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.

1. Condition and Inspection Surveys on a five year 'rolling' programme, either by staff or appointed consultants.
2. '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.
3. 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.
4. Compliance with Tenancy/Lease Conditions, particularly regarding repair and maintenance obligations.
5. 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.
6. 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.

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

Back to: Strategic Decision-taking

• Introduction and Mission Statement
• Strategic Background
• Strategic Direction
• Strategic Context
• Strategic Analysis
• Strategic Decision-taking
• 2007/11  Asset Management Plan
• Monitoring and Performance

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