Corporate Asset Management Plan · Property Asset Management Plan 2 Introduction Purpose and Scope...

Property Asset Management Plan

November 2007


Contents Page Foreword 1 Introduction Purpose and Scope of Plan 2 Format and Content of Plan 2 1.0 The Planning Context & Strategic Direction 1.1 The Planning Context – The Drivers for Change 3 1.2 Corporate and Service Priorities 4 1.3 Current Issues in the Portfolio and Property Management 5 1.4 The Resource Context (Revenue and Capital Expenditure) 7 1.5 The Strategic Direction for Property 7 1.6 A Programme of Action 14 2.0 Asset Management Policy & Practice 2.1 Overall Approach to Asset Management 15 2.2 Roles and Responsibilities 18 2.3 Decision Making and Consultation 18 2.4 Identifying Property Needs 19 2.5 Capital Programme Management 20 2.6 Managing Properties in Use 20 2.7 Review of Need, Utilisation and Cost 21 2.8 Data Management 23 2.9 Performance Management 24 2.10 Partnership Working 26 3.0 The Property Portfolio 3.1 Size and Nature of the Portfolio 27 3.2 Cost of Owning and Occupying Property 28 3.3 Value and Income 28 3.4 Age & Condition 28 3.5 Suitability 29 3.6 Capacity and Utilisation 29 3.7 Statutory Obligations 29 4.0 Review of Portfolio Performance 4.1 Looking Backwards 31 4.2 Measuring our Progress - An overall Performance Scorecard 32 Appendices A Asset Management ‘Health Check’ 41 B The ‘Property Protocol’ 52


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Foreword Local government is re-inventing itself with the whole process of democracy, accountability and service delivery changing. Central to this transformation is the concept of sustainable communities – communities which are vibrant and self sustaining places in which to live and work. Physical infrastructure is an important part of community and place shaping and the assets which the County Council owns and uses must make a contribution to creating these sustainable communities. This presents KCC with the challenge of critically examining our asset base to ensure that it is optimised in terms of the Council’s corporate and service objectives, resource efficiency and its contribution to buildings and supporting communities. Property is a key resource of the Council. It has value; costs money to use and maintain, and is a critical component in supporting service delivery. The Council has a vision to improve the economic, environmental and social wellbeing for the people of Kent. To realise this vision we must continuously challenge our approach to the management of our property portfolio in order to ensure it is supporting this vision. To do this, property must be planned over the long term and within clear corporate and service strategies. In this way its contribution to service delivery can be defined, opportunities for capital funding pursued, and property management effectively undertaken. There are a number of new initiatives that will impact on our property estate, not least the roll out of Gateways (public access centres) and the increased focus on flexible working. Putting services where the customers are is essential. The potential for income generation is another key initiative where our property estate will play a key role. Our role in managing property must change from one of simple stewardship - proving and maintaining buildings to one which embraces social entrepreneurialism exploiting the latent value of the portfolio in an opportunistic way for the benefit of the communities we support. KCC is one of the largest owners and developers of property in the County and most communities have at least one KCC building. As well as presenting a visible image by which the public can perceive the Council, they can have a beneficial or detrimental effect on the communities in which they are situated. A good building of the right quality and design can act as a stimulus to draw in business and people, and so contribute to the prosperity of an area. This document written on behalf of the Council’s Property Board describes asset management policy and practice in Kent County Council. It builds upon previous Corporate Asset Management Plans. This document includes an embryonic long term vision for property ‘Service Places – Property Spaces’ which is intended to act as a catalyst for debate over future asset management direction. The AMP is a ‘live’ document and is subject to continuous review. It is intended to raise awareness of property matters and to seek wide engagement throughout and beyond the authority.

Peter Gilroy – Chief Executive (Chair of the Property Board)


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Introduction Purpose and Scope of Plan This plan sets a broad direction for KCC’s asset management over the medium term enabling its property portfolio (and associated professional support) to be optimised to meet identified needs. It facilitates rational property decision making based on identified corporate priorities. It is intended as a practical tool which helps to define, implement and measure how KCC:-

Makes its investment decisions Maintains and improves its assets Increases the cost effectiveness and value of its portfolio Promotes innovation and development in asset management Listens and responds to property users

The plan has a 5 year time horizon but is updated annually to provide a ‘rolling plan’. It is restricted to consideration of property assets that KCC owns or uses rather than wider infrastructure assets such as roads and equipment. The scope of the plan is therefore restricted to land and buildings. The plan sets the context and programme of action for the council’s property portfolio over the medium term. It is intended for a wide audience including:

Members - to support decisions on investment priorities in the portfolio Service managers - to identify changes in the portfolio to meet their needs Occupiers - to promote understanding of planned changes to the portfolio Public – as a statement of KCC’s asset management practices and priorities

Format and Content As a consequence of the size of the portfolio the Property Asset Management Plan (AMP) does not identify and consider individual building issues but rather provides a broad analysis and direction at the whole portfolio level. The document is arranged into four sections with appendices containing supporting material.

Section one provides a statement of strategic direction for property management and a programme of action based on an analysis of the environment in which KCC is operating and its own priorities in response to this.

Section two describes KCC’s current policy and practice with respect to asset management, and is designed to provide a commentary against current ‘Best Practice’ in asset management.

Section three provides information on the size and nature of the portfolio under thematic headings, and is designed to raise awareness of emerging issues in the estate.

Section four provides a review of portfolio performance, identifying key achievements looking backwards and presenting KCC’s performance against property performance indicators and in comparison with other local authorities.


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1.0 The Planning Context & Strategic Direction 1.1 The Planning Context & Drivers for Change The Property Asset Management Plan (AMP) does not exist in isolation but is set within the context provided by other corporate and service plans. These themselves are a response to wider external drivers impacting on KCC; and have been subject to consultation. The community strategy sets the overall vision for Kent and KCC policy direction is defined in ‘Towards 2010’ which identifies the Council’s priorities and specific targets under eight broad themes. These are:-

Economic success – opportunities for all Enjoying life Environmental excellence and high quality homes Learning for everyone Improved health, care and well-being Preparing for employment Keeping Kent moving Stronger and safer communities

These priorities are amplified by delivery strategies and resource allocations defined through The Public Service Agreement, the Medium Term Financial Plan and Capital Programme and operational business plans for individual service areas. Ultimately the priorities are cascaded to teams and individuals through action plans. The AMP is designed to support these by reflecting how the council’s portfolio and its management need to change over time to ensure these priorities are delivered. A summary schematic showing how the AMP fits within this wider planning context is shown below.


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1.2 Corporate and Service Priorities There are a range of corporate and services aspirations to which the council’s property portfolio must respond in terms of its size, nature and management. The most significant of these are highlighted briefly below.

Renewing the School Estate – The Council faces a significant challenge in ensuring the school estate is ‘fit for purpose’ and providing support in the drive to raise educational achievement. In the primary school sector there is an uneven match of need to places with spare school places in some areas and scarcity in other areas. There is a need to rationalise this estate in order to provide a better match of schools to demand in terms of size, location and facilities. This may require some re-cycling of assets to provide new facilities. The Primary Schools Strategy, the result of a full consultation on the way primary schools are organised and managed will deliver a rationalisation of school places with a consequential rationalisation of the primary school estate. In the secondary schools sector KCC has the challenge of securing maximum value from central government capital funding under the ‘Building Schools for the Future’ initiative (BSF). This will involve investment of £1.8 billion to improve the school building stock; which is the largest investment programme the council has ever had. Ensuring this money is well spent and that the programme is delivered on time will be a key priority for the future. In the special school sector there is a need to review facilities to ensure an appropriate balance between those pupils that can be taught in main stream schools and those that require the extra support provided by special schools. Across all sectors of school provision there is a strong drive to promote well designed buildings of high quality; to promote flexibility in design so that buildings are more adaptable and to embrace concepts of ‘extended schools’ as being at the heart of the community. The council is investing £85 million through the Special School Review.

Modernising the Library Service – the drive to update the library service may

have significant asset implications. Whilst the overall direction of this modernisation has not been defined; key questions over the type of libraries required (multi-user community facilities or more traditional single use); the nature, condition and number of buildings and their distribution will influence this direction. A library in each of Kent’s principal towns is likely to remain a consistent requirement in the future but KCC’s adherence to the non-mandatory national standard of a permanent library facility within 2 miles of 85% of population maybe more difficult to sustain.

A More Flexible Adult Education Service – Whilst the overall direction for the Adult Education Service has not been defined the broad direction can be inferred as an approach which provides greater flexibility to provide courses in locations and at facilities as and when required. This may require a mixed portfolio of core facilities with more flexible uses of other existing KCC premises or third party facilities.

Supporting Cultural Development - KCC’s role in promoting cultural development in the future is likely to be more of an enabling one rather than direct provision. In such an enabling role KCC would seek to secure funding to acquire or provide an asset which was operated by another agency to deliver the service. The key asset issues arising therefore are the optimum way of securing assets, their long term ownership, maintenance and eventual renewal.

Active Lives – This Ten Year vision sets out the Council’s aspirations for the

Adult Services Directorate, looking forward to 2016. The starting point for the


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vision is that everyone in society has a contribution to make to that society, and the right to control their own lives and this underpins the Directorates key objective - To help the people of Kent to live safely and independently in their local communities. The Adult Services Directorate has embarked on a programme to modernise its services and infrastructure to ensure it can deliver the Active Lives vision and its priorities effectively. Many of the current buildings are no longer suitable for the delivery of modern social care services that people prefer to have delivered in their own homes and their local communities.

Therefore the future asset needs of the Adult Services Directorate is for a smaller core of modern properties for specialist services which the market can not provide; or where it needs to exert influence over the market for service reasons; or where it can bring together a number of partners across the public, private and voluntary sectors to improve the effectiveness and efficiency of service delivery. The challenge moving forward is to recycle existing assets to create this core of modernised facilities and to use land and property holdings as ‘funding contribution’ to modern service provision whilst at the same time protecting KCC’s long term interests.

Housing Growth and New Infrastructure Needs – New housing allocations associated with south east regional planning guidance will give rise to new infrastructure needs, which are not consistent with the existing nature and distribution of the portfolio. This will require co-ordinated action between partner agencies to secure maximum developer’s contributions and to plan the provision of new assets in a timely way.

1.3 Current Issues in the Portfolio and Property Management Property management is concerned with both effective property services and ensuring that the portfolio is ‘fit for purpose’. Clients have a right to demand satisfaction with the quality, timelines and cost of the property services the Property Group provides or procures and with the buildings they use. There is a continuing need to ensure on behalf of service managers and buildings users that property services are delivered in a timely, cost effective and responsive way. The Property Group has been through an extended period of re-organisation which has seen consistent improvement in the effectiveness of its services allied to improvements in the portfolio. Despite good progress there remain a range of issues to be addressed and to which a revised strategic direction for the portfolio must respond:-

Capital receipts generation – With a large investment programme, but reduced supported borrowing, the ‘resource gap’ will need to be filled in part from increased capital receipts from property disposals. There is a lack of readily available disposal opportunities in the portfolio; but whilst ‘easy release value’ from the portfolio may have been exploited the longer term ‘latent value’ has yet to be drawn out. Innovative ways to release this value from the estate may have to be explored along with a more robust challenge to the need for and utilisation of property.

Portfolio ‘intelligence’ - Absence of adequate comprehensive and current data

on cost, value, condition, and utilisation on a property-by-property basis mitigates against efficient use of the portfolio; investment decisions and strategic analysis in terms of acquisition-holding-disposal choices. It is recognised that some elements of data, such as cost and utilisation are particularly difficult or time consuming to collect.

Capital programme management – With a significant programme of investment over the next three years it will be critical to ensure that capital projects are well planned, managed and delivered. A continuing priority is to ensure


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that every pound of investment is optimised and to avoid time and budget over-runs. Some slippage and modifications in a programme of such size is inevitable and so the flexibility afforded by preparatory work on schemes will also be essential.

