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					                             ABERDEEN CITY COUNCIL

Name of Committee:        Resources Management Committee

Date of Meeting:          30 March 2006

Title of Report:          Asset Management Planning

Lead Officer:             Rita Stephen, Head of Economic Development

Author of Report:         Roger McKechnie, Principal Surveyor
                                rmck@aberdeencity.gov.uk
                                (52) 2623

Other Involvement: None

Consultation undertaken with:
Colleagues in Finance and ICT and Environment & Infrastructure

Summary of Report:
The report updates members on the progress to-date and anticipated timescale for
completion of the initial Property Asset Management Plan for Aberdeen City Council.

Recommendations:
1)   It is recommended that the Report and Draft Asset Management Plan be circulated to
     all members and Services of the Council to allow full consideration of the implications
     of the impact of the strategy proposed.

Linkage to the Community Plan and to Partnership for Aberdeen:
This report is in accordance with corporate objectives CO 01.01 and ODC 02.04 that the
Council will work in partnership to plan and co-ordinate the development and enhancement
of facilities and that the Council will make effective long term use of resources.

Implementation:
Arrangements will be made to ensure Council wide discussion of the implications of the
report.

Resource Management Implications:

People                      :   Additional members of staff may be required to progress the
                                proposed programme of tasks.

Finance                     :   The salary and on-costs of the additional staff.

Systems & Technology        :   Appropriate IT support in terms of services and equipment
                                for any additional staff will be required.

Property                    :   As discussed in the Report.

Other Equipment (desks, :       N/A.
accommodation, etc.):
Other                   :       None.
Other Implications:

Health and Safety               :   The Asset Management Plan, when completed, will include
                                    an analysis of the condition, fitness for purpose etc of all
                                    corporate buildings.

Risk Management                 :   Failure to complete an Asset Management Plan will make
                                    borrowing under the Prudential Code much harder.
Equal Opportunities             :   No issues identified.
Sustainability                  :
    Environmental               :   Compliance or otherwise with environmental standards
                                    appropriate to the building concerned will be included in the
                                    analysis of individual buildings.

     Social                     :   None.

     Economic                   :   The economic benefits of a well managed property estate
                                    should be felt by all residents of the City.




SIGNATURE: ________________________________




Asset Management Plans - RMcK           Page 2
Main Considerations:

1.0 Reference is made to the report from the Corporate Director of Finance &ICT to the
    Resources Management Committee on the 10 June 2003 when members were advised
    of the Update on the Prudential Code.

2.0 An integral part of the Prudential Code is the requirement of the Council to have in place
    a suitable Asset Management Plan (AMP) for its land and buildings asset base. The
    information that will have to be held for each asset will be similar but will vary between
    types.

3.0 Types of assets held by a local authority are mainly land and buildings (operational and
    non-operational) but also include infrastructure assets, principally, roads and street
    lighting.

4.0 Considerable investment is needed to maintain these assets with a significant (and
    growing) maintenance backlog having been identified for some time. It is therefore
    essential that active management be used to maximise value obtained and minimise the
    effective cost of these valuable assets.

5.0 The draft Asset Management Plan provides information and explanations of the
    information and appraisal necessary to comply with the Prudential Code requirements.

6.0 The Asset Management Plan is a working document to inform the City Council’s
    management of its property. It will require regular updating and review and is
    complementary to the Capital Strategy and has significant relevance to the Council’s
    capital funding programme and future needs.

7.0 The proposed AMP will have a five-year scope, 2006-2011, with specific focus on
    2006/7. It will cover all Council properties with the exception of the housing stock and
    transportation infrastructure (both of which have at present their own separate asset
    management planning processes). The School Estate also presently has its own
    separate asset management processes and has included the 3R’s review programme.

8.0 The format of AMP’s for Scottish Local Councils differ somewhat from that of adopted
    for England. The Scottish Executive have commended the structure for asset
    management planning approved by the Welsh Assembly and the guidance in the
    authoritative source documents available from Office of the Deputy Prime Minister
    (ODPM) and the Royal Institution Of Chartered Surveyors (RICS).

9.0 The AMP’s intended structure is likely to be as follows: Section 1:- The Overview, Parts
    1-4 describe the current portfolio and background issues. Part 5 summarises the main
    corporate property activities, and Part 6 deals with service led activities. Part 7
    examines the influence for change – external, corporate and service led. The final part
    of the Overview section sets out the recommended actions for 2006/07 and the
    measures of success. A copy of the document is available from Group Leaders, in the
    Group room and in the Members’ Library. A copy has also been placed on the intranet
    with a view to publishing it on the Council Website with the agreement of the Committee


10.0 Section Two will provide more detail about the individual, service relevant, asset
     management issues and it is envisaged over time that this section may allow for a suite
     of individual Service Asset Management Plans. It is also considered that, due to the
Asset Management Plans - RMcK         Page 3
     extent of work and the limited timescale available to produce the AMP, additional
     human resources may be required in the form of additional staff or appointment of
     external consultants. Progress and assessment of full workload implications is currently
     hampered by the lack of functional software for the collation and analysis of the data
     required to produce the individual building analysis. Further reports will be necessary
     for discussion as the full extent and complexity of the workload becomes clearer.

11.0 Scottish local authorities hold four main types of property assets namely: -

            •   Land and Buildings used to deliver a direct service to the public – housing,
                schools, residential care homes, public parks etc.
            •   Those that support service delivery in some way – administrative offices, the
                town hall, vehicle depots etc.
            •   Non-operational property, namely that which is not used for, or in support of,
                mainstream service delivery, for example surplus property awaiting sale,
                assets under construction, and investment property mainly commercial and
                industrial property.
            •   Infrastructure assets, principally roads and street lighting.

12.0 The main aims of the AMP is to assist with the provision of citizen and community
     focused service provision with well managed assets, delivered at neighbourhood level,
     where customer need is greatest. AMP’s will therefore allow:-

            •   Improvement of the delivery of the Council Services to local areas and
                citizens.
            •   Making the Council and its services more accountable to the citizens that they
                serve in their area.
            •   Making service delivery more responsive and to break down the barriers to
                accessing services.
            •   Rationalisation of service delivery to provide a coherent response to local
                needs and where possible bring service delivery together to a single local
                point of access.
            •   Improvement of service delivery across the wider public sector, for example
                by linking into the NHiS, Health Boards, doctor’s surgeries and health centres.
            •   Improved information on assets and awareness of the costs of asset
                utilisation as an aid to decision making.
            •   The Council to achieve a sustainable asset base.
            •   Optimisation of capital receipts.
            •   The Authority to adopt a longer planning horizon.
            •   Members more fully into the decision making process.
            •   Provide improved information on which to base a case for additional
                resources/funding.

13.0 The key elements of effective asset management planning are:
           • Adoption of a corporate approach and integration into the wider corporate
              planning framework.
           • Development of a strategic authority wide view.
           • Allocation of sufficient resources to the process.
           • Availability of accurate running cost, area, condition and usage data.
           • Arrangements in place to review assets robustly and in a structured way.

Conclusion:
Asset Management Plans - RMcK         Page 4
14.0 The Council has much to gain from the implementation of improved Asset Management
     Planning processes. These advantages include the provision of significantly improved
     information on utilisation of assets together with their associates costs as necessary
     building blocks for achieving a sustainable asset base to optimise the benefits to
     services and the community.

15.0 In turn it is recognised that these benefits cannot be gained without the allocation of
     sufficient resources to the process. It considered that, due to the extent of work and the
     limited timescale available to carry out a comprehensive AMP, additional human
     resources might be required in the form of additional staff or appointment of external
     consultants. Further reports may be necessary for discussion as the full extent and
     complexity of the workload becomes clearer.

16.0 Whilst this summary report focuses on the initial steps in the process, further
     developments are also required for the full introduction of asset management planning,
     particularly in the areas of performance measurement and the development of common
     IT systems. The current Corporate Asset Management Planning IT review and its
     associated CRM attributes, will integrate the data requirements of the proposed Asset
     Management Plan.

17.0 The Corporate Management Team has considered this report, and approved the
     recommendation.




Asset Management Plans - RMcK         Page 5
 PROPERTY ASSET
MANAGEMENT PLAN




     2006



            aberdeenfutures
            ALL TOGETHER BETTER




                              1
 CONTENTS                                                           PAGE
Part 1 - Introduction
       •   City of Aberdeen                                             4

Part 2 – Delivering Better Public Services for Aberdeen through
Asset Management Planning
What is Asset Management                                                5
       •  Why Aberdeen City Council should adopt Asset Management
          Planning
       •  A Definition of Asset Management
       •  The Asset Management Process
       •  Good Practice in Asset Management
       •  Asset Management Planning
       •  Evidence of a strategic approach to Asset Management
          Planning
       •  Corporate Planning and Its Relationship to Asset Management
          Plans
Best Value                                                              9
       •  Best Value
       •  The aberdeenfutures programme
       •  aberdeenfutures Community Plan
       •  Asset Management Planning - Strategic Objectives
       •  The School Estate Asset Management Pan

Part 3 Corporate Asset Policy
Corporate Planning Framework and Its Relationship to Asset              15
Management Plans
       • Corporate & Service Asset Management Plans & Their             15
         Framework
         •  Corporate & Asset Objectives and Background
         •  Service Asset Management Plans
         •  Corporate Office Rationalisation
         •  Accommodation Needs
         •  Proposed Asset Management Planning Structures
       • Headline Performance Measures                                  19
         •  What needs to be achieved
         •  Doing it in practice
         •  Service & Service Managers
         •  Assets & Asset Managers
       • Stakeholder Views                                              38
         • Learning Services – Asset Management Planning within City
            of Aberdeen Education Service
         •
         •   Consulting & Taking Account of Stakeholder Views
         •




                                                                             2
Part 4 Aberdeenfutures & Change Implications For Property
       • E-Government                                            39
       • Relationships with Aberdeenfutures Agencies and their
         possible Joint Accommodations Requirements



Part 5 Impact on Wider Environment
  •    Local Agenda 21                                           40
  •    Energy Strategy



Part 6 Reviews, Challenge & Options
  •    Strategic Options & Options Models                        47
  •    Options Appraisal
  •    Preferred Strategy Option

Bibliography                                                     55




                                                                      3
Part 1 - Introduction

City of Aberdeen
Aberdeen is Scotland’s third largest city and the regional centre for the North East
of Scotland. Built at the mouth of two Scottish rivers, the Dee and the Don, and
covering an area of 184.47 square kilometres (71.22 square miles), the Granite City
owes it’s distinctive appearance to the famous, locally quarried and widely exported,
building material.

Aberdeen is the seventh most populous council area, with a population of 212,000
in 2001, which is projected to fall to 208,000 by 2016. The population is projected to
age with a decrease in the number of children and younger people and an increase
in the number of older people. The number of children of primary age is forecast to
fall by around 20% in the period to 2016 and children of secondary age to fall by
around 10% over the same period.

Aberdeen has been the operational base of the North Sea oil and gas industry for
the last 25 years. Other major employment sectors in the city are retailing, health,
education and local government services. The oil industry is expected to remain a
major a major sector within the city’s economy, although some job loses are
forecast over the period through to 2016. These will be partly offset by an expected
increase in the service sector, construction and self-employment.

The city has two universities and a further education college, which attract
substantial numbers of foreign students and their families. The number of bilingual
children has grown over recent years, and Aberdeen now has considerable diversity
in terms of place of origin and mother tongue. Overall, 72 different nationalities and
73 languages are found amongst pupils attending Aberdeen City schools.

Aberdeen’s unemployment rate has been well below the national average for many
years. Average income is above the national average, although behind this lies the
largest pattern of disparity between male and female incomes found in Scotland.
The proportion of pupils entitled to free school meals is below the national average.

Aberdeen is an affluent city with high average earnings and low unemployment, but
there are wide variations from one part of the city to another. There are areas of the
city where unemployment rates are more than three times the city average and
more than twice the national average, and wards where more than 40% of children
live in households dependent on Income Support. The city has some wards that
are amongst the most deprived in Scotland and others that are amongst the least
deprived. Average data hides the fact that significant pockets of deprivation exist
within the city.




                                                                                    4
Part 2 – Delivering Better Public Services for Aberdeen through
Asset Management Planning

 Why Aberdeen City Council should adopt Asset Management Planning
 Property assets are essential to local authorities’ functions and their best use and
 management are crucial in the delivery of efficient and effective services.
 Investment in local authority non-housing assets in the UK totalled £78 billion in
 1999.

