STRATEGIC ASSET MANAGEMENT PLAN & CAPITAL STRATEGY 2006
CONTENTS
1 2 3 4 5 6 7 8 9 10 11 12 13 14 App A App B Introduction Context Asset Portfolio Organisational Arrangements Data Management Core Actions Programme and Plan Development Implementation Consultation Best Value Review Programme Performance Management and Performance Spending and Output/Outcome Information Capital project Prioritisation Disposal Action Plan National and Local Indicators Capital Strategy Pages 1- 2 Pages 2 – 3 Pages 3 – 4 Pages 4 - 5 Pages 5 Pages 5 - 7 Pages 7 - 8 Pages 8 Pages 8 Pages 8 - 9 Pages 9 -10 Pages 11 Pages 12 Pages 12-13
1.0 INTRODUCTION 1.1 The Strategic Asset Management Plan 2006 is intended as a corporate tool to utilise, develop systems and processes to enable the Council to use its assets efficiently and effectively. 1.2 Asset management is an integral element of achieving the vision and priority outcomes of the Council by creating an environment that is prosperous, attractive and vibrant communities with good access to jobs, services and facilities where everybody can feel safe, healthy and happy. This will be achieved by, over time, providing the infrastructure to enable the vision and priority outcomes to be delivered. 1.3 It was recognised that a strategic overview and joined up approach was integral to the management of Council assets. A new structure was put in place and came into effect 1st April 2006 which brought together valuation, property maintenance and repair, asset management, energy efficiency, architectural services, and the design and provision of open space and play areas. This approach will provide a comprehensive and joined up service, and enable a proactive management approach in providing the service. The pivotal role of Elected Members was also recognised and reflected in the enhanced status of the Asset Management Sub-Committee. 1.4 The purpose of asset management can be summarised as: Ensure that operational assets used for service delivery is fit for purpose. Ensure that non-operational assets make a contribution to achieving Council objectives. Develop a programme of acquisition and disposal of assets that will contribute to delivering high quality services to the community and visitors. Identify business opportunities and secure/dispose of assets to realize that opportunity. Improving stakeholder satisfaction with the provision of service and improve the corporate image and how the Council is viewed. Ensure affordability and value for money in the use and operation of assets. Ensure compliance with statutory and regulatory codes, e.g. Disability Discrimination Act.
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Improve strategic management to demonstrate clear links between corporate and service objectives and management of assets critical to service delivery. Effectively manage concessions, lease, licence and other agreements to ensure optimal value. Develop and implement a works programme for energy efficient measures that will deliver long term and sustainable reduction in energy use, however given the increasing price of utility services it is unlikely that cost will reduce certainly in the short term. Develop and implement a programmed maintenance plan that will maintain the assets to a satisfactory standard and capable of delivering high quality services to the community and visitors. Work closely with developers to ensure that open space and play provision adequately meets the needs and aspirations of the local community and ongoing revenue costs are minimized through design. Review all service agreements across the Council to ensure consistent and cost effective approach. Support and advise colleagues in other teams in respect of facilities they manage, projects they may be involved with, particularly externally funded projects, and issues relating to fees and charges.
1.5 The needs and aspirations of stakeholders will change in the future as too will demands placed on the service. Therefore the Strategic Asset Management Plan needs to be flexible enough not just to meet today‟s expectations but tomorrow and beyond. For this reason decisions must be made with the future in mind and short term „fixes‟, avoided. 2.0 CONTEXT
2.1 A proactive Asset Management Strategy, and the positive effect that that will have on revenue and capital funding streams is central to underpinning and facilitating the delivery of the Strategic Direction. 2.2 The Strategic Direction states: “We have set these priority outcomes to achieve prosperous, attractive, and vibrant communities with good access to jobs, services and facilities and where everybody can feel safe, healthy and happy”:
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Further enhance Waveney‟s infrastructure and built environment. Reduce crime and anti social behaviour in Waveney and improve community safety. Meet the housing needs of the most vulnerable people living in Waveney. Minimise the environmental impact of Waveney‟s community. Enhance Waveney‟s natural environment and access to it. Encourage economic vitality across the Waveney district and sub region. Support the development of a skilled and diverse workforce in Waveney. Improve the health and well-being of Waveney‟s community. Improve access to information and customer services provided by the public sector in Waveney. Ensure services and performance improves.