Using property as a catalyst for regeneration – Good quality buildings can

attract both people and business, which is important in supporting regeneration and the development of vibrant and sustainable communities. Investment in building design and quality in the public realm can act as a stimulus in support of KCC’s priority of regenerating the eastern and coastal areas of the county.

Securing efficiencies savings from the portfolio – A central government policy driver is the search for efficiency savings. This has been articulated through the Gerhson and Lyons reviews which focuses on efficiency of back office processes and customer interface; and in particular the capital assets which support these. The implicit assumption in this policy initiative to which KCC must respond is that there are efficiency savings to be achieved from better use of property assets.

Ensuring premises are ‘safe and legal’ – Parts of the portfolio have deteriorated due to historic under-investment, and with rising health and safety and service standards, may become unsafe or illegal. This represents a financial risk to the authority as well as a risk to clients in terms of their service provision. A regime of inspection and appropriate investment is already in place and will be extended to all parts of the portfolio to ensure robust statutory compliance. The concept of a ‘premises MOT may be one which provides a basic level of certification of buildings to ensure such compliance, as well as a means to raise awareness with building users some of the significant issues

Acting as an enabler whilst protecting KCC’s interests - As KCC moves towards an enabling authority it is likely to have a smaller asset base and rely instead on service and asset provision through partner or community based organisations. This role can be supported through the use of the asset base but must also be controlled to ensure that KCC’s interest in terms of ownership, maintenance and eventual replacement of assets are protected whilst also ensuring continuity and consistency of service delivery.

Compliance with asset management ‘Best Practice’ – asset management in its widest sense embraces a range of policy and practice. This is coming under closer scrutiny through the ‘Use of Resources’ component of the CPA assessment. It is important that KCC keeps its overall approach to asset management in line with recommended ‘Best Practice’ in order to ensure that its overall CPA status is not put at risk. Improvements in the development of service asset strategies; performance measurement and data quality are all important priorities.

Property management is concerned with effective day to day operational management of buildings needed for service use and about ensuring investment to renew the estate is well targeted and about innovative strategic use of the portfolio to support corporate and service priorities. Whilst attention has been focussed on ensuring cost effective, timely and responsive property services as a priority, there has a been lack of exploitation of the ‘hidden value of property’ – active portfolio management to create and release value from property over the longer term. Whilst the Property Group must retain its short term focus on the operational needs of its service clients it also has an opportunity to add and create value through medium and long term innovative management of the portfolio as a whole. The challenge for property is to develop these shorter and longer terms stands of activity in a complimentary way.


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1.4 Resource Context – Revenue and Capital Expenditure The Medium Term Plan, which is published annually in February, explicitly sets out KCC’s approach to financial planning over the medium term; setting out the context, at both a national and local level, within which the revenue budget and capital programme are framed over the following three years. The national context includes the Treasury’s economic and public expenditure plans. The current spending plans were published by Government in July 2004, and set out revenue spending plans for local government for the period 2005-06 to 2007-08. In 2007 the government is due to publish a new Comprehensive Spending Review (CSR07) which will set out spending plans for the period 2008-09 to 2010-11. It is anticipated that the CSR07 will reflect the predicted worsening of the economic situation in the country, and that increases in revenue grant will be below that of previous spending reviews. Expenditure on capital projects is funded from a variety of sources, including capital grants, borrowing, capital receipts, external funding and from revenue. The majority of funding for capital schemes is through supported and prudential borrowing. The government has previously allocated additional revenue grant to partially meet the costs of the additional supported borrowing approved by Government Departments. This revenue grant support has normally met up to 90% of the costs of the additional borrowing. From 2006-07, however, changes to the local government finance system have meant that KCC has become a "floor" funded authority, only receiving the minimum revenue grant increase, which is determined by Government. KCC has received only the minimum 2 .7 % additional grant for 2007-08. However, within this 2 .7 % increase in grant, KCC has to meet the additional revenue costs arising from the supported borrowing approvals notified to KCC by government departments. The effect of having to the meet the costs of the additional borrowing, and other adjustments, meant that KCC received an effective 0.4 % decrease in grant in 200 7-08 for all of its services excluding schools. In representations to government about this issue, KCC has urged that the supported borrowing approvals be converted to capital grant for floor funded authorities. A fuller appraisal of the council’s funding needs and funding sources is identified through the Council’s Capital Strategy. The overall portfolio implications from both a revenue and capital perspective are that the portfolio has to be viewed much more in terms of ‘productive assets’ which can create or release value. This will require an emphasis on reducing revenue costs; disposing of underused properties to release capital and using underused space to generate income. 1.5 The Strategic Direction for Property Looking Further Ahead (A Vision for KCC’s Property Portfolio of the Future) The Property Board in the spirit of challenge which underpins asset management held a workshop to attempt to articulate an agreed longer term vision for KCC’s property portfolio. The emerging vision (Services Places and Property Spaces) is included as an insert to this Corporate AMP and the framework for action in the next section amplifies the priorities for the council both in making this vision a reality and developing asset management practice.


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Services Places and Property Spaces

Developing a Vision for Kent County Council’s Property Portfolio of the Future


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Context The purpose of this document is to articulate a shared vision for the KCC property portfolio which challenges our conventional thinking on property needs and which promotes a broad framework for action with respect to the portfolio over the longer term. A new vision is required to:-

Promote improved service delivery and access because clients are increasingly demanding services in a place, at a time and in a form of their choosing and models of service delivery need to evolve to reflect changing demography and technology

Support changing working practices which are altering the nature of demand for

property through increasing use of technology and flexible working

Meet the Government’s Agenda of developing sustainable communities and improved resource efficiency through shared use of accommodation

The Future of Public Services Public services are evolving in response to rising public expectations with an increasing focus on improving efficiency and exploring new ways of delivering services. The nature and pace of its evolution are hard to predict but the general characteristics of the future of such services are likely to be:-

Personalised – tailored to individual or group needs; responsive to where, when and how people want their services provided; capable of being self-selected and easy to access and use.

Localised – provided in a way that is immediate and convenient to the client

and which reinforces a sense of community.

Integrated – allowing multiple services to be provided simultaneously or in a form so that they can be accessed in a seamless manner.

Facilitated by Technology – supported by technology allowing alternative

modes of access and self help which are easy to use, secure, resilient and available at a time and place of the client’ choice.

Knowledge Driven – responsive and predictive of specific individual or group

requirements through increasing use of accumulated information on service use patterns and needs.

Regulated – to ensure the continuity of service, legal compliance, equality of

provision and access, the promotion of consistently high standards and the transparency of decision making.

Value for Money – provided in a way which is both effective and cost efficient

so that scarce resources are optimised for the benefit of clients

Flexible – provided in a way that allows services to ‘flex’ as clients needs change; as revised delivery mechanism are adopted and as volumes of services increase or decrease with changing circumstances.


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The Nature of the Future Property Needs The number, type and distribution of buildings will need to reflect this changing nature of public services. In general terms the portfolio will need to be:-

Fit for Purpose – Making sure that the whole building – its location, physical structure, internal layout and environment is supportive of, rather than a constraint to its use.

Productive – Ensuring the portfolio if fully utilised in order to minimise costs or

generate income and well maintained to reduce any liabilities associated with legal compliance or condition.

Adaptable – Ensuring the functional use of buildings can change in response to

changing needs without major physical modifications.

Sustainable – Embracing a design, management and use philosophy which optimises whole life costs and minimises the environmental impacts.

Accessible – Ensuring buildings are well located to promote ease of access for

both staff and clients.

Citizen-equity – Promoting a shared sense of ownership and pride in the public realm through the image it projects, the sense of community it engenders and the economic value it has.

An Emerging Vision for Property Central to both the future of public services and the nature of the supporting portfolio are the concepts of place and space. That is the location of service provision and the environment in which they are provided. These can be physical or virtual; personal or shared, fixed or transient and existing or new. The concepts of place and space can be viewed as a link between the customer and service provider. Together they provide a sense of identity, community, function and image. Services Places and Property Spaces thus provides an embryonic vision for the future of the portfolio which implies community based service provision in locally based facilities owned and managed through arrangements which secure optimal use whilst protecting wider public interest over the long term.

Provider(s)ClientIndividual

Shared

place

space

Physical orvirtual

Individual orshared

Fixed ortransient

Existing ornew

Property Portfolio


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Key Challenges A series of key challenges arise which need to be answered for each of our major services and for different property types (operational, administrative, tenanted, surplus, community investment). These are:- Place

1. Where do we (services & staff) need to be? Somewhere (in a specific location?) – optimise location in terms of access Anywhere (located at any place?) – optimise location in terms of cost Nowhere (no specific location required) Use flexible / home based working

2. What patterns of place are required across Kent?

Space

3. How much space do we need?

4. What type of space do we need?

5. What services can share the same space easily?

6. Is there an optimum size of space for our needs?

7. How can flexibility of space be promoted through building design? Place & Space

8. What is the optimum tenure mix to promote flexibility in place & space?


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Brand / image

flagship

joined-up

internet

accountable

locallydetermined

web-based

similar

not so different

The Future of Public Services

transforming

local

Cheap

Chargeable

Diverse servicemix

incrementalevolving

mergedCommon platform

synergies

gateways

Point of delivery

available

Close toconsumer

Decision making

partnerships

Large scale3 ‘e’s

effective

uniform

Doing job welltailoredPerceived well

Minimised waste

Service usergroups

Affordablequality

resilientstablegiven

secure

convergent

Informationmanagement

accessible

mandateleadership

transparent consistent

governance

legal

fluctuating volumes(more / less)

standardsBackstop non-

tech option

Meeting (rising)client expectations

personalised

integrated

localised

flexible

value formoney

facilitated bytechnology

regulated

knowledgedriven

easy access

Individually-tailored

visible

choice

responsive

self-directed

fast

seamless

convenient

engagement

enabling

workable

flexible

common ‘backoffice’

Communitybased

inclusive


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1.6 A Programme of Action A range of actions have been identified in order to progress asset management. These actions are in addition to the broad range of actions articulated for the Property Group as part of the normal business planning processes and team or individual target setting. The identified tasks are those strategic tasks associated with the continued development asset management policy and practice within KCC and which will be overseen by the Property Board. Short Term Actions (within the next 12 months)

1. Create a protocol for handling requests for asset transfers to the community

2. Define objectives and targets for the Enterprise Fund (as an investment portfolio)

3. Continue with refresh of suitability assessments for the non-schools estate

4. Enhance two-tier working with District Councils – maintain register of joint working initiatives

5. Continue disposal of non-operational and surplus land and property in order to

maximise capital receipts

6. Develop vision for rationalisation of office states to promote flexible working and release running costs and / or capital receipts.

7. Continue to develop KCC Property Vision linking it to the ‘Sustainable

Communities’ Agenda Medium to Longer Term Actions (over 12 months)

1. Develop and implement concept of Area Asset Management Plans in partnership with District Councils

2. Progress office strategy against agreed vision and targets

3. Provide professional property support to the roll out of the Gateway programme


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2.0 Asset Management Policy & Practice 2.1 Overall Approach to Asset Management KCC has developed a simple but coherent framework for asset management based on: -

Identification of overall property management objectives Categorisation of property according to type and associated management issues Understanding the asset implications of corporate / service plans and priorities Definition of data needs for property to ensure ‘portfolio intelligence ‘Challenging’ the portfolio to see what can or needs to be done differently

From this it is possible to: - Define overall strategy for the portfolio and actions for individual assets Identify investment needs of the portfolio associated with these actions Measure performance of the portfolio

Property Aims and Objectives KCC’s property policies provide the link between strategic objectives identified in KCC’s corporate and service plans through to its portfolio management. The Council has a set of on-going property management objectives, originally identified in its property strategy (Managing Property as a Flexible Asset for Service Delivery), approved by members in 1996; and re-confirmed in the revised 2003 property strategy. These objectives shown below provide the primary drivers for shaping action with respect to property.

