EAST AYRSHIRE COUNCIL

CABINET – 1 MAY 2019

ASSET MANAGEMENT FRAMEWORK AND CAPITAL REPORT

Report by the Depute Chief Executive - Safer Communities

PURPOSE OF THE REPORT

1. The purpose of the report is for cabinet to agree a new integrated Asset Management Framework and Capital Report that will underpin the development of future Capital Investment.

BACKGROUND

2. As part of the Council’s Transformation Strategy the Property and Estate workstream identified the need to establish an overarching Asset Management Framework that draws together a number of important asset areas into a single framework to ensure effective management, improvement and long term investment for the Council’s Asset Base.

3. There is an increasingly high-profile focus on the way that assets are managed in the public sector and Government and public interest is currently high. Asset Management links to many Government policies aimed at achieving efficiencies, transforming public services, empowering communities, improving the transport infrastructure and addressing climate change.

4. The Local Government in Scotland Act (2003) provides the legal framework for both the Prudential Code and the Council’s arrangements in respect of Best Value. Under the Prudential Code, local authorities are authorised to make capital investments where it can be demonstrated that these investments are affordable, prudent and sustainable.

5. Scottish Local Authorities are required by regulation to have regard to the Prudential Code when carrying out their duties under Part 7 of the Local Government in Scotland Act 2003. The Prudential Code plays a principle role in capital finance as local authorities determine their own programmes for capital investment that are central to the ongoing delivery of quality public services.

6. The framework which the Prudential Code has established should support local strategic planning, local asset management and proper option appraisal. To achieve this the local authority is required to consider capital expenditure and investment plans against the overall strategic aims and available resources and ensure that decisions are made with due regard to the medium to longer term financial implications and potential risks to the organisation.

7. This Asset Management Framework and Capital Report, sets out the Council’s asset management priorities and Capital Investment Strategy for managing and modernising its assets, and importantly, how this approach is aligned to the wider strategic objectives of the Council and its Community Planning partners to address future risks and opportunities.

ASSET MANGEMENT FRAMEWORK 8. Asset Management principles are well embedded across the council and are the basis of a number of service asset plans previously reported to cabinet and were set out as part of the asset strategy in 2009 along with the initial 10 year Capital investment Plan.

9. The vision for the Council assets is that ‘East Ayrshire has safe, sustainable and efficient assets that meet the needs of its existing and future users and communities’. The development of an Asset Management Framework will contribute to the achievement of this vision, and importantly will also help the Council achieve the objectives set out in our 2017- 2022 Transformation Strategy to maximise the outcomes and benefits of our capital and revenue spend.

10. It is recognised that effective asset management assists in the delivery of sustainable communities whilst providing value for money for the public purse. The Council has a strategic responsibility to ensure that all council’s physical assets remain fit for purpose and support services in delivering for our communities through ongoing support and strategic investment in our assets.

11. The strategic objectives of the Asset Management Framework are:

 To maintain and enhance a flexible portfolio of assets that are fit for purpose and will allow our people to deliver services in transformational and innovative ways;

 To review and rationalise the Council’s asset base as part of service redesign ensuring that their use continues to be efficient and effective and delivers best value.

 To use our assets in support of the Council’s wider aims recognising the value of partnership in a place based approach to facilitating community led regeneration.

 To ensure that our assets are subject to critical review and challenge, considering the outcomes and benefits along with whole life cost and long-term investment needs.

 To provide a clear rationale for future capital investment, building in financial and operational sustainability while working towards being carbon neutral.

 Managing, reporting and analysing asset information to ensure decisions are evidence based and can maximise the leveraging of new and extra funding.

12. Alternative delivery models, including partnerships with other public bodies, are now being used more regularly and are demonstrating different ways of achieving strategic objectives. The Council has extensive experience in developing assets in partnership with others and the need to strengthen and develop this approach is essential along with commitment from partners to further explore opportunities for shared use of assets and integrating future investment priorities, to maximise value for money.

13. The overall Framework aligns to a range of additional documents that provide more detailed information, priorities and operational plans on individual asset types and sets this within the strategic context. It also sets the wider asset management principles that establish the approach of effective asset management;

 Improve Asset Performance,  Improve Asset Value,  Effectively Manage Risk  Enhance Growth and improvement  Evidence Reliable Decision Making  Grow Stakeholder confidence and reputation

14. The Framework therefore sets out the links between the strategic objectives of Asset Management to the aims of the Community Plan, the Transformation Strategy and the Council’s strategic priorities. There are 8 asset types included in the framework:

1. Housing Estate 2. Roads Infrastructure 3. Culture and Community Assets 4. Wellbeing, Sport and outdoor estate 5. Business Growth portfolio 6. Learning estate 7. Corporate estate 8. Transport Fleet

15. Within the report, information is provided on each of these asset types identifying vital investment aims for the asset type outlining current projects, progress achieved to date and future action areas. The framework also provides a clear structure of reports to Cabinet that set out the asset assessment, prioritisation and action plans across specific areas of the asset groups.

16. It is apparent there is a clear strategic and direct link between the asset groups and individual Community Planning themes and corporate priorities and these are reflected in the individual asset management plans. However more fundamentally our assets can demonstrate a greater crossover of use and facilitate a strong approach to partnership working. The development of integrated models of service is strongly evidenced across the Council’s estate therefore each asset type does not sit in isolation and should be used to mitigate future risks and develop new shared opportunities.

17. The above approach draws together a range of strategic aims and how all our assets should contribute to the wider organisational goals while setting clear objectives for the asset types. It recognises that across all Asset types a consistent and explicit approach connects our assets with the Community Planning themes, corporate priorities and future change agenda.

18. Meeting future change is critical where long term investment decisions are being made. The impact of climate change and requirements around future environmental legislation, the community empowerment legislation and community led regeneration will have considerable bearing on our asset planning. The Transformation Strategy, organisational change and in particular our workforce planning and future shape of digital transformation must inform and be informed by the decision making process around our physical assets.

CAPITAL INVESTMENT PROGRAMME

19. The Council has invested in our assets over the past 10 years through the rolling 10 year Capital Investment programme with previous reports to Cabinet detailing that investment and the alignment of individual projects to the wider objectives to the Council. Over the past 10 years since 2009-2019 the council has invested over £549m with a further commitment outlined in this report for the next ten years of a further £482m giving a long term investment of over £1.031billion.

20. The Asset Management Framework builds on this successful delivery and brings it into an overarching strategic context for the current and future investment priorities, providing the Council with a clear link between our assets, ongoing capital investment and the strategic direction of the organisation.

21. As part of the development of the Asset Management Framework the existing capital investment plans have been incorporated into the Framework. The document also establishes the approach for future Capital Reports and the requirement for a Capital Investment Strategy.

22. The overall Capital investment levels within the Asset Management Framework align with Council’s Treasury Management Strategy that has previously been reported to Council on 28th March 2019. The 2019/20 Treasury Strategy Statement identifies that for the period between 2019/20 and 2022/23 the Council has a net financing or borrowing requirement of £273.421m. This includes the capital expenditure planned for both the General Fund and HRA, which is not paid for from grants, the application of capital receipts or through in year charges to revenue.

23. This delivers a General Fund capital investment of £236.289m over the next 4 years and an investment through the Housing Revenue Account of £150.468m with external funding of £113.336m. The programme outlined in the Asset Management Framework is within this overall allocation.

24. As the Scottish Government has committed to three year budgeting for Local Authorities from 2020/21 consideration of any additional capital investment beyond the current allocation will require to be considered as part of the future revenue budget planning and therefore this framework sets the criteria and approach for future investment priorities and decisions. This will facilitate a clearer link between capital and revenue spend and through a business case approach ensure the benefits, the revenue cost and ongoing implications are reflected in decisions.

25. It is recognised that £113.336m of capital funding has come from external sources including the general grant as well as specific government funding for key strategic priorities, including early year’s expansions, community and heritage regeneration, housing investment and the Ayrshire Growth Deal. There remains further opportunities for external funding and the Council capital investment should ensure this is maximised at every opportunity. For example the £10.5m investment in the Dean Castle restoration and Parks for the people project includes £6m of external funding.

26. As with all previous capital investment activity it should be noted that any allocations for future schemes or those still at the early stages of development included within the report are forecast estimates for indicative purposes only and may be subject to rephasing and flexibility depending on the maturity of the project development, emerging priorities, market conditions at the time of tender and construction, and projected inflationary increases where relevant. Similarly, timescales are also shown for indicative purpose only at this stage and are extremely sensitive to a number of factors both internal and external; many of which are outwith the Council’s control.

27. Appendix 1 provides an updated profile of the allocated capital spend agreed as part of the 10 year Capital Investment Programme reported to Cabinet in January 2018. This update reflects adjustments in timing of projects and where allocations have been made to meet future commitments.

28. The overall investment plan remains in line with the project priorities established in January 2018 however there are three areas where a reallocation is required. a. It is proposed to utilise in-year headroom arising from slippage within current schools and early years projects to bring forward spending on roads planned for 2020/21 to 20/19 20 This will allow urgent repairs to be progressed timeously.

b. Investment of £0.265m was previously identified to support building and IT works at North West Area Centre that would facilitate partnership staff moving from Health premises. This is currently being reviewed in terms of work required and opportunities to reallocate this as part of the wider smarter working and therefore the full funding will not be required. It is therefore proposed to utilise the underspend to meet additional higher cost of the H&SC Management system following the recent tender exercise.

c. A previous allocation of £0.345m for remediation of the Lugar site is no longer required as an option to sell the site is currently being progressed. It is proposed to utilise £0.200m of the funding released to support Town Centre CCTV improvements which were signalled as a priority by Cabinet in considering the 2019/20 revenue budget in February. The balance of £0.145m would be retained for future demolitions and addressing other surplus sites.

PROGRAMME AND RISK MANAGEMENT

29. The Asset Management Framework provides the overarching structure of our approach, focusing on the asset management principles and a strong evidence base, setting out our priorities to support decision making, future investment as well as meeting ongoing operational demands. This recognises three layered approaches to ensure effective decision making:

1. Maintain and protect; delivering on a daily basis and meeting core obligations 2. Review and Improve; assessing information and service needs for future priorities 3. Invest and Develop; delivering value in capital investment and whole life of the asset

30. The Framework sets out the structure of governance and project management for the capital programme within strategic areas. The well-established Programme board approach as well as ensuring the effective delivery of the current programme will provide the operational oversight for prioritising and assessing future needs and co-ordinate the development a consistent Business Case approach.

31. The Business Case approach takes into account a number of crucial considerations and based on the Treasury 5 case model that is widely adopted across the public sector. This includes:

 Strategic Case (the need for change),  Economic Case (delivers value for money),  Commercial Case (commercially viable),  Financial Case (is affordable), and  Management Case (can be delivered successfully).

32. It is proposed to establish an Asset Investment Group with membership from the chairs of the programme boards to consider, assess and prioritise future investment requirements prior to submission to cabinet to ensure a consistent and coherent link to the Asset Management Framework focusing on further integration and new funding opportunities.

33. It is also proposed to report an update of the Asset Management Framework and Capital Report on an annual basis as part of the budget setting process to reaffirm the overall approach and provide a progress on the significant capital investment, revenue and resource implications. The existing in year reporting through East Ayrshire performs will remain. The following sections also outline updates within the various asset groups highlighting the main action areas.

HOUSING ESTATE

34. Through the Housing Investment Programme, Strategic Housing Investment Plan, and Housing Asset Management Plan there is a clear rational and focus on managing the housing stock and focusing investment on determined need within our communities.

35. The Scottish Government’s target is 50,000 affordable homes, East Ayrshire Council through their SHIP programme is expected to deliver over 2429 new homes with progress seeing 1141 new or reconfigured Council homes completed since 2006 including the first development delivered in partnership with the Council’s Developer, CCG, at Barbieston Road, Dalrymple Construction work is ongoing at the Council’s developments at Tinto Avenue, Kilmarnock, and Cessnock Road, Hurlford (assisted living), and at Longpark Phase7, Kilmarnock, and Dalsalloch in Auchinleck, both Cunninghame Housing Association projects, to deliver 152 homes.

36. An updated Housing Needs and Demand Assessment will be published alongside the revised Local Housing Strategy later this year. The revised documents will set out how the Council and its social housing partners intend to take forward a range of initiatives that are designed to ensure the housing stock is high quality and sustainable.

37. The current SHIP 2019-24 includes projects with a total potential capacity for delivering up to 836 new, rehabilitated and acquired affordable homes in East Ayrshire over the 5 year period to March 2024, including 746 new or rehabilitated homes and 50 purchased through the open market purchase scheme by the Council and 40 purchased by RSL partners. This is supported by a capital invest of over £150m.

ROADS INFRASTRUCTURE

38. The Roads network provides the basis for economic and community activity and connectivity across East Ayrshire. The severe weather of last winter saw serious deterioration and damage to the Roads network. The Council in response allocated an additional £6m to address the immediate concerns of pot holes and implemented a programme of resurfacing of over 70km of the road network.

39. The Roads Asset Management Plan sets out the assessment, needs and prioritisation of the roads network improvements and the outcome of focused inspection on the Bridge network. It is noted that future capital investment plans will require to consider a greater level of investment to address the long term condition of our infrastructure. It is proposed therefore to re-profile the current allocation from the next 4 years to increase the allocation for 2019/20 to £7.000m from the current £3.555m. This will continue to progress of roads resurfacing as well as initiate initial bridge work priorities. The reported figures in appendix 1 includes a carry forward allocation of £1.772m which is noted prior to the closure of the 2018/19 accounts. A further review and assessment of the longer term programme of Roads and Bridge improvements will be developed and presented as part of the 2020/21 report considering further acceleration of the current 10 year budget.

40. A range of schemes are also being progressed to mitigate flooding, improve road safety and connectivity. The Ayrshire Roads Alliance has been successful in attractive external funding for a number of schemes including £3.7m for the current flood mitigation scheme at New Cumnock that is anticipated to be fully completed in early 2021.

CULTURE AND COMMUNITY ASSETS

41. The current capital investment continues to invest in maintaining and improving our local Culture and heritage. Work continues at Dean Castle with the contractor on site to undertake the restoration of the Castle and adaptation of facilities to support the establishing of a 5 star visitor attraction as part of a £10.5m project supported by the Heritage Lottery and Historic Environment Scotland. This builds on the recently completed improvements across The Dean Castle Park creating new accessible visitor facilities and greater opportunities to expand access to more areas of the park through a new path network. This will be further enhanced by the development and progress of Kilmarnock’s Green infrastructure project.

42. The Council has also supported major investment in the restoration and conservation within our town centres. Investment in The Ingram Business Centre, Opera House and Jonnie Walker Bond, public realm improvements as well as new facilities at Rothesay House and the redevelopment of the Cumnock Town Centre.

43. Supporting our town centres continues to be a focus of the asset investment and the Capital programme has a further allocation of funds to support regeneration, recognising the historic nature of our towns and villages. The expected progress of the Galston Local office project will further enhance the community and sensitively compliment the Galston CARS project. In addition the Council has received an additional £1.7m of capital funding to support Town Centre Regeneration and a detailed report is being presented to this cabinet.

44. Our Heritage and Cultural estate offers substantial opportunity to leverage external funding and the approach taken in both the Dean Castle and the CARS projects has highlighted this. The Dean Castle Projects generating £6m of external funding through the work of the Leisure trust with Heritage Lottery and Historic Environment Scotland. Maintaining and preserving these historic buildings requires a specialist and delicate approach and working with National organisations continues to improve our approach to these buildings. Further work is also being progressed to ensure the long term protection of these assets is maintained noting in particular additional investment will require to be brought forward to address water penetration and façade deterioration at the Palace Theatre.

45. The Council’s Community Asset Transfer approach remains an essential element of managing the overall asset base across the council. This has developed in line with the Community Empowerment legislation and as well as supporting our communities in taking responsibility for the activities in our local communities has also reduced existing property issues with the council’s estate.

46. The progress on remediation of the previous coal sites continues to mitigate the effects on the landscape. The Council’s £10m investment to address the associated risks and support regeneration and restoration of the local environment is expected to be completed during 2019/20.

WELLBEING, SPORT AND OUTDOOR ESTATE

47. Supporting the integration of the Health and Social Care Partnership in delivering its strategic objectives remain an important focus in the development of the asset investment plans. The Council’s role as corporate parent has been supported by investment in children’s home facilities in recent years and community wellbeing facilities for day care. New opportunities however continue to develop around new models of care and support for adults with additional support needs being able to live within their community. 2015 saw Lilyhill gardens open providing new supported living accommodation. The Cessnock road project currently in construction through the Strategic Housing Investment Plan will continue to develop this model.

48. The strategic direction of supporting older people to remain in their home continues to be supported through the capital investment plan. £7.500m has been allocated across next 10 years to private sector housing grants and an additional Telecare investment of £1.350m reducing the need for new facilities investment and reducing the needs in care homes and acute services, maximising the use of new technology and digital advancements.

49. Through the Health and Social Care Property and Asset Management Strategy a priority has been highlighted around the consideration of options for the health and social care needs of the Cumnock and Stewarton Localities and in the development of future business cases it is necessary to recognise the council’s asset management principles and potential for future integrated investment with NHS.