3.0 ASSET PORTFOLIO 3.1 The Council currently holds over 300 property assets with a total value in the region of £30,000,000. Of the total value around £4,000,000 are nonoperational property assets. In addition there are land assets, many of which are for recreational purposes (including play provision) or enhancing the environment. 3.2 Services are provided from a diverse range of properties and land across the district. There is a need to look carefully at the number, type and location of the assets that are required to deliver priority outcomes in the medium and long term, this forms part of the Action Plan as set out at section 14.0. 3.3 Assets have been categorised to fit within the ODPM categories and are given below:
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Property Category
Fixed Asset Value
Assets (No’s)
Operational Assets Offices, Administration Buildings Office Car Parks Sports Centre and Pools Sport Grounds Parks Open Space Museums Cemeteries (Buildings Only) Cemeteries (Land) Beach Chalets Caravan and Camping Sites Yacht Stations Public Conveniences Theatre and Public Halls Contract Services Off Street Car Parks (Pay and Display) Housing (HRA) Property (Tenants Meeting Halls) Miscellaneous Finance Highways Industrial Property TOTAL Non-Operational Assets Surplus Property Allotments Shops on Housing Estates Markets GRF Housing (Care Centre) Parks, Recreation Grounds and Open Spaces Beach Activities Miscellaneous Properties TOTAL GRAND TOTAL
£3,997,500 £44,400 £6,512,000 £555,748 £15,413 £895,211 £91,000 £275,000 £8,000 £1,177,000 £1,200,000 £451,000 £1,140,000 £623,000 £832,200 £4,446,500 £68,500 £51,000 £13,500 £4,076,300 £26,473,308
18 6 4 8 6 25 1 8 8 2 2 5 29 3 7 54 6 2 1 32 195
£463,500 £7,995 £193,750 £99,500 £80,000 £1,080,500 £806,750 £1,101,450 £3,833,445 £30,306,753
7 15 8 5 1 14 11 16 77 304
The figures in the above table are the most recent available but need review which will form part of the ongoing Asset Valuation Programme. For example the present condition of North Denes Caravan Site and loss of the camping field may
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affect the asset value, Highways have transferred to Suffolk County Council, sale of land at Waveney Sports and Leisure Centre to Lowestoft College, the recent changes to car park provision etc. 4.0 ORGANISATIONAL ARRANGEMENTS 4.1 This 2006 Strategic Asset Management Plan will be referred to the Asset Management Sub-Committee, for consideration and adoption on 22 June 2006. 4.2 Elected Members, chaired by a Portfolio Holder, will play a key role in the management of corporate assets through the Asset Management SubCommittee with its enhanced status, replacing the Corporate Asset Management Team. To support this process a regular calendar of meetings has been set 4.3 The role of Corporate Asset Officer is the responsibility of the Corporate Director (Corporate Governance). Part of this function is to ensure that the principles of asset management planning are developed and implemented through the Asset Management Sub-Committee, which comprises of four Elected Members. 4.4 The day-to-day strategic management of property assets falls within the remit of the Portfolio Manager (Legal and Democracy), supported by Principal Service Manager (Asset Management), and Principal Accountant (Corporate Governance). 5.0 DATA MANAGEMENT 5.1 The Council holds over 320 property assets, with a total asset value in the region of £33 million. Details of the core and transient data in respect of the holdings are held both electronically and in hard copy. Such a system has operational shortcomings. 5.2 Accordingly, a new IT support package, LAMP, is soon to be commissioned and contract recently signed. This system, which has an asset management package, should enable asset details to be managed effectively. Our aspiration is to move as quickly as possible to a fully integrated electronic record system. In addition deeds issues have been resolved through Land Registry registration exercise. 6.0 CORE ACTIONS 6.1 The Council has recently resourced the new Asset Management structure following adverse comments in the Comprehensive Performance Assessment Report. The need to deal with assets centrally in a strategic
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manner rather than focusing on operational needs, and co-ordinating the management and use of assets across the whole organisation in a joined up manner were identified in the report as being central to delivering the Strategic Direction. 6.2 It must however be stressed that asset management is not just about disposal of assets, it is about making sure the right assets are in the right place to the right standard to enable the provision of high quality services. This will involve modernising out of date facilities/buildings, disposal of surplus or poor quality assets, and acquisition where appropriate. This approach will enable assets that are designed to meet service needs rather than services making best use of what assets are available, and create a framework where revenue and capital resources are effectively targeted. 6.3 In developing the Strategic Asset Management Plan the following core actions will be the main focus of the team: Develop a programme for what the team needs to do to support the Councils Strategic Direction. Update and maintain accurate records of assets, provide timely brought forward system, and transfer data onto the LAMP module. Identify property, buildings, land and other assets that are fit for purpose and/or contribute to achieving the authorities priority outcomes. Identify property, building, land and other assets that are not fit for purpose and/or do not contribute to the authorities priority outcomes. Develop a programme for the disposal and acquisition of assets that will contribute to the delivery of quality services to the community and visitors to the district, and have a positive effect on future revenue budgets. Identify business opportunity and secure/dispose of assets to realise that opportunity. Identify property, buildings, land and other assets that are necessary to achieve the authorities priority outcomes but require investment to be fit for purpose. Review licence, lease, concessions when the opportunity arises and maximise income potential by achieving optimal rates and best price as set out at section 123 of the Local Government Act 1972.