Purpose Objectives What this Means

To ensure KCC service needs have an effective property solution

Having capacity to manage buildings and related activities

Managing procurement of property solutions effectively

Ensuring all KCC buildings are ‘fit for purpose’

To raise awareness of property as an asset providing clear decision making for its management and use

Providing clear decision making on all property matters

Setting standards for design, care and use of buildings

Monitoring portfolio compliance with legal obligations

To demonstrate continuous performance improvement in the delivery of property services

Giving effective contract and project management advice

Introducing choice/competition into property services

Setting performance indicators and targets for activities

To enhance public services through effective management of property

To release value from property holdings by minimising running costs and releasing space

Challenging the need for ownership/retention of property

Reviewing property holdings to identify sites for release

Monitoring running costs to target potential savings


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These on-going management objectives and the set of principles below provide the basic framework for measuring performance in the portfolio and associated professional services

Principles For the portfolio this means

For property services this means

Property management must support service delivery improvement

Property ownership is not critical to service delivery

Property is a corporate asset rather than in the ‘ownership’ of service

Property decisions must ensure best use of scarce financial resources

Optimising property holdings

Optimising property running costs

Ensuring effective use of space

Protecting the condition of buildings

Optimising the value of property

Ensuring legal requirements are met

Ensuring property is safe Promoting sustainability Ensuring access for all to

property Ensuring property

meets service needs

Ensuring cost-effective services

Promoting quality in services

Ensuring timely / responsive services

Ensuring client satisfaction with services

Audit against Best Practice in Asset Management KCC periodically audits its own practices against recommended ‘Best Practice’ in asset management to identify areas for improvement. A summary of KCC’s current practice against the Key Lines of Enquiry (KLOEs) for the Use of Resources under the Comprehensive Performance Assessment and against wider asset management practice given in Appendix A. KCC takes an active role in both developing practice and learning from others; whilst also at the same time being prepared to critically challenge the value of recommended practice and to adopt it in a pragmatic way for the benefit of the council. A member of staff is being supported in doctoral research into property asset management at the School of Public Policy, University of Birmingham. This research is exploring the linkage between rationale, practice and outcomes in asset management in order to identify the key ‘change agents’ for the effective transition from property management to asset management. As well as contributing to developing KCC’’s own policy and practice this work is contributing more generally to the collective knowledge and practice in asset management. Some of this research work has been written up in the form of practitioner guidance and diagnostic tools. These have been used at councils in the UK, in Ukraine, Nigeria and Kyrgyzstan and at the invitation of the World Bank to measure municipal capacity in asset management at Kazan City Administration in connection with a World Bank loan of $125 million dollars to the Russian Federation. Current KCC practice is amplified in the following sections.


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Should we acquire, investor divest? Tenure & Use

Condition & ‘Fitness for Purpose’

Value, Cost & Income

Capacity & Utilisation

Efficiency & Sustainability

Statutory Compliance

Statutory Changes

Service Growth / Service Decline

New Service Delivery Models

Investment NeedsStrategy & Action Portfolio Performance

Operational Properties

‘Fitness for Purpose’Condition

Cost inUse

To enhance public services through effective managementof property

To ensure KCC service needshave an effective property

solution

Service ‘Intelligence’ Portfolio ‘Intelligence’

Categorization of AssetsPurpose & Objectives

Outcomes

To demonstrate continuousperformance improvement in

the delivery of propertyservices

To raise awareness ofproperty and providing clear

decision making for itsmanagement and use

To release value fromproperty holdings by

minimizing running costs andreleasing pace

Asset Management ‘Challenge’

Administrative Properties

Surplus/Vacant PropertiesTenanted Properties

Community Assets Investment Properties

UtilisationCost in use

Flexibility (configuration / release)

ValueTime to disposal

Interim management costs

Subsidy provided(in relation to market rent)

Rent arrears

Acquisition costsCurrent valueRental income

Subsidy provide(in relation to market value)

Utilisation

Changing Service Standards

Changes in Service Frequency,Length & nature

Changes in Service Location

Is there latent value thatcan be released?

How can future liabilities (such asmaintenance) be minimized?

Do assets assist or hinder servicedelivery?

How can future operatingcosts be minimized?

Are assets in theright location?


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2.2 Roles and Responsibilities Property asset management processes in KCC are intended to seek engagement from across the authority; to build upon existing consultation agreements and to ensure balance between corporate and service perspectives of the asset base. Responsibilities within the process include:

Cabinet – Asset management matters are reported to Cabinet through the Portfolio holder for Finance. Formal reporting is supplemented by regular informal Member briefings. Cabinet approves the AMP and Members are also involved in determining the overall capital programme and for nominating or developing specific project proposals within it.

Property Board – Chaired by the Chief Executive; the Property Board considers

long-term strategic and cross-directorate property matters across the authority. It comprises senior member and corporate and service officer representatives and has authority to take strategic decisions on the portfolio.

The Director of Property – Is the designated CPO (Chief Property Officer) for

AMP purposes – with overall responsibility for developing asset management within the authority and for ensuring timely production of the AMP. KCC property assets are held corporately with Service Directorates occupying by way of agreement.

Property Group – The Property Group comprises the professional property

related expertise of the authority, which works on the broad range of property maters on behalf of service clients and the corporate entity. This is a multi-disciplinary group which manages activities that affect the size and nature of the portfolio (buying, selling and leasing); activities related to the protection and enhancement of buildings (maintenance, design and construction); and the provision of services to, and within, buildings (facilities management). The day to day activities of the property group were outsourced several years ago and the retained staff act as the ‘intelligent client’ procuring work on behalf of the council using a ‘framework of consultants’

Asset Management Focus – A small team within the Property Group is

responsible for asset management policy and practice. Their role is to ensure that KCC complies with current ‘Best Practice’, to develop and monitor the KCC property strategy and the corporate AMP, and to measure the performance of the portfolio. The team also provides a capacity to lead or contribute to cross-service or cross-agency projects in response to emerging organisational priorities. Asset management action is delivered through the Estates Management Team, The Property Disposals Team and the Enterprise Fund Management Team which effect changes in the council’s portfolio of property assets in line with corporate requirements. The Schools Capital Strategy Team within the Children, Families and Education Directorate have responsibility for developing the schools asset management plan and maintain close links with the corporate property AMP. Other directorates work closely with the Property Group and integrate their asset planning with the Property AMP through their own property boards; as for example in the Adult Services Directorate Property Operations Board.

2.3 Decision Making and Consultation A ‘Property Protocol’ provides the controlling framework for property matters ensuring acquisition, occupation and disposal are in line with ’Best Practice’ and that the authority’s interests are protected, with the right to direct in such matters reserved to the Director of Property (with appropriate Member authority). The Property Protocol is attached at Appendix B.


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KCC consults widely on its key corporate and service strategies and works in partnership with other public, private and voluntary agencies in the delivery of shared objectives. The Asset Management Plan and its associated activities has it’s own consultation framework which ensures engagement with all key stakeholders concerned with asset management. This includes:

Members – on criteria for decisions on investment properties, approval of the AMP prior to adoption, progress on identified actions and portfolio performance. A system of local Member consultations is in place for all property transactions (acquisitions, disposals and leases prior to a formal decision).

Property Board - comprises senior member, and corporate and service officer

representatives. It sets the overall strategic direction for the portfolio through its endorsement of the AMP.

Service managers – on AMP concepts, processes and data needs, changes to the

portfolio, criteria for informing investment priorities, actions identified in the AMP.

Schools Capital Strategy team and the Schools AMP Advisory Group to ensure consistency between the Corporate Property AMP and the Schools AMP.

Services Directorate Property Boards to ensure consistency between the

Corporate Property AMP and the Directorates AMPs.

Property users and occupiers – through representative sample surveys on the problems in the estate from an operational perspective; including suitability of accommodation.

Clients receiving property services – annual client satisfaction survey of property

services supplemented by an on-going sample survey to assess satisfaction with individual projects.

Property consultants (service providers) – on AMP issues and actions through

partnership steering group(s), and joint working groups.

District Councils – KCC attends the Kent Property Managers Group (KPMG) which meets monthly and provides a forum to discuss ad resolve asset management issues of common concern. Liaison on individual property issues is on-going and part of common practice. District councils are routinely informed of surplus KCC assets prior to disposal; joint area reviews are undertaken and property initiatives are progressed jointly where relevant

Other Public Sector Agencies – Engagement with other public bodies including

PCTs; the Kent Police Authority and the Kent Fire and Rescue Service is routine on both specific site issues or on more general asset management matters.

2.4 Identifying Property Needs The Property AMP KCC has defined aims and objectives for its portfolio and a Corporate Property AMP which provides a summary analysis of the portfolio and sets a broad direction around which to co-ordinate resources and action. Key areas for change are identified in the AMP but as the portfolio is large these tend to be identified as ‘issues’ rather than site specific actions.


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Service Asset Strategies Service Directorates take a lead in developing Service AMPs with the guidance and assistance of the Property Group. Asset management planning for the schools estate is well embedded within the authority in line with DfES guidance, whilst other parts of the portfolio, whilst less systematic in their approach are also covered by Service AMPs Guidance on the format and content of service asset strategies has been produced and the Property Group is working with Service Directorates to assist in updating strategies in an incremental way to reflect changed policy drivers and revised organisational structures.. It is within the service asset strategies that specific actions relating to individual properties are identified. 2.5 Capital Programme Management The capital programme is directed to ensure that limited resources are invested in the most effective way to improve service delivery. Service Directorates are responsible for identifying capital projects needed to meet their needs, for feasibility assessments and development of a funding ‘bid’. Thereafter prioritisation of competing bids and development of the capital programme is undertaken as part of the Council’s overall budget process and through PAG (Project Advisory Group) prior to Member approval. The Council has a methodology to prioritise investment which is related to its overall policies and objectives. This is designed to ensure that the impact of scarce resources is maximised and that a strategic overview of all schemes is maintained. This overview is supplemented by detailed officer scrutiny to ensure schemes are well planned and achievable. Progress on the capital programme is monitored through periodic reports to Cabinet. This allows early identification of actual or potential slippage, for re-prioritisation of ‘reserve’ schemes for inclusion in the programme. Schemes are included in the capital programme once an outline business case has been approved during the medium term planning process. The outline business case must provide information on linkages to the council’s strategic objectives and priorities, service objectives and funding. At the second stage of the approval process PAG receives the detailed business case which encompasses option appraisal, requiring the proposal to be considered against the existing services (where applicable) and assesses the benefits of the desired option compared with alternatives. PAG then makes a recommendation to the Leader as to whether the scheme should proceed. The management of the whole capital programme links to the formal member decision making process. 2.6 Managing Properties in Use Assessing Condition Schools receive a full condition survey every 3 years through a rolling programme. The survey is undertaken in accordance with the DCSF condition assessment guidance. Those schools not receiving a full condition survey in any one year receive an update inspection. The annual school maintenance programme targets the most urgent priorities identified in condition surveys having regard to other planned building work and future funding programmes such as BSF. The remainder of the operational estate has been assessed by ‘desktop survey’ using local building surveyor’s knowledge, condition reports where available and a standard repair cost multiplier. Additional corporate funding was approved in 2006 to supplement service directorate budgets in order to accelerate the full condition surveys of the non-schools operational estate. A summary statement on the portfolio in condition A-D and priorities 1-4 is given in Section 2. This is reported to Members, Chief Officers & Clients through the AMP itself and in separate briefings. An


