By Matthew Legg Business editor

Last updated 05:48, Friday, 19 September 2008

CARLISLE City Council must act more like a private property developer to maximise income from land and buildings it owns.

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That’s the verdict of consultants Montagu Evans (ME), which was asked to advise the council on how best to manage its assets, which include The Lanes shopping centre and Kingstown Industrial Estate.

The council had considered selling off some of its property – thought to be worth about £124m – or setting up a so-called ‘Local Asset Vehicle’, where a private firm acquires a stake in them and helps to run them.

It was hoped this would create extra cash for regeneration projects like Carlisle Renaissance while simultaneously improving the city’s aging industrial sites and encouraging inward investment.

But ME has advised those ideas be put on the back burner for now and the focus instead be turned to how the sites are managed and what changes can be made to increase returns from them.

Council chiefs must first ditch their ‘one-size-fits-all’ policy for property and instead divide the portfolio into component parts: industrial, retail, land etc and formulate a plan for each category.

The council must then set up a structure to manage the assets better, to be able to adapt to changing market conditions and to take advantage of new opportunities.

This could be done by buying in expert help from the private sector or setting up a new property department, ME said. Ideas like LAVs could then be considered, which ME agreed could increase returns. The consultants have stressed though that while a private sector approach should be adopted, the council must also remember its special social responsibilities.

Catherine Elliott, director of development services for Carlisle City Council, said: “The report is saying that the big bang approach with the LAV is not the answer because one size doesn’t fit all. An LAV for everything doesn’t work.

“We need to look at assets within their categories and then make a decision based on their needs.

“The council would have to consult tenants, like businesses on industrial estates, before it pressed ahead with any of the plan.

There was strong criticism of an earlier proposal to sell off a 50 per cent stake in some of Carlisle’s business parks, with companies saying their rent would go up and that they should have an option to buy their own premises first.

Councillors will now be asked to adopt the ideas laid out in the Montagu Evans report.