50. A majority of the Council’s sport and leisure facilities are managed and operated by the Leisure Trust, with some community run venues. This partnership with the Council has allowed a focus on developing sport and leisure services from a range of facilities including the extensive investment in the school estate, the state of the art Ayrshire Athletics Arena and integrated community hubs including North West Area Centre, Shortlees Campus and Patna Campus. The Leisure Trust are undertaking a further facilities review and this will be reported to Council during 2019/20.

51. The capital investment plan already includes an allocation for the Galleon refurbishment and options have been considered for refurbishment and alternative replacement. Following the report to Council in June 2018 a new opportunity is being considered in relation to its potential role in the development of the town centre and consideration of aligning the sports and leisure offer with a health and wellbeing offer to support a more integrated wellbeing hub model in conjunction with NHS.

52. Our outdoor estate is extensive and includes the Council’s 45 cemeteries. A programme of cemetery improvements has also been committed as part of the investment plan with further prioritised work at Auchinleck, Cumnock, Muirkirk and Riccarton is being progressed.

ECONOMIC GROWTH PORTFOLIO

53. The Council’s Economic Growth portfolio offers opportunities for investment that support local economic regeneration and business growth and is linked to the regional ambitions within the Ayrshire Growth Deal. The Council’s Capital Investment has supported significant business development opportunities recently in Cumnock Town Centre, Moorfield Business Park and the Ingram Business Centre.

54. The commitment for the Scottish and UK governments to support the Ayrshire Growth deal further strengthens the opportunities and amplifies the local investment from the Council. The projects within the growth deal supported by the Council’s capital investment will include The Halo Kilmarnock which will transform the former Johnnie Walker site; The National Energy Research and Demonstrator Project in Cumnock, which will develop new technologies for energy generation and storage; The Ayrshire Engineering Park which will provide expansion and development of Moorfield Industrial Park in Kilmarnock; Ayrshire Manufacturing Investment Corridor, for the food and drink sector, with an innovation hub focused on the dairy sector. The financial support of the Council to these projects is included in the investment plan with the indicative allocation having been reviewed recognising as schemes are developed to project ready status a clearer profile of capital spending will be available.

55. It is however recognised that in addition the significant investment in the above projects to support growth the council has a investment property portfolio of 178 sites leased to local businesses and organisations across the authority area. It is proposed to further review the requirements and opportunities of the leased property portfolio within the Property Management Plan and will be reported to a future cabinet. This will be supported by the Internal Audit review of property letting income.

LEARNING ESTATE

56. The Learning estate accounts for the largest element of the overall operational estate of the Council in terms of scale and investment demand. Through the School Estate Management Plan, and the rationalisation of the school estate, the past 5 years has seen the most ambitious investment in the school estate across East Ayrshire. This has provided vital improvement in condition and suitability and improvements in utilisations of the school estate, supporting the Council’s commitments to raise educational attainment and improving opportunities for all.

57. The completion of the Barony Campus for August 2020 is the single largest investment in the Council’s history of £68m and will be in a unique position to offer magnificent facilities for our young people and the wider communities across East Ayrshire, with construction progressing through 2019/20.

58. The current investment programme continues to progress at pace with new facilities in construction or planned to open in 2020 and beyond. In addition to the current schools programme the Scottish Government has made capital and revenue commitments to deliver the requirements of the early years expansion by 2020. A further £23m has been allocated to East Ayrshire to deliver this commitment and this has required a review of existing resources and changes in prioritisation of some projects.

59. The significant investment in education facilities has, as noted earlier, not only helped improve the learning environment for our young people but created community facilities that offer a wider range of access, opportunities and connections across all our communities. This includes state of the art sports facilities with new all-weather facilities for hockey and rugby at Stewarton and Cumnock, establishing new community run facilities and a clear focal point to develop our communities’ ambitions.

60. The focus for 2019/20 will be on continuing to deliver the current schools investment programme with more than £100m of facilities expected to open in 2020/21. In addition further work will be progressed in developing a future priorities beyond 2023 considering the opportunity offered to access the recently announced Scottish Government funding of £1b for the Scottish Learning Estate within the School Estate Management Plan.

61. The development of a medium term improvement programme that focuses on refurbishment of existing buildings to ensure all our facilities are to an acceptable standard is also being progressed. Current allocations for improvement works have been consolidated and with the component renewal investment will be reviewed with an updated priority improvement programme to be reported as part of the proposed Property Management Plan.

CORPORATE ESTATE

62. The Council has committed capital investment in the corporate estate to support the efficient and effective delivery of Council services. As is outlined in the Transformation Strategy; Smarter working; rationalising our estate as staff numbers reduce and service redesign is implemented; a move to digital services; a focus on place based working and increasing opportunities for shared use of assets across community planning partners continue to offer greater value and improvements in performance across our Corporate Estate. 63. During 2019/20 priorities include further progress on implementing smarter working across our office estate, implementing new arrangements for the customer contact approach and supporting the Integrated Joint Board’s Property and Asset Management Plan in relocating and integrating services and staff.

TRANSPORT AND FLEET

64. As noted as part of the Council’s budget report and Transformation plan agreed in February 2019 a review of the transport fleet has been undertaken and a primary aspiration is to improve optimisation and increase the green fleet utilised by the Council, with a spend to save capital investment agreed to take this forward. It is anticipated the Council will have over 50 electric vehicles by the end of 2019/20 and an increasing use of green fleet will be within a longer term aim of reducing our overall fleet by over 10%.

65. External investment has also been received to support the wider roll out of electric charging stations with a range of Council buildings hosting the new chargers. A new flagship model for fast electric chargers is also being progressed at Ayrshire Athletics Arena and due to be complete in summer 2019. This will further enhance the opportunities for the Council fleet as well as public charging.

DEVELOPMENT ACTIONS

66. The Framework provides an overall approach and principles that will help continue to deliver an ambitious capital programme while ensuring our investment considers the long term nature of our assets and the role they can play in delivering the wider council and community planning partnership strategic outcomes.

67. A number of pivotal actions are noted in the report that will support the ongoing development of our assets, identify future spending needs, opportunities for external funding and the business case for future consideration. These include;

 The updated Housing Needs and Demand Assessment  Increased investment need and re-profiling to meet Roads and Bridges improvements  The prioritising of investment in the schools programme with early years expansion  The Scottish Government funding of £1b for the Scottish Learning Estate  The develop of a detailed Property Management Plan  Ongoing support and development of CARS projects in a number of communities  Proposed additional Government funding for Town Centre Regeneration  The outcome of The Leisure Trust facilities review  Health and social care review of needs of the Cumnock and Stewarton Localities  The priorities from the Ayrshire Growth Deal and profiling of the Council’s investment  The review of the leased property portfolio and internal audit review of property letting income.

68. The Council is also reviewing its Local Development Plan and with the Council as a primary property developer and land owner involvement and consideration of the above issues is vital. The connections to the Council’s Asset Management Framework and Capital Investment plans should be reflected in the development of the Local Housing Needs assessment, business and industrial requirements as well as landscape and urban development opportunities to ensure the overall council investment supports our local community development. EQUALITY IMPACT ASSESSMENT IMPLICATIONS

69. The overall Asset Management Framework will be Equality Impact Assessed and any change mitigation incorporated in to the document, as appropriate. The development of individual business cases and project briefs within the Asset Management Framework will also require to consider the requirements of the Equality Impact Assessment (including socio-economic impacts).

FINANCIAL IMPLICATIONS

70. The Capital investment plan outlined delivers an overall investment of £489m over the next 10 year programme which added to the last 10 year programme of £549m shows and overall investment of almost £1.031billion.

71. As noted in the report the total capital allocations are within the funding envelope agreed through the Council’s revenue budget and treasury management plan.

LEGAL IMPLICATIONS

72. There are no specific legal implications with this report.

COMMUNITY PLANNING IMPLICATIONS

73. The Asset Management Framework directly supports the delivery of the Community Planning themes and strengthens the opportunities for shared use of assets and future alignment of investment under the principles of the place.

74. It is important to recognise the opportunity to maximise future investment in our assets across community planning partners, other public sector organisation and local community and third sector organisations requires a commitment from all organisations to work closely in establishing priorities and the development of shared business cases and delivery models that deliver on the wider outcomes for our communities.

TRANSFORMATION IMPLICATIONS

75. The Asset Management Framework and Capital investment strategy directly support the Transformation workstreams

Workstream 2: Workforce Planning, Cultural Change and Service Re-design Workstream 3: A digitally connected East Ayrshire Workstream 5: Property and Estate Rationalisation

RISK MANAGEMENT IMPLICATIONS

76. A number of principle risks are included in the report in relation to affordability in the event of potential inflation and interest rate rises which are reflected in the Treasury Management strategy. Project Management risks, market risks and insurance risks that are managed and assessed through the project management principles and programme board structure.

RECOMMENDATIONS

77. Members of Cabinet are asked to:

(i) recommend to the Council, (a) approval of the new integrated Asset Management Framework and Capital Report that will underpin the long term management of assets and the development of future Capital Investment and;

(b) the investment priorities across the asset groups and approve the updated capital expenditure profile at Appendix 1 in line with the agreed Treasury Management Plan.

(ii) Agree to bring forward planned spending on roads of £3.445m from 2020/21 to 2019/20 in line with the Roads Asset Management Plan;

(iii) Approve the reduction in capital allocation to the remediation of the Lugar site and transfer an allocation of £0.200m to install improved Town centre CCTV, retaining the balance of £0.145m for future demolition and surplus site remedial works;

(iv) Approve the reallocation of the balance from the funding for relocation of staff to NWAC of £0.265m to support the additional cost of the H&SC IT system and;

(v) Otherwise note the contents of the report.

Katie Kelly Deputy Chief Executive – Safer Communities

LIST OF BACKGROUND PAPERS

Implementation Officers Andrew Kennedy, Head of Facilities and Property Management, Telephone 01563 576089 Appendix 1 : Capital Investment Plan

Housing 2019/20 2020/21 2021/22 2022/23 2023/24 2024/25 2025/26 2026/27 2027/28 Total

Strategic Housing Investment Plan 42.362 31.669 3.527 0.500 11.941 89.999 Housing Improvement Programme 15.180 16.680 16.680 16.680 16.680 81.900 Asset Management Plan 3.390 1.000 1.000 1.000 1.000 7.390 Affordable Housing 0.200 0.200 0.200 0.200 0.200 1.000 61.132 49.549 21.407 18.380 29.821 - - - - 180.289

Roads Infrastructure 2019/20 2020/21 2021/22 2022/23 2023/24 2024/25 2025/26 2026/27 2027/28 Total

Street Lighting LED (Spend to Save) 3.650 0.520 ------4.170 Roads & Transportation Programme 8.772 2.940 2.060 1.925 3.700 3.700 3.700 3.700 3.700 34.197 New Cumnock Flood Scheme 3.295 0.150 ------3.445 15.717 3.610 2.060 1.925 3.700 3.700 3.700 3.700 3.700 41.812

Culture and Community Assets 2019/20 2020/21 2021/22 2022/23 2023/24 2024/25 2025/26 2026/27 2027/28 Total

Dalricket Landfill Site 0.113 ------0.113 Parks and Playparks 0.059 0.059 0.059 ------0.178 Dalrymple Cemetry Extension 0.070 ------0.070 Dean Castle / Keep Match Funding 1.150 0.800 0.800 0.438 - - - - - 3.188 Environmental Risk Management Fund / Skares 5.391 ------5.391 Dalmellington Cemetery Extension 0.175 ------0.175 Other Cemetery Improvements 0.100 0.100 0.100 0.100 0.100 0.100 0.100 0.100 0.100 0.900 1 Dunlop Street / 12 Strand Street 0.291 0.680 ------0.971 Galston CARS 0.071 ------0.071 Dalmellington/Waterside CARS - - 0.100 0.100 - - - - - 0.200 Derelict Buildings Grant Fund 0.179 0.034 ------0.213 Mauchline CARS - 0.100 0.200 0.100 0.100 - - - - 0.500 2-4 John Finnie Street 0.216 ------0.216 Galston Local Office 0.516 2.200 ------2.716 8.332 3.973 1.259 0.738 0.200 0.100 0.100 0.100 0.100 14.902

Wellbeing, Sport and Outdoor estate 2019/20 2020/21 2021/22 2022/23 2023/24 2024/25 2025/26 2026/27 2027/28 Total

Private Sector Housing Grant - Improvement 0.289 0.200 0.200 0.200 0.200 0.200 0.200 0.200 0.200 1.889 Galleon Centre - 7.000 6.669 ------13.669 Private Sector Housing Grant 0.849 0.600 0.600 0.600 0.600 0.600 0.600 0.600 0.600 5.649 New Children's House (Spend to Save) 1.500 ------1.500 Telecare 0.150 0.150 0.150 0.150 0.150 0.150 0.150 0.150 0.150 1.350 2.788 7.950 7.619 0.950 0.950 0.950 0.950 0.950 0.950 24.057

Business Growth portfolio 2019/20 2020/21 2021/22 2022/23 2023/24 2024/25 2025/26 2026/27 2027/28 Total

HALO 1.256 ------1.256 Moorfield Units 1.924 1.000 1.280 1.215 - - - - - 5.419 Economic Growth Fund 1.700 2.200 4.000 4.000 4.000 4.000 4.000 4.000 0.030 27.930 National Energy Research and Development Centre 0.750 0.750 0.750 0.750 0.750 0.750 0.750 0.750 1.500 7.500 Rowallan Park 1.200 ------1.200 Kilmarnock Town Centre Regeneration 0.500 0.500 0.500 0.500 0.500 0.500 0.500 0.500 0.500 4.500 7.330 4.450 6.530 6.465 5.250 5.250 5.250 5.250 2.030 47.805

Learning Estate 2019/20 2020/21 2021/22 2022/23 2023/24 2024/25 2025/26 2026/27 2027/28 Total

Barony Campus 30.948 6.840 ------37.788 Early Years 1140 Expansion 6.875 6.875 ------13.749 Bellsbank Primary & ECC 5.245 0.100 ------5.345 Dunlop Primary and ECC - 2.000 1.420 ------3.420 Loanhead Primary & ECC 2.024 1.921 0.100 ------4.045 Kilmaurs ECC 1.420 ------1.420 Netherthird Primary and ECC 2.750 7.000 ------9.750 Crosshouse Communication Centre - 2.499 3.535 ------6.034 Stewarton Academy - 0.946 5.392 7.520 - - - - - 13.858 Nether Robertland Primary - 1.109 0.740 ------1.849 Kilmaurs Primary - 1.000 ------1.000 Future Schools Development Fund 0.500 3.500 10.500 9.200 - - - - - 23.700 Schools Improvement Programme 2.389 1.436 0.823 0.685 0.874 - - - - 6.207 52.151 35.226 22.510 17.405 0.874 - - - - 128.165

Transport Fleet 2019/20 2020/21 2021/22 2022/23 2023/24 2024/25 2025/26 2026/27 2027/28 Total Fleet 2.000 - - 2.000 - - 2.000 - 2.000 8.000 2.000 - - 2.000 - - 2.000 - 2.000 8.000

Corporate estate 2019/20 2020/21 2021/22 2022/23 2023/24 2024/25 2025/26 2026/27 2027/28 Total

Customer Service & Contact Centre 0.443 ------0.443 Demolition of Greenholm Street Office 0.200 ------0.200 ICT Programme 1.359 1.200 1.200 1.250 1.250 1.250 1.250 1.250 1.250 11.259 Refurbishment & Component Renewal 1.500 1.500 1.500 1.500 1.500 1.500 1.500 1.500 1.500 13.500 ICT Fibre Connection - 0.120 ------0.120 BEMS System Upgrade 0.100 ------0.100 Risk Management Centre Equipment Upgrade 0.400 ------0.400 Lugar Office Site 0.145 ------0.145 CCTV Renewal 0.175 ------0.175 CCTV upgrade Town Centre 0.200 0.200 Energy Efficiency 0.500 0.500 0.500 0.500 0.500 - - - - 2.500 Cumnock Depot Developments 2.217 1.827 ------4.044 Health and Social Care Management System 0.331 ------0.331 North West Area Centre - 0.265 ------0.265 Transformation Strategy Fund 1.000 1.000 1.000 0.870 - - - - - 3.870 8.570 6.412 4.200 4.120 3.250 2.750 2.750 2.750 2.750 37.552

Total 158.019 111.170 65.585 51.983 44.045 12.750 14.750 12.750 11.530 482.582

EAST AYRSHIRE COUNCIL

ASSET MANAGEMENT FRAMEWORK & CAPITAL REPORT

2019/2020

CONTENTS

Foreword 2

Introduction 3

PART 1 INTEGRATED ASSET FRAMEWORK AND CAPITAL STRATEGY

Strategic Context 6

Asset Management 10

Capital Investment 17

Programme Management & Governance 21

Risk Management 24

Planned Capital Programme 27

PART 2 DELIVERY UPDATE BY ASSET CATEGORY

Housing Estate 35

Roads Infrastructure 38

Culture & Community Assets 42

Wellbeing, Sport and outdoor estate 46

Learning Estate 49

Economic Growth Portfolio 55

Corporate Assets 58

Transport Fleet 63

1 FOREWORD

East Ayrshire Council is committed to the effective management of its land, properties, infrastructure and fleet. Our asset base is extensive and diverse, including operational offices and buildings, housing, schools, roads, vehicles and infrastructure. The Council’s assets support the delivery of council services and the overall aims of the community plan. Strategic oversight, sound investment decisions and good management of these assets is essential to keep them safe, secure and sustainable, providing best value for our communities.