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overall corporate policy for condition surveys is required. It should propose a re-survey of all properties on a rolling programme based on a survey of major building elements. Suitability Assessments (Fitness for Purpose) The school estate has been assessed for suitability as part of the production of the Schools AMP. The data is used to inform decision making about school building improvements, tackling suitability issues both specifically and as part of a larger improvement project which may address both suitability and condition issues. Suitability assessments were originally extended to other operational properties in 2002 based on a survey pro-forma with 20 criteria covering 3 suitability components (space, environment & location) providing an overall assessment at establishment level. These assessments are now out of date and a new programme of suitability assessments has been initiated on an incremental basis using an extended and revised pro-forma. The suitability assessment data is being loaded into Enterprise to allow easy analysis. Sufficiency For schools, floor plans have been completed for each establishment. Sufficiency assessments have been undertaken looking at each space and net capacity calculated. This process provides maximum capacity details and informs admission numbers. There has been no systematic assessment undertaken of sufficiency in non-schools premises for the remainder of the operational estate (other than associated with on-going service planning purposes). However, some limited work has been undertaken, notably in the office estate for the development of the KCC office strategy and in libraries and Linked Service Centres to assess both capacity and utilisation. This type of work may be extended incrementally to other parts of the portfolio in due course. Running Cost Management Apart from corporate offices and properties held corporately pending disposal, the running costs of buildings are held in Service Directorate budgets with the responsibility for managing ‘cost in use’ delegated to service managers as part of their service provision responsibilities. School energy and water consumption details are available from the Energy Management Team. Information relating to the previous 3 years consumption is made available to the DfES to inform National Statistics publications As individual buildings are not always treated as cost centres in the Council’s financial system there is some difficulty in identifying running cost expenditure easily and thus management focus on this may not be as desired. Statutory Obligations The Council treats it statutory obligations with respect to property as a priority. There is close liaison with the Health and Safety Manager on buildings related policy and issues and there are routine health and safety risk assessments. A programme of surveys and associated remedial actions has been undertaken in respect of the Disability Discrimination Act, asbestos and Legionella. 2.7 Review of Need, Utilisation and Cost The portfolio has been subjected to systematic review on an area and service basis over a long period of time. In recent years more innovative approaches to review have been undertaken. These have included a ‘Top Sites’ initiative which focussed review activity on


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sites with significant latent value and where there were identified operational concerns with the property; and multi-agency reviews working with partner public sector agency to review collective holdings in specific geographic areas. Currently review activity is being directed to examine assets that have been identified as non-operational, in order to release these where possible. In the medium to longer term, efforts will be renewed to ‘sweat’ operational assets and to challenge their need and retention in line with developing strategies for service delivery. Whilst review processes associated with the need for holding/retaining property are well embedded within the authority, processes to measure utilisation or running cost efficiency are less well developed. These have been constrained because of the resource implications of measuring utilisation and lack of available cost information at a building level. Further emphasis will be given to this area through development of the AMP and associated processes. A formal process for disposing of or re-deploying surplus properties is in place. The process (and associated officer delegations) is designed to expedite consideration of surplus or potentially surplus assets whilst ensuring local Member consultation and agreement to negotiated terms by the portfolio holder. An annual target for receipts from disposals is set through the Council’s budgetary process. Progress against this target is reviewed monthly with reports to Members; and the disposal process is closely monitored to ensure it is operating effectively. Since 1989/90 cumulative receipts from disposals of over £200 million have been realised. Joint use of premises is an area under active consideration as part of property review processes. Public agencies have a responsibility to work together to understand their service needs and the property implications of these. Scarcity of resources suggests that pooling assets by sharing property makes good sense. A number of property initiatives are in progress aimed at promoting improved access to services, in improved accommodation within shared premises. These include ‘Gateways’; high street access points to public services and putting ‘schools at the heart of the community’. Information when brought together provides a mechanism to assess the contribution individual buildings are making to council objectives and for action in the portfolio. The simple framework presented below is a summary of the challenge process used to identify actions at an individual property level. It is recommended that this approach is adopted through review processes and successive AMPs to categorise the portfolio and as a means of identifying required action required for individual assets. The general philosophy underlying the methodology is to optimise the portfolio through retention of assets which meet needs or have a development potential, whilst releasing those which are not meeting requirements, are poorly performing or expensive to use and maintain.


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2.8 Data Management Data Needs & Collection Priorities KCC has a dedicated Asset Database Development Team within the Property Group which is responsible for property data management. This team is responsible for identifying property needs, overseeing data collection and data quality (currency, accuracy and completeness). It also has responsibility for the property IT systems and their development A ‘road map’ of data needs to support asset management has been developed along with an assessment of data sources, availability and collection priorities. This provides an overall framework for data management. A unique identifier (UPRN) and core data as defined by ‘best practice’ guidance is held for all properties. A programme to collect other data (intermediate & transient) where it does not currently exist is in hand, although resource availability constrains the speed at which this can be achieved. The KCC approach is to concentrate on ensuring the currency and accuracy of critical data as a priority over collecting a wider range of data which cannot be maintained. The Asset Database Management Team maintains a ‘timeline’ defining development priorities which is subject to periodic review with the principal users of property information. Information Systems Data is currently held in two major IT systems. These are Enterprise and Atrium. Both systems are ‘owned’ and administered by the Property Group but used by all directorates of the authority and external service providers. A web-based version of the Enterprise system (Interprise) has been implemented allowing web access to property data for all KCC schools. The current scope of data held on the Enterprise system is shown in the diagram below. The immediate development priorities include the development of modules for Asbestos Surveys, Fire Risk Assessments and Legionella Surveys.


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The property information system is available to anyone who needs or wants access to it. Each user is given training in a structured way to enable them to use the system quickly and easily and to make them aware of what support is available. There are currently over 680 registered users of the system including 650 schools, 165 KCC staff and 30 eternal users from retained property consultants. The Asset Database Management Team has a member of staff dedicated to writing reports to extract information from the property database to meet specific information needs which are not available from the standard library of reports which can be run by users to analyse the data. Data Quality Responsibility for data collection and quality (completeness, currency & accuracy) rests with the Asset Database Development Manager within the Property Group This role recognises the critical nature of maintaining data in an outsourced environment in which KCC’s principal property activities operates. Procedures for updating records are well established and subject to periodic review. Data ‘sets’ have an identified ‘owner’ and ‘maintainer’ and the validity of data held is checked by a sampling audit approach and through cross-referencing with other systems. 2.9 Performance Management A comprehensive framework has been developed to identify and measure property performance indicators (pPIs) for asset management. The framework identifies pPIs under key themes which contribute to the overall optimisation of the portfolio and thus contribute to the council’s corporate objectives and overall quality of life within Kent. The framework is illustrated overleaf. Under each theme indicators are defined either as local, KCC specific indicators or as national indicators where these exist through the NaPPMi initiative. Challenging targets are set for each theme by the Property Board and progress over time is tracked against these targets. National comparisons are under taken where data is available using the IPF AMP Network ‘benchmarking service’ and regional comparison through collaborative grouping of south east counties (SECAMP) which meets 3 to 4 times a year to review and share asset management practice. The pPIs are related to the different types of property held by the council and to its on-going management objectives for these identified in Section 2.

The framework (including the PIs and targets set within it) is not static but is refined in use, and as national and local performance measurement initiatives are established. It is intended as a simple device to ensure that a rounded and comprehensive assessment of performance is achieved. Wherever possible, work is undertaken as part of national collaborative initiatives, particularly those under the banner of the Federation of Property Societies. This allows meaningful comparisons with other organisations through the use of consistent definitions and independent validation of results. Only in cases where no other national work is in hand are specific KCC pPIs developed and in these cases the approach adopted is essentially a pragmatic one, ‘keeping it simple’ in terms of available information. The overall process adopted is one of continuous improvement based on a simple ‘action – analysis – plan’ cycle. Performance studies are undertaken during the year and consolidated into ‘Review of Portfolio Performance’ (Section 4). This analysis is used to identify actions for improvement. This allows an annual overview of performance to be taken, with a re-focusing on key issues reflected within the AMP.


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2.10 Partnership Woking Working with District councils is a ‘way of life’ with regular liaison on all property matters. Greater focus to this has been given however through the concerted efforts by the District and County Councils to enhance two-tier working. Property is recognised by the Kent & Medway Chief Executives group as a pivotal part of this joint working and an area where efficiency savings and improved service access can be achieved through closer collaboration. To this end KCC has worked with the District Councils in joint area reviews of collective property holdings in order to identify opportunities for rationalisation, disposal or jot use. One innovative example has been the production of an Area Asset Management Plan for Whitstable Town Centre which is being used as a mechanism to identify the potential to rationalize Canterbury City Council and KCC holdings in the Town centre. KCC maintains a register of all sites in which joint work is in hand. This is made available to Districts through the KCC property web site. To support joint working KCC has undertaken a mapping exercise to map the public estate in Kent and to make this widely available. The easy visualisation of public property holdings on an area basis through large scale mapping acts as a simple catalyst to identify opportunities. KCC participates in the Kent Property Managers Group (KPMG) which draws together senior property professionals from the 12 districts, Medway Unitary Council and the County Council into a regular forum to discuss and resolve issues of common concern. In collaboration with public sector agencies KCC is implementing a Gateway Strategy for Kent. This is intended to provide convenient and simple access to a wide range of public services through a cross agency facility located in a modern retail setting. It is intended to be complimentary to other service access forms such as web, telephone and home visiting. The Gateway draws on modern retail concepts to create high value community retail brand connecting with people’s daily life and recognised as public service access facility in the same way as some modern retail organisations do. The first Gateway was opened in Ashford and attracts over 4500 visitors per month. Within phase 1 of the strategy it is anticipated that 7 gateways will be opened over 2 years with a further 9 gateways in phase 2 in the succeeding 3 years. The intention is to achieve a Gateway presence in each of the 12 districts of Kent.


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3.0 The Property Portfolio 3.1 Size and Nature of the Portfolio The Council has an extensive and diverse property estate spread throughout the entire county. The bulk of the estate is operational property used for direct delivery of services for which the Council has a statutory or discretionary responsibility; and is predominantly freehold. The exception to this is the administrative portfolio (office estate) which is split evenly between freehold and leasehold. The broad dimensions of the portfolio are:-

The portfolio comprises 6000+ individual buildings in 1770 premises containing over 2.3 million M2 of floor-space

Is worth £1,560M in terms of book value which represents 59% of the local

government estate in the Kent and Medway and 37% of the wider public estate (excluding housing and central government agencies)

Costs £85 million in revenue to use which is 4.5% of KCC’s gross revenue budget

Has investment needs of £200M arising from urgent and essential repairs

Whilst all property is in corporate ownership its occupation and use reflects the services provided under the council’s organisational structure.

