Agenda item

Damien Wilson, Strategic Director Regeneration and Environment, and Louise Murray, Strategic Asset Manager, to present

Councillor Lelliott, Cabinet Member for Jobs and the Local Economy,  introduced this item stating that Asset Management had previously been under the guidance of the Commissioners but was now back in the control of the Council. The information to be presented was all included in the Asset Management Improvement Plan which were the combined results of the independent review undertaken by CIPFA and the recommendations put forward by the Commissioners

 

Paul Woodcock, Assistant Director Regeneration, Planning and Transport along with Louise Murray, Strategic Asset Manager, gave a presentation on Asset Management to the Commission.

 

The story so far…

•        Corporate Property Unit provided professional advice and managed some assets.

•        Holding Directorates managed some assets and their budgets.

•        Decisions made could be Directorate/Team focused and not to wider benefit of Council.

•        CIPFA Property Health Check recommended adoption of Corporate Landlord and creation of Strategic Asset Management function.

 

The position now.

•        All Council land and property were viewed as strategic assets – service and community need considered alongside property issues.

•        An Asset Management Plan was almost complete – Policy, Strategy and Action Plan.

•        One Public Estate and partnership working was underway.

•        Service Asset Management Plans and Service Level Agreements were in place.

 

The Improvement Plan.

•        17 over-arching improvement recommendations derived from Health Check.

•        Ranging from governance to a restructure to the creation of a comprehensive Asset Management Plan.

•        Monitored at Asset Management Board and reported to Cabinet.

•        Recent recommendation for return of powers – awaiting final confirmation.

 

OUTLINE STRUCTURE

 

The Asset Management Team

Comprises a Policy, a Strategy and an Action Plan and five main policy objectives:

1.     Enabling delivery of Council’s services and priorities.

2.     Supporting economic growth, housing growth and town centre regeneration.

3.     Maximising opportunities through adoption of One Public Estate.

4.     Developing growth income through commercial/non-operational activities.

5.     Maximising commissioning opportunities for property projects and services.

 

TEAM Structure

 

The Reviews

•        Operational Property Review – includes 248 varied operational properties; based on SAMPs, strategy, condition survey outcomes and action plan. Completion date - 31^st March 2018.

•        Commercial/non-operational Property Review – includes 232 varied assets; based on condition survey outcomes, let ability and investment return. Completion date was 30^th September 2017 through this would be extended as condition surveys had only recently commenced following identification of funding.

 

The Outcomes

•        Reviews would enable rationalisation of portfolios leading to release of assets and also savings.

•        Contributes to housing and economic growth.

•        £2.32m capital receipt in 2016/17; £1.17m so far this year against a £2.0m target.

•        Revenue savings of £780,000 (2014/15), £284,000(2015/16) and £664,000(2016/17)

•        £612,560 so far this year against a £1.178m target.

•        Next year, the target was £594,000.

•        Rigorous asset challenge and Directorate co-operation would be key to achieving stretching target.

 

Other Improvement Points

•        Property Maintenance Review and Compliance.

•        Review of Soft Facilities Management.

•        Facilities Management provision to Academies.

•        Review of Internal Fee Recharging.

•        Constitution and Scheme of Delegation.

•        Performance Management.

•        Data Management.

•        Directorate Engagement.

•        Corporate Profile and communications.

•        Staff training.

 

What are we doing differently

•        Increased internal engagement – via AMOG/AMB and with service representatives.

•        Strategic working with Directorates to ensure optimum outcomes.

•        Closely working with Housing and RiDO to help deliver housing and economic growth.

•        Supporting revenue savings and capital receipts targets through rigorous asset review and challenge.

•        Improved Member and community engagement.

•        Decisions made in line with approved Policy.

 

 

 

The Future

•        Increased engagement with Members and all internal/external customers.

•        Completion of reviews leading to strategic rationalisation of the estate.

•        Implementation of a planned, preventative maintenance plan.

•        Identification of sites to facilitate housing and economic growth both owned and acquired.

•        Increased partnership working.

•        Generation of growth income through investment acquisition.

 

Damien Wilson noted that the health checks had provided confirmation that the Asset Management Service was fit for purpose and assurances that all the associated risks with the Service had been identified. The Council carried out the management of assets well but had not got the balance of resources correct to provide a comprehensive service. This was confirmed by the return of powers to the Council.