 Asset Management is a structured process that seeks to ensure best value for
 money from property assets in serving local authorities strategic needs. Property
 assets have three features that place primacy on their proper management:
    • they are expensive – in terms of both their capital value and annual costs of
         upkeep;
    • they need to be carefully managed over their lives to ensure best value –
         e.g. use, maintenance and generation of income; and
    • it takes time to determine carefully new property needs and to procure and
         provide them.

 This is compounded by the fact that the City Council’s corporate and service needs
 are changing increasingly rapidly as demands for services change and as
 expectations of performance increase.

 Aberdeen City Council’s Asset Management will involve the whole organisation: it is
 not just something for property or service managers. This plan is aimed at the range
 of stakeholder domain groups: - elected members, officers and other particular
 interest groups, who need to be involved in asset management plan process.

 A Definition of Asset Management
 For the purpose of the report, asset management can be defined as:
      ‘optimising the utilisation of assets in terms of service benefits and
      financial return.’
 In this context the term “assets” is used to describe land and buildings specifically,
 rather than other types of assets.


 The Asset Management Process
 In simple terms, we have set out four main steps in what might be described as the
 “asset management process”.
        • Identifying objectives
        • Preparing an asset management plan at corporate and service levels (in
            time we intend to engage area and neighbourhood services to develop
            integrated Area and neighbourhood AMP’s)
        • Implementing the plan and its programmes
        • Auditing and review.




                                                                                        5
                      Typical Local Authority Property Holdings
                       Source: CIPFA LA Assets Statistics 2003

                                                       Non-
               Administrative                       operational
                   5%                                  3%


  Other services
      10%                                                           Education
                                                                      52%




Highways &
 transport
    16%




       Leisure &
        libraries
           10%
                Social Services
                      4%


 Good Practice in Asset Management
 This Council already practices many aspects of good practice in asset
 management, which we intend to develop further as part of the vision for
 aberdeenfutures. In addition to the above process, some key elements are
 already in place or at a developmental stage: -

       •     An integrated approach to asset management across an authority, taking
             both individual service requirements and corporate requirements into
             account.
       •     Explicit and separate responsibility for strategic asset management.
       •     Clear and explicit objectives for holding property which are based on an
             authority-wide view.
       •     Asset management decisions are planned in a co-ordinated manner and
             are consistent with corporate prioritised needs.
       •     Changes to the portfolio that are planned and programmes that are
             implemented and achieve corporate objectives.


                                                                                   6
      •   A performance measurement system that is simple and robust with
          indicators that relate to objectives.
      •   Sufficient, comprehensive and accurate data to facilitate analysis of
          portfolios performance measurement and asset management decision-
          making.

Asset Management Planning
The City Council’s land and property assets are held primarily for the core service
activities of the Council and to support the aspirations for aberdeenfutures. First
and foremost, the property resources must be used to maximise benefits to services
in the most efficient and effective manner. The exception is where property assets
are primarily held for financial rather than service requirements. In this case, the
focus will be on maximising financial return.

Furthermore, asset management planning is applied in terms of the long-term
strategic view of all the local authority’s assets. It covers the strategic issues
related to all aspects of estate management and development. This differs from the
day-to-day provision of estate and project management services such as building
maintenance, rent reviews and so on.

Evidence of a strategic approach to Asset Management Planning include:
   • Corporate & Service planning of assets.
   • An Operational property strategy and review at Service; Area &
      Neighbourhood level.
   • Commercial property portfolio strategy.
   • Overall performance measurement and evaluation.
   • Prioritisation of property related expenditure and capital receipts strategy.

Members will readily recognise that most of the elements above have formed part of
the council’s approach since inception in 1996. I therefore believe that this Council
will welcome similar methodology on Asset Management Plans (AMPs) now
proposed by the Scottish Executive. The Executive’s proposals adopts similar
principles, which seek to maximise use of all financial resources deployed on land
and buildings that local authorities own or occupy, including existing assets and
‘new’ capital.

Whilst the Scottish Executives focus is primarily upon non-school and non- housing
assets, since schools and housing are the subjects of parallel programmes. Ideally,
all assets will form part of the entire management process and should be co-
ordinated together.     Eventually, all the constituent asset management sub-
processes are likely to coalesce together.

Within Aberdeen City Council, the Corporate Director for Resources Management is
responsible for the strategic management of the City Council’s Property portfolio.
Specifically, an Asset Management Section is tasked with strategic professional
property responsibilities.

The City Council has ensured that all its strategic resources issues are managed
corporately by the Resources Management Committee which is responsible for all
budgetary (both capital and revenue) considerations. This Committee will be
responsible for the preparation and deliberation of the City Council’s Asset
Management Plan.

                                                                                   7
Historically, the Council has put in place a detailed Property Strategy and Property
Rationalisation Exercise, which whilst pre-dating the requirement of Asset
Management Plans was consistent with best advice on good Estate practice.

The Asset Management Section was tasked with corporate responsibility for drafting
the City Council’s Asset Management Plan. This was undertaken at the same time
as two School Estate Management Plans have been submitted to the Scottish
Executive. Both documents have been submitted to the Scottish Executive and
have received favourable reviews from them for overall consistency of approach.

We are mindful of work and tasks still needed to achieve a final School Estate
Management Plan though our early submissions of the School Estate Plan 20043 &
2004 move us along the route of a fully integrated city wide Asset Management
Plan covering Community Areas and Neighbourhoods. These plans will ensure that
comprehensive knowledge is available to the City Council (and its partners) when
considering future strategies and option for services and the assets used in the
delivery of services.

It is our intention that our Asset Management Plan will provide a transparent
understanding of the property held and used by the City Council to inform and
enable value for money issues to be addressed, service improvements to be
delivered and accountable decisions to be made. The Corporate Asset
management Plan will draw upon information from service departments, who should
develop service asset management information in conjunction with the Asset
Management Section.



Corporate Planning and Its Relationship to Asset management Plans
The existence of an Asset Management Plan optimises the opportunities for
deployment and utilisation of land, buildings and other assets. Whilst much of the
day-to-day information for the plan will be contained in various locations throughout
the Council, significantly more information on the use and condition of the buildings
will be required. The AMP should develop into a comprehensive document that has
a 5-year plan cycle, reviewed and updated annually.

Aberdeen Corporate Planning strategy is best view through its primary instrument,
Aberdeen’s Community Plan, this document sets out the broad horizons and vision
for aberdeenfutures [see Best Value below]. The Community Plan was launched
in May 2002, and provides the basis for an innovative and ambitious modernisation
programme for planning and delivering services across the city.

The Community Plan is a vision document, which reflects the major issues facing
communities in Aberdeen, and sets out a balanced agenda for change. The
Community Plan has set a clear target of completing Neighbourhood plans for every
Neighbourhood in the city by 2006.

The Community Plan is supported by the Council’s Corporate Plan, both of which
are set within the Council’s Corporate Strategy, these documents are the vehicles
for the delivery of Council’s contribution to achieving its Community Planning
objectives.

                                                                                   8
The role of the Corporate Plan is to identify clearly the action the Council will take,
on its own and in partnership, to fulfil the aims of Community Planning. Structured
to address the Challenges of the Community Plan, the Corporate Plan has the
same key objectives of social inclusion and sustainability. The Council’s planning
framework provides for regular review, and following a comprehensive series of
workshops and stakeholder consultation, it is now proposed to report a revised
Corporate Plan to Council in February 2004. A reviewed Corporate Plan will take
account of the new Administration’s Policy Statement, the Community Plan and
other major influences such as the Local Government in Scotland Act 2003 which
makes Community Planning and Best Value statutory duties for each Scottish Local
Authority.

A Continuous Improvement Plan, supports both of the foregoing Plans, it is a high
level statement of intention report in regard to the Council’s ten point continuous
improvement agenda and is backed up by a “Roadmap” which contains details of all
current and planned projects within the Council. The Continuous Improvement Plan
is monitored by a Continuous Improvement Lead Officers’ Group, which meets on a
monthly basis.

The former Learning and Leisure Service also produces a Strategic Service Plan
and an Improvement Plan. The Service Plan reflects the targets of the Community
Plan together with the objectives of the Corporate Plan. It also provides an
opportunity to outline values, aims and priorities for the Service itself. Detailed
action points to support local improvement objectives are now embedded within the
Education Improvement Plan (2002 – 2005). All plans and objectives will deliver
National Priorities.

Best Value
Aberdeen City Council has been working towards Best Value since its
establishment in 1996. That Best Value has recently become enshrined in statute
merely confirms that the wider government community holds our principles and
approach. The Aberdeen City Council approach can be summarised as seeking
continuous improvement in the delivery of agreed services and outcomes, which
have been, informed by the community itself.

In terms of applying Best Value principles, there is a clear responsibility in terms of
good stewardship of public resources that we make efficient use of all our buildings.
In the context of “joined-up” service delivery, this should include not only the
delivery of other council services from our sites, but also some consideration of
overall efficiency across the public sector. Aberdeen City Council now participates
on a regular and well-established basis within a local public sector property group,
encompassing the interests of police and other emergency services, healthcare
partners, local enterprise groups and the further education and university sector.

Our Customer Service Interface
Aberdeen City Council has introduced a number of initiatives aimed at encouraging
the modernisation and improvement local authorities’ customer focus: for example:

           •   Strong Local Leadership – Quality Public Services;
           •   Local Public Service Agreements;
           •   Strategic Service Delivery Partnerships; and

                                                                                     9
           •   Capacity Building.

Each of these initiatives has implications for property assets and will be
incorporated in the Council’s policies and strategies.

Budget Pressures
Aberdeen City Council’s services have to be provided within a constrained financial
regime:
•  There are wide competing demands on Council expenditure, apart from the
   funding requirements from the Scottish Executive.
•  Secondly, there are pressures to minimise council tax increases, this places
   demands for taking a strategic view in prioritising service ambitions and upon
   finding new and better ways in which to deliver services and better use of
   resources, including property assets.

Influential Reviews – The Gershon Review
This was commissioned to consider scope for efficiency savings across all public
expenditure and to consider proposals to deliver efficiencies. More generally it
looked at changes which could be made to the framework within which the public
sector operates to improve efficiencies. Efficiency savings targets of 2.5% in local
government have been proposed. The Review draws attention to a number of
strands of which two have significant implications for Aberdeen City Council
property assets and how they are managed:
           • the potential for savings in “back Office” activities and which provide
              support to the delivery of frontline services; and
           • scope for savings through better procurement.

Prudential Code
UK Government introduced a new system for the management of capital finance in
Council’s in 2004/05. This requires Council’s to ensure their financial strategies
provide for capital and revenue expenditure, which is prudent, affordable and
sustainable. In doing so, Council’s are required to have regard to the proper
stewardship of their assets and for which asset management planning provides a
structured approach.
aberdeen futures
As outlined within the earlier section on Corporate Planning, Aberdeen has
embarked on an ambitious programme of change called aberdeenfutures.

The main aims of aberdeenfutures are to:

•   Ensure the well-being of the people and environment of Aberdeen.
•   Strengthen local democracy
•   Represent the city and its people

The programme of change embodied in aberdeenfutures focus also on a detailed
continuous improvement programme made up of the following aspects: -




                                                                                   10
The aberdeenfutures programme is based on:

•   Aberdeen City Council working together with its partners – such as health and
    education providers, police, enterprise agency and the voluntary sector – to
    jointly plan and deliver services in the city through our Community Planning
    process.

•   Aberdeen City Council making radical changes to its organisational structure to
    ensure a citizen-centred approach to all aspects of service provision, such as
    services being delivered through multi-disciplinary neighbourhood management
    structures, and the development of innovative working practices where these
    are called for.

•   Using technology to support public service delivery. In particular, offering more
    choice in how these services are accessed; speeding up delivery to citizens and
    enhancing their experience of using services; enabling one-stop service access
    and provision, and achieving cost efficiencies.




                                                                                  11
The aberdeenfutures Community Plan
The aberdeenfutures Community Plan is supported by the Council’s Corporate
Plan, Neighbourhood Plans (more participative planning at a local level) and
individual Service Plans (covering each of the ten services in the revised corporate
structure.

To meet the range of Council aspirations outlined above, there is a clear need to
ensure that Aberdeen’s corporate buildings and schools are in first-class condition
throughout. There is also a requirement to ensure that all buildings are fit for
delivering a modern curriculum and supporting facilities. Schools and centres
should also be able to support City Council targets in terms of developing learning,
and the development of council and other key public services on a truly local basis.

