ITEM NO: 7

Report To: STRATEGIC PLANNING AND CAPITAL MONITORING PANEL

Date: 30 June 2014

Reporting Officer: Elaine Todd - Assistant Executive Director (Asset Management and Investment Partnership)

Subject: CORPORATE ASSET MANAGEMENT PLAN UPDATE

Report Summary: The attached report is intended to update members of the Board Capital Panel with progress on the disposal of the Council’s surplus assets, anticipated capital receipts that will be realised and investment that is required to maintain those buildings being occupied and retained or dilapidations arising from the termination of leases.

Recommendations: That Strategic Capital Members note the contents of the report and approves : a) The allocation of £159,411 to carry out the works detailed at paragraph 2.4. b) That a replacement boiler to service both the school and recreation centre be purchased in the sum of £120,000.

Links to Community To support the delivery of the objectives of the Community Strategy: Strategy.

Policy Implications: Expenditure in line with financial and policy framework. To assist in delivering a balanced budget and support the sustainability of the local economy.

Financial Implications: Substantial work has been undertaken to vacate, market and dispose of a number of buildings, however, the allocation of £4

million budget reduction to the corporate landlord together with increased costs of utilities, business rates and backlog maintenance which are not provided for, means that the vacation of buildings needs to be escalated in order to deliver a balanced budget. Where leasehold properties are disposed of, the corporate landlord will have a reduction in the income target specifically for that asset. It is recommended that close monitoring of the capital receipts projected and realised is continued in future financial years. Prior to the final approval of capital allocations all other funding options need to be exhausted including potential for insurance claims.

Legal Implications: The challenge to the Council is to ensure that its estate makes an effective contribution to improving the Council’s financial and

business performance; the service delivery agenda; resolving the pressure on demands for estate capacity; and achieving change with minimal capital expenditure. We need to ensure that the buildings we need are fit for purpose and congruent with strategic service delivery. The major financial challenge is placing innovation and productivity at the heart of our efficient and effective delivery and the need to deliver better outcomes with less and consequently there is a major challenge to achieve change through improving the productivity of the Council’s estate. This challenge requires a response that benchmarks productivity, critically evaluates estate utilisation and develops low cost capital solutions to service change. Securing change within current circumstances is not easy. It’s as much about ‘hearts and minds’ as buildings. We need to focus on the service and outcomes being provided and not the building from which historically the service was delivered historically been provided from. The key to effective securing and delivering change is a process that ‘gets the right answer’ for the community and the services we deliver. It is recognised that good quality consistent data is essential to inform effective property asset management and some significant work has been undertaken by the TIP and finance to address understanding as to what we have, how much it costs, and what we use it for. In respect of the Copley Boiler issue it is strongly recommended that should we agree to the combined boiler approach a clear legal agreement is put in place in respect of obligations and liabilities so that there is not a transfer back to the Council of liability that transferred from the Council when it opted to become an Academy.

Risk Management: The ownership and use of property carries with it a number of risks including health and safety, economic, financial, service delivery, statutory compliance and maintenance risks. It is therefore proposed to develop a risk register as part of the strategic review of the Councils assets to identify and manage risks. Any further information can be obtained from the report author Access to Information: Elaine Todd, Assistant Executive Director, Asset Management and Investment Partnership who can be contacted on : Telephone: 0161 342 3238 e-mail: elaine.todd@.gov.uk 1 INTRODUCTION

1.1 A report detailing progress on the disposal of assets, realisation of capital receipts and assets requiring investment, was considered at the last meeting of the Strategic Capital Panel.

1.2 This report is intended to provide members of the Panel with a further update.

2 DISPOSAL OF ASSETS

Leased Buildings 2.1 As reported at previous meetings of the Panel, the Council’s policy is to terminate leases it has for buildings owned by others and to relocate services to Council owned properties, where this delivers value for money, to reduce the revenue cost of operating and occupying buildings.