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Market testing through tender processes, where appropriate, will be used for that purpose. Develop and implement a programmed maintenance and works programme that will maintain assets to a standard that is conducive to providing quality services which meets statutory requirements for example the Disability Discrimination Act. Organise repair and maintenance works on corporate properties and buildings. Oversee and project-manage capital projects and building works. Review service agreements across the Council to ensure that a consistent and cost effective approach is adopted. Develop and implement a programme for Energy Efficiency measures that will deliver long term and sustainable revenue savings and contribute to the „green‟ agenda. Work closely with developers to ensure that open space and play provision adequately meets the needs and aspirations of local communities and on-going revenue costs are minimised through design. Examine partnership opportunities relationships with the private sector. and strengthen/develop
6.4 The Asset Management Sub-Committee is responsible for the development and implementation of the Capital Strategy. 7.0 PROGRAMME AND PLAN DEVELOPMENT AND IMPLIMENTATION 7.1 The Council continues to develop its approach to the introduction of corporate strategic plans and planning frameworks. The Strategic Asset Management Plan and Capital Strategy are important elements within the corporate planning framework, the main elements of which are set out below: Optimising property holdings to meet changing service needs. Gaining financial benefits from savings in running costs and enhancing capital receipts. Implementing corporate plans and strategies in areas such as access, sustainability and community safety.
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Acting as a catalyst for partnership working with other public service providers.
7.2 It is recognised that there is a need to move away from the perception of service department ownership of assets, and that ownership of assets be moved away from service managers back to the corporate centre. This has been taken on board, and the service managers now recognise the corporate role in the decision-making process involving assets. This will be further developed through the Asset Management Sub-Committee who will take the lead in asset related issues. 7.3 As part of the Strategic Asset Management Plan, five yearly inspections of all assets will be undertaken as part of the Fixed Asset Valuation Process. Material changes to valuations are noted and appropriate adjustments made in the financial and asset data records. 8.0 CONSULTATION 8.1 To meet the challenges that lay ahead in the future the Council must be „fit for purpose‟. Within this area, numerous actions are identified, but a number are highlighted as being of high priority. One of these top priority areas is to utilise consultation processes to determine community aspirations and to use the results to inform decision-making. This endorses the commitment to the process and the importance it attaches to the views of its stakeholders. 9.0 BEST VALUE REVIEW PROGRAMME 9.1 The Best Value Review programme for 2005/06 has been updated to reflect the progress made to date, and the need to divert resources to other corporate issues, particularly the Comprehensive Performance Assessment. 9.2 The Comprehensive Performance Assessment of December 2004 stated “The council does not have the capacity to deliver effective asset management. While an asset management plan is in place, it identifies that there has been very limited progress in implementing changes, and highlights a lack of appropriate staffing resources as being a clear barrier to securing improvements. No clear plan has been put in place to try and rectify this issue. The council has recognised the constraints of multi-site offices and has recently reduced the number of sites from 4 to 3. Plans for a single civic site are at an early stage.” 9.3 A new asset management structure is now in place, as outlined at section 4.0 above, the Waveney Campus site is progressing, and assistance through a capacity building fund is actively being pursued. Therefore processes are in place to address the issues identified in the 2004 Comprehensive Performance Assessment report. 8
10.0 PERFORMANCE MANAGEMENT AND MONITORING 10.1 Effective performance management requires an integrated planning, review and financial system. Such a system will show where current resources are not achieving desired outcomes, and identify processes that must exist for outcomes to be achieved. This is an evolving process in respect of asset management planning, and an area in which the Asset Management Sub-Committee will take a leading role. Asset performance information is now being collate and although used for specific and project focused purposes, it is currently being expanded to take account of the „wider‟ picture. 10.2 Performance management targets are currently being developed and will focus on the following areas: Indicator 1 (A, B, C & D) - Condition and Required Maintenance Indicator 2 (A, B & C) – Environmental Property Issues Indicator 3 A & B) – Suitability Surveys Indicator 4 (A, B, C & D) – Building Accessibility carried out in conjunction with BV156 10.3 Further indicators will be included as the service develops. At the present time, being a new team, the emphasis is being placed on establishing core accurate information and putting the necessary processes in place to effectively deliver the service in the future. The action plan at section 14.0 outlines this approach. 11.0 SPENDING AND OUTPUT/OUTCOME INFORMATION 11.1 Capital budgets are set over a four-year cycle. These are set out in the Budget Book for 2006/07. Clearly certain assumptions have had to be made to both estimate capital requirements in future years, but also to predict the source of capital funding. For the purposes of the forward years budgets, it has been assumed that Prudential Borrowing meets any gap in the funding of the Capital Programme, rather than any increased revenue contributions. 11.2 The fundamental objective when considering the affordability of the capital programme is to ensure that the total capital investment of the Council remains within sustainable limits, and in particular to consider its impact on the “bottom line” revenue budget. In considering the capital programme, the Council is required, under the Prudential Code, to have regard to: Affordability (implications for Council Tax and rents).