Asset Management Planning - Strategic Objectives
In an asset management context, Aberdeen City Council has been making some
significant use of formal building performance measurement for some time.
Following a Council decision in March 1998, the City Council asset portfolio was
declared subject to ongoing review from a property rationalisation standpoint. As a
result of this decision a significant rationalisation report and analysis of all
operational assets was approved by Committee in 2000, elements of which formed
part of Aberdeen City Council’s submission in May 2000 to the Inquiry into School
Infrastructure conducted by the Scottish Parliament’s Education, Culture and Sports
Committee.

                                                                                 12
The documents described above represented a major move towards an irreversible
strategic review of the Council’s asset requirement set within the context of reliable
performance measurements. We aim to further develop an holistically approach to
the whole portfolio of assets, understanding operational service needs aligned to
our core service delivery demands.

Our data will become increasingly more relevant, robust and strategic, enabling the
City Council to gravitate from site-specific information to aggregate Service, Area
and Neighbourhood asset performance tools taking a Whole Life Cost and
sustainable approach to retention, development or rationalisation.

Over the intervening years, this way of looking at our corporate assets has been
gradually developed. More recently, area reviews of school provision in a number
of parts of the city have underlined the importance of considering both customer
and user needs, in terms of the projected pupil roll/spaces; overall building capacity
and actual pupil rolls, alongside maintenance and condition factors.

The School Estate Asset Management plan
In the latter part of 2002 the Education Service portfolio had been reviewed using
core performance data available on each individual building as follows:

•   Utilisation (projected to 2008 roll/capacity)
•   Space efficiency (m2 / projected to 2008 roll)
•   Condition 1 (planned maintenance/m2)
•   Condition 2 (planned maintenance/m2 )
•   Cost Efficiency 1 (premises costs)
•   Cost Efficiency 2 (premises costs/m2 )

In August 2003 the Scottish Executive “Core Facts” document provided clear
guidance as to the provision of performance measures and ways in which our
Council’s use of performance measures could improve asset management
planning.

By comparison of all schools across the above set of performance measures a clear
indication as to where the greatest need lay for Aberdeen City in terms of improving
its educational buildings was viewed strategically for the first time. The School
Estate Plan submissions of 2003 & 2004 were favourably reviewed by the Scottish
Executive and have been the impetus for a roll out towards a Corporate Asset
Management Planning strategy. The process of analysis is likely still be closely
dependent on the very same factors of space and utilisation, building condition and
operational costs, but greater definition overall on suitability and sufficiency of the
assets to meet customer needs will be obtained.

It is probably important to close this section by underlining that, although the
development of the use of core facts will be centrally important in assisting councils
to make the best, informed decisions about their asset portfolio, they cannot ever
provide the whole picture. Undoubtedly there will remain some essential service
requirements, which are not easily reflected through any objective data examination
process of this nature. We recognise that more sophisticated ’softer’ performance
tools & measures which will have resonance with users, current and future


                                                                                    13
customers and which are coherent in terms of delivering the aspirations of the
Council and aberdeenfutures will be demanded.




                                                                           14
Part 3 Corporate Asset Policy
Corporate Planning Framework and Its Relationship to Asset
Management Plans

 Aberdeen City Council’s Corporate Asset Management Plan & its Framework
 The purpose of Aberdeen City Council’s Corporate Asset Management Plan is to
 ensure best practice in the management and delivery of property assets. These
 assets are valuable key resources, which enable the council’s goals and objectives
 to be achieved. It is important therefore that the service implications of holding
 those resources are understood and the relationship of property with the other key
 resources.

 Perhaps more so than other resources, property has a very significant drawback – it
 is relativity illiquid. It cannot change quickly and lead-in times are long. Therefore
 effective asset planning is essential in bringing agility to property so that it delivers
 council goals and objectives in a sustainable manner, at the right time and on
 budget. Aberdeen City Council will also give due regard to statutory duties in
 property asset management.

 Asset planning will involve all of the Council. It will involve the corporate centre,
 services, partners and other stakeholders. It requires an inclusive process. The
 effective management of assets is a crucial corporate activity for Aberdeen City
 Council to achieve its corporate and service aims and objectives and deliver its
 services with maximum effectiveness into the future.

 Whilst property is a key resource, it is also common with the other headline key
 resources:
           Finance
           Human Resources
           Information Technology
           Knowledge

 The skill with which Aberdeen City Council deploys these resources, together with
 its Asset & Accommodations policy will determine how we make progress with
 change factors. It will require skilful and timely deployment to achieve best value for
 money. That they are all inter-related with property is the essential framework of
 Asset Management Planning. Our service aims and objectives can be translated
 into an asset aims and objectives and then into an asset plan. By doing so we will
 build an Asset Plan, which is coherent with annual business processes and co-
 ordinated with capital, and revenue planning.

 It is import for Council members to recognise that long lead in times for property
 change are involved, which means that the asset planning process is often iterative,
 gradually moving toward a changing analysis of future requirements.

 However this fluidity is no justification for a status quo, or even not doing it at all.
 With the Aberdeen City Council Asset Management Plan and strategy in place,
 opportunities can be grasped quickly without raising major issues of principle.




                                                                                            15
Corporate Asset Objectives -Introduction and Background
The City council’s Policy and Resources Committee approved a Property Strategy
at its meeting on 14 September 1998, the aim of which was to ensure that all
Council property was managed as a major corporate resource.

The City Council’s property portfolio (excluding the Housing Account) is currently
valued at £879.5M broken down as follows:

  •   Non-operational (investments)                    £ 92m
  •   Operational property                             £760m
  •   Common Good & Trust Funds                        £ 27.5m
                                                 Total £879.50


This figure reflects the ‘’asset’’ value of the properties, which does not necessarily
represent the open market value as the asset value is determined by guidelines
issued by the RICS and CIPFA & the ODPM



Property is also held by Aberdeen City Council to assist economic development
within the city. The annual income achieved from this investment portfolio (i.e. non-
operational properties and properties held on Common Good Account or by Trusts)
is approximately £12.2m.

The total property portfolio extends to 1900 individual assets, which can be
subdivided into 1300 non-operational properties and 600 0perational properties.
This total does not reflect all the Council’s property holdings, which are likely to be
in excess of 10,000 because only the details of our major or operational and/ or
leased properties have currently been computerised.

When the council’s total annual budget of approximately £378M is considered
against the property running costs, it is evident that the management of property
(including acquisition, disposal, maintenance and repairs) can have an significant
impact on the Council’s general financial position.

Other major factors that contribute to the property running costs are the non-
domestic rates and water charges, the energy costs and the response repairs and
maintenance works necessary. All these will be monitored by the Asset
Management computer system with a view to monitoring and reducing these costs,
which will also include the forthcoming revaluation and production of an Asset
Management Plan Report for each property.

The Assessor reviews non-domestic rates every five years and significant annual
savings have already been made by ensuring that all assessments are
appropriately challenged.

Energy costs are constantly monitored and energy awareness campaigns amongst
the staff have helped minimise wastage, these do however require to be regularly
reinforced. Energy efficiency and effectiveness measures have been introduced,
especially in larger buildings where building energy management systems (BEM’s)
have been installed. Further opportunities to extend the use of BEM’s and introduce

                                                                                     16
other measures such as movement detectors to turn off lighting, urinal cistern
controls, restrictions on heating in unoccupied premises, swimming pools covers,
etc., are constantly being evaluated as part of internal ‘spend to save’ initiatives.

This authority and the predecessor authorities have, over a number of years, taken
the option of deferring spending on repairs and maintenance, particularly recently
because of successive years of budgetary constraint. The case for spending on
repairs and maintenance of property may not appear urgent or necessary in public
or political terms, until there is catastrophic failure. It is, however, clear that the
condition of the Council’s property portfolio has deteriorated over the past years and
continues to deteriorate.

The current funding of the repairs and maintenance budget for the non-housing
operational portfolio is such that all works are prioritised on a health and safety and
essential maintenance in terms of a statutory and legal basis only, and the works
carried out are very much demand led. Annual expenditure on a response basis to
the non-housing property portfolio is currently in the region of £4m and planned
maintenance is currently £2m.

The rolling programme of condition surveys of the buildings currently within the
operational property portfolio has indicated that approximately £68m is ideally
required over the next six years to restore the existing buildings to an acceptable
operational standard. This standard has been assessed as “that which is required
both to ensure the long-term viability of these properties and to meet the current
operational requirements of the Council Departments occupying these properties”.
The scale of these works mean that they must be classified as planned
maintenance and accordingly will require capital funding.

On-going response repair work is always required to address health and safety
issues, minor repairs, rectifying vandalism and the regular maintenance of plant and
equipment. Following any capital investment these properties would also require to
be suitably maintained both for cyclical and response maintenance to ensure their
sustainability and to ensure that the capital investment is not diminished. These
maintenance works would require revenue funding. It is clear, therefore, that by
reducing the number of properties requiring maintenance works, the Council is able
to reduce its future capital and revenue commitments. The conventional approach
is that response maintenance should only represent approximately 20% of the total
annual maintenance budget.

The Property Strategy identified that although property may be held within various
operational accounts, it is all Council property and must therefore be treated as a
corporate resource to be used to assist in the delivery of corporate priorities by the
Council.




                                                                                    17
Corporate Office Rationalisation
With the exception of a number of Social Work staff, Housing Area Officers and the
Contract Services staff, the majority of Aberdeen City Council administration staff
(approx. 1800) are housed in office the buildings detailed below: -

  Building               Lease/Own      Floor Area    Employees       Gross Cost
                                                                              pa
                                         Sq. metre           Est.          £’000
  St Nicholas House      Own                11,289          1,100          2,057
  Summerhill Centre      Own                 6,678            250            655
  Linksfield Academy     Own                 9,114             20            540
  Spring Garden          Own                   502             40             58
  Woodhill House         Lease                  86             10            217
  Crown House            Lease               1,293            180            350
  Kirkgate House         Lease               1,310            110            283
  Exchequer House        Lease               1,080             90            294
  TOTAL                                     31,352          1,800          4,454

The City Council agreed in 2005 that the redevelopment of Marischal College was
the preferred option to deliver new corporate offices for the City Council.

However, this project gives the Council a unique opportunity to closely examine how
Service provision can be made in the future. For example, the possibility of an ICT
Data Centre can be examined. This in turn would further reduce the number of
individuals required to be located in the preferred site.

Other areas that are now being progressed will be in relation to efficient government
and examining the possibilities of joined up public sector working. There will also
be the possibility to look at how a new corporate headquarters could operate in
relation to mail delivery, reception areas and security. Again all these options may
afford the possibility of reducing the number of staff that will be based in the City
Centre.

Further, with the current developments in technology, hot desking, working from
home and other such innovative working practices, this should further reduce the
number of people that will be required to be physically located within the preferred
accommodation solution. The creation of modern flexible office accommodation will
allow the City Council to remain in the forefront of delivering the Scottish
Executive’s drive for efficient government at the same time as improving the
working environment of its work force.

The Working Group have still to conclude its work relating to exactly how many staff
can be accommodated within the new complex (allowing for new ways of working).
This will help determine the extent of additional office accommodation that the City
Council will require to deliver services.

The Asset Management Plan will help determine the further options that are
available to the Council, and the associated costs and risks attached to these
options.




                                                                                  18
ASSET MANAGEMENT PLAN ORGANISATIONAL CHART
                                                                                    01 August 2005


                                    THE COUNCIL




                             RESOURCES MANAGEMENT COMMITTEE




                              ASSET MANAGEMENT PLAN OPTIONS JURY
                                           BOARD
                             (NOMINATED CORPORATE TEAM MEMBERS)




                                          ASSET
                                                                        ASSET
                                     MANAGEMENT PLAN
                                                                     MANAGEMENT
                                     REPORTING PANEL
                                                                     PLAN PROJECT
                                                                       MANAGER




                    Officer 1 LEAD SERVICE ADVISER
                    Officer 2 AREA / NEIGHBOURHOOD ADVISER
                    Officer 3 ASSET MANAGEMENT TEAM MEMBER
                    Officer 4 PROFESSIONAL & TECHNICAL ADVISORY PERSONNEL
                    Officer 5 A. N. OTHER ADVISORY SPECIALISTS AS REQUIRED


                      ASSET MANAGEMENT PLAN OPTIONS & ADVISORY TEAM




                                                                                      Page 1

 •   Headline Performance Measures

 What needs to be achieved
 Within Aberdeen City Council’s Asset Management Plan, effective performance
 management will be critical for the success of a well run Asset Management
 Service. By adopting Asset Management Planning as its raison d’être and AMP Key
 Performance Indicators, the Asset Management Service will deliver its services and
 set out clear asset performance measures so that: -


                                                                                               19
       •   The Council & Services can measure the performance and management
           of assets in the delivery of core aims, objectives and aspirations.
       •   Services can assess under performing assets and prioritise what is
           important; what needs to gets done and the options for change
       •   Accurate asset performance data can motivate services to manage their
           resources, with partner organisations to achieve corporate objectives and
           desired returns to services for the capital employed
       •   Performance management can measure successes and achievements
           towards the core aims of aberdeenfutures
       •   Improves perception and delivery of neighbourhood and area service
           provision

To be effective our performance management measures should not be isolated to
property performance alone. Performance management within the asset
management function will link and overlap with authority wide corporate strategies
and contribute to corporate service aims and objectives.