Number and Type of Premises

Establishment Type No. Directorate % Primary school 477 Chief Executives 18 Secondary school 116 Children, Families & Education 47 Office 69 Communities 10 Library 103 Environment & Regeneration 19 Housing 62 Kent Adult Social Services 6 Country Park / Picnic Site 27 Waste Disposal Site 23 Highway 178 Other 463 Total 1770 Total 100

Number of Buildings & Size of Portfolio

Types of Buildings Number GIFA M2 GEFAM2 Main buildings 4016 2,011395 2,196,822 Extensions 706 182,706 193,689 Small (less <20M2) 1574 12,879 13,925 Total 6296 2,206,980 2,374,436 3.2 Cost of Owning and Occupying Property There is a recurring cost borne from the revenue budget to own and occupy property. Assuming the portfolio is fit for purpose and in a reasonable state of repair the objective should be to minimise this expenditure in order to release revenue for service priorities. The Audit Commission indicates that on average Councils spend 8% of their net annual budget on property running costs. KCC has:-


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Spent £86.84 million on property running costs during 2006/07 Received £1.207 million from rents & lettings to offset against running costs

Expenditure on schools accounts for 53% of annual property running costs and the total running costs represented 4.37% of the Council’s gross annual spend. (The Audit Commission have identified an indicative spend of 8% as being typical for a portfolio in reasonable state of repair)

Expenditure on Property Running Costs (£000s) Cost Element 2002/03 2003/04 2004/05 2005/06 2006/07 Rates 12.766 12.676 12.411 14.015 14.587 Water & sewerage 2.205 2.357 2.577 2.855 2.958 Energy 7.613 7.701 8.903 11.542 13.416 Rents 38.093 31.906 22.428 17.840 17.477 Maintenance 16.948 16.291 18.888 18.013 18.186 Grounds maintenance 2.992 3.676 3.688 4.244 4.213 Security & cleaning 7.400 8.772 9.626 11.289 11.990 Fixtures & fittings 0.245 0.146 0.134 0.273 0.146 Insurance 3.153 3.540 3.469 2.659 3.859 Gross Expenditure 91.415 87.065 82.124 82.710 86.842 Rental / letting income -2.038 -1.711 -1.636 -2.030 -1.207 Net Expenditure 89.377 85.354 80.488 80.680 85.635 3.3 Value and Income As well as providing the accommodation from which to deliver our services, property can also be considered as a ‘productive asset’ which is capable of releasing value (from property disposals) or generating income (from rental lettings). Although not its primary purpose, this can make a valuable offsetting contribution to capital projects or operating costs. KCC has:-

Produced £?M capital receipts in 2006/07 from property disposals Produced cumulative capital receipts of £>M since 2001/02 Generated rental income from property lettings of £1.2M in 2006/07

Profile of Capital Receipts from Disposals Year 01/2 02/3 03/4 04/5 05/6 06/7 07/8 08/9 Receipts (£Ms) 6.0 7.8 18.5 12.8 20.8 Cumulative 6.0 13.8 32.3 45.1 65.9 3.4 Age & Condition It is important to understand the condition of the building stock in order to be aware of immediate health and safety issues in the portfolio, incipient risks and liabilities to the council; and the investment needs associated with ensuring buildings are in a reasonable state of repair - as required by the authority to meet its service delivery obligations and statutory requirements. It is also an important element of ‘Best Practice’ within current asset management guidance. KCC has:-

Undertaken ?? full condition surveys in 2006/07 Spent 16.2M on maintenance from the revenue budget


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Spent 122.6M of capital on major refurbishment or replacement during 2006/07 The age profile of the portfolio shows a split which is approximately 40% pre 1976 and 60% post 1976 or temporary; although there are still 10% pre World War One buildings.

% of KCC Buildings By Age Pre 1919 Inter War 1945-1966 1967-1976 Post 1976 Temporary Unknown

9.7 5.5 10.2 15.4 42.0 16.2 1.0

Condition of Property Portfolio

Property Good Satisfactory Poor Bad Total Schools N/A N/A N/A N/A Non-Schools 24.3% 47.25% 28.45% 0 100% Total

Maintenance Backlog by Priority

Property Urgent Essential Desirable Long Term Total Schools £58.612 £113.970 £68.607 N/A £241.189 Non-Schools £1.063 £27.243 £41.277 N/A £69.513 Total £59.675 £141.163 £109.884 N/A £309.722 3.5 Suitability Buildings need to be ‘fit for purpose’ in order to support service delivery. A building of the wrong type; in the wrong location can be a major inhibitor to effective service provision. It is important therefore to periodically review the suitability of buildings to see if they are having a beneficial or detrimental effect on services.

Undertaken ?? suitability assessments Developed a revised pro-forma approach for assessing suitability in the non-

schools estate

Suitability Assessments Floor Area in M2 by DfES Grading

Property A Unable to

teach curriculum

B Teaching methods inhibited

C Management organisation

affected adversely

D Pupil/staff morale or behaviour Affected

adversely

Suitable

Schools 9,655 58,602 74,569 15,196 1,498072 Non-Schools N/A N/A N/A N/A N/A 3.6 Capacity and Utilisation Limited work has been done outside the schools estate and the corporate office estate to look at space utilisation. This is an area requiring further consideration in the future.


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3.7 Statutory Obligations Ensuring the portfolio confirms with statutory obligations is a high priority of the council. Failure to do so may expose council staff and clients to health and safety risks or expose the council to financial risks. The statutory obligations for the portfolio and related professional services are varied and subject to continued revision and therefore need to be monitored closely. During 2005/06 KCC has:-

Buildings open to the public which are accessible to the disabled (BVPI 156) 2002/3 2003/4 2004/5 2005/6

Total no of buildings open to the public 177 173 166 No. of buildings accessible to the public 49 87 105 % of accessible buildings open to the public 27.70% 50.28% 63.25% No of buildings adapted 3 38 18

Disabled Discrimination Act (DDA) - Schools 2002/3 2003/4 2004/5 2005/6

Number of buildings subject to DDA audit 617 617 617 617 Number of completed surveys 2 125

Disabled Discrimination Act (DDA) - Non-Schools 2002/3 2003/4 2004/5 2005/6

Number of buildings subject to DDA audit 329 329 329 329 Number of completed surveys 11 214

Key Performance Indicators Key Performance Indicator 2003/4 2004/5 Target BVPI 156 - % of accessible buildings open to the public 50.28% 63.25% 100%


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4.0 Review of Portfolio Performance 4.1 Looking Backwards Over the last 12 months Kent County Council has demonstrated its commitment to asset management through a range of initiatives. Whilst not an exhaustive list some of the more significant achievements include:-

The Council has established an Enterprise Fund with a maximum permitted

deficit of £10M which can be used to aid enterprising property acquisitions in a timely and cost effective manner. The fund is designed to assist in adding value to the portfolio, to acquire properties for future use and support regeneration and income generation opportunities. This Fund allows the council to intervene in the market quickly to secure assets which present significant investment potential which would not otherwise be the case if funding for available investment relied solely on the disposal of existing surplus assets. The maximum deficit permitted is £10M funded by Prudential Borrowing over 10 years with transactions proceeding only with an agreed business case. The deficit in the Fund is offset by disposal income as assets disposals are realised and the cost of borrowing is charged against the Fund. It is anticipated that the Fund will be in surplus at the end of the 10 year period. The fund operates within the governance arrangements prescribed by the Property Management protocol and in compliance with the Council’s Constitution and Financial Regulations

Improvements have been made to the provision of property services through a

range of mechanisms. These have included the appointment of a Head of Operations to provide an increased management focus and direction on operational property service delivery and the widening of the consultancy base for estates management services through the provision of an expanded Consultants Framework. Internal arrangements with service directorate clients of property services have also been strengthened and reinvigorated with revised Service Level Agreements and regular liaison to consider cost and appropriateness of property services provided.

KCC has bought the Kent International Business Park from Manston airport. This

is an area of 70 acres which links the airport to expansion at Westwood Cross. The mutual aim of Thanet DC and KCC is to regenerate the area with extra jobs and homes, to meet local service needs and create global economic opportunities. A new road joining Manston airport and Westwood Cross will be constructed and funded by KCC.

The Kent highways service is being reshaped by amalgamating the three

functions of client, consultant and contractor. Two major super depots are being built on new sites in Wrotham and Ashford to gain the operating improvements of a quicker service at a reduced cost. Advanced information technology will enable and empower the transformation of a service rooted in tradition

The property Group undertakes an annual survey client satisfaction of schools

which is its principal client base. This is undertaken by independent survey company Mori through a qualitative interview process. As in preceding years this has shown that the Property Group is performing well and its overall client satisfaction rating is improving year on year. The Mori survey also identifies specific areas of concern to which the Property Group needs to respond and this provides a stimulus to action in order to sustain the group’s overall performance.

The Property Protocol that provides the overall controlling framework for

property maters has been revised to reflect changed circumstances and to uplift


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levels of delegated authority on property transactions to better reflect current property values. The revised protocol will add provide greater clarity on responsibilities with regard to decision making on property matters as well as streamlining the decision making process.

In conjunction with service directorates the Property Group has redefined KCC’s

vision for its office portfolio. This is based on improving service access to clients and improving working environment for staff whilst at the same time reducing the revenue costs associated with the office portfolio. In order to release these savings the vision is predicated on increased use of flexible working to improve space utilisation and to release under-used or unwanted space.

4.2 Measuring our Progress NAPPMI Performance Indicators COPROP (Chief Corporate Property Officers Association) along with other representative bodies and with the support of DCLG (Department of Communities and Local Government) and DfES (Department for Education & Skills) have developed a set of property performance indicators (pPIs) to be collected nationally under the banner of NAPMI (National Property Performance Management Initiative). KCC current and trend data from these performance indicators are shown on the tables overleaf with national and regional comparative data where available. The national comparative data is based on all 34 counties and the regional comparative data for counties in the south east region. The comparative data is extracted from the IP AMP Network Benchmarking service to which the authority subscribes. Targets for these performance indicators are set and reviewed periodically through the Property Board. Summary scorecard of Progress The Overall Scorecard (on the table overleaf) provides a set of indicators to measure whether property is meeting service standards. It contains indicators related to the portfolio as well as to the professional property related services. Each indicator is ‘tracked’ against KCC target or a national ‘norm’.


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National Performance Indicators Condition (Schools)

Performance Indicator Kent County Council 2007 Comparisons Progress Ref pPIs 2004 2005 2006 2007 National Regional Target Change

PM1A % Gross floor-space in condition A Not collected on this basis N/A

% Gross floor-space in condition B Not collected on this basis N/A % Gross floor-space in condition C Not collected on this basis N/A % Gross floor-space in condition D Not collected on this basis N/A

PM1Bi Required maintenance cost in priority 1 £58.612M Required maintenance cost in priority 2 £113.970M Required maintenance cost in priority 3 £68.607M

PM1Bii % maintenance costs in priority 1 24.3% <5% % maintenance costs in priority 2 47.3% % maintenance costs in priority 3 28.4%

PM1Biii Overall maintenance cost M2 (GIA) £135

PM1C An. % change in required maintenance New pPI – no trend data

PM1Di Total spend on maintenance PM1Dii Total spend on maintenance M2 (GIA) PM1Diii % split - planned / reactive spend 70/30


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Condition (Non-Schools)


PM1A % Gross floor-space in condition A 0 0 N/A 0

% Gross floor-space in condition B 54.0 65.8 N/A 62.84 % Gross floor-space in condition C 44.0 33.1% N/A 35.17 % Gross floor-space in condition D 2.0 1.1% N/A 1.75

PM1Bi Required maintenance cost in priority 1 1.063 Required maintenance cost in priority 2 27.243 Required maintenance cost in priority 3 41.277

PM1Bii % maintenance costs in priority 1 5.0 2.2 N/A 1.53 <5% % maintenance costs in priority 2 43.0 34.1 N/A 39.16 % maintenance costs in priority 3 52.0 63.7 N/A 59.31

PM1Biii Overall maintenance cost M2 (GIA) £173

PM1C An. % change in required maintenance New pPIS – no trend data

PM1Di Total spend on maintenance PM1Dii Total spend on maintenance M2 (GIA) PM1Diii % split - planned / reactive spend 70/30


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Environmental Issues


PM2A Energy consumption £/M2

Energy consumption KWH/M2

PM2B Water consumption £/M2 Water consumption volume/M2 See 1

PM2C CO2 emissions tonnes of CO2/M2 See 2

1 7.5% reduction by 2010 and 15% reduction by 2015 2 10% reduction by 2010 and 20% reduction by 2015 Suitability (‘Fitness for Purpose’)


PM3A % floor-space with survey last 5 years 100%

PM3B % properties with survey last 5 years 100%


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Accessibility


PM4A % floor-space with an access audit N/A 100 100 100 100%

PM4B No. properties with an access audit N/A 333 338 345

PM4C % floor-space with an accessibility plan N/A 100 100 100 100%

PM4D No. properties with accessibility plan N/A 333 338 345

Sufficiency (Capacity & Utilisation) – Office Portfolio


PM5A1a Office floor-space as % of portfolio New pPI – no trend data 3.7% PM5A1b Office space per head of population New pPI – no trend data 0.06M2 PM5A2 Office space as % of operational space New pPI – no trend data 55.4% >70% PM5A3a No. of offices shared with others New pPI – no trend data 10 PM5A3b % of offices shared with others New pPI – no trend data 45

PM5B1 Av. Floor-space per staff 7.9M2 <6.0M2 PM5B2 Av. Floor-space per workstation 8M2

PM5B3 Annual property cost per workstation £1538


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SPEND


PM6A Property costs as % of revenue budget 4.36% 4.37% 4.50% < 8.0%

PM6B Property costs / M2 New pPI – no trend data £36.57

TIME & COST PREDICTABILITY


PM7A Time predictability – Design 83% N/A

PM7B Time predictability – Post contract 70% N/A

PM7C Cost predictability – Design Data systems not consistent with definition

PM7D Cost predictability – Post contract 63% 94%

For the year 2006/07 there were no non-school projects over £50,000 completed


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Local Performance Indicators (KCC Property Scorecard)

The table below is presented as an overall ‘performance scorecard’ to measure performance for individual property types and the overall portfolio level. It is presented as a ‘scorecard’ with a single measure under a series of key themes related to the KCC ongoing management objectives for property. The approach will be refined through successive AMPs with indicators and targets agreed by Property Board.