This Asset Management Framework and Capital Report sets out the Council’s asset development priorities and Capital Investment Strategy for managing and modernising its assets, and importantly, how this approach is aligned to the wider strategic objectives of the Council and its Community Planning partners.

Community involvement, and working with other agencies is integral to the current approach and will maximise the impact of these resources going forward, particularly given the challenging financial circumstances which are facing Local Government.

In delivering on its Capital Investment Programme, the Council has made a major contribution to the local economy through the construction of new schools and leisure facilities, improved strategic road links, the provision of new industrial and commercial premises, social housing investment and the regeneration of our town and village centres. Travelling through East Ayrshire as I do regularly, the tangible and positive impacts of these developments are there for all to see.

The development of this Framework will help the Council to better understand the wider context and demands across all our communities. In developing a better understanding of current performance levels and the quality of our existing assets, this will in turn help us to identify our future investment needs.

In this current financial climate, as the Council seeks to redesign its services to meet changing needs and to deliver on the aims of our Transformation Strategy, it is important that we optimise the use of our asset base. Ultimately, the Asset Management Framework will help us to ensure that our ongoing investment in these assets supports current and future service delivery and ultimately, improves our communities.

Councillor Douglas Reid Leader of the Council

2 INTRODUCTION

Vision

The vision for the Council assets is that ‘East Ayrshire has safe, sustainable and efficient assets that meet the needs of its existing and future users and communities’. The development of a corporate Asset Management Framework will contribute to the achievement of this vision, and importantly will also help the Council achieve the objectives set out in our 2017-2022 Transformation Strategy to maximise the outcomes and benefits of our capital and revenue spend.

It is recognised that effective asset management assists in the delivery of sustainable communities whilst providing value for money for the public purse. The Council has a strategic responsibility to ensure that all council’s physical assets remain fit for purpose and support services in delivering for our communities through ongoing support and strategic investment in our assets.

The strategic objectives of the Asset Management Framework are:

 To maintain and enhance a flexible portfolio of assets that are fit for purpose and will allow our people to deliver services in transformational and innovative ways;

 To review and rationalise the Council’s asset base as part of service redesign ensuring that their use continues to be efficient and effective and delivers best value.

 To use our assets in support of the Council’s wider aims recognising the value of partnership in a place-based approach to facilitating community led regeneration.

 To ensure that our assets are subject to critical review and challenge, considering the outcomes and benefits along with whole life cost and long- term investment needs.

 To provide a clear rationale for future capital investment, building in financial and operational sustainability while working towards being carbon neutral.

 Managing, reporting and analysing asset information to ensure decisions are evidence based and can maximise the leveraging of new and extra funding.

Alternative delivery models, including partnerships with other public bodies, are now being used more regularly and are demonstrating different ways of achieving strategic objectives. The Council has extensive experience in developing assets in partnership with others and the need to strengthen and develop this approach is important along with commitment from partners to further explore opportunities for shared use of assets and integrating future investment priorities, to maximise value for money.

3 Local Context

East Ayrshire has a population of approximately 122,000 and covers an area of 490 square miles. Containing a mix of urban and rural communities, its largest town is Kilmarnock, with a population of 47,000. The rest of the population live in smaller communities, ranging from fewer than 100 people in some villages and rural areas to around 10,000 in both Cumnock and Stewarton. Looking ahead, our population is expected to remain relatively static over the next fifteen years.

The council has a revenue budget of £336 million and delivers a wide range of services including education, housing, social work, roads, planning, environmental health and trading standards. Leisure, cultural and community services are delivered by East Ayrshire Leisure Limited on behalf of the Council. The Council also supports a range of public sector partners, community and private sector organisations to deliver local services through its asset base.

The Council has a wide range of assets from housing to schools, historic listed buildings to modern offices, outdoor spaces and parks to roads and bridges. The Council has over 300 operational buildings across 140 sites, over 12,000 homes, 178 facilities leased to local businesses and community organisations, 1268km of roads, 318 bridges and a transport fleet of 549 vehicles.

4 PART 1

INTEGRATED ASSET FRAMEWORK AND CAPITAL STRATEGY

5 STRATEGIC CONTEXT

The Asset Management Framework provides a strategic direction of travel and sets out the framework for the development and implementation of a robust process for Capital Investment.

This strategic framework integrates a strategic asset management approach, the Council’s 10 Year Capital Investment Programme and the requirements of a Capital Strategy. It is important that the large scale investment the Council and its partners make in East Ayrshire is placed in its proper strategic context if we are to deliver successful outcomes for communities across East Ayrshire. The development of this document provides a context for the effective operation of our current assets, the priorities and delivery of capital investment and the long-term support to service delivery.

In a wider context, there are a number of crucial policies, strategies and frameworks which are closely aligned to the Asset Management Framework. The most important of these are detailed below.

East Ayrshire Community Plan

The East Ayrshire Community Plan is the sovereign and overarching planning document for the East Ayrshire area, providing the strategic policy framework for the delivery of public services by all the Partners. The Plan is also the Council’s Corporate Plan and covers the 15 years from 2015 to 2030. The Vision contained within the Community Plan is shared by all Partners and states that:

“East Ayrshire is a place with strong, safe, vibrant communities where everyone has a good quality of life and access to opportunities, choices and high quality services which are sustainable, accessible and meet people’s needs.”

The Community Plan is implemented through three thematic Delivery Plans, namely Economy and Skills, Safer Communities, and Wellbeing, supported by the day to day work carried out by services across the Council.

Service Improvement Plans

Service Improvement Plans are an essential element of the Council’s performance management and improvement framework. They set out the principle issues for delivering services in support of the Community Plan Vision and priorities, provide a focus on performance improvement aligned to the Local Outcomes Improvement Plan and describe the service specific risks that may impact on the delivery of the Service.

6 Transformation Strategy

The Transformation Strategy agreed by Council in June 2018, sets out savings targets that are designed to build a programme which will deliver a sustainable financial position over the period to 2022 and setting the direction of travel to 2030.

6 Transformation work streams have been identified:

Workstream 1: A fairer, kinder and connected East Ayrshire Workstream 2: Workforce Planning, Cultural Change and Service Re-design Workstream 3: A digitally connected East Ayrshire Workstream 4: A vibrant and empowered East Ayrshire Workstream 5: Property and Estates Workstream 6: Income and Commercialisation

Strategic Priorities

Within each three year period of the Community Plan, the Community Planning Partnership Board focusses on 2-3 priority issues, with the expectation of a demonstrable shift in performance. The Board’s strategic priorities for 2018-21 are:

 Improving outcomes for vulnerable children and young people.  Older people: adding life to years – tackle social isolation.  Community led regeneration: empower communities and build community resilience.

Links between the Asset Management Framework and wider strategic drivers Framework or Relevant themes/aims/objectives Strategy: East Ayrshire Make East Ayrshire a destination of choice for business growth Community Plan and investment Scottish NO3 We are better educated, more skilled and more successful, Government renowned for our research and innovation National NO4 Our young people are successful learners, confident Outcomes individuals, effective contributors and responsible citizens NO9 We live our lives safe from crime, disorder and danger NO10 We live in well designed, sustainable places where we are able to access the amenities and services we need NO14 We reduce the local and global environmental impact of consumption and production NO16 Our public services are high quality, continually improving, efficient and responsive to people’s needs Strategic Community led regeneration: empower communities and build Priorities 2018- community resilience. 21 Transformation Workstream 2: Workforce Planning, Cultural Change and Strategy Service Re-design Workstream 3: A digitally connected East Ayrshire Workstream 5: Property and Estate Rationalisation

7 Other drivers

As well as the strategic context referred to above, there are a number of policy drivers and strategic programmes that inform the use of Council assets. The most important of these are listed below:

 Ten Year General Services Capital Programme

 Ayrshire Growth Deal

 Local Development Plan

 Economic Development Strategy for East Ayrshire 2014-2025

 Strategic Housing Investment Plan

 Energy Management Strategy

 Corporate Office Accommodation Strategy

 Kilmarnock Town Centre Strategy

 Corporate Procurement Strategy

 ICT & Digital First Strategy 2014-2020

 Records Management Policy and Records Management Plan

Legal Basis

Best Value

There is an increasingly important focus on the way that assets are managed in the public sector and Government interest is currently high. Asset management links to many Government policies aimed at achieving efficiencies, transforming public services, empowering communities, improving the transport infrastructure and addressing climate change.

The Local Government in Scotland Act (2003) provides the legal framework for both the Prudential Code and the Council’s arrangements in respect of Best Value. Under the Prudential Code, local authorities are authorised to make capital investments where it can be demonstrated that these investments are affordable, prudent and sustainable.

Scottish Local Authorities are required by regulation to have regard to the Prudential Code when carrying out their duties under Part 7 of the Local Government in Scotland Act 2003. The Prudential Code plays a principle role in capital finance as local authorities determine their own programmes for capital investment that are central to the ongoing delivery of quality public services.

8 The framework which the Prudential Code has established should support local strategic planning, local asset management and proper option appraisal. To achieve this, the local authority is required to consider capital expenditure and investment plans against the overall strategic aims and available resources and ensure that decisions are made with due regard to the medium to longer term financial implications and potential risks to the organisation.

Asset Management is a basic element of achieving Best Value. Councils have a statutory duty to deliver Best Value. This has considerable implications for asset management, meaning that local authorities must:

 Ensure that management arrangements secure continuous improvement;  Balance quality and cost in relation to the procurement of assets; and  Ensure that asset management decisions contribute to sustainable development.

Community Empowerment

In 2015 the Scottish Parliament passed the Community Empowerment (Scotland) Act 2015 to give new rights to community bodies and new duties to public sector authorities. This provides support and commitment towards;

 Encouraging Community Led regeneration  Establishing Participatory budgeting  Facilitating Community Asset transfer  Greater community representation and participation  Guidance on common good property  Ensuring Community Planning Partners work together

Community involvement in the use and decisions around assets and the built environment is central to this legislation.

Climate Change

A new Climate Change Bill is being progressed through the Scottish Parliament that will amend the Climate Change (Scotland) Act 2009 and will immediately increase the 2050 target of 90% which requires a monumental shift in the design, construction and use of assets.

The Council currently provides an annual response to meet the requirements of the above Act through the Climate Change Declaration that demonstrates the contribution to carbon emissions reduction targets, climate change adaptation and evidence of acting sustainably. Our Asset base contributes significantly to our carbon footprint as well as opportunities to mitigate climate change.

9 ASSET MANAGEMENT

Asset Management Principles

Assets are the basis for any organisation to deliver what it aims to do. Whether public or private sector, and whether assets are physical, financial, human or ‘intangible’, it is good asset management that maximises value-for-money. It involves coordinated and optimised planning, asset selection, acquisition/development, utilisation, care and ultimate disposal or renewal of assets and asset systems.

Insights into the integration and optimization of asset management have developed since the 1990s, to identify a range of essential business processes that provide valuable benefits:

 Alignment of processes, resources and functional contributions (instead of departmental ‘silos’ and competing, short-term priorities).  Creating a transparent audit trail for what is done, when and why.  Better understanding and usage of data and information to provide informed and consistent decisions.  Improved planning (especially capital expenditure).  Consistent, prioritised and auditable risk management.  Alignment and co-ordination of existing initiatives.  Greater engagement of the workforce, including leadership, communications and cross-disciplinary teamwork.

The table below sets out the principle areas within the ISO 55000 standard that covers Asset Management and highlights the key focus of effective asset management.

10 The place principle

The ‘place principle’ was developed collaboratively with a range of organisations to provide a shared context for place-based work. It was signed off by Scottish Government in February 2018 with a commitment to work in close partnership with COSLA to adopt and implement the Principle.

Place is where people, location and resources combine to create a sense of identity and purpose, and are at the heart of addressing the needs and realising the full potential of communities. Places are shaped by the way resources, services and assets are directed and used by the people who live in and invest in them. A more joined-up, collaborative, and participative approach to services, land and buildings, across all sectors within a place, enables better outcomes for everyone and increased opportunities for people and communities to shape their own lives.

The principle requests that: All those responsible for providing services and looking after assets in a place need to work and plan together, and with local communities, to improve the lives of people, support inclusive growth and create more successful places.

We commit to taking: A collaborative, place based approach with a shared purpose to support a clear way forward for all services, assets and investments which will maximise the impact of their combined resources.

The Council through its Community Planning Partnership has recognised the shared responsibility to our communities and is committed to working collaboratively for the best outcomes of our communities.

Strategic Asset Management

It is apparent there is a clear strategic and direct link between the asset groups and individual Community Planning themes and corporate priorities and these are reflected in the individual asset management plans. However more fundamentally our assets can demonstrate a greater cross-over of use and facilitate a strong approach to partnership working. The development of integrated models of service is strongly evidenced across the Council’s estate therefore each asset type does not sit in isolation and should be used to mitigate future risks and develop new shared opportunities.

11

Within this strategic context there are 8 main asset types that encompass the Council’s asset portfolio, including property and facilities, roads and infrastructure, housing, land and fleet. It is important therefore that each of the asset categories does not sit in isolation and every asset can support the achievement of the Community plan themes, our corporate priories and future change needs. Our Housing Estate - as well as providing secure and attractive neighbourhoods - should also encourage independent living and wellbeing within our communities and town centres. Our Housing Estate includes a property stock of 12,222 homes for social rent and supported accommodation.

Our Roads and Infrastructure - as well as offering safe and efficient connectivity - should stimulate economic growth and sustainable use of fleet. Our Roads Infrastructure includes 1,268 km of carriageway, 318 bridges and 20,372 street lights.

Our Culture and Community Assets - as well as maintaining our cultural significance -should strengthen our sense of safety and opportunities for healthier lifestyles and learning Our culture and community estate includes 45 sites (some nationally significant cultural buildings as well as a wide range of community used facilities.

Our Wellbeing, Sport and outdoor estate - as well as supporting vulnerable people in our communities - should provide sustainable opportunities for inclusive connections across our communities. Our Wellbeing Estate has 18 sites that support a variety of functions in support of the Council’s corporate parenting role as well as adult and older people residential and day care accommodation along with sports and recreation facilities.

Our Learning Estate - as well as preparing our young people for the world of work - should be at the centre of our communities, reinforcing the visibility of our corporate identity. Our Learning Estate includes 48 sites (schools and early childhood centres,

12 although these also provide an extensive community access and support to other services including some corporate facilities).

Our Economic Growth Portfolio - as well as supporting job creation and economic growth - should inspire creativity, strengthen local heritage and stimulate learning. Our Economic Growth estate includes 178 properties with a wide variety of facilities that include buildings leased to community and commercial organisations as well as buildings that offer facilities to support economic growth and local start up organisations.

Our Corporate Assets - as well as supporting efficient service delivery - should recognise local regeneration and facilitate integration across community partners and themes. Our Corporate Estate includes 29 sites that provide our corporate office accommodation with back office and corporate functions as well as facilities for Council staff working in community based services. This also includes our support facilities and depots for operational services.

Our Transport Fleet - as well as delivering our core services sustainably in communities - should help reduce our need for buildings and promote safety on our roads and in our towns. Our Transport Fleet is comprised of 549 vehicles. Reflecting the complexity of the Council’s business, there are no fewer than 37 separate vehicle classifications, 29 of which are specialist or require a specific driving licence entitlement

To maximise the value of our capital investments, the asset management framework recognises and will support opportunities which have the potential to realise direct and indirect multiple benefits. Future asset investment must be deployed to creatively provide opportunities to deliver efficient and effective asset management while maximising the multiple benefit across all aspects of the council’s aims and aspirations.

Asset Management Framework

The management of the asset base is provided through a range of mechanisms and cuts across all services within the Council. To ensure the effective development of our assets and alignment to both services and communities there are a number of more detailed asset management plans relating to specific areas of service delivery within the Council. These Asset Plans form part of the overall Asset Management Framework which will inform the Council, its employees and its service users of the condition of the asset base, the investment priorities to maintain, improve or renew the asset portfolio. The most important of these Asset Plans are:

 Housing Asset Management Framework (HAMF). The HAMF was developed to ensure that East Ayrshire’s housing stock meets the present and future needs of tenants, sustainability of tenancies is improved and that the best use of resources is made. The framework is compliant with the Scottish Housing Regulator’s guidance and supports the objectives set out in the Local Housing Strategy. This is reported to Cabinet in November each year.

13  Roads Asset Management Plan (RAMP). The RAMP provides for the management of all Ayrshire Roads Alliance assets within the adopted road network, including carriageways, footways, structures, street lighting, car parks, traffic signals, drainage and other street furniture. The Plan is produced in accordance with national guidance and recommended good practice developed through the SCOTS Asset Management Project. This will reported to Cabinet in March each year.

 Health and Social Care Property and Asset Management Strategy (PAMS). The PAMS document is approved through the Health and Social Care Integrated Joint Board (IJB) and supports the organisation’s Strategic Plan. It sets out the needs of the IJB as well as governance arrangements and progress on property, estate and asset needs. This will be reported to the IJB in March each year.

