UK councils and other public agencies will look to dispose of property worth £35bn in the next decade, a government report says today.

As revealed by Property Week last Friday, the government wants to dispose of far more property than the £20bn it identified in the 2009 Budget.

We said that the government is planning sweeping changes to help reduce the national debt.

Today, the Treasury has published its Total Place Report, outlining initial measures to create Local Property Vehicles for all publicly-owned property in a particular area.

Pilot schemes in Kent and Worcestershire that fed into this report reveal that better managing property via these vehicles would generate capital receipts of up to £35bn over a ten year period.

This would be driven by more co-location of back office staff across different local agencies and more flexible approaches to estate management.

The report also predicts that the public sector could save 10% on property running costs and 10% on better procurement of property services.

Kent, which has a public estate worth £5-6bn, and Worcestershire, which has a £3bn estate, will now work with government on how best to develop property vehicles before they are rolled out across the country.

These will be implemented nationally with measures due to be set out in the next Pre-Budget report.

The government hopes to incentivise local authorities to get better performance out of their estate by giving the highest achieving councils extra flexibility over how to use funding from central government. This is set to be introduced in April 2011.

Communities Secretary John Denham says: “The pilots have made a compelling case for a radical re-think in the way local services are provided and government is responding with equal ambition by delivering the freedoms and flexibilities to make that happen.

“For the first time all local spending is being looked at as a whole to fit around the needs of communities cutting out waste and duplication, while protecting and improving front line services.

“The pilots have shown that it is possible to breakdown silos to work collaboratively to improve outcomes while making savings and we now want all areas to benefit from the Total Place approach, which will help to meet the challenge of continuing to drive up standards in public services in a tougher economic climate.”

To see the report and its recommendations in full, click here: Total Place Report

• Budget 2010: Total Place
• Budget 2010: Darling to create Strategic Property Vehicles
• Budget 2010: 15,000 more Whitehall jobs to move
• Budget 2010: report to help create “Whitehall of North”
• Kent could save £280m from Total Place