Operational

Offices

Tenanted

Investment

Surplus

Community

Portfolio

Condition

Urgent repairs as % of the backlog in priorities 1-3

Urgent & essential repairs as a % of annual running cost

N/A

Urgent & essential repair as % of gross rev budget

Cost

Property running costs as % of cost of service

Running cost / M2

Management cots / M2

Property costs as % of gross revenue budget

Income

Annual income from lettings as a % of running costs

Annual income from lettings as a % of running costs

Actual rent income against expected rent income

N/A

Letting income as % of spend on property

Value

Capital receipts as a % of asset value

Asset value as a % of gross revenue budget

Sufficiency

To be defined

Floor-space per staff

N/A

Floor-space / head of population

Suitability

% floor-space which is ‘fit for purpose’

% of floor-space which is ‘fit for purpose’

N/A

% portfolio by floor-space not fit for purpose

Satisfaction

To be defined

To be defined

N/A

To be defined

Utilisation

To be defined

Av floor-space per member of staff

N/A

Operational space as % of total portfolio

Sustainability

N/A

The total carbon footprint of portfolio

Accessibility

% of buildings with full access surveys & plans

To be defined

(pPIs in relation to ass3ets held for

investment purposes through

the Enterprise Fund)f

N/A

To be defined

To be defined


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Operational

Offices

Tenanted

Investment

Surplus

Community

Portfolio

Condition

10.1%

Cost

£107M2

4.5%

Income

2.3%

1.3%

Value

78%

Sufficiency

1.56M2

Suitability

N/A

Satisfaction

N/A

Utilisation

7.9M2

91.4%

Sustainability

N/A

Accessibility

N/A

pPI Not defined No change Getting better Getting worse


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Appendices

Appendix A – Audit of KCC Practice against ‘Best Practice’ in Asset Management

Audit Commission Key Lines of Enquiry (KLOEs) July 2007 Wider ‘Best Practice’ (RICS / DCLG / Practitioner Associations)

Criteria & Evidence Audit 1 Roles & Responsibilities

1.1 The council has a designated corporate property function2

Principal property activities were incrementally outsourced in 2002 following a ‘Best Value Review’. The retained ‘intelligent client’ function is the corporate property function working within the Chief Executive’s Directorate along with other corporate functions (Legal, Finance, Policy, ICT and Human Resources)

1.2 Corporate Property Role (CPO)

The Director of Property is the Corporate Property officer with overall

responsibility for asset management within the authority. The Director of Property reports directly to the Chief Executive.

1.3 CPO’s responsibilities defined

The CPO’s responsibilities are defined through the Director of Property’s job description which makes explicit reference to the asset management responsibilities of the post.

1.4 CPO reports to a strategic committee The Council works with a Cabinet Structure and Scrutiny Committees.

The Portfolio Holder for Finance is responsible for asset management and property matters are reported through him to Cabinet. Asset management has been reviewd at Policy Overview Scrutiny Committee

1.5 Cross service forum established on property matters

The Corporate Asset Management Group was established with the introduction of asset management (Chaired by the Chief Executive). The CAMG was disbanded and replaced with the Property Board in May 2006. This contains representation from all service directorates.

1.6 Occupiers / users role defined

The property responsibilities of ‘occupiers’ and ‘users’ were defined in the KCC management handbook under the terms of a notional landlord and tenant lease. This has not been reviewed and with the passage of


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time it may be necessary to update and re-circulate it. 1.7 Group to oversee AMP policy & practice / to develop AMP

A team within the Property Group is responsible for asset management policy and practice. Its role is to develop and monitor the KCC property strategy and the AMP, and to measure the performance of the portfolio. The team also provides a capacity to lead or contribute to cross-service or cross-agency projects. Asset management action is delivered through the Estates Management Team, The Property Disposals Team and the Enterprise Fund Management Team which effect changes in the council’s portfolio of property assets in line with corporate requirements.

The Schools Capital Strategy Team within the Children, Families and Education Directorate has responsibility for developing the schools asset management plan and linking this with the corporate property AMP. Other directorates work with the Property Group to integrate their asset planning with the Property AMP through their own property boards; as for example in the Adult Services Directorate Property Operations Board.

1.8 Cabinet Member lead for Property matters3

The Cabinet Member for finance has responsibility for asset management and attends the Property Board.

2 Decision Making & Consultation

2.1 Clearly defined processes for decision making on property matters

The ‘Property Protocol’ which is revised from time to time forms part of the council’s constitution and defines decision making procedures and levels of delegated authority on property acquisitions and disposals. It was last updated Nov. 2006

2.2 Consultation process on the AMP

The AMP does not seek to duplicate consultation processes for corporate and service plans and priorities but rather to use these. In addition there is a simple framework of consultation for the AMP itself which seeks to secure senior corporate, service officer and member engagement on the contents of the AMP. On a more practical day to day level many forms of consultation are used to seek users views such as post-project evaluation, client survey satisfactions etc.

2.3 Views of services, users & occupiers sought

As above views of services, users and occupiers are sought through a variety of mechanisms including post-project evaluations; surveys etc. There are periodic liaison meetings with services through ‘service leads’. Mori studies been commissioned to review property services to schools.

2.4 Public consultation on property matters

There is no direct public consultation on general asset management matters, but public forums on major site specific proposals or projects. The AMP and processes reflect consultation undertaken by the County Council as a whole and for individual service areas.


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2.5 Full member reporting

Asset management matters are reported through to members through a variety of mechanism including local member consultation on property transactions; reports to cabinet on strategic property issues; and through formal and informal briefings.

3 Identifying Property Needs

3.1 Defined aims & objectives for asset management

The council has a defined set of aims and objectives for asset management. These were set originally through the Property Strategy (Managing Property as a Flexible Asset for Service Delivery approved by Members in 19996) and re-confirmed through subsequent property strategies and versions of the Corp. AMP.

3.2 Strategic Vision and goals

The council’s initial strategy was defined in 1996 (Managing Property as a Flexible Asset for Service Delivery). The current version of the Corp. AMP includes a long term vision for the council’s portfolio based on an assessment of the future of public services looking ahead over the long term. It has been written in a style which poses some direct challenges to conventional thinking in order to initiate a dialogue within the council over the future direction for the portfolio and its management.

3.3 Current Corporate Asset Management Plan

The Corporate AMP is approved by the Council’s Property Board. The latest approved version is for October 2006, but the 2007 version is in draft form to be considered by the Property Board. The Corporate AMP provides the strategic context for asset management within the authority, an overview of asset management practice, roles and responsibilities, details of the portfolio and portfolio performance.

3.4 Corporate AMP linked to corporate objectives

The Corporate AMP provides an analysis of the strategic environment in which the council is working and identifies at a high level the asset implications arsing from corporate and service strategies. These implications are amplified through more detailed service asset strategies; service unit business plans and the business and team plans of the Property Group itself.

3.5 Asset needs defined in service plans

Services areas have their own Service Asset Plans which identify the asset implications of service strategies and issues with respect to the portfolio. Different approaches and levels of detail are adopted within each Service Directorate. According to their own needs. .

3.6 Key areas for change (in the portfolio) identified Areas for change in the portfolio are identified through corporate and

service asset management planning and through property review


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processes which challenge the need for and performance of assets. The change areas are articulated as broad themes in the Corporate AMP or property strategy but as individual establishments through supporting policies and strategies such as the Office Strategy or in individual service plans and policies

3.7 Identify options for change areas A broad range of options are identified and presented for defined areas

of change through normal planning processes or in individual policies or business case development.

3.8 Evaluation of change options Evaluation of identified options is normally undertaken as part of

business case development using defined criteria with which to evaluate 9and score) the broad range of defined options

3.9 Commercial portfolio needs identified N/A

N/A – The Council does not have an investment portfolio. (This may need to re-consider this in light of the Enterprise Fund. What are its objectives & financial rate of return targets?)

4 Capital Programme Management

4.1 Option appraisal / prioritisation / whole life costing3 The outline business case provides information on linkages to the

council’s strategic objectives and priorities, service objectives and funding. At the second stage of the approval process PAG receives the detailed business case which encompasses option appraisal, requiring the proposal to be considered against the existing services (where applicable) and assesses the benefits of the desired option compared with alternatives

4.2 Outcome targets for capital spend Outcome targets for capital spend are set through the individual projects

as part of the business case preparations. These targets are identified and expressed as contributions to corporate and service priorities and also form part of the process for evaluating projects for inclusion into the capital programme

4.3 Process for identifying projects2 Service Directorates are responsible for identifying capital projects

needed to meet their needs, for feasibility assessments and development of a funding ‘bid’. Thereafter prioritisation of competing bids and development of the capital programme is undertaken as part of the Council’s overall budget process and through PAG (Project Advisory Group) prior to Member approval.

4.4 Projects assessed using an agreed methodology2 The Council has a methodology to prioritise investment which is related

to its overall policies and objectives. This is designed to ensure that the


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impact of scarce resources is maximised and that a strategic overview of all schemes is maintained. Schemes are included in the capital programme once an outline business case has been approved during the medium term planning process. The outline business case must provide information on linkages to the council’s strategic objectives and priorities, service objectives and funding.

4.5 Authority wide group to oversee programme Project Approvals Group (PAG) oversees the capital programme. This

provides ‘authority to plan / spend’ against capital schemes with an agreed business case and options appraisal. It monitors the overall programme in order to identify and respond to programme slippage. It is attended by the Leader of the Council and the Portfolio holder for Finance

4.6 Process for post-project evaluation Post project evaluations are undertaken on a systematic basis for all

major schemes using a standard template methodology. This process involves the views of all parties (client, consultant, contractor etc.) to identify issues that arose during the project. It is not a substitute for problem resolution during the project life but a mechanism to capture successes and failings to inform future projects

4.7 Post-project evaluation reports + process to learn from evaluations Post-project evaluations are undertaken routinely and reports shared

with clients and consultants as appropriate (both in written form and through meetings). The lessons learnt are systematically used to improve performance

4.8 Some projects completed on time & budget2 All projects are monitored for completion against time and budget.

General performance is good although client variations are a predominant cause for delays or cost overruns.