 

The future of working to the Corporate Landlord model was very important and how officers bought into this idea. The Corporate Landlord message needed to be shared through the Council.

 

Assets needed to be viewed as what they were and not what they were being used and to also keep potential uses in mind for the asset and the potential yield it could bring. This message needed to be shared and understood across the Council.

 

Services provided by the Council should not dictate how buildings were used but instead the use should be governed by the landlord/tenant relationship.

 

The Council’s assets were a finite resource. If assets were disposed of then that income could potentially be used to acquire buildings which would generate a rental income stream for the Council at zero cost to the rate payers.

 

Examples of such projects included:-

 

TECentre, was acquired with funding from Sheffield City Region and would provide an income stream.

 

Beighton Link Project which was business units funded using finance from the private sector, JESSICA funding with underwriting by the Council. There was a shared risk associated with this project which reduced over three years when the likelihood was that the units would be occupied providing local people with employment and a rental income received by the Council.

 

A change in culture was required to fully adopt the corporate landlord model, but this model would encourage Ward Councillors to get more involved in Council-owned buildings in their area.

 

Councillor Reeder raised the issue over lack of maintenance by the Council on the properties in its ownership. An acknowledgement to this fact was made and that it was not specific to Rotherham Council. This was a short term outlook and one that needed to be redressed. The results of the conditions of the building would be provided on the completion of the condition survey, which would result in an Investment Plan being produced. Buildings would be prioritised firstly from a health & safety perspective to if the building could be transferred to the community. 

 

Councillor McNeely asked for confirmation of when the operational and condition surveys were to be completed and noted that empty properties cost the Council money. The surveys would be completed by the end of March 2018 and information relating to the cost to the Council on empty properties would be provided.

 

Councillor Atkin asked for confirmation on the “Right to Buy” initiative, but this only related to homes in the Borough and not community buildings. The presentation mentioned Estates and Valuation both of which were technical areas of work and provided assistance in relation to all Council-owned properties and not just Housing. 

 

The point was made about there being more than one Town Centre in the Borough and all of the Town Centres should be considered when work was being considered or that there were employment opportunities coming forward.

 

Discussions took place around let ability using a property at Fir Close as an example, which was losing £8,500 per year. Hire of the property was charged at £18 per hour but was considered too expensive for small community groups to pay. Councillor Atkin suggested that it would be better to have some income rather than no income from the hire of the building.

 

Damien outlined what let ability meant with the bottom line of there being a minimum hourly cost necessary for the Council to keep the building staffed and operational. There was an increased need to look at the full cost of recovery for the use of buildings. Councillor Lelliott stated that the points being put forward as an issue would be discussed at the Asset Management Board.

 

The Chair offered the suggestion that organisations such as Voluntary Action Rotherham and RotherFed may be able to help support groups who wanted to meet.

 

A proposal was put forward to holding a seminar for Members on the topic of Let ability to promote a better understanding on the topic.

 

Damien Wilson stated that a report was to be submitted to Cabinet in October in relation to Swinton Town Centre and the opportunities currently available. There was a need to look at the assets owned by the Council in all of its Town Centres to provide employment opportunities. The Council was now assembling land, buildings and creating a vision for Rotherham. Along with the Masterplan and the Supplementary Planning Document, Rotherham Borough would be of interest to developers who wanted to come to the area.

 

Councillor Walsh was encouraged by the presentation on Asset Management but noted the action to Review Internal Fee Recharge was amber in the ratings. Corporate Landlords charged fees to service providers and there was a potential to develop an empire. Councillor Walsh suggested monitoring this element.  Damien explained the reason behind this action. Historically charges for work had been higher for services in order to meet an inflated income target. This was an attempt to look at charges and therefore make it more competitive in the open market. A response in relation to the internal recharges was awaited from Financial Services.

 

Councillor Cutts concurred with what had been said about the increased interest in Rotherham. There was a greater responsibility to recognise and utilise our assets.

 

There were now only three football pitches on Herringthorpe playingfield but the grass on the whole field still needed to be cut. This area was currently in the Masterplan. If all the pitches were not used then less income was received. Under the current budget proposals managing how the Council used its assets was under close scrutiny.   