Doing it in practice
By measuring our progress and success the Asset Management Service will: -

   •   ensure that performance management is not over complicated. Our
       Performance Measures will be clear and linked to key issues;
   •   ensure the authority’s key aims, aspirations and objectives are the foundation
       of any asset performance management system;
   •   translate these aims into specific measures and targets relevant to Asset
       Management;
   •   prioritise measures and targets based on importance to the authority.
   •   make sure targets are Specific, Measurable, Achievable, Relevant and Time
       bound. (SMART);
   •   challenge whether measures identify good performance or failing
       performance in relation to property assets used in the delivery of services or
       providing support to services and corporate objectives;
   •   ensure that performance targets cover the short, medium and longer-term
       aims for the Council;
   •   ensure that staff who are best positioned to contribute to the delivery of
       measures and targets have the power/ownership to do so;
   •   ensure that measures and targets are communicated to all relevant
       stakeholders;
   •   ensure that systems are in place to handle and collate performance
       information;
   •   illustrate how assets can contribute to the authorities key aims and objective;
   •   Show how assets can support and contribute to the effectiveness of frontline
       service delivery including user satisfaction, suitability and sufficiency
       information;
   •   Identify that sensible, targeted and effective maintenance programmes can
       contribute to maintaining, enhancing and developing how service assets
       meet desired service goals through:-
            o building conditions which are ‘fit for purpose’;
            o are suitable for the delivery of present and future service
                requirements;

                                                                                   20
           o are sufficient to achieve future aspirations; and
           o Sustainable within the tight budgetary framework for economic and
              effective service delivery, which gives value for money and best
              community value to the citizens of Aberdeen
    •   Our Performance Management system will examine the effectiveness of
        maintenance regimes including specific issues such as:-
           o whole life analysis of component materials;
           o energy use and environmental performance over the life of assets;
           o performance and targets for income of investment portfolio;
           o challenging why the authority is holding surplus property;
           o challenging shortfalls in provision; and
           o challenging duplication of provision with other authorities/agencies.

We will collect data for all property in relation to: -
  • Suitability for service, need; and;
  • Condition-required spend on maintenance and rectification (includes spend
      requirement for bring property up to standard in issues such as accessibility,
      fire, health and safety, etc.)

The Asset Management Section recognises the need to establish a performance
management framework for the entire asset portfolio, ensuring that it identifies Core
Facts on which to base decisions are collected and reported annually, and at other
appropriate times, to ensure portfolio performance is fit for purpose for the needs
and aspirations of services.

We intend to adopt and report on: -

•   National Performance Indicators as and when these are announced by the
    Scottish Executive
•   Adopt Best Practice advice on appropriate performance measures from Audit
    Scotland, ACE’s, IPF and other related groups, which are asset specific,
    measurable, accurate, relevant and timely (Smart)
•   Ensure performance measures are coherent with the Best Value plans of the
    Council, its services and partners.

The development of relevant performance measures will also continue to assist our
benchmarking activities current and in the future. Such approaches will engender a
culture of continuous improvement within the Asset Management Service already
started and embedded as part of aberdeenfutures.




                                                                                  21
Often services collect data but this traditionally has been little used for decision
making. By using clear and easy to understand formats to express the performance
data, using both quantitative and graphical approaches, as shown below will allow
us to highlight key issues to enable decisions to be made.

Example 1
A simple box format identifying which asset groups/types match High / Low
Suitability against the Investment Costs to sustain the asset




Reporting Core Facts & Key Performance Measures for Service
Asset Portfolios.
Operational Assets – AMP Core Facts
Suggested and Proposed Examples (Unless otherwise stated data sets are
illustrative examples only)

AMP Core Fact 1: Percentage of Operational Assets Internal Floor Space in
Condition Category A-D (Report by Service and/or Portfolio Type)
We are intending to commence a 5-year programme of condition surveys of the
whole portfolio including Infrastructure, but excluding Social Housing. Such surveys
and analysis of the data results will ensure that accurate and relevant information
on the state of the portfolio is available to aid effective management and
coherent/rational decision making.

Specifically, the condition surveys will be in a format that enables the Council and
its service managers to assess future capital needs and priorities between essential
and desirable works, which meet service delivery needs. A representative example
such Core Fact data is set out below.




                                                                                 22
              Condition Category A-D
PI No
              (Stated data sets are illustrative examples only)
Core Fact
1
% Internal
Operational A = Good          B            = C = P18.4oor D = Bad
Floor                         Satisfactory
Space      in
Condition
A-D
2003           11             73.3           17.3            0.7
2004           8.7            75             14.5            0.5
2005 target 10                68.3           18.4            0.5
2005 actual 12.8              70             16              0.4
Based on the information example it can be seen that the condition of the
portfolio has changed over time with the key point to note that the reduction
in proportion of assets in Category D. This may have been achieved by
rationalisation policies; maintenance programmes and demolition of unfit
assets. The performance reports will identify what factors have influenced
the change variance.


AMP Performance Indicator Core Fact 2: - Percentage of Backlog Maintenance
of Operational Assets Priority Levels 1- 3 (Report by Service and/or Portfolio Type)
             Condition Category A-D
PI No
             (Stated data sets are illustrative examples only)
Core Fact
2
Backlog
Maintenanc 1             = 2 = Essential 3 = Desirable 4 = Long term
e by value   Imminent                                           (beyond            5
and (%) in                                                      years)
priority
levels 1-3
2004 target
2004 actual
2005 target 9.3%            50.7%              40.0%
2005 actual 9.0%            49.0%              42.0%
Notes: - Less than 10% of Operational Assets are in condition 1 = Imminent
and in 2005

Results of Condition Surveys and Maintenance Backlog Reports will be reported to
the appropriate committee on an annual basis to inform and identify the extent of
capital resources needed to ensure the service asset portfolio is: -
ο Wind & Weathertight
ο Complies with relevant Health & Safety regulations
ο Has identified the resources to deal with DDA upgrades
ο Has identified the resources to deal with :-
   ο Asbestos Treatment upgrades
   ο Building works


                                                                                 23
ο   Structural Works
ο   Electrical Works
ο   Mechanical Works
ο   Environmental & Energy Improvements




                                          24
AMP Core Fact 3: Overall Internal Rate of Return (IRR) for Non-Operational
Assets by sector (Industrial, Retail, Office, and Agricultural)

PI No         Internal Rate of Return (IRR) for
Core Fact Non-Operational Assets by Sector
3         (Stated data sets are illustrative examples only)

              Sector          IRR                   Minimum Prudential IRR
                                                    / Target
2A            Industrial
2B            Retail
2C            Office
2D            Agricultural
Notes: -



AMP Core Fact 4: Total Annual Property Management Costs per Sq. M.

                  Portfolio Area
PI No
                  (Stated data sets are illustrative examples only)
Core Fact 4
                                             Cost
                  Operational                £/ Sq. m.
4A                Whole Portfolio            Data to be collected
4B                Education                  Data to be collected
4C                Leisure                    Data to be collected
4D                Social housing             Data to be collected

                  Non – Operational
4E                Whole Portfolio            Data to be collected
4F                Industrial                 Data to be collected
4G                Retail                     Data to be collected
4H                Office                     Data to be collected
4J                Agricultural               Data to be collected
Notes: -




AMP Core Fact 5: Total Spend Property Management Costs per Sq. M.

                  Total Spend Property Management Costs per Sq. M.
PI No
                  (Stated data sets are illustrative examples only)
Core Fact 5
CF5 a             Property Costs as a % of the Total Revenue Budget of
                  the Council
CF5 b             Property Costs per m2 GIA by CIPFA Categories




                                                                             25
Notes:-
Objectives: - To measure the overall property costs and changes over time.
This will be backed up by a number of local indicators relating to the various
elements of buildings
Definition: - Property costs should include all costs associated with the
running of property excluding all management costs.

Included elements:- Repairs and Maintenance (Planned and Reactive but
not including improvements to the property); Energy; Grounds Maintenance;
Rents; Rates; Cleaning and domestic costs; Premises insurance; PFI and
PPP schemes should be excluded.

Purpose: - To relate the total cost of operating property assets to the
revenue budget; to build up profiles over time; To assist in highlighting
buildings that are expensive to run.



AMP Core Fact 6: Utilisation Sufficiency
PI No           Utilisation Sufficiency
                (Stated data sets are illustrative examples only)
Core Fact 6
CF6 a           Operational property as a percentage of the total portfolio
CF6 a1             Surplus/Vacant Operational Property as a percentage of
                      the total portfolio
CF6 b              Operational Property: Average floorspace per staff
                   (administrative offices)
Notes:-
Objectives: - To measure the capacity and utilisation of the portfolio

Definition: -

CF6 a Utilisation measures the extent to which available space (capacity) is
in use. The total operational portfolio area is the amount of space classified
as ‘operational assets’ under the CIPFA accounting code guidance. Surplus
/ vacant space is the area of assets in M2 in the surplus category identified
in the CIPFA accounting code guidance.

CF6 b Office floorspace is the amount of office space excluding circulation,
and space allocated to member areas

Purpose: - To identify the intensity of use of space. To assist councils to
identify and minimise assets which are surplus or not in use. To minimise
costs of assets (or avoidance of costs from acquiring more space) through
intensification of use.


AMP Core Fact 7: Suitability




                                                                                 26
                  Suitability
PI No
                  (Stated data sets are illustrative examples only)
Core Fact 7
CF7 a             Percentage of properties for which a Suitability Survey
                  has been carried out
CF7 b1            Percentage of properties graded as good or satisfactory
CF7 b2            Percentage of properties for which grading has improved
                  since the base date of April 2006

CF7 c             Percentage of properties for which an access audit has
                  been carried out

CF7 d             Percentage of properties for which an accessibility plan is
                  in place

Notes   Do assets comply with BS8300? Have we met Access to Services:
        disability equality in local government best practice?
        (www.lga.gov.uk) & Planning and Access for Disabled People: A
        Good Practice Guide (www.odpm.gov.uk)
Purpose: CF7 A-B To enable the Council to understand the performance
-             of the portfolio in service delivery terms and to track trends
              over time.
           CF7 C-D To monitor the progress at which the Council has been
              able to carry out accessibility audits. To enable key decisions
              to be made.




                                                                                27
AMP Core Fact 8: Energy & Environmental Sustainability
                Environmental Sustainability
PI No
                (Stated data sets are illustrative examples only)
Core Fact 8
CF8 a1          Energy (gas, electricity, oil and solid fuel) – reported by
                CIPFA categories by Kwh / m2 GIA
CF8 a2          Energy (gas, electricity, oil and solid fuel) – reported by
                CIPFA categories by £ spend /m2 GIA
CF8 b           Water and Sewerage Costs reported by CIPFA category
                £ spend / m2 GIA
CF8 c           CO2 Emissions – in tonnes of carbon dioxide / m2 GIA

Notes   Whilst reported by CIPFA categories, the Council must also be
        able to obtain this information on a per building basis to comply
        with EU directives regarding Energy Certificates, (and thus
        providing useful base information to build up by Service, etc). Data
        to be supplied by Aberdeen City Council’s Energy Management
        Unit.
        To be reported for all operational buildings including schools,
        (excluding Housing) occupied by Aberdeen City Council.
DEFINITI
ON            CIPFA Categories:
CF8 a1         ~  Schools
CF8 a2         ~  Other Land and Buildings
CF8 b          ~  Community Assets including parks, open spaces,
                  cemeteries and crematoria (land) and external works of
                  community art
               ~  Non operational property
               ~  Surplus property
              Infrastructure Assets (when available, as part of the highways
              AMP process).
CF8 c         This indicator focuses on energy consumption rather than
              spend.
              CO2 emissions data will fit with the Council’s and the UK’s
              Climate Change Programme targets. To be reported for
              operational properties occupied by Aberdeen City Council,
              including Schools.
Purpose: -    These indicators focus on the consumption and costs of
              consumption for all operational buildings including schools,
              (excluding Housing) occupied by Aberdeen City Council. By
              monitoring costs year on year we will be able to assess
              progress and improvements in terms of energy efficiency
              targets which will have direct cost saving benefits for the
              council as well as improvements to environmental standards
              and air quality.




