Lift companies are in advanced talks with councils about plans that would see parts of local authorities’ estates sold off to raise money for urgent capital projects.
The public-private partnerships formed under the Local Improvement Finance Trust scheme would then finance and deliver the new schemes themselves and be paid back from the property sale.
Lift firms believe their experience in asset management, ability to raise private finance and the long-term nature of their partnerships with councils leaves them well placed to carry out the plans.
David Pokora, executive director of the Lift Council, which represents Lift companies, told Construction News that selling property was the only way to fund necessary capital work.
“The next five-year period is about rationalisation in health, education and other services. If you have 100 properties you can look at what you need and reinvest the money from selling what you deem surplus,” he said.
“We all have to live with the Comprehensive Spending Review that says savings have to be found.
“We need to look very critically at what we’ve got and see whether we can utilise asset managers such as Lift companies to come up with an investment plan that rationalises the estate.”
He said Lift companies were approaching councils and that interest was being shown in joint ventures delivering a broad range of schemes, particularly education.
He added: “Councils need a means of finance and it is hard to come by. There are sophisticated models of finance that can be used but they need to raise cash.”
A spokesman for Local Partnerships, which provides councils with commercial expertise, said at least one council had drawn up an implementation plan.
He added: “There is definite potential in the idea. Lots of Lift companies have specialist knowledge and provide specialist services.”
A series of Lift companies are set to enter the market for sub-contractors in the coming months, according to Mr Pokora. They have to ‘market test’ their supply chain every five years, a time limit that is approaching for many.
“Lots of Lift companies were started about five years ago,” he said. “Each one will have different priorities but it is not about lowest cost. It is about how people work as partnerships and how they approach schemes.”