4.9 All projects completed on time & budget with some exceeding these3 Not all projects are completed to time and budget according to the

definitions used for the NaPPMI indicators. This is in part due to changing client requirements which can lead to either time delays or cost overruns

5 Managing Properties in Use

5.1 Maintenance backlog known and reported to members2 The repair backlog of schools is assessed through a programme of

rolling condition surveys and in the non-schools estate through use of a desk-top assessment using local building surveyor’s knowledge supplemented by latest condition survey data where available. The schools repair backlog is reported to members through the schools AMP and the schools and non-schools backlog to the Property Board and members through the Corporate AMP. The backlog is also reported to members in other forms such as service asset strategies and informal


45

briefings and medium term financial planning. 5.2 Periodic assessment of building condition2 In accordance DfES requirements schools have been subject to a full

condition survey with a rolling programme of re-surveys over a 3 year cycle. Schools not receiving a full condition survey have an annual update inspection. The remainder of the estate has been assessed on a less systematic basis where funds have permitted with additional corporate funding approved in 2006 to supplement service directorate budgets in order to accelerate the programme of condition surveys.

5.3 Maintenance spend prioritised Spend on maintenance is informed and prioritised using condition data

and according to available funds.

5.4 Running cost performance known Running costs data is not available for all operational properties – in part

because the council’s finance system does not treat properties as individual cost centres. Cost data (and hence running cost performance) is generally available for schools, offices and libraries which make up a substantial proportion of the estate.

5.5 Statutory obligations met

The council places a strong emphasis on H & S matters and compliance with statutory obligations. An asbestos policy has been developed, asbestos surveys, DDA access surveys and legionella surveys have all been undertaken and the Property Group maintains a risk register. H & S reporting is a key PI tracked through all commissioned work.

5.6 Targets set for running cost

The council monitors its overall running cost expenditure on property and uses the Audit Commission indicative spend of 8% of annual budget as a broad indicator for comparative purposes. Specific running cost targets are set for different parts of the portfolio (such as the office estate) and for different running costs elements (such as energy); although these are not set on a systematic basis.

5.7 Suitability of buildings assessed

Suitability assessments have been made of all schools as part of the Schools AMP processes. Suitability assessments of the remaining operational buildings were made in 2002. A new programme of assessments of the non-school estate is underway using a revised assessment pro-forma. That data is being entered on the Enterpr1se system.

5.8 Satisfaction with buildings measured

Direct user / occupiers satisfaction surveys on buildings are rarely undertaken. However satisfaction of buildings is measured indirectly through surveys for individual council functions or services area. However in the case of new build or major refurbishment projects client


46

satisfaction with their buildings is measured as part of the post-project evaluation process.

6 Review of Need, Utilisation & Cost

6.1 3 – 5 year profile of capital receipts

A medium term profile of likely capital receipts is maintained as part of the medium term planning process. This provides a profile of likely receipts based on known or likely disposals over a 3 year period. Less certainty is ascribed to estimates for the receipts in the 3rd year in comparison with the 1st year.

6.2 Systematic review programme

KCC has had a programme of reviews for many years. These have operated on a service and area basis. There has also been innovative attempts to identify and release latent value through for example the ‘top sites’ initiative which focussed on those sites with the greatest commercial value. More recently the focus has moved to joint reviews on an area basis with distinct partners or on a multi-agency basis. Focussing on the principal urban areas.

6.3 Criteria to challenge retention4

KCC has developed a challenge methodology which is used as a framework to challenge retention of assets. This draws together all intelligence on individual properties to assess and categorise them according to recommended action (dispose, continued maintenance, change of use, investment potential etc.). Whilst this is not used in a systematic way it identifies the basic approach adopted. The basic philosophy adopted is to ‘justify retention’ rather than ‘justify disposal’.

6.4 Incentives to release property

Over time KCC has adopted both a ‘carrot and stick’ approach to rationalisation and property release. Directorates have in the past been offered a 50% share of net receipts from disposals. The current emphasis has moved to one of challenge supported by mechanisms to expose costs or poor utilisation. For example the possibility of introducing asset rents within the office state to use price as a rationing mechanism and incentive to reduce space is being explored.

6.5 Identification of under-utilisation4

Under-utilised assets have been identified through review processes. In addition for the schools estate capacity and utilisation have been assessed through the schools sufficiency assessments. Within the non-schools the utilisation of administrative space has been scrutinised regularly to bear down on cost inefficiency through under-used space. And targets set for space utilisation.

6.6 Specific organisational focus on property review

KCC has a specific review team which provides a focus on challenging the retention of assets. This acts in addition to normal review processes undertaken through the estates management team including area and


47

service reviews. This team provides a dedicated capacity to ensure the latent value of the portfolio is exposed and released where possible

6.7 Disposal processes monitored

KCC has a specific property disposals team who actively manage the disposal process in order to secure maximum value for the council but also to identify and resolve issues that might cause a potential delay to the disposal process.

6.8 Shared use of buildings promoted4

KCC actively seeks opportunities for shared use of facilities. Shared use of priority of the Kent & Medway Chief Executives under Enhanced Two-Tier working. This has lead to increasing focus on shared facilities both in the operational and administrative estate. Gateways are one specific example of this. Others include a feasibility study into creating a shared public access facility at Whitstable.

6.9 Framework for assessing action in the portfolio3

KCC has had over the years a range of mechanisms to challenge retention or disposals of assets and to identify action with respect to individual buildings. These have typically been associated with property review processes. The council has adopted a ‘challenge methodology’ which is briefly summarised in the Corporate AMP. This is used as the basis for determining action with respect to the portfolio and draws on a wide range of ‘portfolio intelligence’ to identify appropriate action.

7 Data Management

7.1 Inventory and core data available2

KCC maintains core an up to date inventory and core data (name, address, location, area, UPRN etc.). This is maintained for all its properties by the Asset Database Management Team.

7.2 Statement of data needs / priorities

KCC has developed a ‘high level template’ which defines data needs to support asset management and a mechanism to audit data quality (currency, completeness and accuracy). The Asset Database Management Team maintains a ‘road map’ of data needs which summarises data available and development priorities.

7.3 Processes to ensure data quality

KCC has undertaken periodic assessment of data quality through sample checking and cross referencing data held on the main IT systems with other records. For all data sets a procedures reference manual has been developed and is maintained which describes the data updating processes in detail.

7.4 Data sources identified

As above the procedures reference manual identifies the ‘owner’ of data and its originating source9s); along with the procedures for


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maintenance. 7.5 Unique property reference number (UPRN) held for all properties

Each KCC property has an allocated UPRN for use within the Enterprise system. This number is allocated and maintained within the Data Management Team.

7.6 Organisational focus for data management

The Council has a dedicated Asset Database Management team within the Property Group which is responsible for property information. This team is responsible for identifying property data needs, overseeing data collection and data quality (currency, accuracy and completeness). It also is responsible for the property IT systems and their development.

7.7 Non-core data available (cost, suitability etc.)3

The Council’s property data needs and availability are defined in the ‘road map’ of data needs. In general terms the broad range of data required to support asset management is available but there are some recognised deficiencies to be addressed. These are suitability assessments for the non-school estate which are now out of date and running cost data at an individual property level. There is a programme in hand to update suitability assessments for the non-schools estate using a revised pro-forma to collect relevant data. Running cost data is more problematic to collect as individual buildings are not held as cost centres on the council’s financial system. Attempts are made to collect data where available and for specific property types (such as offices).

7.8 Information easily available to users

The property information system (enterprise) is available to anyone who needs or wants access to it. Each user is given training in a structured way to enable them to use the system quickly and easily and to make them aware of the support available. There are currently over 860 registers users of the system, including 650 schools, 165 staff and 30 external users from retained property consultants.

The Asset Database Management team has a member of staff dedicated

to writing reports to extract information from the property database to meet specific information request. These reports are over and above a library of standard reports which can be used by users to extract information.

7.9 IT systems periodically reviewed

The property IT systems are subject to periodic review to evaluate whether they are meeting the council’s needs. The current database was selected following a formal procurements process and its continued development is shaped through review meetings with system users and in consultation with the product suppliers.

8 Performance Management

8.1 Annual performance report produced


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The council has produced a property performance report intermittently since 1999. This separate report was discontinued with a performance review integrated into the Corporate AMP. This was in part because of changes to the property PIs used and partly because it’s full value was not being recognised through a stand alone document divorced from the Corporate AMP.

8.2 Corporate AMP includes all national property performance indicators4

The Corporate AMP includes the national property PIs as amended from time to time. Some absences in data have occurred where it has been difficult to collect data.

8.3 Performance progress reported to members

Performance of the portfolio is reported to members through the Corporate AMP and the Property Group Business Plan. This Business Plan includes data on PIs for both the portfolio and associated professional services and is produced annually and approved by cabinet. The Business Planning process is the main way in which performance data across the council is shared with Members. Performance on individual work streams, such as property disposals; operation of the Enterprise Fund are reported to Property Board which the Council Leader and portfolio holder for Finance attend.

8.4 pPIs related to defined property objectives4

A set of high-level on-going management objectives have been agreed by members through successive iterations of the Corporate AMP and the Property Strategy. These objectives provide a simple framework to which the pPIs are directly related.

8.5 Agreed targets for pPIs4

Property performance targets are set through the Property Board, the Property Group Business Plan and Team and individual Action Plans. Where possible these are set with reference to national standards (such as those identified by the Audit Commission). In other cases practical short and longer term targets are set through discussion with a basic approach of being both challenging but achievable.

8.6 Processes to gather required data for pPIs

Process to gather performance data are well embedded within the organisation. These rely principally on the Information Team, the Project Commissioning and the Corporate Finance Unit. Whilst the processes are embedded it may be helpful to write these up as procedure notes.

8.7 Comparisons on performance made with others

The council seeks to benchmark its performance both nationally and at a regional level. National comparisons are made through the IPF AMP Network; with regional comparisons made through SECAMP (South East Counties Asset Management Group).

8.8 Local pPIs in place


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The council uses a range of local property PIs as a supplement to the national PIs. These were developed initially in collaboration with other authorities and have changed over time and therefore do not provide trend data. There is a need to review these and assess what is useful going forward.

8.9 An improvement plan is in place (informed by performance data)4

Improvement actions are informed by available performance data and reflected through both the Corporate AMP and the Property Group and Team Business Plans. These contain both a long term and short term perspective of actions to improve performance and are also influenced by a range of other data, but principally by client feedback.

9 Partnership Working

9.1 Integrated management of asset base with other public agencies4

KCC initiated in 2002 a joint working RiPE (Renewing and Improving the Public Estate) which had the support of all district councils. This was supported by an exercise to map the public estate in order to identify opportunities for rationalisation, disposal or shared use. Copy of initial concept paper and validation report by KPMG.

KCC maintains a register of all joint working initiatives with the District Councils which is readily available to all.

KCC has undertaken joint area reviews with District councils in order to identify opportunities for joint working. One innovative example has been the production of an AAMP (An Area Asset Management Plan) for Whitstable as a catalyst to identify opportunities for rationalisation of property holdings to promote improved community services through shared accommodation.

KCC participates along with the 12 District Councils and Medway Unitary Council in the Kent Property Managers Group (KPMG) which is a professional and practitioner forum to discuss and resolve issues of common concern.


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Appendix B – The Property Protocol

Introduction

1. This Protocol provides a framework of principles, minimum requirements, levels of authority and delegations to ensure that KCC property is managed effectively to achieve maximum value for money.

Overarching principles

2. A set of overarching principles govern the operation of this Protocol. These are:

(1) All property owned or leased by KCC is held corporately (including KCC-owned schools).

(2) The Director of Property (in consultation with the Cabinet Member for Finance) is responsible for ensuring that the occupation of all KCC property by Directorates is in accordance with best management practice and in the interests of the Council as a whole, with the authority to direct the use, disposal or acquisition of any land or property within the Council’s budgetary framework and decision-making process.

(3) Directorates have discretion to manage the property they occupy in order to promote effective service delivery. However, this discretion operates subject to the corporate responsibilities of the Director of Property, who (in consultation with the Cabinet Member for Finance) has the authority to intervene in property matters to protect KCC’s overall interests.

(4) Resolution of disputes on property matters is through the Cabinet Member for Finance and then, if necessary, the Leader.