                                                                               28
Other Performance Indicators
   All the following PI’s which are currently reported each quarter to the
   Resources Management Committee and when read in conjunction
   with the proposed Core Facts will represent a coherent system of
   asset performance measures for services to base maintenance,
   revenue and capital options, and decisions on return the on return on
   capital employed.




                                                                             29
AMP PI 1 Non Operational Portfolio – Level of Rent Arrears
     Tgt        Apr            May            Jun         Jul          Aug          Sep       Oct         Nov      Dec        Jan         Feb         Mar       Est
     7%        5.1%           23.3%          4.3%        9.1%         23.5%
   Potential
   Income
    £000's    12,333          12,307        12,169      12,209        12,230
Arrears £000'   627            2,871         521        1,110          2,871
Target £000's 853               852          842         844            845
                                                                           2004/05 Performance
     Tgt        Apr            May            Jun         Jul           Aug        Sep        Oct         Nov      Dec        Jan         Feb          Mar      Est
     7%        5.1%           13.3%          6.6%        9.8%          8.2%       6.8%       11.2%       17.1%    11.3%      14.4%       12.1%        2.5%
   Potential
   Income
    £000's    11,040          12,128        12,100      12,173        12,170      12,233     12,262      12,243   12,273     12,301      12,320       12,351
Arrears £000'   563            1,614         799        1,191          993         834        1,373       2,099    1,387      1,776       1,487         314
Target £000's 764               840          838         843           843         847         849         847      851        851         852          855
                                                                                           4 Year Targets                  2002/03: 7% of total rental income
                Target                    2002-2003                 2003-2004
                2004-2005                 2005-2006                                                                        2003/04: 7% of total rental income
 25.00%                                                                                                                    2004/05: 7% of total rental income
 20.00%
                                                                                                                           2005/06: 7% of total rental income
                                                                                           Corporate Plan Ref              Challenge "Property & Prosperity"
 15.00%
                                                                                                                           (EC01.05)
 10.00%

  5.00%
                                                                                           Reporting                       Committee - Each Cycle
  0.00%                                                                                    Frequency
          Apr     May   Jun   Jul   Aug     Sep   Oct   Nov   Dec     Jan   Feb   Mar
                                                                                                                           Departmental - Monthly




                                                                                                                                                                      AMP   PI   2   Non
Operational Portfolio – Number of Commercial Voids




                                                                                                                                                                                      30
Commercial Voids Management

Definition                                   Non-Operational property portfolio: - Level of commercial voids/vacant units managed by the unit, as a
                                             percentage of the Opening Stock Level entered in the preceding financial year Asset Register (Excludes
                                             Agricultural). Void parameters will reflect core objectives of the organisation & attitude to risk:- Pension
                                             Funds: Capital Growth/ Yield/ROI 7%-10%; Property Companies ROI/Capital Growth 10%12%; LA's
                                             Revenue/ Yield 12%-16% + Economic Development issues. Expressed as number of vacant units.
                                                                                     2005/06 Performance
   Tgt               Apr             May            Jun             Jul           Aug        Sep         Oct         Nov        Dec            Jan          Feb       Mar     Est
    80               22                22           16              17            21
 Value £'s         142,641       142,993         141,755          147,405       154,103
                                                                                     2004/05 Performance
   Tgt               Apr             May            Jun             Jul           Aug        Sep         Oct         Nov        Dec            Jan          Feb       Mar     Est
    80               22                22           21              22            22          21         21          24          25             26           20       21
 Value £'s         131,949       131,949         130,192          130,192       130,192    134,444     130,057     136,617    121,162        147,533      144,540   143,346
                     Target    2002-2003  2003-2004     2004-2005     2005-2006                      4 Year Targets                       2002/03: 80 units Max
90
                                                                                                                                          2003/04: 80 units Max
80                                                                                                                                        2004/05: 80 units Max
70
                                                                                                                                          2005/06: 80 units Max
60

50
                                                                                                     Corporate Plan Ref                   Challenge "Property & Prosperity"
40                                                                                                                                        (EC01.05)
30

20

10
                                                                                               Reporting                              Committee - each cycle
 0                                                                                             Frequency
     Apr     May         Jun   Jul    Aug    Sep     Oct    Nov    Dec    Jan    Feb    Mar
                                                                                                                                      Departmental - Monthly




                                                                                                                                                                                    31
AMP PI 3 Non Operational Portfolio – Revenue Value of Commercial Voids & Voids Per Staff Resources Employed
Commercial Voids Management

Definition
                                                                             Equivalents - FTE's). FTE's = the total number of recorded hours for all staff employed (extracted from the time
                                                                             recording system) divided by Net Annual Hrs 1584hrs. Voids/vacant units = All property which is unoccupied and
                                                                             not held under formal agreement, but excludes property declared for demolition.
                                                                             Expressed as a ratio of the level of voids held in relation to the number of FTE's. All figures in £'s.
                                                                                                               2005/06 Performance
    Tgt                             Apr                 May                      Jun          Jul          Aug          Sep            Oct         Nov         Dec             Jan     Feb                   Mar      Est     Avr
 150,000                          142,641             142,993                  141,755      147,405     154,103                                                                                                             145,779
 Voids per
   staff                           20,377              20,428                   20,251             21,058          22,015                                                                                                   20,826
                                                                                                                        2004/05 Performance
    Tgt                             Apr                 May                       Jun                Jul            Aug         Sep         Oct                Nov        Dec        Jan         Feb         Mar      Est     Avr
 150,000                          131,949             131,949                   130,192            130,192        130,192     134,444    130,057             136,617    121,162    147,533     144,540     143,346          134,348
 Voids per
   staff                           18,850              18,850                   18,599             18,599         18,599               19,206     18,580       19,517   17,309      21,076      20,649      20,478          19,193
            Target
            Target
                                 2002-2003
                                 2002-2003
                                                2003-2004
                                                2003-2004
                                                                    2004-2005
                                                                    2004-2005
                                                                                       2005-2006
                                                                                       2005-2006
                                                                                                                                                4 Year Targets                    2002/03: £150,000
                                                                                                                                                                                  2003/04: £150,000
        250,000
             250,000
        230,000                                                                                                                                                                   2004/05: £150,000
             230,000
        210,000
             210,000
                                                                                                                                                                                  2005/06: £150,000
        190,000
             190,000
        170,000                                                                                                                                 Corporate Plan Ref                Challenge "Property & Prosperity"
  £'s




             170,000
£'s




        150,000
             150,000                                                                                                                                                              (EC01.05)
        130,000
             130,000
        110,000
             110,000
         90,000
              90,000                                                                                                                            Reporting                         Committee - each cycle
         70,000
              70,000
         50,000
              50,000                                                                                                                            Frequency
                       Apr Apr       MayMay   Jun
                                                Jun         Jul
                                                              Jul     Aug
                                                                       Aug       Sep         Oct
                                                                                             Oct    Nov
                                                                                                   Nov      Dec
                                                                                                          Dec     JanJan   Feb Feb   Mar Mar
                                                                                                                                                                                  Departmental - Monthly




                                                                                                                                                                                                                                 32
AMP PI 4 Non Operational Portfolio – Percentage Revenue Loss due to Business Centre Voids

Business Centre Voids

Definition                                      The degree to which the Asset Management unit has minimised void levels at Council run
                                                business centres. Voids expressed as a percentage of the total possible rental income.
                                                                                2005/06 Performance
   Tgt                Apr           May             Jun           Jul       Aug         Sep          Oct          Nov           Dec        Jan         Feb         Mar     Est     Avr
   10                   8            7               5             5          7                                                                                                     6
 % Voids          15.33%         13.93%           12.88%        12.67%    11.60%                                                                                                 13.28%
                                                                                2004/05 Performance
   Tgt                Apr           May             Jun           Jul       Aug         Sep          Oct          Nov           Dec        Jan         Feb         Mar     Est     Avr
   10                   9            9              10            10         10          10          11           13             14         13          7           9              10
 % Voids          22.03%         16.62%           11.21%        11.21%    11.21%      12.61%      12.34%        15.91%       18.60%      19.88%      17.52%      13.13%          15.19%
     Target     2002-2003 2003-2004     2004-2005     2005-2006                                 4 Year Targets                         2002/03: 10 voids
25                                                                                                                                     2003/04: 10 voids
                                                                                                                                       2004/05: 10 voids
20
                                                                                                                                       2005/06: 10 voids
15
                                                                                                Corporate Plan Ref                     Challenge "Property & Prosperity"
10
                                                                                                                                       (EC01.05)

 5
                                                                                            Reporting                              Committee - Each Cycle
 0                                                                                          Frequency
     Apr      May    Jun    Jul    Aug    Sep    Oct    Nov    Dec    Jan    Feb    Mar
                                                                                                                                   Departmental - Monthly




                                                                                                                                                                                  33
AMP PI 5 Non Operational Portfolio – Level of Rent Arrears



                             Aug                   Sep                    Oct                  Nov                 Dec              Jan            Feb               Mar              Apr            May             Jun            Jul
  >360 days                £135,177              £74,280             £133,633               £142,381           £148,170          £118,628        £114,158          £71,774          £75,517        £75,063          £71,041    £74,877
  >28 days<360 d            #REF!                £992,625            £834,406               £1,373,120        £2,099,492         £1,386,573     £1,776,008        £1,487,312        £314,218       £627,012       £2,871,268   £520,624
  <28 days                 £202,102          £1,057,038             £2,352,060              £867,212          £1,111,412         £168,360        £352,322         £1,034,636       £2,252,862       £5,209        £1,100,332   £178,545
   £000's                   #REF!            £2,123,943             £3,320,100              £2,382,713        £3,359,074         £1,673,561     £2,242,488        £2,593,723       £2,642,597      £707,284       £4,042,642   £774,046


                                            LEVEL OF RENT ARREARS PER ANNUM                                                                   NOTES/COMMENTS:
                                          [NON-OPERATIONAL PROPERTY] - 2005/2006                                                              Calculation based on rental invoices outstanding more than
                                                                                                                                              28 days from date of issue.Short term peak due
              >360 days       >28 days<360 days                   <28 days                                                                    to half yearly billing cycle.
                                                                                                                                              ACTION POINTS
                                                                                                                                              Economic development arranged to discuss debt
              £4,500,000                                                                                                                      management with debtors - ongoing.Benchmarking information
              £4,000,000                                                                                                                      being co-ordinated nationally/benchmark targets to be supplied.