 School Estate Management Plan (SEMP). Local authorities are required to submit an annual School Estate Management Plan (SEMP) to the Scottish Government, which details the status of the existing school estate, the vision for the estate, the required capital investment to meet this vision and timescales within which this vision would be achieved. The current version of the plan reflects upon the significant investment in the school estate via the Capital Investment Programme, demonstrating the recent successful completion of a number of projects and the ambitious next phase of an extensive building programme for our schools. This will be reported to Cabinet in October each year.

 Property Management Plan This plan provides an overview of the council’s property portfolio, current management arrangements that support the safe, secure and sustainable operation of our buildings. This includes management of statutory inspection and safety maintenance, lifecycle and component renewal investment as well as assessment and information on condition, suitability and longer-term investment priorities. This will be reported to Cabinet in June 2019 and will incorporate Council assets and those operated by the Leisure Trust.

 ICT and Digital First Strategy. This Strategy seeks to ensure that ICT assets are disposed of in a responsible and sustainable manner, and are reused within the Council and wider community where possible. Recognition is also given to 'agile, home and flexible working'. The benefits of allowing employees to work from home, in certain circumstances, are many and include reduced emissions resulting from less commuting to and from the workplace.

 Fleet Asset Management Strategy. This strategy aims to set standards for sustainable specification care and use, reduce the number of fleet assets to a sustainable level, monitor and report running costs and identify improvement opportunities. The fleet strategy was presented as part of the 2019/20 budget proposals, with future updates being brought forward as necessary. Cabinet annually?

 Transformation Strategy - As part of the Council’s Transformation Strategy 2012-2017 the total number of Council buildings was reduced by 25% through the property and asset management workstream. This workstream delivered on a

14 major schools modernisation and rationalisation programme, a Community Asset Transfer programme and reviews across office accommodation, community facilities and depots. Property and estates remains a core workstream in the 2018-2023 Transformation Strategy. Updates are presented to Cabinet regularly and as part of the annual budget setting process in February each year.

 Climate Change Declaration Report. The Council’s Energy Management Approach is set out within the Climate Change Declaration Report which seeks to ‘Reduce our carbon emissions and minimise our contribution to climate change’. In approving the Council’s 10 year Capital Investment Programme in April 2016, Cabinet agreed to invest in an Energy Efficiency Capital Fund. This demonstrates the Council’s commitment to the environment and carbon reduction and the Facilities and Property Management Service, through the development and implementation of a range of ambitious projects, that will pilot developing technologies such as Biomass and District Heating Systems, Building Management Systems and other controls, will take a large stride towards reducing carbon output from the Council’s non-housing portfolio. This will be reported to Cabinet in October each year.

 East Ayrshire Performs - The Council reports a range of performance information and progress updates across a range of areas including Finance, HR, Health and Safety, Service performance as well as progress on the capital investment programme. This is reported 4 times per year.

The following table outlines the proposed alignment of the main asset management plan reporting to future cabinets.

Asset Group Strategic Client Service Cabinet reporting Housing Estate Housing & Communities November Roads and Infrastructure Ayrshire Roads Alliance March Culture & Community Leisure Trust June* Wellbeing Estate Health & Social Care March Economic Growth Portfolio Economic Development June* Learning Estate Education October Corporate Estate Facilities & Property June* Transport Fleet Transport January

*The three areas noted will be included in the Property Management Plan.

15 Tiered Management and Response

The focus of the Asset Management Plans is developed around three core approaches that ensure the effective short term, medium term and long-term response to managing assets effectively. This is also supported by both revenue and capital expenditure.

16 CAPITAL INVESTMENT

The Prudential Code sets out that in order to demonstrate that the Council takes capital expenditure and investment decisions in line with strategic and service objectives and takes account of stewardship, best value, prudence sustainability and affordability, it should have in place a Capital Strategy:

The Capital Strategy should form part of the authority’s integrated revenue, capital and balance sheet planning and is intended to give a high level overview of how capital expenditure, capital financing and treasury management activity contribute to the overall provision of services along with an overview of how the associated risk is managed and the implications for future financial sustainability.

As a result the Capital Strategy should set out the long term context in which capital investment and expenditure decisions are made and give due consideration to both risk and reward and impact on the achievement of priority outcomes.

Capital Expenditure

A clear understanding of what represents capital expenditure is important to understanding the benefit that the Council can obtain through the prudential framework. If expenditure fails to meet the definition of capital it will be out with the scope of the prudential framework and fall to be recorded as revenue and accounted for in the period incurred.

Capital Expenditure is defined in the Local Government (Scotland) 2003 Act [the 2003 Act] as expenditure which, in accordance with proper accounting practices, falls to be capitalised. Proper accounting practice is currently accepted to be the CIPFA/LASAAC Code of Practice on Local Authority Accounting: A Statement of Recommended Practice (known as the SORP).

On this basis, capital expenditure essentially relates to the provision and improvement of fixed assets including land, buildings and equipment (such as schools, new houses and machinery) which will be of use or benefit in providing services for more than one financial year.

In addition The Council is permitted by the Local Authority (Capital Financing and Accounting) (Scotland) Regulations 2016 to borrow to fund expenditure that is not capital expenditure of the local authority.

Regulation 2(1) (b) and 2(1) (c) allows a local authority to borrow to provide a capital grant to a third party or to finance certain capital expenditure on a third party’s tangible assets.

Regulation 2(1) (c) allows a local authority to lend to those bodies, and for those purposes, as set out in Part 3 of the 2016 Regulations. By permitting borrowing for

17 this purpose the loan made must be treated as a capital transaction for the purposes of the legislative capital control framework and the Prudential Code.

Capital Funding

The main sources of funding are:

Scottish Government General Capital Grant The purpose of the grant is to allow councils to finance capital investment in a way, which ensures the delivery of their Single Outcome Agreement and contributes to the National Strategic Objectives and Purpose. The Government does not therefore direct how the grant must be spent, with councils determining how these resources are used to meet both local and national priorities.

The terms and conditions relating to this grant are set out in the General Capital Grant offer letter issued to individual councils each year. Revised offers may be made during the year. Grant will be applied to finance capital expenditure firstly against short life assets in line with the agreed methodology.

Scottish Government Specific Grant Sometimes referred to as specific purpose grant, or ring-fenced grant, these may only be used by Local Authorities to fund specific types of capital expenditure, and not for general use. The terms and conditions of each grant are set out separately in the offer letters for these grants.

Capital Receipts The Council is able to generate capital receipts from the sale of surplus assets such as land, building, vehicles and other plant and equipment. Capital receipts from the sale of General Fund assets are credited to the Capital Fund, whilst the receipts from Housing assets are applied to reduce the level of capital expenditure.

Capital Grants from other Public Sector Bodies Grants are received from bodies such as Strathclyde Passenger Transport Executive and Heritage Lottery Fund and Historic Environment Scotland

Capital Financed from Current Revenue (CFCR) Revenue contributions can be made from existing budgets to support capital schemes. This might be to meet specific elements of a larger project or to ensure that efficiencies in future years can be released through a one off contribution

Prudential Borrowing This represents the net balance of capital expenditure, not funded from any other source. The Prudential Code for Capital Finance in Local Authorities enables councils to approve borrowing limits with a requirement that these are prudent, sustainable and affordable.

18 Business Case Approach

The development of a business case approach to capital investment continues to be the most effective method of determining the validity, effectiveness and deliverability of successful projects.

A standard business case approach has been developed by HM treasury to ensure any assessment and determination of capital investment meets the strategic outcomes. This is based on the development of a Strategic Business Case (SBC) to establish the project, an Outline Business Case (OBC) to develop and test the assumptions and a Full Business Case (FBC) to take the project forward. The Business Case stages develop the original idea with the document developing the detail as the project moves to fruition. Depending on the project it may be an option to consider a Single Business Case approach. The level of detail in a business case is commensurate with the scale and complexity of the project. No matter the complexity of the project or the stage of business case the basis of any Business Case should set out the principles of the 5 case model to allow effective assessment and comparability across the range of potential options:

Strategic Case –demonstrate the proposals support a robust Case for Change.  the strategic context and business need  alignment with service strategy and related projects, government policy  imperatives, existing arrangements, need for change?  desired service outcomes and investment objectives  Prospects for joint working and all stakeholders  Scope

Economic Case –demonstrate the proposals optimise value for money

 Options for meeting the Project objectives (including doing nothing)  assessment criteria for identifying and reducing options  options appraisal or value-for-money and risk analysis  consideration of level of detail needed at each stage

Commercial Case –demonstrate the proposals are commercially viable  assessment of the likely attractiveness of the project to the market  assessment of whether the project is suitable for government funding.  assessment of potential for additional funding, resources and scale  consideration of commodity strategy

Financial Case –demonstrate the proposals are affordable

 appropriate level of detailed costing of investment  revenue implications savings and future whole life costs  affordability targets and sensitivity analysis  level and sources of funding available and capacity for contingency

19  level of commitment from all stakeholders

Management Case –demonstrate the proposals can be delivered successfully.  achievability and critical success factors  project plan, timetable and key milestones  project management, procurement and resource arrangements  communication, change management, engagement and training implications  risk management and benefit realisation  evaluation process and lessons learned approach  any further work required to inform development of the project

The focus of a SBC is the strategic case, economic case and project management case. Details about the commercial case generally do not become available until after the project has been advertised and tenders have been submitted, ie, after the OBC.

A SBC should be judged in terms of whether it addresses the issues outlined above. It should contain the relevant information in order to allow decision-makers to form a view of whether to proceed with or reject a project.

The consideration of the business cases should allow gatekeeping at the appropriate stage to determine and confirm:

 abandonment the project: perhaps on grounds of affordability, unacceptability to stakeholders or inability to manage the risks successfully  redefine the project: to make it more manageable and improve the likelihood of a successful outcome  undertake a pilot or test exercise: and use the results to inform how best to proceed with the project  proceed with the project: as originally conceived with a set of broad recommendations on how to proceed, including a short-list of options for more rigorous assessment at the OBC stage –this will not include identification of a preferred option since the analysis undertaken as part of the SBC will not be sufficiently robust to support an unequivocal conclusion.

Assessment and Agreement of business case proposals An Asset Investment Group will be established to assess and manage the development and challenge of business cases for ongoing and future investment priorities. The group will be co-chaired by The Depute Chief Executive of Safer Communities as Programme Sponsor and the Head of Facilities and Property Management as Programme Manager.

It is proposed that the Group will be made up of the Chairs of the Programme Boards established as part of the Programme Management and Governance arrangements to ensure clear strategic integration and priority spending across the full breadth of the asset portfolio.

20 The Group will require to establish a methodology to assess each element of the five case model against the strategic priorities of the Asset Management Framework to provide prioritised options appraisal for consideration, scrutiny and review.

21 PROGRAMME MANAGEMENT & GOVERNANCE

Monitoring Arrangements

The Council has put in place a range of governance arrangements to support the delivery of its Asset Management Framework and Capital Investment Strategy:

Programme Boards are put in place for all major capital project areas. These Boards are made up of a range of officers from relevant Council services. The Council has adopted robust project management principles, based on PRINCE 2, for each capital project. Each programme board will record actions, decisions and milestones via highlight reports, which form the basis of higher level reporting. Current programme boards are: o Education Programme Board. o Early Learning and Childcare Programme Board. o Future Homes Programme Board. o Waste Management Programme Board. o Economic Development Programme Board. o Dean Castle Programme Board. o Infrastructure Programme Board. o Health and Social Care Property and Asset Management Board

Overall progress against the Capital Programme is included within the ‘East Ayrshire Performs’ report, which is submitted and considered by Cabinet 4 times per annum. This is also presented to the Governance & Scrutiny Committee.

The 10 Year Capital Investment Programme has been updated and previously presented to cabinet and has been incorporated into this document.

Individual Asset Management Plans, such as the School Estate Management Plan and Roads Asset Management Plan, are reported to Cabinet as required and noted earlier in this report.

Operational responsibility for delivery of the Capital Programme rests with the Head of Facilities and Property Management. The Council has the overall responsibility for the formal approval of the Asset Management Framework and Investment strategy.

In addition to the capital investment and other major projects, extra funding is also provided from other sources including revenue budgets and grant funding. Project management and reporting arrangements remain consistent.

The Asset Management Framework will be reviewed on an annual basis to ensure its continued alignment with the Council’s priorities and it supports the determination of future capital investment plans.

22 Knowledge and Skills

The successful delivery of effective Asset Management and the Capital Programme requires that the Council has appropriate and proportionate input from suitably trained and knowledgeable professionals.

The Council employs professionally qualified staff across a number of disciplines including Architects, Surveyors, Engineers, Solicitors and Accountants. The required professional development of these employees should be identified through the Council’s EAGER process and also through individual’s Continuous Professional Development (CPD) plans

It is essential that the matrix of skills required to deliver the capital programme is matched to those available and that in addition the forward planning of the programme reflects any specialist input required from external sources. This would include the provision of specialist advice not immediately available within the Council.

The Council will also ensure that Elected Members are suitably supported to undertake the required scrutiny and provided effective oversight of the capital investment as part of the wider governance arrangement.

23 Performance Management

The ability of the Council to manage its extensive property estate is largely underpinned by access to accurate and up to date information. To monitor the success of the Asset Management Framework, a performance management framework has been put in place consisting of a range of performance indicators (see below).

The Council is currently carrying out a review of its performance management framework to take into account changing circumstances both internal and external to the organisation.

Corporate Asset Management Strategy: Performance Management Framework

2015/16 2016/17 2017/18 Trend Proportion of operational accommodation that is: In a satisfactory condition 97.2% 98.2% 98.0% ↓ Suitable for its current use 81.6% 81.4% 83.7% ↑ Occupancy rates for office 17.8 18.1 19.8 ↑ accommodation expressed as sq. m per FTE Extent of operational portfolio 322,682 316,827 315,477 ↓ expressed in sq. m Percentage of council buildings in which 83.2 82.8 86.1 ↑ all public areas are suitable for and accessible to disabled people Emissions – actual energy usage 57.9 kg 51.6 kg 47.9 kg ↓ (CO2/m2) across the Council estate Emissions – overall energy usage (CRC 20,509 18,180 16,117 ↓ return) tonnes tonnes tonnes Percentage of schools graded A or B 96.3 98.1 98.1 ↑ (good or satisfactory) Percentage of schools with occupancy levels above 61% - Primary 73.8 69.1 73.2 ↑ Secondary 66.6 55.5 66.6 ↑ Number of attendances per 1,000 2,383 2,416 2,195 ↓ population – pools Number of attendances per 1,000 9,130 7,831 6,498 ↓ population – indoor sports & leisure facilities

In addition to the above corporate indicators each asset management plan and service plan should reflect priority targets and KPIs in developing their approach within each asset category.

24 RISK MANAGEMENT

Risk Appetite

The Risk Management Strategy 2017/2020 defines the Council’s risk appetite as: “East Ayrshire Council will be risk aware, but not overly risk adverse, actively managing business risks to safeguard the organisation while supporting transformational change.

Risk within the capital programme should therefore be managed through the overall governance framework in place and with reference to individual project risk assessments.

All capital projects require the establishment of appropriate management controls to offset the risks inherent in delivery. The effective monitoring, oversight and mitigation of these risks is integral to managing the capital strategy and form an essential aspect of the programme management arrangements.

General and Specific Risks

Interest Rate Risk

This Capital Strategy identifies an underlying borrowing requirement of £301.367m to the period March 2023 and thereafter is expected to reduce to £271.470m over the remaining period to 2029/30. Interest rates will vary over this period and any increase above the rate assumed could increase the cost of servicing the debt beyond the point of affordability.

To mitigate the potential risk from interest rate rises the Council has used the following rates to calculate the interest element of the capital financing costs. The table also shows the impact of a +1% increase in these assumptions

2019/20 2020/21 2121/22 2022/23 2023/24 2024/25 Interest Rate % 3.00% 3.20% 3.40% 3.50% 3.75% 4.00% + 1% £0.756m £1.909m £2.535m £2.889m £3.014m £3.014m

Inflation Risk

Construction costs are sensitive to inflation on items such as raw materials and wages. There is a potential that previously agreed budgets would be insufficient to meet the revised costs resulting in additional borrowing being required. Due to the current potential of Brexit the risk of inflation increases remains uncertain.

25 An increase of 1% across the planned capital programme for the period 2019/20 to 2029/30 would increase the required borrowing by an estimated £4.830m and result in additional interest costs of £26.170M over the same period.

The inclusion of contingencies within overall project costs acts to mitigate against the impact of inflation as does the utilisation of fixed priced contracts and regular reviews as part of the contract planning stage. Construction inflation is also monitored through BCIS indices.

Regulatory and Legislative Risk

A change in the statutory or legislative framework governing either the construction industry or the service specific to the asset (e.g. Education or Social Care) could in some circumstances result in additional cost pressures.

As far, as is possible these will be mitigated through awareness of forthcoming changes and the inclusion within contract specifications of contingencies.

Project Management Risks

The adoption of PRINCE 2 principles looks to minimise the potential risks associated with project management. Developing a clear scope of works and ensuring effective allocation of responsibilities, appropriate skilled and qualified staff, close risk management and informed decision making all assist in reducing project management risks.

