Asset Management Strategy 2007 - 2011
5.0 Strategic Analysis
The cost of owning and managing property is substantial;
it needs to be closely managed in the interests of
efficiency. To take well informed decisions, the Council
needs to gather, collate and maintain good statistical information
about its property. In basic terms, this must include a
recent valuation, important because property value is rising, and
is also needed for the Council's Balance Sheet. The other key
statistics will be obtainable by a planned survey and
inspection; the costs of executing necessary repairs can then
be budgeted for.
Finally, in terms of economic contribution, up to date
information on rents, lease and licence income received (along with
any debts to be pursued) must be rigorously maintained. None
of this is possible without data management.
5.1 Property Database
The Council has a plethora of available information, but it is
not integrated. The Schedule of Properties, 'The Terrier', is
paper-based, whilst the Estate Management information on Leases and
Conditions is electronic - the 'Estate Man' software system. This
software is not presently linked to the Council's financial system;
CEDAR. Information technology advice indicates that a link is
technically possible, but will require considerable work and some
investment. Finally, a Survey of Repairs is held on a third
system.
As a starting point, 'The Terrier' needs to be held on GIS
(Graphical Information System). This will make amendment and
maintenance much simpler and easier to use. Next, as a second
priority, the existing systems for holding information need to be
integrated. Options will be considered, but the 'Estate Man',
subject to agreement from the IT section, does appear to be the
most sensible way forward.
Once the Council has the benefit of an electronic database, it
can put in place the mechanisms for maintaining data. This
needs to happen in respect of the following subject matter.
- Condition and Inspection Surveys on a five year 'rolling'
programme, either by staff or appointed consultants.
- 'Rolling' programme of valuations, again to be conducted by the
Council's own qualified surveyors or, in specialist areas like the
Port or Theatres, by external specialist consultants.
- In terms of income-generating properties, details of the
lease/rent/licence payable in order that maintenance of payments
can be pursued, with interventional action taken at target
levels. Obviously, this data must link directly to Financial
Services and Debt Management.
- Compliance with Tenancy/Lease Conditions, particularly
regarding repair and maintenance obligations.
- Maintenance Contracts – these recurring obligations,
particularly on infrastructure like clifftop lifts or maintenance
of community assets like public clocks, must be programmed and
correctly carried out. The public notice very quickly if the
obligations are not maintained.
- Equality and Diversity is justifiably an objective of the
Council. It is also relevant to the subject of Property
Management because Council owned buildings to which the public have
access should all be of full mobility standard. Sadly, we
know that in Thanet this is not the case. Despite statistical
evidence confirming that our resident population is of age profile,
with morbidity ratios, etc. indicating that full accessibility is
important, standards enabling those with a disability to enter
Council-owned properties are not satisfactory. The Council
urgently needs to improve its performance in this area.
Indeed, the Extended Management Team has committed itself to
achieving 100% compliance before 2008/2009. Progress will
need to be quick, and it must be monitored.
5.2 Repairs and
Maintenance
The Council has an estimated £2.5 million deficit of repairs on
its property portfolio. This figure is not based on a
detailed survey, but on a sample survey. It was reported by
the East Kent Internal Audit Partnership in its report of April
2006. Because the Repairs Budget is less than £1,000,000 a
year, much of which is allocated to routine/planned maintenance, it
is self-evident that the repair deficit must be reduced quickly -
the most efficient method being to dispose of those properties in
worst repair (banded 'Poor') not needed to achieve the Corporate
Plan or/and fulfil operational service.
The framework for achieving this reduction is the integrated
property database as explained above. Surveying resources are
being found to design a five year 'rolling' programme of surveys,
compare this with existing records and thereby ensure that funding
is apportioned to properties on the basis of cost benefit analysis
– the fundamental need being to move repair funding away from
reactive to pro-active allocation. In doing this, survey will
result in categorisation of all properties into three repair bands,
these being Good, Average or Poor. The table below shows
broadly how Surveyors will classify properties.
|
Good
|
Routine maintenance only, including planned redecoration.
Minor expenditure only.
|
|
Average
|
- some work required to prevent fall into 'Poor'
classification;
- either urgent, and of scale <£10k, or <5k and needed
within three years;
|
|
Poor
|
- not compliant with Access Standards;
- uncompliant with Statute Law (including Listed Buildings,
electrics, asbestos etc.)
- major energy efficiency weaknesses;
- visible internal/external disrepair.
|
For various reasons repair surveys are in arrears. The
only method of remedying this position, and thereby enabling the
property database to be restored is to invest in appointment of
specialist consultants to assist in revision of existing systems,
to achieve integration of the terrier, validations and repairs
surveys (costs) on the same electronic system.
Once in place the Council will systematically review the asset
register, focussing on the classification, condition and usage of
each property to inform decisions on repair, alternative usage or
disposal.
Particularly attention will be paid to property which:
- from the repairs survey, is banded as poor
- is classified as non-operational, but of nil, or limited income
generation.
This assessment assumes that the Council will maintain its
operational properties in, at worst, average condition. With
any deleterious conditions resulting in a banding of poor
attributable to damage covered by insurance.
The objective into the medium-term of banding properties by
repairs is that the Council moves towards holding all of its
property in a good or average banding.
Integration of data will allow collection of running costs on a
property specific basis. Thus each building can be recognised as a
cost centre enabling performance on energy efficiency, and water
consumption to be monitored. In terms of carbon footprint
civic buildings, especially facilities like swimming pools and
sports halls will also be monitorable. This is important
because these type of buildings are potentially huge consumers of
energy. Trend lines in performance will guide investment
decisions.
The purpose of establishing an electronic, current database, is
to embed decision taking based on known costs and statistics.
5.3 Required Resources
With reference to the Organisational Structure outlined in this
Strategy, it is apparent that the Council has an Organisational
Structure capable of taking innovative action to release and
extract value from its Property Portfolio. Ongoing
development, involving innovative approaches and community
engagement, include the former allotments at Manston Road, Ramsgate
and the pending scheme of joint disposal at Eurokent but there is
not capacity to carry on this work whilst at the same time
assembling and maintaining the database we need as the bedrock of
strategic delivery.
Considerable investment is needed in catching up on property
surveys in arrears, valuations in arrears and provision of an
integrated electronic property database. The solution is not
to employ more staff, increasing the establishment and the Revenue
Budget cost base of the Council. Instead, a substantial but
nonetheless essential and invaluable investment in setting up the
framework for future delivery is needed. The one-off cost
will be £250,000. From this sum separate contracts will be
placed with technical specialists on property surveying, property
valuation and software management – the latter working closely with
our own IT section. Our property database must be integrated
with the Thanet Suite.
The provision of £125,000 is allocated and being spent during
2007/08. A similar sum is identified for 2008/09.
Next: Strategic Context
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Decision-taking