              £3,500,000
                                                                                                                                              INTERPRETATION                    Aberdeen City Council’s Non-Operational
              £3,000,000                                                                                                                                                        Property Portfolio level of rent arrears
                                                                                                                                                                                expressed per £000' s.
    £ 000'S




              £2,500,000
                                                                                                                                                                                Rent Arrears = Rent due, whether demanded or not,
              £2,000,000
                                                                                                                                                                                which is unpaidfor a period in excess of 28 days
              £1,500,000                                                                                                                                                        from the due date.
              £1,000,000                                                                                                                      MEASURE                           Expressed as the level per £000's

                £500,000
                                                                                                                                              SOURCE                            Locally determined (by Council,
                      £0                                                                                                                      OF INFORMATION                    Department), Internal Recording System
                            Aug

                                    Sep

                                           Oct

                                                    Nov

                                                            Dec

                                                                    Jan

                                                                                Feb

                                                                                      Mar

                                                                                               Apr

                                                                                                       May

                                                                                                             Jun

                                                                                                                    Jul

                                                                                                                           Aug

                                                                                                                                              FREQUENCY                         DEPARTMENTAL:-                  Monthly
                    MONTH
                                                                                                                                              OF REPORTING                      Feeds into PI AM1




                                                                                                                                                                                                                                    34
AMP PI 6 Non Operational Portfolio – Level of Vacant Units

Ref: Stat2
Title: Vacant Units                                    Aug     Sep    Oct     Nov         Dec         Jan     Feb    Mar      Apr   May     Jun      Jul       Aug
           Business Centre Units (64)                   10      10    11       13         14           13       7     9        8     7        5       5          7
           Industrial Premises (154)                    6       4      4       4           4           6       6      5        5     6       5        6         7
           Offices (91)                                  1       1     1        1          1            1       1     1        3     3        1       1          1
           Shops (119)                                  5       6      5       6           6           6       6      6        6     6       5        5         6
           Total (318)                                  22      21    21       24         25           26      20    21       22    22       16      17         21


              Shops (119)
              Offices (91)
              Industrial Premises (154)                                                                             INTERPRETATION        Number of vacant units
              Business Centre Units (64)                                                                                                  available for immediate relet/sale




                                                                                                                    MEASURE               Actual number of units
   30

   25
                                                                                                                    SOURCE OF             Locally determined (by Department),
   20                                                                                                               INFORMATION           Internal Recording System
   15
                                                                                                                    FREQUENCY
   10                                                                                                               OF REPORTING          DEPARTMENTAL:-
                                                                                                                                                     Monthly
    5

    0
        Aug




                   Sep




                             Oct




                                    Nov




                                           Dec




                                                 Jan




                                                         Feb




                                                               Mar




                                                                     Apr




                                                                            May




                                                                                    Jun




                                                                                                Jul




                                                                                                        Aug




                                                                                                                                                                               35
AMP PI 7 Non Operational Portfolio – Level of Vacant Floorspace
Business Centre Un                 206              249          287              317          374          353      231           257        200        140         75          75           175
Industrial Premises                800              647           647              647          647          838     838           618        686        941        644         744           953
Offices                            175              175          175              175          175          175      175          1422       1422       1422        175         175           175
Shops                              237              368           237              300         300          300      300           327        327        327        276         263           384
Total sq m                        1418             1439          1346             1439         1496         1666     1544         2624       2635       2830        1170        1257          1687

                                                                                               Shops               INTERPRETATION         Area of units available for immediate relet/sale.
                                             VACANT FLOORSPACE

        3000                                                                                                       MEASURE                Actual net lettable area of vacant property
                                                                                               Offices


        2500                                                                                                       SOURCE                 Policy & Resources, Property Sub Committee
                                                                                               Industrial          OF INFORMATION         24th March 1999, ACES, Locally determined (by
                                                                                               Premises
        2000                                                                                                                              Council Department), Internal Recording System
                                                                                               Business            FREQUENCY              DEPARTMENTAL:-
 SQ M




        1500                                                                                   Centre              OF REPORTING           Monthly
                                                                                               Units


        1000
                                                                                                                               NOTES/COMMENTS:
        500                                                                                                                    Maintain amount of vacant floor space at as low a level
                                                                                                                               as possible to maximise rental income. However a limited number
          0                                                                                                                    of vacant space required to fulfil economic development objectives.
                                                                                                                               ACTION POINTS
               Aug

                     Sep

                           Oct

                                 Nov

                                       Dec

                                             Jan

                                                    Feb

                                                          Mar

                                                                Apr

                                                                      May

                                                                            Jun

                                                                                  Jul

                                                                                         Aug


                                                                                                                               Monitor units which are proving difficult to let.
                                                   MONTH
                                                                                                                               Disposal of redundant space ongoing.




                                                                                                                                                                                                36
AMP PI 8 Non Operational Portfolio – Potential Monthly Rental Income v Actual
Ref: Stat4
TITLE:- POTENTIAL INCOME

     £0            Aug               Sep                  Oct                  Nov               Dec             Jan              Feb             Mar               Apr
  ACTUAL
  INCOME       £12,039,558       £12,098,882           £12,132,371          £12,106,454      £12,151,374     £12,153,256      £12,175,568     £12,207,911        £12,190,137
   VOIDS        £130,192          £134,444              £130,057             £136,617         £121,162        £147,533         £144,540        £143,346           £142,641
 POTENTIAL
  INCOME       £12,169,750       £12,233,326           £12,262,428          £12,243,071      £12,272,536     £12,300,789      £12,320,108     £12,351,257        £12,332,778
   % TOTAL
  ACHIEVED         99%               99%                  99%                  99%               99%             99%              99%             99%               99%



             POTENTIAL INCOME                    ACTUAL INCOME                                             INTERPRETATION                   Actual rent billed as percentage
                                                                                                                                            of total rental achievable
     £12,400,000                                                                                                                            taking account of voids.
                                                                                                           MEASURE                          Actual and potential rents,
     £12,300,000
                                                                                                                                             percentageof theoretical
                                                                                                                                             total achieved
                                                                                                           SOURCE                           Locally determined
     £12,200,000
                                                                                                           OF INFORMATION                   (by Department), Internal
                                                                                                                                            Recording System
     £12,100,000                                                                                           FREQUENCY                        DEPARTMENTAL:-
                                                                                                           OF REPORTING
     £12,000,000                                                                                                                            Monthly


     £11,900,000
                                                                                                           NOTES/COMMENTS:
                                                                                                           Monitor income, report revenue implications
     £11,800,000                                                                                           of any proposed disposals.
                   Aug


                         Sep


                               Oct


                                     Nov


                                           Dec


                                                 Jan


                                                          Feb


                                                                Mar


                                                                      Apr


                                                                               May


                                                                                     Jun


                                                                                           Jul


                                                                                                 Aug


                                                                                                           ACTION POINTS
                                                                                                           Effective management to minimise impact of voids on




                                                                                                                                                                           37
Key actions for Lead Members and Officers– Lead Members and Chief
Officers should:
   • Make sure they receive information on relevant property performance
   • Make decisions taking into account property performance
   • Agree and prioritise targets for property performance
   • Address poor performance where identified
   • Provide resources necessary to collect and analyse information

Service – Service Managers should:
   • Make sure they receive information on relevant property performance of their
      service portfolio
   • Ensure that property PIs are an integral part of service reviews
   • Make decisions taking into account property performance of their portfolio
   • Agree and prioritise targets for property performance relevant to their service

Assets – Asset Managers and Property Managers should:
  • Develop systems to highlight performance of assets
  • Develop targets based on corporate/service priorities
  • Report on performance on a regular basis
  • Ensure that methodology for reporting to members is appropriate


 •   Stakeholder Views

There is a need to work more closely with all stakeholders to identify not only their
views on premises currently used to provide existing services, but also what ideally
they would seek in improved provision of services. The Education Service in
Aberdeen, for example, has a shared vision with its partners to make Aberdeen a
“City for Learning” – ready to play a full part in the knowledge economy, meeting the
needs of a modern, successful Scotland. That vision sees Aberdeen recognised
locally, nationally and internationally as a place where learning is highly valued and
contributes significantly to the well-being of the city and its people, a city where
individuals fulfil their potential.

Consulting & Taking Account of Stakeholder Views

Consultation with all relevant stakeholders on future proposals for the School Estate
has taken place as a central part of the process of improving the whole school
estate, and lessons will have to be learned to be used in wider consultation. A very
important foundation for the further development of genuine and meaningful
dialogue was established in 2002 as part of the Aberdeen City Council’s 3Rs
Project, when “first stage” consultation asked stakeholders from every area of the
city to give their views on what an integrated new community school should offer
pupils, their parents, school staff and the wider community.

A “first stage” consultation questionnaire designed in partnership with the Robert
Gordon University in Aberdeen, elicited feedback from respondents in key areas
such as learning and teaching, external facilities in schools, integrated service
delivery and access for the wider community. More than 6,600 individual adult


                                                                                   38
stakeholders and stakeholder groups were contacted as part of this major exercise.
Additionally a participative pupil workshop day involved delegates from around 90 %
of the city’s primary, secondary and special schools, and endeavoured to elicit
participants’ views on the same key areas as the adult questionnaire.

The views of stakeholders collected and summarised will be an important influence
on any new-build schools or significant refurbishment progressed through the 3Rs
Project or other whole school estate improvements.

It is also proposed that any new-build or significant refurbishment projects
progressed by Aberdeen City Council in the future will involve the participation of
school boards, PTAs and school management alongside elected members and
council officers.




                                                                                39
Part 4 Aberdeenfutures & Change Implications For Property
•

•    E-Government

    There will be a need to ensure that all reviews take account of changes to working
    practices within premises to take account of increased use of improved methods of
    working

    Asset Management Planning - Working with Other Agencies

    Aberdeen City Council officials meet on a regular basis with representatives of key
    partner groups on shared property issues. Within the context of the “Public Sector
    Partners Property Group”, regular liaison takes place with senior representatives of
    the Health Authority, Police/Fire/Ambulance Services, Further Education Institutes
    and Enterprise partners. There already is some co-location in terms of partnership
    working within Aberdeen, however different respective timescales for the
    implementation of any new facilities required, and the difficulties in making
    conjoined budgets available at the correct time, often militate against effective
    progress. Recent discussions through the above group in respect of possible
    developments with the 3Rs Project have suggested that some very significant
    partnership possibilities may arise through any major regeneration of the school
    estate progressed by Council at this time. In terms of Health Care possibilities,
    these discussions included an appropriate focus on both dental service and school
    nurse requirements.

    In a similar vein, there is already some small co-location with the voluntary sector
    on school sites at present. Increased development in this direction would be
    welcome in terms of making best use of surplus accommodation in educational
    buildings if appropriate entry and security arrangements can be made.




                                                                                     40
Part 5 Impact on Wider Environment

 LOCAL AGENDA 21

 Standards required for Sustainable Building Construction by Aberdeen City
 Council

 In June 2004, the Policy and Strategy Committee approved a Sustainable
 Construction Policy for Aberdeen City Council. That policy will regulate on all
 construction and maintenance work carried out by or on behalf of the Council.

 Indoor Environment

 ‘Healthy buildings’ are an intrinsic part of good asset management plans and are
 largely a result of healthy materials choices. We shall minimise the use of high-
 emission carpet, paints, adhesives, ceiling tiles, wood composite products, acoustic
 materials and insulation materials. We shall seek to choose low-emission materials
 by a recognised selection procedure, such as low-toxicity rated products, or a pick
 list of low-emission materials by “generic type” i.e. by product category.

 ‘Healthy’ floor, ceiling and wall coverings are also those that release the least dust
 and do not support microbial growth. Hard and resilient floor coverings, such as
 linoleum and tile, have inherent health advantages over carpet, since they do not
 trap dust and contaminants. Where carpet is necessary, we shall select products
 that minimise chemical emissions and have high-recycled content.

 We shall seek furniture from manufacturers that have designed their systems using
 chemically safe wood fibreboard made with formaldehyde-free glue, low-odour
 plastic foams and upholstery fabrics to minimise volatile emissions.

 The building use and its occupants often have need of equipment or materials that
 can be sources of indoor air pollution. These include high-capacity photocopiers,
 laser printers, blueprint and film processing machines, gluing or painting areas, and
 toxic cleaning products. We shall seek to reduce occupant exposure to indoor air
 pollutants, isolate the source from occupied spaces and provide a local exhaust to
 the outdoors.

 Low to zero energy usage
 By using imaginative combined heat and power, wood fuel boilers or solar energy
 for heating hot water we will aim to ensure that the majority of our operational
 buildings shall be as near as possible zero carbon emission buildings – by using
 design to ensure minimal heating required, and using renewable sources of energy.

 Natural light/ orientation / natural ventilation
 The most important design issue for windows and fenestration is whether the
 windows provide single-sided or cross-ventilation to interior spaces. We shall
 ensure that our development and refurbishment programmes have building
 elements that have operable windows/ rooflights for improved daylight distribution
 and night venting and those windows are designed to admit natural ventilation and
 are orientated to optimise natural light.


                                                                                    41
Minimum water usage (rainwater), recycling of water
We shall adopt policies that: -
• Ensure rainwater storage and its use for toilets
• Ensure water conservation measures using new technologies
• Ensure all buildings are fitted with water meters
• Hard surfaces should be porous to ensure water run off

Green Transport

   •   For commercial and institutional facilities, provide changing rooms, lockers
       and showers for employees.
   •   Connect changing room, shower and locker facilities with bicycle storage, or
       with wash-room facilities, exercise rooms or pools.
   •   Provide sufficient showers to avoid waits at peak times, and to accommodate
       growing use.
   •   Provide separate change/shower rooms for males and females. For very
       small buildings, a single lockable shower/dressing room for both genders
       could be provided.
   •   Locate electric vehicle (EV) parking in a conspicuous and preferred location,
       close to a main building entrance and the EV charging station electrical
       panel. Provide one EV parking stall for every 20 on-site parking stalls, and
       space for one charging station for every two EV parking stalls. Provide a
       plinth for the charging stations, equipped with conduit to the electrical panel.