 

Investors are now looking to Rotherham at what land was available. The Forge Island site would be shortly going to market with the Council undertaking a specification for its potential uses to maximise the potential benefits it could bring to the town. Domine Lane was also being considered in relation to the Forge Island site. The Council was in communication with property owners in the areas surrounding Forge Island to get the best possible outcomes for the area in terms of the Town Centre Masterplan, however, not all property owners were interested in releasing land.

 

A planning application has been received by the Council from a private source relating to Westgate for 47 apartments along with a commercial element.

 

Sheffield Road was part of land assembly and the Council was in discussions with the Royal Mail regarding their site on Westgate/Sheffield Road.

 

Other smaller businesses owned land in that area which was preventing a land assembly project coming together.

 

Councillor Reeder asked a question relating to the derelict building on Corporation Street and whether or not business rates were applicable. Business rates were applicable unless there was an exemption on the building. The Council had limited powers in being able to deal with this building as it was in private ownership. A Section 215 Notice had been served and a charge has been put against the property.

 

Councillor Jones pointed out that the issue of recharging between Services only created an extra cost called “on costs” which in reality employed two people, one to issue the cost and one person to accept and log the payment. Councillor Jones continued that there were buildings within the Borough which were in a bad state of repair. Decisions needed to be made as to the best use of those buildings. If they were to be sold then the money could be used to re-invest in the Council’s remaining properties. The standard of the remaining buildings needed to be examined.

 

Many local groups were looking at Community Asset Transfer as this was an opportunity, with the assistance of funding e.g. Lottery Funding, to refurbish the buildings for use by local groups, with ownership remaining with the Council.

 

The Council was happy to work with Local Councillors to improve the way Asset Management was undertaken.

 

Co-opted Member, Lillian Shears, noted that groups needed to look at the running costs of the buildings. High costs could result in groups folding.

 

A paper was circulated by Lillian Shears in relation to the piece of scrutiny work on repair appointment, communication process and the customer journey by RotherFed.

 

In answer to Councillor Albiston’s question on knowing when a building was fit for purpose, this was agreed on at the Asset Management Board after a survey has been completed.

 

Discussions took place around encouraging Directorates in the Council to work together strategically. This was the role of the Asset Management Board which was responsible for all the operational buildings in the Council’s ownership.

 

Concerns were raised by Councillor Albiston as to how investment could be made into the poorer communities and the ethos of Asset Management not turn into a postcode lottery. How could the Council invest in the poorer communities? Councillor Albiston added her support to the Community Asset Transfer.

 

The Council needed to be clearer to the community on what was available. There was concern with regard to the offloading of buildings to community group who then invested time in running a building rather than providing services. The approach of the Council should be to be involved with working with community groups.

 

Full cost recovery was supported – there were some services that may not warrant charging full costs because it was due to the social benefits the service provided; a balance was required between economic and social benefits.

 

Through the Asset Management Board the Council had a more strategic overview of the buildings and the quality of them in its ownership. A business plan would need to be prepared for any new potential use of buildings to be approved by the Asset Management Board and ultimately Cabinet.

 

A process was in place regarding the transfer of community assets to community groups.

 

Damien Wilson undertook to ascertain the number of buildings had been transferred to community groups under the Community Asset Transfer scheme.

 

Each Directorate needed a strategic approach to its Service directory need which informed the Corporate Landlord function.

 

In moving forward, the Strategic Asset Management Plan presented both risks and challenges. Suggestions put forward for savings may not be acted upon due to Elected Members having other views.

 

Savings targets had been identified against these properties. The final decision about the properties rested with other Directorates within the Council, however, this placed a pressure on savings target.

 

It was a postcode lottery as location did impact upon property value. Certain areas were more proactive and encouragement was given for the Council to work with the community and voluntary sector to improve the capacity of the residents.

 

Councillor Jayne Elliot would prefer to see when services/people needed to be relocated that this was completed with fewer moves as possible.  Damien Wilson stated that in previous years the services had suffered from lack of investment and lack of management. The new structure included management and ownership by the Director and Cabinet Member.

 

Paul Woodcock highlighted that over the next two years, significant revenue savings have to be achieved. The current position was that the Council could not afford to run the amount of buildings in its ownership.

 

There were limited funds available for maintenance of buildings and the results of the condition survey would require significant decisions from the Council.

 

Other recommendations were in the Asset Management Improvement Plan