Managing the balance between, cost, quality and time is effective to ensuring projects deliver the expected outcome. The development of clear project scope, detailed design development, market testing and competition, quality control in construction and effective handover, soft landings approach, user feedback and lessons learned are all critical control steps in the project management process.

The recommendations of the Cole report following the Edinburgh schools incident has further focused attention on the quality control arrangements during construction projects across the public sector. The use of on site clerk of works including specialist Mechanical and Electrical staff has been utilised on recent projects and the introduction of photographic evidence of all construction staged further enhances confidence of quality construction. Critical to the successful project management is the role of the Council and Facilities and Property management in supporting the intelligent client role.

Market Risks

The Construction market can be variable with a history of feast and famine times for the industry. As order books fill up and demand is high there is a higher turnover of staff, tender prices can be inflated with less competition. However, when the market

26 is supressed risks to organisational failure and cash flow issues can create local difficulties and effect project value and delivery. Evaluation of financial status and market intelligence is used through the procurement process.

The appointment of professional teams, including architecture and design teams, engineering, cost consultants and QS services provide an important role in effective project delivery. Although the Council retains an in-house team framework contracts are in place to allow the utilisation of external professional services. As demand is high with current levels of capital investment the opportunity to retain and increase in- house staff provides a greater level of flexibility, quality and ownership of project delivery and quality.

Insurance Risk

As noted earlier the level of risk appetite influences the decisions taken in the assessment and determination of contract provisions. The Council has historically set a high threshold for insurance cover and protection within contracts. With a greater level of contract activity involving alternative procurement models and partnership approaches consideration of appropriate levels of insurance should be reflected.

The construction market is more regularly reflecting a £10m aggregated level of insurance as opposed to an each and every claim. This reduces the protection offered by a contractor through their insurance however; any valid claim on liability would remain with them. Insurance levels should to be considered in relation to the value of the construction contract and complexity noting the achievability of cover and likelihood of a claim within the market.

27 PLANNED CAPITAL PROGRAMME

Overview of capital investment

The following tables summarise the Council’s approved capital investment programmes, together with estimated funding streams for the period 1 March 2019 until 31 March 2030. The gap between planned expenditure and estimated funding represents the underlying borrowing requirement of the Council. Full details of project spend are set out in Appendix 1.

2024 to 2019/20 2020/21 2021/22 2022/23 2023/24 2030 Est. Est. Est. Est. Est. Est. £m £m £m £m £m £m Housing 61.132 49.549 21.407 18.380 29.821 0.000 Roads 15.717 3.610 2.060 1.925 3.700 14.800 Heritage & Env 8.332 3.973 1.259 0.738 0.200 0.400 Wellbeing 2.788 7.950 7.619 0.950 0.950 3.800 Economic Growth 7.330 4.450 6.530 6.465 5.250 17.780 Learning 52.151 35.226 22.510 17.405 0.874 0.000 Fleet 2.000 0.000 0.000 2.000 0.000 4.000 Corporate 8.570 6.412 4.200 4.120 3.250 11.000 Total Expenditure 158.019 111.170 65.585 51.983 44.045 51.780

General Grants 14.598 12.329 12.329 12.329 12.329 73.974 Specific Grants 12.564 11.723 1.126 0.300 3.250 0.000 Capital Receipts 0.000 0.000 0.000 0.000 0.000 0.000 CFCR 7.620 7.620 7.620 7.620 7.620 0.000 Reserves/balances 3.475 0.583 0.500 0.200 0.400 0.000 Affordable housing 0.200 0.200 0.200 0.200 0.200 0.000 grant Total Funding 38.457 32.455 21.775 20.649 23.799 73.974

Required 119.563 78.715 43.810 31.334 20.246 -22.194 Borrowing

The following table provides a summary of the overall distribution of the capital budget and investment projects across the next 10 year capital investment plan.

28 Housing 2019/20 2020/21 2021/22 2022/23 2023/24 2024/25 2025/26 2026/27 2027/28 Total

Strategic Housing Investment Plan 42.362 31.669 3.527 0.500 11.941 89.999 Housing Improvement Programme 15.180 16.680 16.680 16.680 16.680 81.900 Asset Management Plan 3.390 1.000 1.000 1.000 1.000 7.390 Affordable Housing 0.200 0.200 0.200 0.200 0.200 1.000 61.132 49.549 21.407 18.380 29.821 - - - - 180.289 Roads Infrastructure 2019/20 2020/21 2021/22 2022/23 2023/24 2024/25 2025/26 2026/27 2027/28 Total Street Lighting LED (Spend to Save) 3.650 0.520 ------4.170 Roads & Transportation Programme 8.772 2.940 2.060 1.925 3.700 3.700 3.700 3.700 3.700 34.197 New Cumnock Flood Scheme 3.295 0.150 ------3.445 15.717 3.610 2.060 1.925 3.700 3.700 3.700 3.700 3.700 41.812

Culture and Community Assets 2019/20 2020/21 2021/22 2022/23 2023/24 2024/25 2025/26 2026/27 2027/28 Total

Dalricket Landfill Site 0.113 ------0.113 Parks and Playparks 0.059 0.059 0.059 ------0.178 Dalrymple Cemetry Extension 0.070 ------0.070 Dean Castle / Keep Match Funding 1.150 0.800 0.800 0.438 - - - - - 3.188 Environmental Risk Management Fund / Skares 5.391 ------5.391 Dalmellington Cemetery Extension 0.175 ------0.175 Other Cemetery Improvements 0.100 0.100 0.100 0.100 0.100 0.100 0.100 0.100 0.100 0.900 1 Dunlop Street / 12 Strand Street 0.291 0.680 ------0.971 Galston CARS 0.071 ------0.071 Dalmellington/Waterside CARS - - 0.100 0.100 - - - - - 0.200 Derelict Buildings Grant Fund 0.179 0.034 ------0.213 Mauchline CARS - 0.100 0.200 0.100 0.100 - - - - 0.500 2-4 John Finnie Street 0.216 ------0.216 Galston Local Office 0.516 2.200 ------2.716 8.332 3.973 1.259 0.738 0.200 0.100 0.100 0.100 0.100 14.902

Wellbeing, Sport and Outdoor estate 2019/20 2020/21 2021/22 2022/23 2023/24 2024/25 2025/26 2026/27 2027/28 Total

Private Sector Housing Grant - Improvement 0.289 0.200 0.200 0.200 0.200 0.200 0.200 0.200 0.200 1.889 Galleon Centre - 7.000 6.669 ------13.669 Private Sector Housing Grant 0.849 0.600 0.600 0.600 0.600 0.600 0.600 0.600 0.600 5.649 New Children's House (Spend to Save) 1.500 ------1.500 Telecare 0.150 0.150 0.150 0.150 0.150 0.150 0.150 0.150 0.150 1.350 2.788 7.950 7.619 0.950 0.950 0.950 0.950 0.950 0.950 24.057

Business Growth portfolio 2019/20 2020/21 2021/22 2022/23 2023/24 2024/25 2025/26 2026/27 2027/28 Total

HALO 1.256 ------1.256 Moorfield Units 1.924 1.000 1.280 1.215 - - - - - 5.419 Economic Growth Fund 1.700 2.200 4.000 4.000 4.000 4.000 4.000 4.000 0.030 27.930 National Energy Research and Development Centre 0.750 0.750 0.750 0.750 0.750 0.750 0.750 0.750 1.500 7.500 Rowallan Park 1.200 ------1.200 Kilmarnock Town Centre Regeneration 0.500 0.500 0.500 0.500 0.500 0.500 0.500 0.500 0.500 4.500 7.330 4.450 6.530 6.465 5.250 5.250 5.250 5.250 2.030 47.805

Learning Estate 2019/20 2020/21 2021/22 2022/23 2023/24 2024/25 2025/26 2026/27 2027/28 Total

Barony Campus 30.948 6.840 ------37.788 Early Years 1140 Expansion 6.875 6.875 ------13.749 Bellsbank Primary & ECC 5.245 0.100 ------5.345 Dunlop Primary and ECC - 2.000 1.420 ------3.420 Loanhead Primary & ECC 2.024 1.921 0.100 ------4.045 Kilmaurs ECC 1.420 ------1.420 Netherthird Primary and ECC 2.750 7.000 ------9.750 Crosshouse Communication Centre - 2.499 3.535 ------6.034 Stewarton Academy - 0.946 5.392 7.520 - - - - - 13.858 Nether Robertland Primary - 1.109 0.740 ------1.849 Kilmaurs Primary - 1.000 ------1.000 Future Schools Development Fund 0.500 3.500 10.500 9.200 - - - - - 23.700 Schools Improvement Programme 2.389 1.436 0.823 0.685 0.874 - - - - 6.207 52.151 35.226 22.510 17.405 0.874 - - - - 128.165

Transport Fleet 2019/20 2020/21 2021/22 2022/23 2023/24 2024/25 2025/26 2026/27 2027/28 Total Fleet 2.000 - - 2.000 - - 2.000 - 2.000 8.000 2.000 - - 2.000 - - 2.000 - 2.000 8.000

Corporate estate 2019/20 2020/21 2021/22 2022/23 2023/24 2024/25 2025/26 2026/27 2027/28 Total

Customer Service & Contact Centre 0.443 ------0.443 Demolition of Greenholm Street Office 0.200 ------0.200 ICT Programme 1.359 1.200 1.200 1.250 1.250 1.250 1.250 1.250 1.250 11.259 Refurbishment & Component Renewal 1.500 1.500 1.500 1.500 1.500 1.500 1.500 1.500 1.500 13.500 ICT Fibre Connection - 0.120 ------0.120 BEMS System Upgrade 0.100 ------0.100 Risk Management Centre Equipment Upgrade 0.400 ------0.400 Lugar Office Site 0.145 ------0.145 CCTV Renewal 0.175 ------0.175 CCTV upgrade Town Centre 0.200 0.200 Energy Efficiency 0.500 0.500 0.500 0.500 0.500 - - - - 2.500 Cumnock Depot Developments 2.217 1.827 ------4.044 Health and Social Care Management System 0.331 ------0.331 North West Area Centre - 0.265 ------0.265 Transformation Strategy Fund 1.000 1.000 1.000 0.870 - - - - - 3.870 8.570 6.412 4.200 4.120 3.250 2.750 2.750 2.750 2.750 37.552 Total 158.019 111.170 29 65.585 51.983 44.045 12.750 14.750 12.750 11.530 482.582 Loans Fund Advances and Repayment of Principal

The Local Authority (Capital Financing and Accounting) (Scotland) Regulations 2016 – Loans Fund Accounting require local authorities to make loans fund advances each year for expenditure of, or lending by the local authority which it has determined should be met from borrowing as permitted by Regulation 2.

Loans fund advances are repaid over the assumed useful life of the asset created or enhanced by the expenditure. Cabinet considered and approved a revised methodology for calculation of loans fund repayments in February 2018. In broad terms most advances will be repaid over 40 years.

Repayments of loans fund advances form the principal element of the capital financing charge made to the General Fund and Housing Revenue Account along with an allocation of interest (due on external debt) and expenses.

The forward estimate of principal repayments arising from prior year expenditure and expenditure forecast for 2019/20 onwards is summarised below. The full detail of this can be found in the Treasury Management Strategy Statement which was approved by Council on 28 March 2019.

Advances Later Repaid - 2019/20 2020/21 2021/22 2022/23 2023/24 2024/25 Years Principal Act. Est. Est. Est. Est. Est. Est. £m £m £m £m £m £m £m General 7.725 8.341 8.603 8.487 8.845 8.523 421.008 Fund HRA 2.998 3.558 4.059 4.393 4.724 4.625 197.456 Total 10.723 11.899 12.663 12.880 13.569 13.147 618.464

Borrowing to Fund the Capital Programme

In order to raise the cash required to pay for the acquisition or creation of capital assets it is necessary to borrow. There are two types of borrowing:

External – where loans are taken usually from the Public Works Loan Board but this can also be from commercial banks and financial institutions.

Internal - where the Council uses resources such as reserves and balances to finance capital expenditure. In the current economic climate this is a prudent use of Council resources as it reduces the exposure to counterparty risk and, as investment returns are currently low, reduces the cost of carrying additional debt at higher interest rates.

The following table shows the relationship between borrowing, reserves and capital expenditure already incurred and planned which has still to be financed - the Capital Financing Requirement (CFR).

30 2019/20 2020/21 2021/22 2022/23 2023/24 2024/25 Est. Est. Est. Est. Est. Est. Capital £m £m £m £m £m £m Position: CFR at 1 April 393.207 502.046 568.862 600.010 618.464 625.141 Principal (10.723) (11.899) (12.663) (12.880) (13.569) (13.147) Repaid New 119.562 78.715 43.810 31.334 20.246 0.421 Expenditure Closing CFR 502.046 568.862 600.010 618.464 625.141 612.415 at 31 March

Borrowing

Position: External Debt 322.139 444.576 516.975 553.622 572.276 578.953 at 1 April New external Debt 151.138 79.430 45.817 24.982 14.741 (6.218) (estimate) Debt (28.702) (7.031) (9.169) (6.328) (8.064) (6.509) repayments Closing 444.576 516.975 553.662 572.276 578.93 566.227 External Debt

Over /(Under) (57.471) (51.888) (46.388) (46.188) (46.188) (46.188) Borrowed

Reserves and 57.471 51.888 46.388 46.188 46.188 46.188 Balances:

The Treasury Management Strategy assumes that internal borrowing will continue to be utilised at a level equal to the available reserves and balances. In practice it is usual for the Council to have other short terms balances which typically arise from movements in working capital and accounting charges which do not require cash payments, such as loans fund principal repayments.

As a result, the actual level of external borrowing may vary above or below the estimated amount in any year. This will be monitored as part of the wider approach to treasury activity with the actual level and timing of borrowing being phased appropriately.

Revenue Impact of Capital Investment Programmes (Affordability) Capital Financing Costs

The fundamental objective when considering the affordability of the Council’s capital investment plans is to ensure that the cost of servicing the debt incurred remains within sustainable limits.

31 To achieve this it is important that there is a clear linkage between the longer term capital investment proposed and the revenue implications of this - the capital financing costs or debt charges. These are made up of:

 Repayment of loans fund principal  Interest (payable on external borrowing)  Expenses (bank charges, support costs etc.)

The following tables sets out the current forecast position.

General 2019/20 2020/21 2021/22 2022/23 2023/24 2024/25 Fund Est. Est. Est. Est. Est. Est. £m £m £m £m £m £m Principal 7.725 8.341 8.603 8.487 8.845 8.523 Interest 10.704 12.353 13.614 14.411 14.273 14.280 Total 18.429 20.694 22.217 22.898 23.118 22.803

Housing 2019/20 2020/21 2021/22 2022/23 2023/24 2024/25 Est. Est. Est. Est. Est. Est. £m £m £m £m £m £m Principal 2.998 3.558 4.059 4.393 4.724 4.625 Interest 5.153 6.482 7.261 7.524 7.722 7.873 Total 8.151 10.040 11.320 11.917 12.446 12.498

The figures shown above form part of the budgets which underpin the setting of the Council Tax and Housing Rent levels for 2019/20, whilst later financial year figures will be incorporated into the medium term planning assumptions.

Revenue costs from Spend to Save Capital Schemes

Capital financing costs where the capital expenditure has been approved on spend to save principles are charged direct to the appropriate service revenue account in the expectation that savings released or income generated will be at least equal to the costs of servicing the debt. These are currently projected as being:

Spend to Save Capital 2024 to 2019/20 2020/21 2021/22 2022/23 2023/24 Financing 2030 Costs Est. Est. Est. Est. Est. Est. £m £m £m £m £m £m Principal 0.125 0.165 0.230 0.256 0.267 1.179 Interest 0.537 0.699 0.827 0.852 0.842 4.743 Total 0.662 0.864 1.057 1.108 1.108 6.522

32

Spend to Save Capital 2024 to Financing 2019/20 2020/21 2021/22 2022/23 2023/24 2030 Costs - Services Est. Est. Est. Est. Est. Est. £m £m £m £m £m £m Housing ------Economy & - - 0.003 0.011 0.011 0.067 Skills Safer 0.662 0.864 1.054 1.097 1.097 6.455 Communities Wellbeing ------Total 0.662 0.864 1.057 1.108 1.108 6.522

New and Recurring Revenue Costs

In addition to the capital financing costs implicit with a decision to incur borrowing consideration also needs to be given to any revenue consequences arising from a capital project.

These will include any additional costs from commissioning or operating a new facility plant or vehicle together with the ongoing maintenance and compliance with all statutory requirements.

Where revenue consequences cannot be met from existing departmental budgets Depute Chief Executives and Directors are required to seek formal adjustment to the allocated budgets, prior to committing capital budgets.

Commercial Investment Activities

The Transformation Strategy has identified, as part of the wider review of property and estate, the need to consider the potential capacity to maximise the strategic, community, economic, commercial, and financial and risk management benefits.

The transformation strategy further recognises that income generation can be an additional tool to doing more with less and consequently will explore opportunities where a more commercial approach can be used to reduce costs and generate additional grant income.