ENERGY STRATEGY

INTRODUCTION
Aberdeen City Council is committed to achieving sustainable development and
social inclusion, and has been progressing this through the Community Plan, the
Corporate Strategy and the Environment Strategy. The Energy Strategy, which sits
within the overarching Environment Strategy, will deliver an Energy Policy for
Aberdeen.

Energy
Energy is an essential part of everyday life. The major sources of energy in
Scotland are fossil fuel (oil, gas and coal), nuclear and large scale hydro. By their
very nature fossil fuels will inevitably run out and it is important that sustainable
alternative forms are developed to allow these finite sources to be utilised more
efficiently and effectively. In addition, the burning of fossil fuels has led to an
increase in global carbon dioxide (CO2) emissions, which in turn has led to global
climate change. Nuclear energy has a limited range of end uses and there is
widespread concern regarding its waste products, which will take thousands of
years to decay.

Renewable sources of energy will make an important contribution towards securing
a sustainable and diverse supply of energy for present and future generations.
Energy conservation is a key element in reducing the negative effects of energy
supply and demand. This can be achieved by relatively cost-effective means, which
will have both economic and environmental benefits in the long term.

                                                                                    42
Aberdeen City Council Statement on Energy and Water

Aberdeen City Council is committed to a strategy of energy management and
increased energy efficiency based on addressing the following issues:

•   Climate Change
•   Sustainable Development
•   National Policy
•   Quality service, efficiency and minimum cost

The Council will develop policies that relate from its activities, its buildings and
services and its partners and will:

1. Lead by example;

2. Cut energy and water usage and noxious emissions;

3. Use planning and building regulations to promote improvements in buildings as
   far as statutory regulation permits;

4. Seek to achieve cost reductions through continuous improvement;

5. Work in partnership with others to:

    •   Promote energy       awareness     of   citizens,   staff,   businesses   and
        organisations;

    •   Ensure a place in the educational curriculum for energy conservation;

    •   Continue to promote Aberdeen’s role in the World Energy Cities Partnership
        and ‘Energie-Cités’;

    •   Reduce home energy consumption and CO2 emissions;

    •   Develop energy conservation and best practice projects;

    •   Work with local industry and business to develop opportunities
        for energy efficiency;

    •   Develop cost effective procurement of energy services;

    •   Promote the use of renewable and alternative energy technology and
        opportunities.

6. Encourage partners organisations and individuals to reduce their water
   consumption;

7. Monitor, evaluate and report progress of the energy strategy.




                                                                                  43
COUNCIL CONTROLLED PUBLIC BUILDINGS

Monitoring, control and reporting fuel and water consumption will be monitored to
allow faults to be identified, saving to be quantified, measurement of progress
towards lower consumption and to assist in budgeting and reporting. The Energy
Management Unit, within the Resources Department, shall report energy and water
usage on an annual basis.

The City Council shall, where economically viable, install control systems to
remotely monitor and control plant to ensure optimum energy use. The Energy
Management Unit shall, with the aid of a centralised electronic billing system and
after consultation, set targets and budgets for individual properties and
departments.

Energy and Water Audits
On behalf of the City Council, the Energy Management Unit shall identify where
energy or water is being wasted via audits, monitoring, targeting and comparing
energy use against recognised good practice benchmarks and make
recommendations for future investments. Property Services, within the same
department will use the asset management software package, to record and
monitor energy measures in non-housing Council controlled buildings.

Investment
The City Council shall seek approval for the establishment of an annual corporate
energy budget to be administered through the Director of Resources Management
Service. This budget shall be used to finance energy and water saving projects and
top-up new building design projects to improved environmental standards. Savings
produced each year shall be ring-fenced for future energy schemes. The Audit
Commission in England and Wales has recommended that the level of energy
investment should equate to 10% of the energy bill. The Council shall strive to meet
this criterion.

Procurement
The City Council on behalf of itself and its tenants, shall endeavour to achieve best
value from fuel purchasing in terms of price, additional services, experience,
customer care, billing methods, and commitment to energy efficiency and
sustainability from utility suppliers. The City Council will strive to form partnerships
with utilities and others to promote both energy efficiency and renewable energy
across the Council.

The Energy Management Unit shall ensure all energy and water supplies and tariffs
are the most economical for each building.

ABERDEEN CITY COUNCIL’S ACHIEVEMENTS TO DATE

Establishment of an Energy Management Unit

The main function of the Council’s Energy management Unit is to reduce energy
consumption and costs in all Council public buildings.

The Energy Management Team has developed a programme of energy saving
measures for Council properties.

                                                                                     44
An example of the energy saving measures carried out in the past 18 months
include,

          lamp replacement in more than 80 schools – older inefficient lamps have
          been replaced with more energy efficient compact fluorescent lamps

          water saving devices / urinal controls installed in 8 sites

          heating controls/ timers in 7 sites – reflective panels have been installed
          behind radiators to prevent heat loss and thermostatic radiator valves and
          time switches fitted to provide more efficient control of heating systems

Lamp Replacement Programme

The lamp replacement programme has been rolled out to non-education sites such
as leisure centres, offices and depots. In the coming year, a number of renewable
energy projects including, wind, solar water heating and biomass will be carried out.
These projects will be part funded by the Scottish Community Households
Renewable Initiative.

Fuel Procurement

The Energy Management Unit is responsible for negotiation and administration of
gas, oil and electricity supply contracts for the Aberdeen Consortium. The
Consortium consists of Aberdeen City Council, Moray Council, Grampian Housing
Association, Scottish Water, Grampian Police and Grampian Fire Brigade.

There are over 2,000 properties on the main electricity contract with a total annual
consumption in excess of 40,000,000kWh and an annual cost of over £2.5million

The gas contract includes over 290 properties, which have an annual consumption
in excess of 145,000,000kWh and an annual cost of around £1.4million.

The Council has 35 properties with oil-fired boilers that use over 2million litres of oil
every year and costs more than £350,000.

In our ongoing efforts to reduce the impact of climate change we stipulate that at
least 30% of the electricity used in our properties be generated from new renewable
sources.

Monitoring and Targeting

A database of energy cost and consumption is held for all Council public buildings.
The energy data is used to produce annual benchmark reports and identify areas of
improvement. Monthly energy performance reports are published for all sites to
ensure accurate billing and measure changes in consumption. The data from the
monitoring and targeting system is also used to update and maintain the Carbon
Management Programme database.

Building Energy Management System (BEMS)


                                                                                      45
The Energy Management Unit monitors the time schedules of plant and equipment
in more than 35 schools, 5 sheltered housing complexes, 2 leisure centres and 4
offices from a central database. Time schedule, temperature set points and plant
operational requirements are managed to ensure to ensure optimum building
operation with minimum requirements.

Water
A comprehensive water management and conservation project has been carried out
over the last year. The study has identified the potential for significant saving
through

    •   the installation of water meters to unmetered sites
    •   rightsizing of oversized water meters
    •   checking of water bills charging structure

The survey, carried out in 2003, identified potential savings in the order of
£250,000. Many of the meters have since been replaced and the savings are being
realised in the most recent quarterly billing period. The water conservation
programme will continue and water saving devices will be installed where identified
in the ongoing energy audit programme.

Sustainable Transport
All diesel run Council vehicles now run on City Diesel – a low sulphur fuel. The
Council signed the Declaration of Florence in 1998, which was an obligation to
review our own transport on a clean or near zero emission basis.

Street Lighting
The City Council has replaced almost 70% of the old mercury street lamps with
high-pressure sodium bulbs, which are more energy efficient. The redundant bulbs,
are disposed of in an environmentally acceptable manner

Home Energy Conservation Act
Achievements of the HECA Unit over the two years 1997 to 1999 include the
following:

•   CO2 emissions from existing domestic properties (that is dwellings built before
    1997) have reduced by 3.3%.

•   In October 1998 the Council appointed a full-time Home Energy Co-ordinator
    and a full time Administrative Assistant to be responsible for the implementation
    of HECA across the City;

•   Over £13 million was spent on carrying out energy efficiency measures in the
    Council’s own housing stock. This resulted in an improvement in the average
    National Home Energy Rating across the Council’s own stock from 4.2 to 4.5;

•   A pilot project was completed with 2,200 privately owned households in
    the City in order to identify the most effective ways of marketing to, and
    encouraging, owner occupiers to carry out energy efficiency measures;

•   The evaluation of this pilot was used to inform a successful funding bid to the
    Energy Savings Trust to establish a Bulk Discount Scheme. This will market

                                                                                  46
    energy efficiency measures to all owner occupiers over a 6 year period, starting
    in autumn 2000;

•   An Affordable Warmth Scheme has been established to access grants and offer
    secured loans to owner occupiers who are on low-fixed incomes, have no capital
    assets, except the house they live in, and are unable to afford to keep their
    homes warm.

Save Cash and Reduce Fuel
The Council works closely with Save Cash and Reduce Fuel (SCARF), a voluntary
organisation. Grant funding to SCARF from the Council ensures the availability of
Energy Advice Services for all citizens of Aberdeen. SCARF is a co-opted member
of the HECA Task Team. This helps to achieve a co-ordinated, and hence more
effective, approach to the projects, promotions and other activities carried out by
both the Council and SCARF.




                                                                                 47
Part 6 Reviews, Challenge & Options


 Strategic Options & Options Models
 What is Option Appraisal within the Aberdeen City Council Asset
 Management Plan Context?

 For Aberdeen City Council Asset Management Plan purposes Option appraisal is a
 decision making tool for use in defining our service objectives, identifying the
 different ways in which they can be achieved and examining all the important
 factors before taking a decision on implementing a project.

 Aberdeen City Council’s option appraisal model will have to answer three basic
 questions to determine effective and strategic use of its assets:

    1. Has the Council taken into account all relevant factors in deciding what the
       project should be?

    2. Should the Council go ahead with the project?

    3. What is the best way to carry out the project?

 All the decisions will be consultative, inclusive and involve Members, Services,
 users, and occupiers to inform and develop the best value options and outcomes for
 the City. In some cases, will adopt totally informal approaches to ascertain Options;
 in other case a rigorous and robust model will be necessary to assure all
 Stakeholder groups that the outcomes are optimised for best corporate advantage
 to service delivery. Appropriate procedures will be implemented in all cases,
 especially for large capital schemes.

 Aberdeen City Councils Option Appraisal model involves a set of principles that will
 to help make rational decisions, whilst accounting for a level of detail commensurate
 with the project scale and nature. Our principles for option appraisal are:

       1. To be clear about what we are hoping to achieve – our objectives;

       2. To consider the different ways in which they could be achieved – the
          options;

       3. To assess the costs and benefits of the different options;

       4. To identify all the pros and cons of the options and quantifying them and
          valuing them wherever possible;

       5. To consider any risks and sensitivities;

       6. To consider the most appropriate and best value use of resources, not
          just focussing on the lowest initial costs.

 Option Appraisal and Asset Management Planning

 Option appraisal is an integral part of the Asset Management Planning (AMP)

                                                                                   48
  process. This is reflected in the guidance issued both by Scottish Executive and
  ODPM. The model below shows how we expect to plan for flows from the capital
  priorities identified through the AMP process linked into Aberdeen City Council’s
  corporate strategies and plans.

  Whilst the Option appraisal process is necessarily a ‘top-down’ process it will take
  account of the Council’s strategies and plans on a holistic basis, and will ensure that
  the subsequent projects align with them. Anything less would lead to great risks of
  underused or misused money.




                                                             ABERDEEN CITY COUNCIL
                                                           OPTION APPRAISAL IN CONTEXT



                            Corporate                     Strategies                        Service Strategies and
                            and Plans                                                       Plans
Asset Management Planning




                            Service                                    Capital Priorities         Property
                            Performance                                                           Performance




                                                                       Priority Project


                                                                                                                       Evaluation
Option Appraisal




                                                                       Option Appraisal
                                        Funding Options




                                                                 Define the Objectives
                                                                                                        Consultation




                                                                 Develop the Options
                                                                 Information Gathering
                                                                 Assessing the Options
                                                                 Analysing the Options

                                                                Choose Preferred Option
                                                                           Reporting




                                                                          Decisions




                                                                       Implementation

                                                                                                                          49
Effective option appraisal, in conjunction with the a rational and strategic approach
to resource funding will assist the Council to move away from the piecemeal ‘patch-
and-mend’ policies, towards a more joined-up, modernisation programme that will
deliver best value facilities.

This will inevitably mean that some service delivery projects will have to wait longer
than others for investment, but overall a strategic approach to Asset Management
Planning and resourcing needs through devolved prudential funding, will free up
other service funding to achieve strategic best value solutions for the highest priority
projects.