2.2 Most buildings which are leased by the Council, have already been vacated or dilapidations are in the process of being negotiated in respect of the remaining tenancies. The latest progress update is shown as follows:

Property Former Occupant Estimated Level Status of Dilapidations / Payment in Lieu of Work Being Undertaken £ Frederick House Adult services 82,500 Completed Toll Bar House Adult services 11,800 Asha Building Hyde Children’s services 0 New Century House Children’s services 49,000 Post Office House Children’s services 15,000 Oldham Street Children’s services - 0 Owner seeking a now vacant commuted rent rather than dilapidations. Good Hope Mill Drugs Intervention Buildings vacated – Programme -now agreeing vacant dilapidation costs

2.3 The exact level of dilapidations in respect of the Good Hope Mill, will be subject to further reports to the Strategic Capital Panel and formal governance.

Properties Requiring Investment or Demolition 2.4 Various Building Fabric Repairs

Since 1.4.2013, the former £400,000 general capital budget allocated to the Corporate landlord has been withdrawn and whilst there is a planned maintenance budget for servicing equipment, there is no reactive maintenance budget. In the past few months a number of repairs have been requested for civic and operational buildings for which there is no revenue or capital budget allocation. The analysis of repairs is shown in the table below:

Building Type of Repair Element Estimated Cost £

Ashton Market Hall Main Drive Lift 5,300 replacement South Walk, Stalybridge Tarmac repairs 3,400 Health and safety Stained Glass 5,700 Window Droylsden Library Repairs Roof 7,950 Ryecroft Hall Asbestos removal Basement 32,000 Hurst Resource Centre Repair Roof 4,250 Park Bridge Visitors Centre Repair Roof 3,700 Ashton Town Hall Replacement Stage Curtains 3,500 62-67 Bennett Street Hyde H&S -Demolition Garages 2,900 Tame Street Offices Repair Shutters 4,400 New handrails Fire Escape 44,350 H & S New Ladder, Access to Roof Platform and incidentals Dukinfield Town Hall Upgrade Fire Alarm 3,800 Unit 3 Bayley Street Replacement Shutter 6,041 Ashton Town Hall H&S installation of Access to Flag 5,400 safety features Pole Wilshaw House Installation of Ramps and Access 5,900 Mossley Youth Centre Replacement Sump Pump 3,020 Stalybridge Civic Hall Repair Windows 8,500 Dukinfield Town Hall H & S New Ladder Access to Roof 9,300 and Platform Total 159,411

3.0 CAPITAL RECEIPTS

3.1 The following table shows the capital receipts that are anticipated to be received over the next three years.

Estimated 2013/14 2013/14 2014/15 2015/16 Post Total Projected Receipt Est Actual Est Est 2015/16 Shortfall/ Required to Est Surplus Balance Est Capital Programme

£000 £000 £000 £000 £000 £000 £000 £000 16,333 295 3,548 14,028 7,460 1,000 25,331 8,998

3.2 The above summary of estimated capital receipts is based on land and property already identified for disposal and reflects either firm offers received or the best estimate of the capital receipt that is likely to be received. General receipts are retained corporately and allocated in line with Council policy. In addition to the above general receipts, an analysis of vacant land and property currently owned by the Council across the borough, but under utilised or vacant, is currently being carried out on an town by town basis.

3.3 The projected shortfall in respect of the disposal of the former school sites (£3.083m) against the contributions made to the BSF capital programme has been caused by a general reduction on the value of land since the initial valuations were carried out in 2006.

3.4 If the estimated value of former school site capital receipts (£13.250m) is realised as expected, the resulting projected shortfall of £3.083m will be temporarily funded from corporate resources.

3.5 The process for the disposal of the surplus school sites has commenced and an application for permission to dispose of some of the sites, including the two former Thomas Ashton sites, has been approved by the Secretary of State for Education. Firm offers have now been made for both of the former Thomas Ashton sites in Ashton and Hyde. The Hyde site will be redeveloped as housing and the Ashton site has planning for the erection of a mosque.