To date acquisition of property has predominantly been undertaken to support service delivery rather than for investment or regeneration purposes. Prior to undertaking any extensive programme of commercial or investment acquisition it will be necessary to develop a property investment strategy for the Council which should address the following:

33  The objectives for acquiring commercial property investments  The criteria for investment acquisition  Risks to the Council and a programme of risk mitigation and control  The overarching governance framework for acquisition, management and disposal

This approach should align to the Business Case model for investment.

Section 95 Officer Assurance

The capital investment plan and capital strategy has been prepared in line with the requirements of the 2018 CIPFA Prudential Code and 2018 CIPFA Treasury Management Code of Practice.

The Depute Chief Executive and Chief Financial Officer views the capital investment to be prudent and affordable and confirms that the revenue implications have been incorporated into the forward financial planning for the Council.

34 SECTION 2

DELIVERY UPDATE OF INVESTMENT AIMS BY ASSET CATEGORY

35 HOUSING

The Council’s social housing portfolio extends to 12,222 council houses. This figure includes 24 Adult Supported Units, 437 supported accommodation units for older adults, 8 units of interim ‘moving on’ accommodation and 73 temporary furnished flats.

Our investment aims in respect of the housing estate are:

 Ensuring that the Council has a sustainable, quality housing stock within strong and vibrant communities. Using resources as efficiently and effectively as possible.

 Maximising resources for further investment in existing and new stock.

Ensuring that the Council has a sustainable, quality housing stock within strong and vibrant communities. Using resources as efficiently and effectively as possible.

The Housing Asset Management Framework (HAMF) ensures that the Council’s housing stock meets the present and future needs of our tenants; that resources are used effectively and efficiently and that resources are maximised for further investment in existing and new stock.

The development of the Housing Asset Management Framework will contribute to achieving the vision of East Ayrshire’s Local Housing Strategy:

“Everyone in East Ayrshire can afford to access a quality home that meets their needs and aspirations, and is located within a safe and attractive neighbourhood in which they are proud to live while ensuring that we retain vibrant communities with good quality homes”.

This approach will not only focus on the fabric of our buildings but also on the stability of our neighbourhoods and the framework will inform our strategic approach through the Strategic Housing Investment Plan (SHIP) and the Housing Investment Programme (HIP).

Progress to Date

Maintenance works carried out between 2016 and 2018 have reduced the number of properties causing concern from 680 to 370.

The adoption of an ‘estate agent’ approach to void properties, many of which have been fully upgraded and advertised via a range of local outlets.

98.6% of council properties had achieved full compliance with the Scottish Housing Quality Standard by the end of 2017/18.

36 “We are focused on future proofing our communities, not just our buildings. It is therefore vitally important that we address void properties as they have a negative effect on our neighbourhoods. This work will be carried out in partnership with local people; we will be carrying out consultations and answering residents’ concerns, every step of the way.” Councillor Elena Whitham, Cabinet Member for Housing and Communities

Future objectives

An updated Housing Needs and Demand Assessment will be published alongside the revised Local Housing Strategy later this year. The revised documents will set out how the Council and its social housing partners intend to take forward a range of initiatives that are designed to ensure the housing stock is high quality and sustainable.

Maximising resources for further investment in existing and new stock.

The Council, along with its social housing partners, prepares an annual Strategic Housing Investment Plan (SHIP) detailing specific housing development priorities in the area. The main objectives of the SHIP are to deliver more new build, affordable homes and target investment in social housing to support regeneration of local neighbourhoods and to increase the number of people living in our town centres. The SHIP also sets out to increase the supply of suitably designed properties to meet the needs of older people and those with a physical disability.

Progress to Date

1141 new or reconfigured homes have now been completed, including the first development built by our strategic partners, CCG (Scotland) Ltd, in Dalrymple. This award winning development has helped to regenerate Dalrymple and has created a sense of connection between neighbours in the area.

The Council continues to use the new build programme to increase the supply of specialist housing to meet particular needs.

Completion of a new social housing development at Barbieston Road, Dalrymple. Barbieston Road is a stunning new £1.74m development, providing eleven new build affordable homes for rent in the heart of the village, while Hearth Place saw the conversion and upgrade of seven pre-fabricated properties built after the Second World War.

Of the new build homes under construction, 50 homes (33%) are designed for particular needs.

Future objectives

The SHIP 2019-24 includes projects with a total potential capacity for delivering up to 836 new, rehabilitated and acquired affordable homes in East Ayrshire over the 5 year period to March 2024, including 746 new or rehabilitated homes and 50 purchased

37 through the open market purchase scheme by the Council and 40 purchased by RSL partners. The actual output will be subject to a detailed development assessment of the viability of each site as well as the level of grant funding that is available over the period until 2024.

Our strategic partners, CCG are committed to building 152 homes in East Ayrshire and the new build programme will help to increase the supply of specialist housing to meet particular needs. As part of SHIP, the Housing team is working closely with colleagues from the Health and Social Care Partnership to ensure that specialist assisted living facilities, like Cessnock Road in Hurlford, meet the future needs of our residents.

The Council has entered into a strategic partnership with CCG (Scotland) Ltd through the Scottish Procurement Alliance. CCG will deliver almost 400 new homes on behalf of the Council by 2023. The new affordable homes will be built using CCG’s off-site manufacture process that reduces the construction phase works on site and ensures a more efficient delivery timescale for new homes across East Ayrshire, all in support of the Scottish Government’s target of 50,000 affordable homes being realised by 2021.

The ground has been officially broken at Cessnock Road, Hurlford, where the Council’s strategic partner CCG (Scotland) Ltd is building a new assisted living development. The development, which will be similar to the award winning Lilyhill Gardens development in the centre of Kilmarnock, is designed to support people with learning disabilities to live independently and safely in their own homes with the support of an on-site Care Provider and assistive technologies.

“Our ambitious house building and improvement programmes are transforming the lives of so many residents in our communities and our Housing Asset Management Framework is a key element of our arrangements. Over the past two years, our teams have been undertaking a thorough review of the Council’s housing stock and implementing a range of actions to ensure that our houses meet the needs of our tenants”. Councillor Douglas Reid, Leader of the Council

Outcome measure: Reduction in the number of properties causing concern % of homes meeting the Scottish Housing Quality Standard % of new build homes suitable for additional support needs

38 ROADS INFRASTRUCTURE

The Ayrshire Roads Alliance (ARA) is the roads authority for both East and South Ayrshire Council areas. In East Ayrshire, ARA is responsible for over 1,200 km of carriageways, 946 km of footways, 21,406 streetlights, 72 traffic signals and 768 bridges.

Our investment aims in respect of the Roads Infrastructure are as follows:

 Investment to maintain the roads and bridge network  Climate change mitigation, active travel and flood prevention  Support connectivity and economic activity

Investment to maintain the roads and bridges network

East Ayrshire’s economic prosperity, re-generation and well-being is reliant on a properly maintained public road and bridge network.

The economic benefits of an effective road network are:

 Connecting our communities and providing a lifeline transport link in remote areas  Providing access to essential services  Improved public satisfaction  Improved resilience  Better and smoother road surfaces  Reduction in insurance claims  Fewer weight restrictions  Less potholes  Improved Council reputation.

The Local Government Benchmarking Framework Overview Report for 2016-17 states that spending on local roads has declined by 20% in real terms over the last seven years as a result of the prioritisation of education and care, which now account for around 60% of all local spending.

The Road Condition Index is a Statutory Performance Indicator and it is defined as “the percentage of the road network which should be considered for maintenance treatment”. In 2017/18, 39% of the East Ayrshire road network was classed in this category. The current roads maintenance backlog in East Ayrshire is £49.2 million, with an annual steady state budget of £6.19 million. The previously agreed capital allocation for Road improvements is approximately £3.4 per annum that includes road safety measures as well as maintenance and resurfacing. To achieve a step change and sustained improvement in the roads a more focused approach to road improvements is required.

39 ARA uses the County Surveyors Society’s inspection reporting system which provides the base data for the evaluation of the Bridge Stock Condition indicator. These indicators are used to monitor the change in condition over time and they are also suitable for monitoring whether adequate funding is being provided for bridge maintenance. From this work, it has identified a structural maintenance backlog of £35.2 million with an annual steady state budget of £2.25 million.

The Roads Asset Management Plan sets out the assessment, prioritisation and work plan to progress and maintain the roads network. In order to make a step change in improvement to the road and bridge condition, substantial financial investment is required. The Council has operated within a capital allocation on an affordability and risk management basis.

Road surfacing operations can be carried out relatively quickly, as demonstrated by completion of the 2018/19 programme with its increased funding to £6 million. Bridge projects, on the other hand, often require substantial design input and can be affected by a number of factors, including planning, land issues, statutory undertakers, SEPA and traffic orders.

Progress to date

East Ayrshire’s delivered an extensive £6m road resurfacing programme during the summer months of 2017/18. The Ayrshire Roads Alliance has designed a road resurfacing programme covering 60km of local roads which will ensure that resurfacing work focuses on the roads most affected by defects, potholes and surface fragmentation.

In 2018/19, the Council piloted the use of recycled plastics within the bitumen material, 500m of the C7 Dunlop to Neilston Road has been resurfaced.

A full inspection programme has been undertaken on our 768 bridge assets during 2018/ to assess and prioritise requirements for maintenance and improvement works as noted above,

Future objectives

A number of route improvements have been identified to support the Ayrshire Growth Deal. It is proposed to work with Transport Scotland to develop a Regional Transport Appraisal to assess and prioritise these projects to ensure that investment is targeted to support the aims and objectives of the Growth Deal.

Establish an infrastructure capital programme approach to prioritise, develop, manage and deliver on the investment requirements for Roads and Bridge improvement set out in the Roads Asset Management Plan with a re-profiled allocation across 2019/20 to 2022/23 to increase year one to a £7m investment.

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Climate change mitigation, active travel and flood prevention

Wherever possible, ARA and the Council seek to ensure that every day functional journeys can be made by walking; cycling and public transport and they also aim to support an increased proportion of ultra-low emission vehicles on Scotland’s roads.

Working with SPT, the Council and ARA aims to deliver improved bus infrastructure, bus priority and routes to public transport hubs for improved safety, quality, access, journey reliability and comfort for passengers.

Progress to date

ARA, with funding from SPT, continued to progress the delivery of an additional 22 park and ride spaces at Kilmaurs train station. The project seeks to improve access to the station and improve safety on adjacent roads.

EAC secured Smarter Choices, Smarter Places funding for 2017/18 to continue the work of the active travel officer and volunteers at Kilmarnock Active Travel Hub to deliver a programme of behaviour change interventions and monitoring activities including led rides and walks, providing advice and information about public transport and promoting the health benefits of increased active travel.

ScotRail installed electric vehicle chargers at Kilmarnock railway station during 2017/18.

Completion of phase 1 of the flood protection works at the Leggate, New Cumnock.

Future objectives

Plans for Ayrshire’s first electric vehicle charging hub are at an advanced stage. The hub, which will feature 10 new bays and 5 rapid charging points, will be built at the Ayrshire Athletics Arena on Queens Drive, Kilmarnock. Funding for the project was awarded from Transport Scotland.

Completion of the flood protection works in New Cumnock. Works on phase 2 are underway at the Afton Water, providing further protection to the community. The final part of this project involves the adjustment of the profile of the B741 carriageway that will complement the flood prevention work carried out to date.

“The use of electric vehicles is a key target for the Scottish Government who have pledged to phase out petrol and diesel cars by 2032. By ensuring that we have the right infrastructure in place now, we will be in a good position to meet demands on this service in the future’. Councillor Jim Roberts, Cabinet Member for Economy and Infrastructure, December 2018

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Support connectivity and economic activity

ARA, the Council and SPT continue to work together to address connectivity issues across East Ayrshire, including improving road safety and traffic management in towns.

Progress to date

In 2017/18, SPT provided grant funding to ARA to progress the realignment of the A70 at Glenbuck to improve safety on this important regional route between Ayrshire and the M74, central Scotland and Edinburgh.

ARA, with funding from SPT and EAC, delivered an upgrade to the Urban Traffic Control system for Kilmarnock. The new UTC improves the reliability of traffic signals and allows more bus priority measures to be introduced in other town centres beyond Kilmarnock such as Cumnock.

Future objectives

Continued partnership in the A76 Partnership to take forward the outcomes of the A76 multi-modal transport study. The study includes 23 options to be considered for full appraisal including an option for a new rail station at Mauchline.

Continued support to the growth ambitions as set out in the Ayrshire Growth Deal. ARA will work alongside partner organisations to make the case for investment, including via the new Regional Transport Strategy.

Outcome measure: Improvement in Road Condition Index % of bridges in need of essential improvement

42 CULTURE & COMMUNITY

Our Culture and Community estate includes 45 sites that includes some nationally significant heritage and culture buildings as well as a wide range of community facilities, open space and cemeteries.

Our investment aims in respect of the community and heritage assets are:

 Maintain our cultural heritage through conservation, enhancing access and interest.  Improve the quality of open spaces and parks, engaging communities to maximise the potential to enhance our environment.  Ensure that there is sufficient long term provision for cemetery grounds and that cemeteries are a tranquil and safe place to visit.

Maintain our cultural heritage through conservation, enhancing access and interest.

East Ayrshire’s history and heritage is one of the area’s principle strengths and our property portfolio boasts a wide range of listed buildings from castles and monuments, as well as industrial and community facilities. The council has responsibility for protecting and maintaining these assets, using funding from the Capital Investment Strategy and other grant funding opportunities. Our heritage buildings also form part of our operational assets, providing a setting for our museums, libraries and art collections.

The council’s Regeneration Team also support funding bids to Historic Environment Scotland to support a cohesive heritage-focused, community based economic growth project that will enable the sympathetic restoration of many of the town’s most precious buildings in our towns and villages through Conservation Area Regeneration Schemes. It is also important to recognise the sensitive approach required in maintaining, conserving and restoring our heritage estate. The Council will maximise the use of specialists and will continue to work with Historic Environment Scotland and have recently worked with the Lime Mortar Trust on Dean Castle. Progress to date

The newly refurbished Dick Institute in Kilmarnock reopened to the public in late 2018. The refurbishment includes a new digital suite, café area and digital seating as well as improvements to the adult and junior lending libraries.

In Galston, a number of restoration projects have been carried out using CARS funding from the Scottish Government. Many of the town’s precious old buildings, including the Portland, Buck’s Head Inn and the Principal Café have been extensively refurbished.

43 Major repair and refurbishment works are underway at Dean Castle. The Council, supported by East Ayrshire Leisure, was recently awarded £1.5 million from the Heritage Lottery Fund towards the restoration and modernisation of Dean Castle. The castle is expected to reopen to the public in June 2021.

Kilmarnock’s Palace Theatre underwent extensive external refurbishment works during 2011 and 2012, including the installation of a new LED lighting system, which is designed to highlight some of the building’s interesting and historical features, however the sandstone façade has shown unacceptable deterioration and water damage, that requires further action. Safety netting has been installed while further investigations are undertaken.

Future objectives

Plans are being developed to formulate a CARS funding bid in support of the regeneration of Mauchline, which would include the sympathetic restoration of a number of the town’s most precious historical buildings. A decision on the funding bid is expected to be made by Historic Environment Scotland in March 2019.

The Council approved plans for the further regeneration of Galston, following the demolition of the former Co-op building. The plans include the upgrading of the library within the former Town Hall and the building of new retail units.

Plans will be developed to utilise the £1.7 million, which was awarded to the Council as its share of the Scottish Government’s new £50 million Town Centre Regeneration Fund.

Improve the quality of open spaces and parks to encourage use and maximise the potential to enhance health and wellbeing.

East Ayrshire boasts some of the most picturesque open spaces in South West Scotland, including historic parks and gardens, playing fields, cemeteries and one of Scotland’s most visited country parks. These spaces are important to ensure that East Ayrshire is an attractive place to live, work and visit.

The Council works together with the Leisure Trust to maintain free open access to our open spaces for residents and visitors. The Outdoor Amenities Team has responsibility for delivering projects to enhance and improve the area’s parks and open spaces. The Team is responsible for the maintenance of over 5.5 million square metres of open space.

Asset management for open spaces will focus on a place based approach to developing consistent standards for their management and maintenance. This will involve the deployment of new technologies to monitor performance, maintenance and customer satisfaction levels, providing the Council with robust evidence that can be used to inform strategic decision-making.

The value of our community and heritage estate goes beyond the role the council has as custodians of our heritage and environment. Opportunities continue to be

44 identified to support this nationally important landscape with the development of grant funded schemes.

Progress to date

Dean Castle Country Park officially reopened to the public in October 2017. A number of enhancements were completed during the year, including the new adventure play park, the replacement of animal corner with a Rare Breeds Farm, a new farm trail including 2 new bridges, a refurbished café and improvements to the visitor centre and Rural Life centre. This project generated £1.5 million of grant funding from the Heritage Lottery Fund.

2017 also saw the completion of a review of cycling opportunities within East Ayrshire. This included a full audit of existing trails and an identification of gaps in infrastructure.

Completion of improvement works at Holehouse Gardens to reinvigorate a space for contemplation and remembrance and enhancements at Kay Park pond creating new wildlife habitats as well as accessible areas for visitors and a feature fountain. Kay Park is a beautiful green space in the heart of Kilmarnock, gifted by Alexander Kay gifted to the people of Kilmarnock in 1879.

