Agenda item

Report of Director of Regeneration and Planning.

Lead cabinet member:  Councillor Dean Sabri.

(1) Corporate asset management plan 2017-2020 approved and adopted.

(2) Director of regeneration and planning given delegated authority, in consultation with strategic property board (i) to make minor amendments to the plan if required before formal publication; and (ii) to approve procurement waivers in respect of commercial agents and legal fees relating to strategic acquisitions undertaken in line with council’s acquisition and investment strategy.

(3) Save for exceptional circumstances, council’s policy will be to apply open market rent for all new leases.

18.1 Cabinet considered the report of the director of regeneration and planning.  In order to ensure the property aspirations of the council’s corporate plan were met, and in particular the over-arching aim of achieving a sustainable asset base by 2021, the council needed to put in place a robust property strategy.  The corporate asset management plan 2017-2020 (AMP) provided this strategy and set out the objectives against which progress in delivering the aspirations of the corporate plan could be measured.  The plan together with appendices was appended to the report.

18.2 The plan was the first joint property document between Lewes District Council (LDC) and Eastbourne Borough Council (EBC).  In line with the commitment both councils had to sharing services whilst retaining sovereignty over their respective areas, property asset management would be aligned across LDC and EBC but each council’s property portfolios would be treated separately.  The AMP reflected both the shared vision and each council’s individual priorities.

18.3 A yield growth target of 10% year on year would be achieved through the strategic management of current and future assets in line with the AMP.  Costs incurred in meeting objectives and carrying out works arising out of the adoption of the plan would generally come from existing budgets, however, there might be circumstances when additional funding was sought to support future one-off projects.  Property management and the responsibility for maintenance, development, disposal, estate management (including leases and licences) and statutory compliance would be brought under a centralised corporate unit. 

18.4 The AMP implementation plan would be subject to progress reporting to strategic property board and annual refresh in line with changes in legislation and government requirements and the priorities of the council’s corporate plan and the medium term financial strategy.

18.5 The AMP focused on 4 key areas for realising efficiencies:

·         Improving yield from the investment portfolio.

·         Reducing maintenance costs and liabilities.

·         Delivering efficiencies through smarter procurement.

·         Increasing the capital value of each council’s asset base.

18.6 The following documents would support the aspirations and objectives of the AMP:

·         Building maintenance plan.  To move from the current position of almost 100% reactive maintenance to a 60/40 planned/reactive maintenance basis over a two-year period.

·         Strategy and policy principles.  Providing for governance and decision making procedures.

·         Acquisition and investment strategy.  Covering investment yields, due diligence checks, risks and achieving a balanced asset base with 70% of assets held as a long-term investment and 30% trading for profit.

·         Disposal and transfer strategy.

·         Lease and rent management policy.  All new leases would generally be assessed on an open market rent basis.  Social value might be taken into consideration if this was clearly in support of the councils’ main aims and objectives.

·         Accessibility policy.  Accessibility funding would be prioritised in order to enable access to all.  Where it was not possible to improve access to a building, an access plan would be put in place and alternative arrangements made so that the councils’ services remained accessible.

·         Risk and compliance policy.  A rolling programme of surveys and assessments would be undertaken.  Safe management and ultimately the safe removal of any high priority risks identified would be prioritised.  Contractors would be monitored to ensure that their performance targets were being met in relation to the councils’ inspection and testing regime.

·         Property maintenance policy.  Maintenance spend would be focused on planned rather than reactive works.  Energy saving works would be included in replacement programmes where it was cost effective to do so.  Operational buildings will be maintained to a good (‘grade B’) standard.

18.7 In order to ensure compliance with council’s contract procedure rules and allow the council the flexibility to move quickly to secure acquisitions, the report recommended that authority to be delegated to the director of regeneration and planning, in consultation with the strategic property board, to agree waivers in respect of agents and legal fees relating to acquisitions.

18.8 A key part of the AMP was the asset challenge process whereby officers would stress-test existing assets considering income generation, and costs of the assets to the council.  Difficult decisions would then need to be made regarding retention, disposal, investment or transfer of assets, as well as taking account of any community value.  Importantly, whilst disposal and realising capital receipts was part of efficient property management, asset challenge was not solely a disposals programme.  Whilst inevitably there would likely be some assets identified for disposal as they no longer met the needs of the council and its communities, all elements that would help achieve a sustainable asset base would be considered, such as regeneration opportunities, opportunities for increased yield, and reduced maintenance and financial liabilities for retained properties.  Key to the process was recognition of the council’s unique role as custodian for its communities and ensuring all assets that were retained had strong social, cultural, environmental and economic benefits and clearly contributed to increasing social value.

18.9 LDC’s cabinet approved the AMP at their meeting on 26 June 2017.

18.10 Resolved (key decision): (1) That the corporate asset management plan 2017-2020 be approved and adopted.

(2) That the director of regeneration and planning be given delegated authority, in consultation with the Strategic Property Board, to make minor amendments to the plan if required before formal publication.

(3) That the director of regeneration and planning be given delegated authority, in consultation with the strategic property board, to approve procurement waivers in respect of commercial agents and legal fees relating to strategic acquisitions undertaken in line with the council’s acquisition and investment strategy.

(4) That save for exceptional circumstances, the council’s policy will be to apply open market rent for all new leases.