First appeared in Public Finance on 28th July 2011
Selling-off parts of a property portfolio can be a clear income generator for many councils looking to cut spend in their local area. But disposing of community buildings is not the only way to increase funds and many councils are now looking at realistic ways of ‘sweating the assets’ to drive efficiency. Letting out facilities to a host of organisations is a tried-and-tested measure to securing an income stream for local authorities, and is likely to continue as councils strive to increase income and decrease spend.
For communities, this approach may mean an increase in ‘multi-function’ buildings. Schools are a prime example – a school hall can host adult learning groups, clubs or be transformed into a church hall out of hours, while pupil sports facilities can be opened up to the entire community after the school bell has rung or during the school holidays. And it’s not just schools; libraries, town halls, dormant public office space and leisure centres can all have a life beyond their core purpose, providing venues for local business events and society AGMs.
What this means in practice though, is that the local authorities or public bodies which own those buildings need to carefully consider the impact of opening up a building outside normal operations, to ensure all potential risks are sensibly managed. For example additional lighting and security measures may be required if a school site or building is to stay open during winter evenings.
Equally, using a building outside of its intended operational hours will also likely increase damage through wear and tear, and, consequently increase maintenance costs – something that should be taken into account when assessing the financial benefits of letting the property. Further, expensive or potentially dangerous equipment may need to be safely stored away from those hiring the venue.
It is also vital to consider the suitability and potential impact of the specific activity that will be happening in the building, and the people involved in its provision. For example, in a large building multiple activities could take place concurrently, but it may not be appropriate for a group of adults to use the building at the same time as a group of young children. Conversely, not all buildings will have facilities designed for use by larger groups, so a small kitchen in a town hall may not be sufficient to produce lunch for a large-scale youth project.
Building owners should also be mindful of the suitability and experience of the people running or involved with the activity and ensure that they communicate their responsibilities appropriately for the activity being provided – be that language classes, football coaching or a cookery course. Where buildings are hired out to community groups in particular, who may not be as familiar with building hire as commercial organisations, local authorities and building owners need to take a greater active role in this communication. It is important to ensure that the users understand and agree their responsibilities for maintaining health and safety standards and identifying the sensible and proportionate precautions that might be necessary for the activity. Community users may also need to be made aware of appropriate liability insurance requirements for their activity and the responsibility for maintaining security and the like.
By keeping a check on these issues and actively supporting community groups in this way, potential pitfalls and risks of an incident occurring which could implicate the building owner and have financial or reputational ramifications can be easily mitigated. For example, agreeing with the organisation which kinds of activities or events are acceptable on the premises can avoid confusion, and meeting with organisers early-on can help highlight potential areas of conflict and offer an opportunity to discuss their responsibilities.
Trying to relinquish responsibility of what happens behind closed doors once a public building has been let could be an expensive, short-sighted decision. Instead, the key to hiring out a public property to any third party is to view it as a supply chain arrangement – it is not a case of ‘out of sight, out of mind’ and the building owner must take responsibility for what happens in it. Then, with effective communication, controls and the right checks, multi-function buildings could be a sure way to generate funds and support community activity at the same time.
