Redeveloping and Releasing Surplus Land to Generate Income

In this article, we’ll explore different ways to generate income from an existing estate.

We heard from Lara Newman, Chief Executive of LocatED, who explained that post-Covid-19 many estates are going to find themselves with surplus space, and there is the potential to maximise the value of this space.

About LocatED

LocatED has been operating across England since 2016. It is comprised of a multidisciplinary team bringing commercial property sector expertise to the Department for Education’s (DfE) large estate.

They function at an arms-length from the DfE but are hosted by them as their main government department, they operate in a similar way to a private sector body.

Their main roles are to find, buy, and manage sites for new schools. They work with commercial developers to deliver mixed-use developments, including sites that could provide a school and housing for example.

They also support schools to self-fund building improvements which often involves the releasing of land for housing. LocatED advise schools and others through this process.[1]

At the time of writing, LocatED have:

• Acquired 174 sites
• Disposed of 12 sites
• Managed 166 assets
• Provided 630 advice commissions
• Have 5 mixed use schemes in progress
• Provided 91,074 future school places

The Scale of the Challenge

There are over 65,000 buildings in the school estate, estimated to cover more than 100,000 acres of land. Less than 2% of that land falls under the DfE’s remit due to reasons such as fragmented land ownership agreements with local authorities and others.

This leads to a lack of awareness of how to unlock funds to provide additional capital investment in school buildings, as some authorities don’t have teams dedicated to this.[1]

Schools in some areas are not configured in the best way to meet their changing needs, leaving parts of the school estate underutilised or surplus to requirements.

The demand for school condition improvement work is increasing nationally and LocatED assists the programmes the DfE has in place to supplement the ongoing work.

There has also been an increased demand for housing, with a lack of available land to build new homes in areas with a high need for housing. Local authorities are constantly searching for sites to develop.

Part of the work LocatED carry out is to free up some of the surplus lands within school sites to help ease the pressure on social housing providers.

The question that drives their work is:

“can parts of the school estate be creatively redeveloped to maximise investment in school buildings and, in turn, provide affordable housing?”[1]

In effect, this means selling off bits of land that are no longer used by the school and are genuine surplus to requirements, in order to fund condition improvements and free up the land for much-needed housing developments.

Opportunities to Support School Improvements

One of the schemes LocatED are supporting is the School Rebuilding Programme.

This consists of opening up school land, buildings, and facilities for multiple uses to generate income. This has provided new local partnership opportunities to carry out continued work on these sites and maximise their use.

The first phase of school transformation has launched with the following measures:

• Introducing a £1 billion programme to support the delivery of 500 projects over the next 10 years
• Focusing on rebuilding and refurbishing new facilities
• Announcing the first 50 projects (February 2021)
• Targeting 70% of schools in the North and Midlands[1]

Opening up the schools allows them to make the most of the numerous facilities including:

• Sports pitches
• Classrooms
• Kitchens
• Car parks
• Event space
• Halls
• Multiple-use game areas
• Theatres
• Gyms

The income generated from renting these areas out can be used to improve the facilities for everyone.

Some ways of utilising these spaces include renting out the theatre for short term filming and photoshoots, as well as offering it as a corporate event or exhibition space.

Many schools will have parking facilities, which can be rented out during holidays and weekends. There’s also the opportunity to partner with an electric vehicle charging provider and increase car parking revenue that way.

Leasing out kitchens and catering spaces during holidays or after school hours is also a possibility, with partnership opportunities with local events becoming available.

Another option is to install solar panels across buildings, enabling the school to sell energy back to the grid and raise funds.

As well as utilising the land by making it multi-purpose, there are also a lot of sites with genuine surplus land, such as:

• Mothballed/unused buildings
• Scrubland
• Dilapidated courts
• Roads and paths
• Car parks
• Hard standing areas

Working in partnership with the Ministry of Housing, Homes England, and local authorities across England, LocatED is targeting sites in areas with very high housing needs.

The Surplus Land for Housing pilot has so far seen:

• 700 desktop site appraisals
• 75 planning appraisals
• 30 feasibility studies
• 1000 potential new homes
• Large investments in school estates

12 sites have been approved by Ministers, with LocatED leading the delivery on these sites as part of the ongoing development of the strategic relationship with their partners.

Looking Ahead

The scale of the whole school estate means there are ample opportunities to improve a range of issues, from something small such as implementing efficient heating systems to full school rebuilds.

There could be significant financial savings as well as income opportunities for schools, at a time when they are in severe need of extra revenue.[1]

Part of the project also addresses the other concern schools have, which is the need for maintenance work. Improving their current condition can also mitigate future costs on even larger scale renovation requirements.

Continuing the ‘Surplus Land for Housing Project’ could also help to alleviate pressure on housing providers, helping to resolve the housing crisis, as well as help further fund school estates.

All of this also improves the sustainability, both financially and in terms of emissions, of the school estate.[1]

[1] Newman, Lara. 2021 Chief Executive, LocatED. Redeveloping and Releasing Surplus Land to Generate Income.