Prioritisation

Whilst the Prudential Code has made significant resources available for capital
investment, they are still limited. It is therefore important that we are able to
prioritise effectively so as to maximise the use of the resources in order to achieve
best value. The resources available will provide the basis against which the Council
will prioritise and will be an essential consideration in appraising the available
options.

Data collated on the performance and investment needs of properties must be
considered alongside information on service-related issues.

Information in these areas would typically include:

1 The Council’s AMP Statement of Priorities. This sets out the strategic priorities
  for capital investment arising from other Corporate Plans, major rationalisations,
  specific initiatives, and from its stewardship responsibilities for maintaining the
  fabric of the property portfolio. The statement would also explain how local
  capital investment will align with the Scottish Executive’s priorities;

2 In the context of the City Council’s Community Plan objectives, information on
  crosscutting issues. These might include childcare, health and social services,
  adult and family learning, recreational and leisure facilities, ICT access, and
  possibly legal or housing advice;

3 Available capital resources;

4 Information on the properties with the most significant condition needs and
  suitability needs.

By using the appropriate range of information to prioritise potential capital projects,
the Council will be able to ensure that our capital spending is not simply a reaction
to immediate building problems, but takes a longer-term view. Our aim should be to
progress towards a situation where school premises are not only in good condition,
but where they are suitable for delivering a 21st Century curriculum and where their
potential for delivering a range of community services is fully realised.

Presenting Our AMP data
Typically facts and figures to inform stakeholder groups will be illustrated different
ways, but in each case it is intended that the information and performance data will
be meaningful, specific, relevant and timely which can be used to by decision


                                                                                     50
groups to benchmark the performance of buildings. This can will help all
stakeholders to identify priority areas and informing and guiding them through the
appraisal process.

When should we do an Option Appraisal?

The City Council should carry out an option appraisal whenever we are planning
capital projects for which there are a number of possible different approaches to
meeting our desired objectives. Other factors that should lead to carrying out an
appraisal include:

1. Where there are any doubts about whether to go ahead;

2. Where there is a change of use or disposal of a site or building;

3. Where there might be wider objectives which could be achieved as part of the
   same project with relatively low incremental cost, and certainly lower than if two
   or more separate projects were carried out;

4. Where there are particular sensitivities about a project affecting a range of
   stakeholders;

5 Where there is a high level of risk or uncertainty;

6 Where the project involves the authority entering into a long term relationship or
  partnership with another organisation;

7 Where there is a need to demonstrate transparency in the decision making
  process;

8 Where the long-term solution may be different from the short-term solution.

9 Refurbishment and modernisation of existing buildings;

10 New build on one site, with disposal of the other;

11 Disposal of both sites, with new build on an alternate site.

•   In each of these cases, there will be further possible solutions relating to designs
    and specifications. Detailed appraisal of each of these options will help to
    ensure that the right decision is taken in the light of current circumstances.

•   However, there is a need to ensure that option appraisal is not something only to
    be used when large or complex projects are being considered. With less
    complex projects, the principles of appraisal still apply, but the scale of the
    process should be proportionate to the planned project.

•   For an option appraisal to be meaningful it should be carried it out well before a
    final choice has been made on the preferred approach. This is clearly better
    than deciding on a course of action and then carrying out a retrospective review
    of the possible alternatives in order to justify the decision. At best, this will be
    documenting the informal appraisal that has already been carried out. At worst,
    this is a purely additional activity that adds no value and provides no credible
    justification for the decision. It is an approach that is likely to lead to a poor

                                                                                     51
    value for money end product.

•   By going through the option appraisal process before the decision is taken, you
    ensure that each of the options is considered appropriately. This is not to say
    that each will be appraised to the same level of detail, as you may be able to
    rule out some options early on in the process.

•   The specific timing of your appraisals will be influenced by a number of factors,
    including:

12 The authority’s planning cycle for capital spending;

13 The timing of specific funding programmes;

14 The range of priority projects which your authority is considering;

15 The nature of the project. A repeat project with reliable data can be appraised
   relatively quickly. New and complex projects will need more time (and
   resource);

16 The level of sensitivity associated with the project, and therefore the extent of
   consultation needed;

17 Planning applications and decisions.

•   These need to take place in sufficient time to enable all options to be considered
    meaningfully and properly, without any having to be rejected because of lack of
    time etc.

What are the links between Option Appraisal and Evaluation?

•   Option appraisal and evaluation are closely linked. In this context, we are
    referring to evaluation as the post-implementation review of a project, to assess
    whether the investment has gone as planned and has led to the expected
    benefits.

•   Option appraisal involves the comparison of a range of possible options,
    considering the hypothetical outcomes of each choice. Evaluation involves
    reviewing the course of action that you chose, to assess whether the right option
    was selected and whether it achieved the objectives set.

•   Evaluation also helps in identifying factors that have impacted on performance.
    Over the longer term, this may include assessing how effective the investment
    was in delivering the expected service outputs, e.g. whether user satisfaction
    and staff morale were raised in line with expectations, inclusion objectives met,
    use levels increased etc.

•   Effective evaluation is the key to the continual improvement of your ability to
    develop successful capital schemes. The results of your evaluations should
    provide inputs to your future appraisals, to ensure that you are learning from
    past experiences




                                                                                   52
SECTION 3. THE STEPS OF APPRAISAL
How do you do appraisals?

•   Each appraisal carried out will involve the same broad steps (see Figure 3.1).
    However, the size and nature of the project that is planned will influence the
    specific activities needed to carry out at each step.

    Figure 3.1: The Steps of Option Appraisal


                          Define the Objectives
                          Develop the Options
        Funding Options




                          Information Gathering




                                                                              Consultation
                          Assess and Analyse the Options



                          Choose the Preferred Option

                          Reporting


The steps are described below. Two examples are used throughout this section to
illustrate how the process works at the various stages of the appraisal:

18 Example A - a simple project to replace a school boiler;

19 Example B - a more complex project involving consideration of major works at
   an existing corporate office, which are aimed at tackling existing accommodation
   problems and providing facilities for delivering improved working conditions and
   more effective services to the community.

Define the objectives

•   Once the priorities have been identified, the first stage in all option appraisals,
    regardless of their nature, involves defining a clear set of objectives. They
    should be sufficiently wide, joined up and inclusive of all policy interests. This
    process is key to actually shaping the appraisal.

•   It is only by having clearly defined objectives that we will be able identify the
    different approaches that could be taken and consider the relative merits of each
    option. Unless there is clarity about what we are hoping to achieve, possibilities
    may be overlooked, or may be misinterpret the relative significance of different
    factors. This holds whether the appraisal is for a small-scale building project or
    for a large-scale cross-service area-wide property review.

•   The over-arching objectives of the authority set the context for the corporate and
    individual service AMPs. Project level objectives should be considered in the
    context of their contribution to corporate and service objectives and targets.



                                                                                             53
•   The objectives that are set need to be broad enough to ensure that they do not
    rule out potential realistic options, but they should not be too general. If
    objectives are too broad, this can create too much flexibility and lead to
    unnecessary work.

•   In developing the objectives, it is good practice to make them as SMART as
    possible:

•   A clear set of objectives will also mean that it is possible to evaluate the
    performance of the project once it has been implemented.

•   Objectives are likely to include some that are regarded as essential and others
    that are desirable but not as important. In this case, we should set out your
    objectives in order of priority. These priorities can then be used to decide on the
    weightings used in assessing your options.




                                                                                    54
Setting Objectives. Example A - Boiler replacement

A school’s coal-fired boilers have reached the end of their operational lives.
They break down regularly and the system is not powerful enough to sustain
the required temperatures, leading to frequent disruption to the operation of
the school.

The objective is to provide a heating system that is reliable, maintains the required
temperature, is fully compliant with the City Council’s energy efficiency and
environmental policies and enables the school to remain fully operational.


Setting Objectives. Example B - Corporate office reprovisioning

Service objectives

Consultation has shown that the existing room layout is counterproductive and
wasteful of space. These accommodation problems are limiting the delivery of
services. The Authority’s Corporate accommodation Development Plan has
identified the need to improve standards.
A recent report concluded that poor working environment in staff facilities was
contributing to low staff morale and problems with staff recruitment and retention.
Condition surveys have shown that major capital repairs to the building required.
There are significant problems with water penetration the building needs to be re-
clad.
In relation to these issues, objectives for the capital project were identified as follows:
20 to provide sufficient new or modernised accommodation suitable for delivering the
   whole service. This will eliminate the unsatisfactory accommodation and improve
   space utilisation.The Directors consider that this would make a significant
   contribution over time towards meeting their improvement targets.;

21 to improve staff morale and reduce staff turnover;

22 to overcome the need for immediate major repairs;

23 to reduce on-going maintenance commitments;

24 to improve energy efficiency.




                                                                                       55
Bibliography
   • “Asset Management of Local Authority Land and Buildings – Good Practice
       Guidelines” – Department of the Environment, Transport and the Regions – 2000
   • “Development and Implementation of Corporate Capital Strategies and Asset
       Plans, Baseline Report” – York Consulting Ltd – available at
       www.local.odpm.gov.uk/reseach/index.htm
   •   “Finding the Right Solution” – jointly commissioned by the Department for
       Education and Skills and the Office of the Deputy Prime Minister and available at
       www.dfes.gov.uk/amps
   •   “Appraisal and Evaluation in Central Government” (“The Green Book”) available
       through HMSO or on-line at www.hm-treasury.gov.uk
   •   “Comprehensive Project Appraisal – Towards Sustainability” – Royal Institution
       of Chartered Surveyors / Environment Agency – 2001
   •   “Making the Right Choices” – Chartered Institute of Public Finance Accountants
       – 1996
   •   “Option Appraisal and the Outline Business Case” – Public Private Partnerships
       Programme (4Ps)
   •   “While Life Costing and Cost Management Procurement Guide” – OGC –
       available at www.ogc.gov.uk
   •   “A Client’s Guide to Whole Life Issues”- available at www.clientsuccess.org.uk
   •   Fact sheet on whole life costing available from Constructing Excellence at
       www.constructingexcellence.org.uk
   •   Whole life costing support available from the Building Research Establishment at
       www.bre.co.uk
   •   Procurement and other advice available from the Improvement and Development
       Agency (IDeA) available at www.idea.gov.uk
   •   Support available from IPF at www.ipf.co.uk
   •   ‘Public Participation in Local Government – A survey of Local Authorities’
       published      by      The     Office    of     the      Deputy   prime    Minister
       www.odpm.gov.uk/stellent/groups/odpm_localgov/documents/page/odpm_locgov
       _030252.pdf provides the findings of a survey into the range and extent of public
       participation initiatives
   •   ODPM have also produced another guide entitled ‘Guidance on enhancing public
       participation’
       http://www.odpm.gov.uk/stellent/groups/odpm_localgov/documents/page/odpm_l
       ocgov_023830.hcsp which provides some useful advice/techniques.
   •   A simple guide entitled ‘Let’s Talk about it – Principles for Consultation on Local
       Governance is available from the Local Government Association. www.lga.gov.uk
   •   ‘Consultation – A briefing paper’ is available from the Improvement and
       Development Agency. www.idea.gov.uk
   •   www.ipfproperty.net provides a number of examples of questionnaires used by
       authorities for Capital Prioritisation and suitability assessments.
   •   www.IPFproperty.net - Provides an extensive member-only library for Asset
       Management within Local Government and access to Asset Management related
       events. The network also provides an active discussion forum where queries can
       be raised on any aspect of asset management.
   •   A similar member only network is available to look at education specific Asset
       Management available at http://www.pillar.saqnet.co.uk/amp.htm.
   •   The Beacon Council Scheme can be accessed at http://www.idea.gov.uk/beacons/
   •   The Core Cities Asset Management Group contacts can be obtained from
       http://www.corecities.com
   •   Details of The Corporate Real Estate Group of the Royal Institute of Chartered
       Surveyors can be obtained from http://www.rics.org/cre/
   •   www.idea.gov.uk have produced a ‘Managers Guide – To performance

                                                                                             56
    Management”
•   The Audit commission have a number of publications on performance
    measurement and Management including Aiming to Improve - The Principles of
    Performance Measurement – www.Auditcommission.gov.uk
•   Details of the Investment Property Databank (IPD) can be found at
    http://www.ipdindex.co.uk
•   “Managing Local Authority Heritage Assets” - English Heritage
•   “Economic Performance of Listed Buildings” – RICS




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