Recommendation 9

Local authorities and infrastructure owners should apply resource assessments as a matter of course to identify the potential of land and infrastructure assets to generate long-term, stable revenue streams and not just oneoff, short-term windfalls from selling-off assets.

Central government, local authorities, utility owners and many other stakeholders are sitting on land and assets that could be more effectively used to provide new revenue streams.[49] On-going budgetary pressures have forced local authorities to consider a range of options for raising revenue and improving efficiency. This has led to the sale of significant amounts of property and land. iBUILD research has explored how resource mapping can be used to identify sustainable business models that take a longer-term view over unlocking new revenue streams whilst delivering wider social and environmental benefit.[50*]

Developments in urban energy resource assessment modelling enable potential revenue streams to be calculated using spatial mapping to overlay resource potential and local authority asset locations. For example, a case study in Leeds analysed the renewable electricity generation potential of over 6,500 sites owned by the City Council.[51*] This work was combined with information on generation and export revenues, avoided electricity costs and operational costs to assess net returns. Of the sites analysed, over three-quarters delivered a positive return for all generation options considered, with 334 sites returning a net present value of £100,000 or more for at least one option.

Resource potential will inevitably depend on the asset inventory and geography of each local authority; this study nevertheless suggests there are enormous untapped resources across the UK. Work to date has focused on wind and solar energy generation potential, but future research will extend this to consider other natural resources as well as financial schemes to unlock asset capital value.

Chicago parking - upfront payment at the expense of long terms lock-in

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Chicago raised a seemingly impressive $1.16bn in 2008 by leasing its 36,000 parking spaces for 75 years to a consortium led by Morgan Stanley in partnership with Allianz and the government of Abu Dhabi. Parking
fees in Chicago rapidly rose and the deal has created new costs for the city to compensate for periods when the meters are taken out of use, including during streetworks, public festivals and to offer free disabled parking. Furthermore, the deal penalises innovation in the transport sector as implementation of any measures to improve safety or to deliver more sustainable transport options incur additional penalties.[52] Subsequent analysis has suggested the city substantially undervalued the deal and should have asked for over $2bn.[53] This is consistent with other public sector infrastructure being undervalued which can stem from misunderstanding how private investors package and assess future revenue.[54]