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Prudence and sustainability (implications for external borrowing). Value for money Stewardship of assets. (planning) Service objectives Practicability (achievability).
11.2 The Prudential Code will enable the Council to have more flexibility in its borrowing in the future, having regard to the above factors. 11.3 It must also be recognized that the use of capital funds impacts on revenue budgets not just in terms of meeting debt charges but day-to-day running costs. It is therefore imperative that any capital bids fully address revenue implications, meets corporate objectives, and makes a strong business case. Using capital funding wisely will have a positive and sustainable effect on revenue budgets. 11.4 The potential for moving towards a pro-active approach in the short/medium term is being explored/developed and the aspiration in the not to distant future is to make a surplus contribution to the revenue budget. Included in this work is partnership working with the private sector. Pro-actively managing assets is far more than disposal. 12.0 CAPITAL PROJECT PRIORITISATION 12.1 The importance of ensuring there is a robust consistency in its consideration of capital projects is recognised, and a need to ensure that capital resources are directed to appropriate corporate priorities. Accordingly, the Asset Management Sub-Committee has developed a methodology to address this issue. This is also referred to in the Capital Strategy. 12.2 The principle behind the process is to score each project against consistent criteria, including the following: How the project contributes to the Medium Term Priorities, specifically how it underpins the Strategic Direction and other corporate policies and Plans. How the project will lead to improvements in service delivery. How the project will support the principles of corporate asset management planning.
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How the project supports, and promotes, cross service delivery. How the project impacts on revenue budgets and if potential savings are sustainable.
This will be kept under review by the Asset Management Sub-Committee and adjustments made when appropriate. 13.0 DISPOSAL 13.1 There is a need to take a pro-active role in the identification, management and disposal of under-utilized or surplus property. Disposal however is an integral part of generating capital funds for reinvestment purposes. Thus making best use of available funds. 14.0 ACTION PLAN Priority Activity Input Outcome When Outcome By
1 2 3 4 5
Develop a Strategic Asset Management Plan setting out clear direction and objectives for the service. Oversee the collection and input of data to ensure that records are accurate and up to-date. Develop a framework that will review assets to determine if fit for purpose and supports corporate objectives and priorities.
April 06 to May 06
Adopted as policy through Asset Management SubCommittee. Electronic database.
Principal Service Manager (Assets) Principal Service Manager (Assets) Principal Service Manager (Assets)
July 06 to March 07
Sept 06 to March 07
Report(s) to Asset Management SubCommittee.
Ensure that „best price‟ is achieved on all transactions and proactive approach is developed and sustained. Ensure that all resources are used effectively to maximise performance.
May 06 to March 07
May 06 to March 07
Reports to Asset Management SubCommittee. Financial Performance and Monitoring Processes. Performance Management. Staff Development Processes. Training Programmes.
