Agenda item

The Head of Asset Management gave a presentation regarding a proposed mandate to review the Council’s operational property portfolio.  The presentation introduced the mandate and explained that the rationale behind its development was that the review had been identified as one initiative in the Council’s Savings Strategy which sought to generate revenue savings required to reduce the Council's cumulative budget deficit of £6.0million over the next 5 years.  This was an overarching programme level review and underlying projects would be subject to their own individual project mandates.

This mandate followed the standard mandate format and the aspects addressed included those set out below:

·             Strategy

·             Options Evaluation, Considerations and Resources

·             Potential costs to proceed to the next stage to develop the Strategic Outline Case

·             Issues and assumptions

·             Risks and dependencies

·             Constraints and opportunities

·             Likely projects

·             Reviewer list

In terms of strategy, a full review of the Council's 250 operational assets and office accommodation would be undertaken in order to identify any rationalisation and revenue savings opportunities, in conjunction with other savings initiatives and service changes being carried out across the Council.  Covid-19 had accelerated a review of the use of the Millmead House complex due to the new and accepted home-working culture which had subsequently led to the Council's reduction in its office space requirement and created an opportunity to save significant revenue costs and potentially generate capital receipts.

The options evaluation offered three alternative potential ways forward regarding assets, namely, do nothing, do minimum or do more.  All of these options were green rated under the RAG system as they could pose a solution for a particular asset.  This would depend upon whether the asset was fulfilling its purpose in line with service requirements, was redundant or underutilised accommodation suitable for sale / leasing / transfer, or could offer opportunities for redevelopment or alternative use.  It would be necessary for Asset Management to collaborate closely with discretionary services when reviewing assets.

Considerations included the assumption that savings achieved in some discretionary service areas would not be included in this programme in terms of costings and savings and would not therefore contribute to the Asset Management savings target of £1.5million net revenue savings, which would be refined as the review progressed.  However, Asset Management would have regard to the outcome of discretionary services reviews.

Potential resource costs to progress to the next stage / gate and develop the strategic outline busines case would include those associated with internal staffing and specialist external consultants for ICT development work to the Property Asset Database.

The issues and assumptions and the risks and dependencies were also explained.

The likely projects forming the programme consisted of office accommodation, community centres and Stoke Park Nursery.

The following points arose from related questions, comments and discussion:

1.           A Councillor expressed the view that the Council’s operational property portfolio should be reviewed more widely than from a purely financial perspective to take account of the Council’s property requirements to meet the needs of residents overall.  This should include consideration of possible alternative uses of redundant or underutilised property prior to disposal, such as social housing provision for rent, for which there was considerable demand in the Borough.  In response, the Head of Asset Management advised that the current strategic programme work sought to capture all asset opportunities whilst related risks and liabilities were being explored for sites with redevelopment potential, including housing, which would be progressed at the project level.

2.           Owing to the uncertainty surrounding the property market following the Covid-19 pandemic, difficulties could be incurred when assessing the level of potential savings which could be achieved via the programme.

3.           The Government’s consideration of the possible expansion of permitted development rights could be beneficial to the Council when deciding the future use of assets.

4.           There was experience of a growing need for local charities to secure new premises due to the expiry of existing leases, the need to expand owing to increased demand or the sharing of facilities to increase efficiency and possibly create an accessible central hub.  Accordingly, it was suggested that the review should consider releasing redundant or underutilised property for this purpose where feasible.

5.           The need for improvements to the system for booking Council owned facilities, such as community halls, was raised as a means to increase income generated by the property portfolio.

6.           Whilst staff accommodation was not a statutory requirement, it was linked to the relevant service, for example the Millmead House complex included on site accommodation for a caretaker in Riverview Lodge.  Some staff accommodation had been sold in recent years and the future of each unit was considered on its own merits in the light of property condition, links to the related service area and existing contracts in place.  Right to Buy was also a consideration in relation to staff accommodation.  Ward councillors would be consulted regarding future decisions in respect of staff accommodation at the project level.