(5) All property transactions should be referred to the Director of Property who will consult with the Cabinet Member for Finance and seek the comments of all interested parties, including other relevant Cabinet Members, Directorates and Local Members, before the decision is taken to proceed. All decisions must be taken in accordance with the delegations set out in this Protocol and the decision making procedures set out in the County Council’s Constitution.

(6) This Protocol is organised in sections to reflect the lifecycle of property (acquisition – management in use – disposal) with additional requirements to support specific initiatives and exceptional circumstances.

ACQUISITIONS

3. Objective: To ensure that land and property requirements are appropriately identified and appraised; and that all acquisitions have the necessary authority and funding, including an assessment of the impact on revenue of funding from borrowing.

4. All acquisitions (freehold and leasehold) must be authorised by the Director of Property (following consultation with the Cabinet Member for Finance, the Director of Finance, other relevant Cabinet Members, Directorates and Local Members) either in accordance with the delegations set out in paragraph 33, below, or the decision making procedures set out in the Council’s Constitution.


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Non-Highways Acquisitions

5. For all non-highways acquisitions, the relevant Directorate will provide the Director of Property with:

(1) A definition of the service requirement giving rise to the proposed acquisition

(2) A full financial appraisal of options for meeting service delivery requirements (developed as appropriate with support from the Property Group and in accordance with the Project Appraisal Handbook)

(3) An evaluation of the potential (if any) for joint use

6. The Cabinet Member for Finance will be consulted on all proposed acquisitions and kept informed of their progress and will determine if s/he or an officer will give approval for the acquisition. The Cabinet Member for Finance may at any stage direct that a decision be referred to him/her.

7. Where the Cabinet Member for Finance has determined that s/he will take the decision on a proposed acquisition, the matter will be dealt with in accordance with the appropriate provisions of this Protocol and decision making procedures set out in the Council’s Constitution. Local Members and the Cabinet Scrutiny Committee will be sent a copy of the officer report at the same time as the Cabinet Member for Finance, so that they may comment to the Cabinet Member for Finance if they so wish.

8. Subject to paragraph 12 below, the use of compulsory powers for acquisitions must be agreed by both the Cabinet Member for Finance and any other relevant Cabinet Member(s).

Highways Acquisitions

9. The Managing Director for Environment & Regeneration will, in the case of all highway acquisitions, seek Local Member views as part of the consultation process for highways and traffic schemes.

10. Highways scheme design and cost (including land acquisition) shall be approved by the Cabinet Member of Environment, Highways & Waste and the Managing Director for Environment & Regeneration (or officer authorised by him/her), after considering the views of the Project Advisory Group (PAG).

11. Highways acquisitions may be made by the Director of Property in consultation with the Cabinet Member for Finance provided the scheme is in an approved programme or falls within blight policies.

12. All other highways acquisitions (i.e. land not incorporated in the highway) will be referred by the Director of Property to the Cabinet Member for Finance, who will determine if s/he or an officer will give approval for the acquisition. Once the principle of acquisition of land is agreed, any decision whether or not to use compulsory powers will be decided by the Cabinet Member for Environment, Highways & Waste in accordance with the terms of this Protocol and the decision making procedures set out in the Constitution.


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MANAGEMENT & USE

13. Objective: To ensure that property is used efficiently, effectively and economically with due regard to legislative requirements; and that when it is no longer required for operational purposes it is formally declared surplus, at which point its management reverts to the Director of Property, and the budgetary implications of this are identified and reported to the Cabinet Member for Finance.

14. The occupation and use of property by a Directorate is subject to the authority of the Director of Property (in consultation with the Cabinet Member for Finance) to approve all material changes to property, including change of use, appropriations, granting/taking of interests, reversion to operational use, alterations or additions. Such changes must be reported to the Director of Finance for correct accounting treatment and apportionment of charges.

Premises Management

15. The Director of Property has the authority to undertake reviews of the property portfolio, or parts of it, to determine if it is optimised in terms of its utilisation, cost and value and within this to challenge the retention or use of existing properties occupied by Directorates.

Building works

16. Major capital works for properties should be subject to a formal project appraisal and should be consistent with existing financial approval and procurement processes.

Health & Safety

17. Staff are required to ensure that in respect of all property matters all obligations under health and safety legislation and KCC health and safety policies are followed.

DISPOSALS

18. Objective: To ensure that land and property surplus to operational need is either reallocated to meet alternative needs or sold in line with statutory requirements and/or KCC policy.

19. Directorates will notify the Director of Property of:

(1) Any property (or part) that is:

(a) Vacant

(b) Held against a future operational need

(c) Not used for the principal purpose for which it is held

(d) Likely to be surplus to requirements (with estimated time-scale)

(2) Any operational issues associated with such property (e.g. longer term requirements)


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(3) Any statutory/process issues relevant to its disposal (e.g. established consultation processes, reference to the Secretary of State, etc)

(4) The recipient of the capital receipt and its intended use, as agreed with the Cabinet Member for Finance and the Director of Finance

(5) Any other issues which need to be considered prior to disposal

20. The Director of Property may identify any property (or part) that s/he considers is, or could be made, surplus to operational requirements.

21. The Director of Property will consult with the Cabinet Member for Finance on all disposals and inform him/her of the comments of Local Members. The Cabinet Member for Finance will determine whether s/he or an officer will give approval for disposal in accordance with this Protocol and the decision making procedures set out in the Council’s Constitution.

Treatment of Capital Receipts (Rules and Processes)

22. Capital receipts from disposals are deemed to be ‘Earmarked Capital Receipts’ or ‘General Receipts’.

(1) Earmarked Capital Receipts – are proceeds from the sale of an identified (named) site (or number of sites) to be used for the funding of a specific scheme (or number of schemes); where the schemes are intrinsically linked

(2) General Receipts are where receipts are not intrinsically linked (generally non-operational and surplus land and property), and they are applied to the overall capital programme, including reducing the impact of revenue and reinvestment through the Enterprise Fund.

(3) All receipts are agreed through PAG with no assumption on application to particular schemes

23. Use of capital receipts are subject to the following rules:

(1) Overspending on schemes dependent on receipts must be contained within the portfolio

(2) Capital schemes dependent on receipts are included in the Capital Programme only after full vetting and valuation signed off by the Director of Property prior to consideration by PAG

(a) All dependencies, assumptions and risks to be clearly identified by the project sponsor leading to prudent valuation adopted in project sign-off

(c) Values cannot be guaranteed – dependent on market conditions and uncertainties of planning consents and Local Development Framework (LDF) allocations

(d) Scheme assumptions re quantum, timing and phasing of receipts to be explicit. Receipts cannot be “counted” until sales complete

(e) Monitoring will be undertaken by PAG with Property using a traffic light system to assess the level of risk around the receipts

(f) Market risk receipts emerging to be contained by the portfolio budget


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24. The process for planning for the realisation use of capital receipts will take a medium term approach (3 years minimum) to allow:

(1) Property to be able to work on projects in good time prior to consideration by PAG. Larger, complex schemes can need 12-24 months lead-in

(2) Property to agree strategy for disposal including timescale, planning, marketing, viewing arrangements, temporary occupation, minimising holding costs, surplus declarations etc as core components of project justification to PAG

(3) Directorates must deliver vacant possession when required by project plan

(4) Risk analysis to be included as part of project plan

SPECIAL PROVISIONS

Kings Hill

25. All decisions relating to the acquisition, management and disposal of land or property at Kings Hill shall be dealt with in accordance with this Protocol and the decision making procedures set out in the Council’s Constitution by the Cabinet Member for Policy and Performance and the Managing Director of Environment & Regeneration.

Enterprise Fund

26. All transactions (acquisitions and disposals) undertaken through the Property Group ‘Enterprise Fund’ will be supported by a business case containing as a minimum:

(1) Details of the proposal

(2) The rationale for making the investment (against the agreed investment criteria for the Enterprise Fund, which may be varied from time to time)

(3) Specific objectives to be met

(4) The cost or income to KCC (revenue and capital)

(5) The opportunities to be gained

(6) Any return on investment

27. All transactions coming within the Enterprise Fund balancing limit of £10m may be authorised jointly by the Director of Property and Director of Finance in consultation with the Cabinet Member for Finance, the Chief Executive and the Leader (subject to the delegations contained in paragraph 33).

28. All transactions which cause the Enterprise Fund to exceed its balancing limit of £10m will, following consultation with the Chief Executive and the Leader, be recommended by the Director of Property and Director of Finance for decision by the Cabinet Member for Finance.


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Urgent Decisions

29. In exceptional circumstances, where an urgent decision is required on property matters, this will be taken by the Director of Property in accordance with the provisions of this Protocol and only after consultation with the Cabinet Member for Finance, the Director of Finance and the Director of Law & Governance. If the matter is outside the delegations set out in paragraph 36, below, then the matter can only be authorised by the Cabinet Member for Finance in accordance with the procedures for the taking of urgent decisions set out in the Council’s Constitution.

30. Any decisions made under the ‘Urgent Decision’ arrangements will be reported to the relevant Managing Director, Cabinet Members and Local Members.

Financial Regulations

31. All of the protocols set out in Financial Regulations and Schemes of Delegation must be adhered to, except where this Property Management Protocol specifically provides for alternative levels of authorisation. No transaction should be approved unless specific budgetary provision is identified, except where the purchase is approved under the authority given in Paragraph 28 above.

Reporting

32. The Director of Property will prepare each month a schedule of acquisitions and disposals dealt with by the Cabinet Member for Finance or by him/herself, and send this to Democratic Services for publication.

Delegation to Officers

33. Subject to the consultation provisions set out in this Protocol, the Director of Property is authorised to:

• Determine and settle the acquisition or disposal of any land or property, or an interest in land or property where the consideration (including any associated works) does not exceed £1,000,000 in any single transaction.

• Determine and settle the terms of a lease (taken or granted) for any land or property, not exceeding a period of 20 years or where the consideration does not exceed £100,000 per annum in any single transaction.

• As provided by arrangements made under Appendix 2 Part 4 of the Constitution for the Leader to discharge executive functions, the Chief Executive may exercise any power delegated under this protocol to the Director of Property; and the Director of Property may delegate his/her powers in writing to more junior officers.

Supporting Mechanisms

34 Whilst having no Constitutional or decision-making status, the management of property will be exercised through a variety of mechanisms which amplify and support this protocol. The key mechanisms and their purpose are summarised below:


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• Property Board chaired by the Chief Executive provides a forum to discuss and agree the strategic direction for property management and key property related initiatives. It provides a mechanism to assess whether this protocol is working in practice and to identify and resolve issues with regard to corporate and service responsibilities.

• Project Advisory Group (PAG) considers capital projects and significant changes to capital projects and ensures that proper planning and processes have been followed and risk assessments undertaken in line with the Council’s Constitution, the project appraisal handbook and associated financial procedures. It makes recommendations to the Leader for schemes to be included in KCC’s capital programme.

• Property Group Business Plan prepared in accordance with KCC’s planning guidelines identifies the main priorities of the Property Group and includes as an annex a schedule of properties for disposal. This provides delegated authority to proceed with disposals in line with the provisions of this protocol.

• Medium Term Financial Plan sets out KCCs spending priorities and/or financial allocations over the medium term. All capital schemes are subject to the appraisal and decision making processes around the Capital Programme and the Medium Term Financial Plan.

Information to the Council and Scrutiny

35. The Director of Property will prepare each month a schedule of property transactions dealt with by the Cabinet Member for Finance or him/herself, and send this to Head of Democratic Services for publication.

36. Transactions proposed to be authorised by the Cabinet Member for Finance are subject to the normal processes of publication and scrutiny for Cabinet Member decisions.

Approved by Full Council

November 2006

Corporate Asset Management Plan · Property Asset Management Plan 2 Introduction Purpose and Scope...

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