Genuine progress continues to be made to remediate areas scarred by the coal businesses liquidation. The Council has supported the development, funding and implementation of new restoration schemes for a number of sites including Dunstonhill, Skares and Netherton, Ponesk, Gasswater and Powharnal.

Future objectives

Development of Kilmarnock’s Green Infrastructure, which will provide an 18 mile circular route through the town. This will create a natural green link for local neighbourhoods into the town centre and provide off road links between parks, visitor attractions, schools and other places of interest, increasing the visibility and connectivity of our venues.

Following our nationally recognised approach to Community Asset Transfer (CAT) we will continue to work with communities and explore further opportunities for communities to develop financially sustainable community-based solutions for buildings and community spaces.

Further progress will be made on restoration schemes will be developed for the remaining three abandoned opencast coal complexes at Chalmerston, Dalfad and Garlaffan/Grievehill.

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Ensure that there is sufficient long-term provision for cemetery grounds and that cemeteries are a tranquil and safe places to visit.

Cemeteries and graveyards are essential elements within the open space provision of the area. The Council’s Cemetery Team is responsible for the ongoing inspection of memorials ensuring safety within our cemeteries and churchyards.

The current Cemetery Strategy was set in 2015 and it forms an important part of the Council’s wider Green Infrastructure and Green Network Strategy. The strategy sets out a clear vision for the future development of cemetery services for East Ayrshire during the next 10 years.

The Council currently monitors cemetery usage (based on the last five years of burial demand occurring in each cemetery) and this information is used when considering future local service provision and expansion.

Progress to date

The Council’s Cemetery Safety Team carries out a regular and ongoing inspection programme for memorials, making dangerous memorials safe within our cemeteries and churchyards which are identified as requiring immediate action.

Future objectives

Increase capacity and facilities at identified cemeteries including expanding capacity at Dalmellington cemetery, providing additional provision for a further 20 years; new car park at Fenwick cemetery that will address concerns with the existing entrance which restricts traffic movements during busy periods.

Carry out a programme of targeted repairs and maintenance at all East Ayrshire cemeteries, focussing specifically on the condition of paths, roads and walls within older cemeteries and churchyards.

Based on current demand pressures, identify cemeteries which will require additional capacity (the 2015 Cemetery Strategy estimated that Dalrymple has 5 years remaining and Auchinleck has 7 years remaining).

Outcome measure: Total visitors to our heritage estate Performance standards for place based satisfaction of outdoor space % availability in cemeteries

46 WELLBEING & SPORT FACILITIES

Our wellbeing and sport facilities include 18 sites that support a variety of aspects from the corporate parenting role to older people residential and day care facilities to community sports and recreation.

Our investment aims in respect of the wellbeing facilities are as follows:

 Provide and maintain first class sports and leisure facilities that will encourage active lifestyles and make a positive impact on the health and wellbeing of all our people.  Ensure that residents with additional support needs have access to high quality supported accommodation  Support the strategic aims of the integration Joint Board and the Health and Social Care Property Asset Management Strategy

Provide and maintain first class sports and leisure facilities that will encourage active lifestyles and make a positive impact on the health and wellbeing of all our people.

The East Ayrshire Leisure Trust is focussed on the enhancement of the health and wellbeing of everyone in East Ayrshire by encouraging them to participate in health and fitness activities. By providing a range of sports and leisure facilities, the objective is to inspire all residents in East Ayrshire to live healthier and adopt more active lifestyles.

Facilities across our area include the Ayrshire Athletics Arena, leisure and sports centres, games halls, golf courses, synthetic and grass pitches. The Leisure Trust is responsible for programme development, community sports hubs and events.

The Council is responsible for the management of all Leisure Trust facilities via a Service Level Agreement. The major maintenance and life cycle replacement requirements of the grounds and buildings for the majority of the Leisure Trust properties remains with the Council. The Facilities and Property Management Service ensures that these assets are fit for purpose, in appropriate condition and are utilised by the community.

Progress to date

The Ayrshire Athletics Arena was opened in 2013. Designed and built to the highest standard, this premier athletics and sports training facility boasts a UK Athletics Class A outdoor athletics facility with Mondo surface and 6 lane 63 metre indoor training area with strength and conditioning area. The facility has been designed to meet the highest of training and competition requirements for a wide range of athletes, sports clubs, schools and community groups.

A range of new sports facilities have been developed at Stewarton, Loudoun, Auchinleck Grange, St Joseph’s, Doon that provides modern sporting facilities for

47 both schools and the local community, including a FIFA 1 synthetic grass pitches, swimming pools and a fitness suite. There are also multi-purpose halls which can be used for badminton, basketball, volleyball, gymnastics and dance.

Future objectives

Following the report to Council in June 2018 a new opportunity is being considered in relation to its potential role in the development of the town centre and consideration of aligning the sports and leisure offer with a health and wellbeing offer to support a more integrated wellbeing hub model in conjunction with NHS.

Construction of the new West of Scotland Climbing Centre, a major regeneration project in Kilmarnock’s Woodstock Street, will begin in late 2019. Funding has been secured from a range of sources, including the Scottish Government’s Regeneration Capital Fund and the Council. The new centre will be based in the former Grange Church and offer more diversity in sports provision.

The new facilities currently being constructed at William McIlvanney Campus, Stewarton Academy and the Barony Campus will further enhance the provision extending and enhancing professional standard facilities for Rugby, Hockey, Football and athletics across the Authority.

Carry out improvement works to the existing heating system at the Hunter Fitness Suite in the North West Area Centre, Kilmarnock.

Ensure that residents with additional support needs have access to high quality supported accommodation

In line with the objectives set out in the Transformation Strategy 2017-2022, innovative supported accommodation solutions require to be identified in response to increasing pressures on public services and resources so as to assist the growing numbers of people with additional support needs to remain living within their own communities for as long as is practicable. Moreover, the delivery of homes that will support residents to live in their own homes and communities throughout their life experiences links to the Council’s Transformational proposals and highlight the Council’s commitment to the following work streams:

• Fairer, Kinder and Connected • Vibrant and Empowered • Property and Estate

Progress to date

Working co-operatively with colleagues in the Health and Social Care Partnership, the Strategic Local Programme (SLP) 2012-2015 delivered an award-winning housing model at Lilyhill Gardens in Kilmarnock. The development, that was completed in January 2015, offers support to adults with a range of disabilities so as to promote successful moves from care settings to each resident’s own home. The development comprises 14 units and benefits from on-site support and provides a mix of wheelchair

48 accessible and general needs homes, housed in one building, all with wet floors, rise and fall kitchen units, assistive technologies, a glass elevation to bring the outdoors indoors and a safe enclosed garden area for residents’ private use.

This type of provision is being replicated in response to need identified by colleagues in the Health and Social Care Partnership, given the benefits that may be derived from this type of housing model both for the residents and in terms of the efficient delivery of high quality care.

Future objectives

The Strategic Housing Investment Plan (SHIP) 2017-2022 and 2018-23 allowed for the development of this model on three more sites identified in Hurlford, New Cumnock and Mauchline, thereby enhancing the opportunity for people to live as independently as is possible within their own communities across East Ayrshire with access to appropriate support. The SHIP 2018-2023 continued to support this provision, with works at the first of the three proposals in Hurlford now underway, following consultation having taken place with both the local Community Association and the Community Council. Completion is anticipated to be achieved in August 2019.

The SHIP 2019-24 continues to feature, and to extend, the delivery of this model of care in New Cumnock and Mauchline and allows for the provision of a further smaller scale model on a site identified via the Housing Asset Management Framework (HAMF) annual review to demolish existing flats that cannot be reconfigured at 13-19 and 21-27 Quarryknowe, Auchinleck, to deliver 6 flats, along with a Care Provider’s base, in response to need identified by the Health and Social Care Partnership. This partnership working to deliver housing that will support residents to remain living in their communities supports the objectives set out in the Scottish Government’s discussion paper 2021 and beyond, dated September 2018.

Support the strategic aims of the integration Joint Board and the Health and Social Care Property Asset Management Strategy

The integrated joint board has established a Property and Asset Management Strategy aligned to the Council’s Asset Management Framework. This sets out the objectives and principles to support the IJBs Strategic Plan.

The objectives of the Property & Asset Management Strategy are:-  To support the Strategic aims of the Integration Joint Board and the Community Planning Partnership.  To gain best value from our use of property;  To ensure that health and social care services are provided in and from fit- for-purpose, modern buildings;  To enhance provision of health and social care services in local communities;  To rationalise our estate in order to reinvest savings into frontline services;

49 A number of principles were also adopted in the implementation of the 2018/21 Property and Asset Management Strategy and these are:-

 Designing and delivering services to meet the needs of individuals, carers and communities;  Being transparent and demonstrate fairness when allocating resources;  Delivering services to people in their local communities;  Making best use of the assets available to us;

Progress to date

Service redesign and new models of care have been developed to reduce the requirement of accommodation at Kirklandside Estate with 88 staff transferring to Council facilities and utilising alternative town centre facilities for community based services.

NHS Ayrshire & Arran’s New Digital Strategy aims to connect citizens, health and social care through digital information, tools and services to help achieve the healthiest life possible for everyone in Ayrshire and Arran. The Council’s capital investment through telecare and IT systems supports the wider digital strategy as well as supporting people to stay in their own home. In addition, £7.500m is currently allocated for future investment in private sector housing grants.

Social Work Paper Case Files were replaced by Electronic Case Records during 2018. Funding of £185,601 was approved by the Council’s Transformation Board for the procurement of the Northgate Information @ Work Document Management System, integration with SWIFT and back scanning all current case files.

Future activity Options for the health and social care needs of the Cumnock and Stewarton Localities are priorities and in the development of future business cases consideration of the council’s asset management principles and potential for integrated investment should be considered.

Outcome measure: Participation in competitive level sport Number of people in supported living homes

50 LEARNING ESTATE

Our learning estate includes 48 sites accommodating our schools and early childhood centres, although these buildings also provide a wide variety of community access and support to other services including some corporate facilities.

Our investment aims in respect of the learning estate are as follows:

 Improve the condition and suitability of the learning estate to provide the best learning environment for all.  Maximise the wider community benefits of our investment by encouraging greater community engagement in the learning estate.  Develop a wide range of new and high quality facilities to support Early Years expansion, developing our young workforce and improve inclusion.

Improve the condition and suitability of the learning estate to provide the best learning environment for all.

The importance of a modern learning estate cannot be understated. Experience from new school buildings demonstrates that new and flexible learning environments can inspire pupils and impact positively on the culture to support attainment and encouraging positive destinations beyond school.

The Council’s learning estate is a large property portfolio in its own right and we have invested considerably in improving the overall condition and suitability of our schools. The current capital programme will address the requirements of the School Estate Management Plan in bringing all our buildings to an overall A or B condition and suitability. The current capital investment plan has, and will continue to make strides in achieving this; however, a number of buildings with their age, construction style and ongoing maintenance demands will continue to require future investment to continue to meet the aspirations of learners, parents and teaching staff.

We monitor and report on all aspects of the condition and suitability through the School Estate Management Plan and will continue to invest significant resources into our school buildings in a prioritised manner ensuring all our education buildings are the best they can be, recognising the long-term nature of modernising an extensive school estate.

Progress to date

The ongoing investment across the school estate has resulted in more children benefitting from access to excellent facilities with the current Capital Investment Programme seeing £83.9 million of new facilities opened in the last 5 years.

The Council continues to make progress towards the rationalisation of its school estate, where appropriate. This has been delivered alongside an ambitious programme of new builds and extensions in areas of growth and refurbishments of

51 existing establishments to ensure they are fit for purpose and maximise opportunities for our children and young people.

Two new build projects were completed in summer 2017, Whatriggs Primary School and Early Childhood Centre in Kilmarnock (a merger of Bellfield and Kirkstyle Primary Schools) and Muirkirk Primary School and Early Childhood Centre. Both establishments have been opened to local and national acclaim demonstrating modern and flexible learning facilities to meet the needs of 21st century learning and teaching. They have successfully blended traditional learning spaces with flexible zones, innovatively furnished, to facilitate independent learning. Both establishments have been nominated for national awards.

“I was very impressed by the new Whatriggs Campus. I am sure that the fantastic new facilities will bring huge benefits to students, staff, parents as well as the wider community. “Learning and teaching in such inspirational settings can make a real difference to young people.

Derek Mackay MSP, Cabinet Secretary for Finance and the Constitution, June 2017.

We continue to ensure schools operate safely and effectively during the delivery of the capital programme and recognise the need to decant children or where possible develop projects that limit the impact on learning and teaching. Following a yearlong decant, Hurlford Primary School and Early Childhood Centre returned to their own building in the summer of 2017. Staff and pupils are now benefitting from an enhanced learning and teaching environment in a building that has successfully blended traditional sandstone with a light, bright and modern extension.

Fenwick Primary School extension was also completed in the summer of 2017. The school now has access to modern sports and dining space, additional classrooms to address an increasing roll and reconfigured administration spaces. The end result is a successful blend of traditional and modern learning and teaching spaces.

The £43 million William McIlvanney Campus was officially opened in September 2018 with the school operational from April 2018. The campus merges the previous Kilmarnock Academy, James Hamilton Academy, New Farm and Silverwood Primaries, and also provides a new facility for Gaelic education.

Future objectives

Complete the construction of the Barony Campus, Cumnock that will invest £68 million for a new learning and enterprise campus to incorporate The Robert Burns Academy, Lochnorris Primary School, Cherry Trees Early Childhood Centre and Hillside School, providing state of the art facilities for children, young people and the local community.

Conclude the consultation on St. Sophia’s Primary School, Galston which will address the remaining school at C condition.

Further develop schemes identified through the SEMP and current capital investment to deliver improvements at Netherthird Primary, Stewarton Academy, Nether

52 Robertland Primary, Doon Academy and Dalmellington Primary, Loanhead Primary, Dunlop Primary and Crosshouse Primary.

Establish a clear improvement plan for each school building where there remains condition and suitability elements below a B standard.

Following the announcement of the next Scottish Government Schools For The Future fund, develop outline business cases that support the aspirations of the SEMP programme and prioritise for future investment beyond the current capital projects.

Maximise the wider community benefits of our investment by encouraging greater community engagement in the learning estate.

The schools estate has a wide range of educational, recreational and sporting facilities that can be used to meet a variety of needs not only for pupils, but for their parents, families and local communities.

Beyond their direct and primary function of educating our young people, our schools are increasingly playing an important role in strengthening and enriching the communities they serve. This dual role as a community hub can take on a number of forms, including:

 provision of sports and leisure facilities, including gyms and fitness classes;  further education classes;  meeting places for local groups and societies; and  recreational learning opportunities.

The Council wants its investment in education establishments to create places which people and communities will enjoy using and are proud of.

Our investment in new and refurbished facilities has realised other tangible benefits for local communities. Construction contracts awarded by the Council have included an increasing level of community benefits including work placements and apprenticeships for young people, extensive local job opportunities, educational site visits and competitions for learners of all ages, interactive presentations and sponsorship of specific community projects and events.

Progress to date

Kilmarnock’s new William McIlvanney Campus, which opened in April 2018 further adds to the excellent community sports and leisure facilities across the authority. Opened to the public beyond school hours, the centre comprises 3 sports halls, a dance studio, fitness suite and community rooms.

The recently opened all weather pitches at Stewarton Academy and at the Barony Campus further enhance the community facilities and have helped in the promotion of hockey and rugby respectively, supporting development with local sports clubs and community groups.

53 Muirkirk Primary School and Early Childhood Centre, which also opened in 2017, provides a genuine community hub model, building on the work of the Transformation Strategy to reduce the number of facilities in the community by creating more efficient facilities where young people and the wider community can co-exist.

Future objectives

The new Barony Campus, which is scheduled for completion in 2020, will include a range of community facilities, including a community café and other sports, cultural and leisure facilities. This will offer enhanced leisure and recreational facilities for all members of the community linking into Visions, Cumnock Rugby Club and Cumnock Juniors. Discussions are progressing to further develop these facilities as integrated community run facilities.

Construction of the new Bellsbank Primary School is currently underway, with the opening of the school scheduled for the early part of 2020. The new school will create new state of the art facilities to further enhance the community approach in the village through the integration of the schools, early years, community planning partners and third sector organisations support. The new development will incorporate an Early Childhood Centre and new community leisure facilities, creating a new social, educational and leisure hub in the village.

Develop a wide range of new and high quality facilities to support Early Years expansion, developing our young workforce and improve inclusion.

The Council aims to reduce inequalities and deliver improved outcomes for all of East Ayrshire’s children and young people. The specific focus is on improving educational attainment for all and enabling children with additional and complex needs to access high quality services.

Support is also targeted at early years in order to address the issues which prevent children from achieving their full potential. The Scottish Government has made a commitment to increase funded Early Learning and Childcare expansion from 600 to 1,140 hours by 2020. This statutory requirement will place further demand pressures on the Early Years estate, and this is reflected in the prominence of Early Years projects within the Capital Programme and direct funding of £23 million from the Scottish Government.

