.” Charles Maxlow-Tomlinson

As local government officers, we often find ourselves caught between two competing imperatives: the need to address immediate financial pressures and the responsibility to safeguard long-term sustainability. For Section 151 officers in particular, the dilemma is stark do we sell assets to plug short-term budget gaps, or do we retain them in the hope of generating future revenue?

Charles Maxlow-Tomlinson offers a compelling alternative: we can do both. Through strategic asset management, we can rationalise our estates without resorting to fire sales. This means making informed, evidence-based decisions about which assets to retain, which to improve, and which to release. It’s about managing with intent, not reacting out of desperation. By taking a long-term view, we can reduce day-to-day budget pressures while building a more resilient financial foundation. This is not just a technical exercise it’s a strategic imperative.

The Role of Data and Expertise

“Data is crucial, but it's only useful in the hands of people who know how to interpret it.” Charles Maxlow-Tomlinson

We are living in a data-rich world, and the public sector is no exception. Tools like GIS mapping, digital twins, and even AI platforms like ChatGPT can help us visualise our estates, identify opportunities, and model scenarios. But data alone is not enough.

To make the most of these tools, we need professional insight. We must ensure that our teams or the partners we work with have the commercial acumen and property expertise to interpret the data and act on it. Managing a commercial estate is fundamentally different from managing residential property. It requires a deep understanding of market dynamics, lease structures, risk, and value creation. If we want to unlock the full potential of our estates, we must invest in the right skills and surround ourselves with the right advice. Data is powerful, but only when paired with genuine expertise.

A Model for Debt Repayment

“You can’t pay debt with hope. You need strategy. You need discipline. And you need the right expertise.” Charles Maxlow-Tomlinson

Charles has developed a practical and compelling model that offers a way forward for councils burdened by debt. It’s a model rooted in realism, discipline, and long-term thinking. Here’s how it works:

1. Selective disposals of underperforming or non-strategic assets

2. Reinvestment of capital receipts into 30-year government gilts

3. Controlled long-term asset management to generate secure, sustainable income

This approach is low-risk, transparent, and designed to protect the public purse. It avoids the pitfalls of short-termism while offering a credible path to financial recovery. It’s not just a viable option it’s one we should be actively exploring and advocating for.

Legislative Change: The Missing Piece

“No new unitary council should be born bankrupt.” Charles Maxlow-Tomlinson

For this model to work at scale, we need support from central government. Specifically, we need the Treasury to make a few targeted but crucial changes:

• Allow PWLB debt to be repaid through reinvestment in government bonds, rather than immediate repayment upon asset disposal

• Enable the creation of a corporation tax-free pooled vehicle to hold and manage assets across reorganised authorities

• Waive stamp duty on internal transfers of property between public bodies

Without these changes, we risk setting up new unitary authorities to fail before they’ve even begun. Legacy debt could cripple their ability to deliver services, invest in communities, or plan for the future. This is not about asking for a bailout. It’s about creating the conditions for responsible, strategic financial management. With the right legislative framework, we can turn our estates into engines of recovery and resilience.

Overcoming Challenges: Collaboration Is Key

“Property needs to be seen as a cross-cutting enabler of this transformation process.”   Charles Maxlow-Tomlinson

The greatest barriers we face in unlocking the value of our public estates are not technical they are organisational. Too often, we operate in silos. Departments within councils, and even different tiers of government, pursue their own priorities without recognising the shared value that strategic property management can deliver.

We must change that. Property underpins everything we do from education and adult social care to regeneration and economic development. It is not a background function; it is a strategic asset that touches every service and every community.

To succeed, we need joined-up thinking. We need to break down silos, align our goals, and work collaboratively across departments and between local and central government. With multiple workstreams, deadlines, and reforms converging, the system is at risk of being overwhelmed. Now more than ever, we need brave leadership and a shared commitment to long-term thinking.

Engaging Elected Members and Communities

“Party politics has no place in property strategy. It’s all about financial survival and public value.” Charles Maxlow-Tomlinson

We know that property decisions can be politically sensitive. Elected members are often focused on short-term electoral cycles, while property strategy demands a long-term vision. That tension is real but it can be managed. We must do more to communicate clearly with members and communities about the rationale behind our decisions. We need to explain not just what we’re doing, but why we’re doing it and how it will benefit the public in the long run.

We also need to de-risk decision-making by providing members with access to professional advice and independent expertise. And crucially, we must work to build cross-party consensus. Property strategy should not be subject to political swings every four years. It requires continuity, stability, and shared ownership across the political spectrum.

Looking Ahead: Trends in Public Sector Estates

“Councils will start to need to treat their estates like every other investment portfolio.”   Charles Maxlow-Tomlinson

As we look to the next five to ten years, several trends are already beginning to reshape how we manage our estates. We must be ready to adapt and lead this change.

We can expect:

• A shift from passive ownership to proactive asset management 

• Greater scrutiny of the risk profiles of property investments

• Rationalisation of estates to focus on high-performing, income-generating assets

• A stronger emphasis on long-term planning for debt repayment and financial resilience

We must treat our estates with the same discipline and strategic intent as any institutional investor would. That means understanding our assets, managing them actively, and planning for the future not just the next budget cycle.

Conclusion: A Call to Action

This isn’t just a conversation it’s a blueprint. Charles Maxlow-Tomlinson has laid out a practical, strategic, and financially sound approach to tackling the debt crisis in local government. But it will only work if we act together.

To our colleagues in central government: the legislative changes required are modest, but the impact could be transformative. By enabling flexibility around PWLB debt and supporting pooled asset vehicles, you can empower councils to take control of their financial futures. To those of us in local government: the time to act is now. We must know our estates, manage them strategically, and advocate for the changes needed to unlock their full value. Let’s stop setting councils up to fail. Let’s start building a future where property is the foundation of financial resilience, not a forgotten asset on the balance sheet.

This blog post was sponsored by RPNA, who help local authorities to deliver projects and implement changes efficiently. They offer expertise in areas like leadership, wellbeing, technology, and commercial acumen, ensuring excellent value for money and meeting key priorities.