3.6 An outline planning application has also been submitted for the former footprint of the Stamford High School site, for residential redevelopment. The outline planning application for new primary academy on the former playing fields.

3.7 An offer of £30,000, has been made by Ashton Golf Club to purchase part of the land at the former Hartshead High School, located in the green belt, that they have leased for the last seven years. The club has been advised to submit a planning application for their proposed development before this is progressed as the land is located in the green belt. This request has also been made to the Secretary of State.

3.8 Schemes will be developed to enable outline planning applications to be submitted for the remaining former Hartshead School site over the next few months, part of which is in open green space and part undesignated.

3.9 Other former school sites are located all or partly in the green belt including:

 Samuel Laycock;  Littlemoss; and  Mossley Hollins;

These sites will form part of the review of the use of greenbelt land. An application to dispose of Mossley Hollins has been approved by the Secretary of State for Education on the basis that the receipt will be used to repay part of the cost of the school’s programme.

3.10 The Two Trees site is currently being used as a decant location for Russell Scott Primary School and will not be vacated for about 18 months. In the meantime, applications will be made to the Secretary of State for Education to dispose of the site when it is vacated. An outline planning application will be developed for residential use within the next 6 months. There will be a requirement that market value is achieved and the receipt used to repay the BSF temporary funding.

3.11 As further general sites are identified for sale, offers and disposals completed, the above list will be updated.

3.12 The tables below provide additional information in respect of properties that have been marketed and received offers this year or where tenants have sought to acquire the freehold of the properties that they lease. Again these will be updated as new disposals are identified and completed.

Annual Lease Estimated Sale Price Property Purchaser / Future Use Payment Completed Sale Price Received (Forfeited) / Achieved £ £ £ £ Long Leaseholds Boodle St, AUL Stan Dean (JBS) Limited Pension Fund (7,966.00) 6/09/2013 93,000.00 Winton St AUL Richard Smith (Slates 4U) (5,934.00) 26/07/2013 85,000.00 Unit 3 Broadway, Hyde Martina Limited (10,000.00) 21/06/2014 170,000.00 Read St / Rhodes St / Frances St Lynne Young & Russell McLaren (9,500.00) / Mill Lane, Hyde (Linlok Engineering) 9/10/2013 96,000.00 Land adjacent Stalyhill Infants Mr Elturkie 140,000.00 7,000 School Plot 6 and 8 Windmill Road Tom Chandley 550,000.00 42,600

Resource / Community Centres Stalybridge Resource Centre, Dr Prabhakaran (Medical Centre) 31/10/2013 405,000.00 Dukinfield Community Centre Carol Melia – Nursery 30/04/2014 295,000.00 Audenshaw Community Centre Increased offer received - Housing 170,000.00 Duke Street Interest by local business - offices 225,000.00 Ryecroft Hall Ryecroft Hall Management Committee 47,000.00 01/01/2013 Newton Centre E Sagar (Nursery) 28/02/2014 295,000.00 Libraries Former Haughton Green Library Irwell Valley Housing Trust 11/02/2013 (10,000.00) Former Newton Library Abdul Sharif ( Pharmacy) 10,000.00 05/2013 Former Hurst Library, AUL Rosebuds Childcare Limited 18/8/2013 200,000.00 Former Mossley Library Ian McConnell (Veterinary Practice) 28/2/2014 147,500.00 Former Mottram Library Terry Brookes & Sons (Apartments) 12/07/2013 140,000.00 Forner Denton West End Library Friends Group (Community Facility) 05/07/2013 150,000.00

