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Executive Decision Notice

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Executive Decision Notice 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: [email protected] 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 Dukinfield Town Hall 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 Hyde Town Hall 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.
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