Principal Service Manager (Assets) Principal Service Manager (Assets)
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6 7 8 9 10 11 12 13 14 15
Develop condition survey programme for corporate assets in line with Property Performance Indicator 1 Conduct condition survey based on 6 above
May 06 to Oct 06
Complete programme
Service Manager (Property) Service Manager (Property) Service Manager (Property) Service Manager (Property) Service Manager (Property) Service Manager (Property) Service Manager (Property) Service Manager (Property) Service Manager (Property) Service Manager (Property)
Nov 06 to Mar 07
Complete survey on four assets based on programme Proposed projects
Develop programme for Energy Conservation projects
May 06 to Dec 06
Identify capital project(s) for the forthcoming financial year
Dec 06 to Mar 07
Secure approval and funding to implement initiatives Number of completed projects
Monitor projects that are provided through developer commuted sum contributions Develop programme for Environmental Property Issues for corporate assets in line with Property Performance Indicator 2 Conduct Environmental Property Issues survey based on 11above
May 06 to Mar 07
May 06 to Oct 06
Complete Programme
Nov 06 to Mar 07
Complete survey on four assets based on programme Complete Programme
Develop programme for Suitability Surveys for corporate assets in line with Property Performance Indicator 3 Conduct Suitability Surveys based on 13 above
Aug 06 to Mar 07
April 07 to Oct 07
Complete survey on four assets based on programme Implement surveys and develop actions from findings
Implement measures identified in the policy documents in respect of asbestos and legionella
May 06 to March 07
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16 17
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Establish property asset database (LAMP)
June 06 to November 06 August 06 to October 07 July 06 to December 07
Concentrate on register of ownership
Programme to review individual property assets and prioritise
Programme ONLY – review of 5800 sites could take 10 years, thus prioritisation Regularised before any transfer. Robust approach may be required to meet timescale
Service Managers (Property, Assets, Valuation) Service Manager (Assets) Service Managers (Assets, Valuation)
Southwold Harbour Regularisation
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Appendix A PERFORMANCE MANAGEMENT TARGETS
BV156
2003/04 2004/05 2005/06 2006/07 2007/08 2008/09
% of authority buildings open to the public in which all public areas are suitable for and accessible to disabled people.
Target 39% 39% 45% 65% 75% 85%
Out-turn 36% 42% 57.14%
Variance 7.69% 26.97%
As outlined at points 6, 7, 11,12,13, and 14 of the Action Plan, further indicators will be developed and implemented.
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Appendix B Capital Strategy
The Capital Strategy outlines the policies and processes within the authority that are in place or are being developed to ensure that the authority‟s capital spending is focused on projects that will meet corporate priorities and deliver service improvements. This is outlined within the Strategic Asset Management Plan and in the capital program that is summarized on page 16.
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OTHER SERVICES EXPENDITURE
Actual 2004/05 £k
Revised Budget 2005/06 £k
Expenditure to 30 Sep 05 £k
Percentage of Budget Spent %
Budget 2006/07 £k
Budget 2007/08 £k
Budget 2008/09 £k
Total £k
Corporate Governance Regeneration Community and Operations Total Expenditure
FUNDED BY:
444 4,130 323 4,897
386 7,499 3,276 11,161
32 1,517 223 1,772
8% 20% 7% 16%
6,314 9,508 15,822
101 28,745 28,846
1,807 5,550 7,357
386 15,721 47,079 63,186
SCE(R) - Single Capital Pot SCE(R) - Flood Defence etc Capital Receipts Capital Contributions Direct Revenue Financing Revenue Funds Capital Grants Unsupported Borrowing Total Funding
158 91 848 25 183 3,592 4,897
410 2,006 3,541 46 20 3,639 1,500 11,161
519 1,939 7,645 20 2,899 2,800 15,822
760 18,259 20 7 9,800 28,846
267 1,765 2,913 20 993 1,400 7,357
1,195 6,470 32,358 46 80 7,537 15,500 63,186
HOUSING INVESTMENT PROGRAMME EXPENDITURE
Actual 2004/05 £k
Revised Budget 2005/06 £k
Expenditure to 30 Sep 05 £k
Percentage of Budget Spent %
Budget 2006/07 £k
Budget 2007/08 £k
Budget 2008/09 £k
Total £k
Council Dwellings Other Housing Total Expenditure
FUNDED BY:
1,917 1,176 3,093
2,527 1,300 3,827
4,576 1,300 5,876
4,348 1,300 5,648
4,337 1,300 5,637
15,788 5,200 20,988
SCE(R) - Single Capital Pot Major Repairs Allowance Capital Receipts Direct Revenue Financing Disabled Facilities Grants Other Contributions Total Funding
972 1,170 1 650 300 3,093
1,010 1,871 650 296 3,827
1,000 3,926 650 300 5,876
1,000 3,698 650 300 5,648
1,000 3,687 650 300 5,637
4,010 13,182 2,600 1,196 20,988
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