Other Annual Lease Estimated Sale Price Property Purchaser / Future Use Payment Completed Sale Price Received (Forfeited) / Achieved Denton Toilets Georgie Porgies Nursery Limited 26/07/2013 35,000.00 28 Cemetery Rd, Mossley George Jones (Residential) 25% to be paid in respect of covenant 11/09/2013 162,000.00 Stalybridge Toilets Ray Harrison (Extension of Business) 19/09/2013 32,000.00 The Williams Freehouse TBC – Extension of Business 50,000.00 61 Oldham Road Mr Gokaldas ( Extension of Business) 22/11/2013 55,000.00 5 Church Street, Ashton under Michael Entwistle (Extension of 11/11/2013 5,000.00 Lyne Business) 8 Ashton Road, Droylsden Mr Celik (Sandwich Shop) –Lease 6,000.00 Ash Road Depot, Droylsden Sold at Auction P Lackery – Training 360,000.00 11/06/2014 Centre / relocation of PL Civil Engineering Business from Rochdale West Villa STC residential conversion 140,000.00 Former Scout Green Depot STC employment / leisure 340,000.00 Former Lymefield Visitor centre Subject to community lease 6,000.00

Land Edge Lane, Droylsden Adj 284 Arcon Housing – (Affordable Housing) 130,000.00 Edge Lane, Droylsden Arcon Housing – (Affordable Housing) 02/08/2013 110,000.00 Lime Street Club, Dukinfield Arcon Housing – 50% of proceeds to be 60,000.00 shared with tenant JW Lees – (Affordable Housing) Land Rear of 4-8 Henrietta St, Mr Bharti – (Consolidation of Business) 23/12/2013 20,500.00 Land at Charlestown Industrial Berkeley (UK) Limited Estate, AUL 50,000.00

Property Purchaser / Future Use Estimated Annual Sale Price Lease Payment (Forfeited) / Sale Price Achieved Completed Received £ £ Burlington Street Car Park NCHT ( Affordable Housing) 31/10/2013 Moss St East, AUL NCHT ( Affordable Housing) 31/10/2013 Deferred receipt Knowle Avenue NCHT ( Affordable Housing)

Kynder St, Denton NCHT ( Affordable Housing) 14/10/2013 Grosvenor St, Stalybridge NCHT ( Affordable Housing) Hawthorns former school site NCHT ( Affordable / Private Housing) 1/11/2013 1,000,000.00 Katherine House NCHT ( Affordable Housing) 31/10/2013 Garage site at Botany Lane Ashton Central Mosque Trust Car Park 55,000.00 (2,500.00) Extension Hyde Multi Story Car Park KFC (Fast Food Outlet) 650,000.00 21/02/2013 65,000.00 Milk Street, Hyde Mr La Colla (Restaurant Car Park) 20/12/2013 23,500.00 Wilshaw Lane Ashton former Shree Ram Mandeer- proposed temple school site site 250,000.00 Manchester Road Redwood Developments 6/ 7 detached private houses 200,000.00 Lees Road former school site TBC – proposed temple site 550,000.00 Former Thomas Ashton School, McDermott Homes – Residential Hyde 360,000.00 Land at Brushes Road Persimmon Homes 434,000.00 Land at Stayley Road, Mossley McKay Homes – residential development 100,000.00 Part of Playing Field former Ashton Golf Club – extension of junior Hartshead School club facilities 30,000.00 Ashton Hill Lane On Market 275,000.00 Denton Nursery On Market for lease 20,000.00 4.0 REPLACEMENT OF COPLEY RECREATION CENTRE BOILER

4.1 The need to replace the boilers, which also provide hot water to has been reported to previous meetings of the Panel. The intention when the school converted to Academy Status outside the maintenance responsibility of the Council, was that the boiler would only be replaced in the recreation centre and the Academy would replace their own system. However, initial surveys identified that the entire system could be replace at a cost of £120,000, it would cost an additional £86,000 to separate the boiler systems and provide separate systems. In addition. it would also be less disruptive for the school who would need to identify a site to install their boiler.

4.2 From a capital investment point of view it would be cheaper to replace the current boiler with a boiler that services both sites as it currently does, however, this will mean that there is a continued requirement to supply the Copley Academy with hot water that wasn’t envisaged when the school converted.

5.0 RECOMMENDATIONS

5.1 These are set out at the front of the report.