Whilst most children in the area are able to attend mainstream schooling, there is an increasing minority who have physical, cognitive or behavioural difficulties that act as a barrier to their effective learning. It is the responsibility of the Council to put measures in place to overcome these barriers. In recent years, there has been a sizable increase in the numbers of children accessing specialist educational provision which has resulted in the rolls increasing by between 30– 40%. The appropriate physical environment plays an important part in meeting learners’ needs; this can be within a mainstream school or in a stand-alone facility.

54 Across East Ayrshire, there are currently 3 dedicated specialist schools for children with additional support needs and 5 specialist centres located within mainstream schools (3 primary and 2 secondary).

Progress to date

Kilmarnock’s Willowbank School opened in 2013. The school houses pupils of the former Woodstock and Witchill schools in a modern learning environment built on the site of the former Park School. It is designed for 50 primary and secondary pupils with complex additional support needs.

The current Barony Campus will include new facilities for the young people that attend Hillside School in Cumnock with the sensitive design of the facilities creating the opportunity to balance a small scale safe and nurturing environment with the opportunity to grow and experience the varied spaces across the campus.

As part of the current Capital Programme, the Council committed to invest in Early Years accommodation prior to the government funding which has resulted in new Early Years facilities being incorporated at Muirkirk, Whatriggs and William McIlvanney schools, all of which are currently delivering flexible 1140 hour provision.

Future objectives

Deliver the ambitious programme of 25 projects for new build, extension or refurbishment of Early Years facilities to meet the ambition of delivering 1140 hours for identified 2 year olds and all 3 and 4 year olds by 2020.

Crosshouse Primary School and Communication Centre: upgrading of the existing school building, guaranteeing its future for the 40 children with additional special needs who attend. Plans will also include an enhanced gym, dining and improved outdoor facilities.

As part of the replacement of Netherthird Primary and Early Childhood Centre, it is proposed to provide an inclusive design to complement the proposals for Crosshouse Communication Centre, strengthening the support for children in the southern part of East Ayrshire.

Senior Phase Specialist Educational Provision will be developed to address additional support needs (ASN) capacity issues in Willowbank and Park Schools, further strengthening supports as young people prepare for the transition into adulthood.

55 ‘This new campus will provide the opportunity to transform the lives of young people in Kilmarnock, inspired by the creative strength of William McIlvanney. The facilities are of a different league, offering pupils and staff new opportunities to shape the curriculum to create the best in innovative educational practice that meets the need of every young person regardless of their background’.

John Swinney MSP, Deputy First Minister of Scotland, September 2018

Outcome measure: % of schools meeting A or B condition and suitability standard Number of schools with integrated community use Number of opportunities for children to access 1140 hours by 2020

56 ECONOMIC GROWTH PORTFOLIO

The Council’s Economic Growth portfolio comprises 178 non-operational (leased) property assets such as shops, business centres, industrial units, offices and industrial ground. These are leased to commercial organisations, charities and voluntary groups, which helps to support the Council’s economic development objectives.

Our investment aims in respect of the economic growth estate are as follows:

 Maximise the value of the non-operational and Economic Growth portfolio.  Develop and expand the range of commercial and industrial premises in East Ayrshire to maximise the wider economic benefits to the area.  Promote and encourage Town Centre regeneration and investment

Maximise the value of the non-operational and commercial property.

The Council’s commercial and industrial property portfolio is a corporate asset, generating almost £1m rental income which is managed by the Estates Management Service. The portfolio contains 178 lettable units. This is comprised of 38 shops, 35 offices, 34 industrial units, 33 sports facilities, 27 halls, 5 converted dwellings, 3 garages, 2 dwelling houses and 1 storage facility.

Progress to date

The Council continues to develop a proactive maintenance regime for all of its empty commercial properties based on identified repair and maintenance liabilities to ensure that the portfolio provides accessible, attractive and fit for purpose commercial and industrial premises.

Future objectives

Ensure that our land and property assets are used to improve the quality of the environment and take decisions around our surplus and vacant land that support clean, green and vibrant communities agenda.

Internal Audit to undertake a review the non-operational (investment) portfolio income to determine the value to maximising opportunities as part of the transformation strategy and to assist in the development of a strategic framework for future asset investment.

Develop and expand the range of commercial and industrial premises in East Ayrshire to maximise the wider economic benefits to the area.

The successful and sustainable regeneration of our towns and villages is a strategic objective of the Council and its Community Planning partners. The detailed

57 approach to this is set out in the East Ayrshire Economic Development Strategy 2014- 2025.

Crucial to the regeneration of East Ayrshire is the Ayrshire Growth Deal (AGD), which will take forward a number of transformative projects across Ayrshire. Agreement has been reached with both Scottish and UK governments that they will support the Ayrshire Growth Deal. This will now be used to fund major projects driving essential support sectors and enabling work to progress which will greatly add to the value of the local economy. The current portfolio of projects within the AGD includes an economic growth programme for East Ayrshire, focussing on the HALO Kilmarnock Ltd, Ayrshire Manufacturing Investment Corridor, Ayrshire Engineering Park (Moorfield) and the National Energy Research & Demonstration Centre.

The delivery of an enhanced infrastructure will support more businesses to start up, grow or be attracted to the area. Ultimately, this will raise our profile and promote East Ayrshire as a business location of choice. A review of land supply for business and industry carried out by Ryden on behalf of the Council in 2017 highlighted that East Ayrshire has a limited commercial and industrial property portfolio. The provision of suitable industrial and business properties will allow more businesses to set up in East Ayrshire and, ultimately, encourage the development of a more balanced, diverse and dynamic economy.

By investing in our town centres, the Council acknowledges their importance to the wider area’s economic vitality and their potential for future development and opportunity. Considerable progress has already been made towards the reinvigoration of our unique heritage and traditional townscapes, but there is still much more to do to ensure that our town centres are attractive places for living, visiting and working.

Progress to date

In Kilmarnock town centre, the Ingram Enterprise Centre opened for business during 2018, following an extensive refurbishment and restoration of this historic building. The new facility introduces much needed new office accommodation within the town centre, incorporating meeting rooms, breakout spaces, and training facilities with a reception facility. The centre was the latest in a series of 22 buildings in Kilmarnock’s historic quarter to undergo a comprehensive programme of renewal.

“Giglets Education has an inextricable connection to Kilmarnock and we are thrilled to be locating our headquarters at the Ingram Enterprise Centre (IEC), particularly as we enter such a significant period of growth in our business. East Ayrshire Council has shown true leadership and ambition by investing in this development and supporting local business. That same sentiment meets with our vision of growing a global organisation from right here in East Ayrshire, our home. The IEC provides us with the infrastructure and working environment that our team needs as an outwardly looking, international EdTech business. Craig Johnstone, Giglets Education, February 2018

Cumnock town centre is currently undergoing extensive regeneration. 7 new retail units opened in 2017, providing modern, stylish and affordable space. A further

58 development on the site of the former Glaisnock Shopping Centre opened in early 2019, bringing with it an additional 5 retail units.

“It’s great to see this major piece in the jigsaw of Cumnock’s town centre regeneration fall into place. The new shops and the surrounding landscape are a beautiful addition to the town, providing space and opportunity for people to enjoy and businesses to thrive. We are doing whatever we can to support local businesses, enhance the environment and make shopping, working and living in Cumnock an exceptionally attractive option.” Councillor Jim Roberts, East Ayrshire Council

Future objectives

As part of the Ayrshire Growth Deal further redevelopment of the Moorfield Industrial Estate, including the construction of 7 new small to medium sized speculative units for industrial or commercial use.

The Council approved plans for the further regeneration of Galston, following the demolition of the former Co-op building. The plans include the upgrading of the library within the former Town Hall and the building of new retail units. Plans are being developed to formulate a CARS funding bid in support of the regeneration of Mauchline, which would include the sympathetic restoration of a number of the town’s most precious historical buildings. A decision on the funding bid is expected to be made by Historic Environment Scotland in March 2019.

Develop new provision of ‘easy in, easy out’ accommodation for starter and developing companies. Identify improvements to accommodation quality and retain users at maximum capacity.

Strengthen the approach to acquisition of assets where there is evidence and value in supporting wider regeneration projects.

Outcome measure: % of accommodation let Income as a percentage or rateable value Number of derelict buildings removed from the register

59 CORPORATE ESTATE

Our corporate estate includes 29 sites that provide our corporate office accommodation with back office and corporate functions as well as facilities for Council staff working in community based services. This also includes our support facilities and depots for operational services.

Our investment aims in respect of the corporate estate are as follows:

 Rationalise and reduce the amount of buildings used by the Council.  Improve our facilities to support smarter working and service redesign.  Maximise opportunities for partnership working and income generation.

Rationalise and reduce the amount of buildings used by the Council

Rationalisation is the process of reducing the number of buildings managed and operated by the Council to reflect the continually changing service requirements of the organisation. By rationalising our buildings, the Council will reduce the overall size of our estate, reduce our running costs (including repairs and maintenance) and increase our capital receipts.

The 2017-22 Transformation Strategy acknowledges that, moving forward, the Council will be a smaller organisation, employing fewer people but working more flexibly. As a result, it is likely that less office accommodation will be required. Utilisation studies have demonstrated that actual usage of desk space across the Council is well below the numbers allocated. New ways of working, including mobile and flexible working, will allow the Council to make a reductions in its portfolio of properties and as a result, a considerable and recurring financial saving.

The introduction of mobile and agile working presents opportunities for the Council to optimise the use of our buildings. Whilst the traditional layout of many of the buildings present challenges in adapting them to be agile-friendly and shared space, the advantages to the Council are in terms of efficiency, innovation, improved business continuity and ultimately reduced property requirements. The implementation of smarter working environments will facilitate improving the efficiency of the corporate estate. We will continue to explore opportunities to maximise local provision of service and in future create opportunities for staff to increase working with local communities.

The Property and Estate workstream of the Council’s previous 2012-17 Transformation Strategy led to a 25% reduction in the number of premises occupied by the Council. This reduction was in no small part, thanks to the excellent and innovative approach in transferring Council Assets to sustainable community organisations and developing community led solutions.

Surplus properties have been sold, leased to the community via the CAT process or demolished. Capital investment through the Transformation Strategy Fund to support property rationalisation has, and will continue to improve the Council’s property portfolio reducing the need for buildings not fit for purpose or meeting future service

60 demand. The approach applied will reflect individual community needs and is relevant and appropriate to the facility in question.

By reviewing how services are delivered our buildings and depots will require to be shaped to meet the needs of future service delivery models. As services progress service redesign the implications and needs for our assets requires to be considered and clearly stated in the development of proposals.

Progress to date

Since 2009, the Council’s office accommodation strategy has seen some major improvements in utilisation and condition of facilities used by Council staff. The number of properties identified as office accommodation has decreased from 24 to 11, and the overall floor area has reduced also, from 32,639 to 27,180 square metres.

Service redesign in waste management and the development of new and improved waste facilities in Kilmarnock and Cumnock will continue to support the improvement in waste collection and reduction of costs for landfill, reducing budget pressures as well as reducing the council’s carbon footprint.

The Community Asset Transfer programme has over the last 5 years continued to build capacity and support community organisations in taking responsibility for local assets through 6 management transfers, 35 leases and 3 ownership transfers. This has recently culminated in the largest single Community Asset Transfer of the old Kilmarnock Academy site to Centrestage.

Future objectives

Implement the Council’s agreed plan for corporate office accommodation in 2019/20 and reduce the office accommodation used by the Council in Kilmarnock.

Establish a model for future space allocation and usage for council service and partner organisations aligned to smarter working ratios.

Demolish the office facilities at Greenholm Street, Kilmarnock following relocation of employees to an alternative location.

Identify further property rationalisation or disinvestment opportunities aligned to the Capital Programme and service redesign.

Deliver on the opportunities provided via the Council’s Transformation Strategy to further support Community Asset Transfers and find alternative uses for surplus sites.

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Increased adoption of new, flexible and smarter working practices

There is a broad research base that demonstrates that smarter working is good for both business and the wellbeing of employees. In talking to our staff, it is clear that they value their working environment but that they would like to become more efficient, use their time more productively and improve their work-life balance.

The introduction of smarter working practices is closely linked to office rationalisation and will result in a reduction in the overall number of premises being used, which will generate efficiency savings for the Council. The council has a large estate with a presence in all our communities and developing service models that reflect the communities we serve will create further opportunities to utilise our buildings more effectively. To facilitate the transition to smarter working, our buildings and ICT infrastructure will be used to enable employees to make greater use of non-traditional methods of working, including ‘paper-lite’ and home or place based working.

As well as the financial savings from investing in digital technologies, there are a number of softer and people benefits, including improved employee retention, improved collaboration and teamwork and improved employee wellbeing.

Furthermore, our services are in the process of identifying transformational service redesign opportunities on the back of increased employee mobility and developing digital solutions for service delivery and customer contact improvement.

Progress to date

Continued investment in new technologies to support service delivery, with progressive replacement of older, energy intensive equipment with mobile technology solutions and remote access devices.

Establishment of a digital oversight board to drive forward implementation of the Council’s digital principles and carry out a review of our customer contact and customer journeys.

An assessment of the Council’s property portfolio to establish the best places and spaces for Council staff to work in as they adopt more flexible and mobile forms of working.

Future objectives

Extend the principles of smarter working across the corporate estate on a phased basis between now and 2021 in line with service redesign and development of HR policies that are supportive and enabling that supports the principles of Smarter Working.

Review and establish requirements for new customer contact and service delivery models for customer engagement across our corporate facilities.

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Maximise opportunities for income generation and partnership working

As well as rationalising existing facilities and adopting smarter working principles for Council services, the Council continues to explore opportunities to use the corporate estate differently, by, for example, sharing premises with Community Planning partners and seeking to explore new revenue generating opportunities and further efficiencies.

As the pressures on public sector budgets continue, it will be increasingly important to explore the opportunities afforded by place based working and partnerships with other organisations and thinking about solutions that are based around communities and place. East Ayrshire Council has forged strong ties with partners including NHS Ayrshire & Arran, Scottish Enterprise, Ayrshire College, Police Scotland and Scottish Fire & Rescue as well as a range of third sector and local community organisations.

Collaboration will be important in this area, and the Council works with Community Planning partners to join up service delivery where possible and make better use of each other’s estate. The Council is creating strong links with partner organisations to continually develop new ideas and initiate new projects.

Collaboration projects aim to reduce the overall footprint of the public sector estate, the running costs of the estate and the maintenance backlog. There are also opportunities to sell or lease space from one another to make savings to the public purse.

Progress to date

The Council has a strong track record of working with our local partners and communities in the shared use of our respective buildings for co-location and joined- up service delivery arrangements.

Operated in partnership between the Council and NHS Ayrshire & Arran, the Council’s five area centres (Dalmellington, North West Kilmarnock, Stewarton, Crosshouse and Drongan) have brought together a wide range of primary care and other public services together in single, shared facilities.

Integrated Health and Social Care continue to transform service delivery and support to service users. Through co-locating staff across Social Care and Health services, new models of delivery are being tested to further develop service models in community settings.

“The North West Area Centre is a great example of the integrated, community model we are moving towards, by bringing together a number of different facilities under one roof. These changes are improving care, co-ordination and support for those who use health and social care services and I congratulate East Ayrshire Council and NHS Ayrshire and Arran on what has been a successful transition”.

Shona Robison MSP, Cabinet Secretary for Health and Sport, January 2017

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Future objectives

Reconfigure the existing office accommodation within the Town Centre and at North West Area Centre, Kilmarnock to support smarter working and integration of the Health and Social Care Partnership.

Relocation of NHS Ayrshire and Arran Mental Health Services (South Locality) from Netherthird Clinic to Rothesay House, Cumnock.

Support the HSCP in developing solutions for future delivery of service in priority areas of the property and asset management strategy including East Ayrshire Community Hospital, Cumnock and Health and Social Care services in the Stewarton Area.

Review further commercialisation opportunities with partners that will add value to our property base by securing rental income from other organisations.

Outcome measure: Improve metre squared per person allocation in corporate office accommodation Increase % of space occupied by external organisations Reduce overall m2 of operational estate

64 TRANSPORT FLEET

The Council’s transport fleet is comprised of 549 vehicles. Reflecting the complexity of the Council’s business, there are no fewer than 37 separate vehicle classifications.

Our investment aims in respect of the transport fleet are as follows:

 Optimise the size of the vehicle fleet using utilisation data and the application of minimum acceptable utilisation levels to challenge the need for vehicles and reduce the need for the future size of the fleet.  Invest in a greener, more efficient fleet to improve air quality through lower emissions and reduce running costs and working to the Scottish Government’s target of 2032 for all new vehicles to be zero emission.

Optimise the size of the vehicle fleet using utilisation data and the application of minimum acceptable utilisation levels to challenge the need for vehicles and reduce the need for the future size of the fleet.

As part of the Council’s wider transformational service redesign process, there is a renewed focus on rationalisation and sharing of the fleet, facilitating a shift to a more efficient, greener and modern fit for purpose fleet, which reflects the future requirements of the Council.

The Council operates a diverse fleet of vehicles, with a mixture of owned and hired vehicles. These are operated across 30 different service areas from 33 locations. Of the 37 different types 29 are specialist or require a specific driving licence entitlement. Across the Council, the 4 largest users of fleet are the Ayrshire Roads Alliance, Housing Asset Services, Outdoor Amenities and Waste Management, with a combined 405 vehicles and plant items. The most common types of vehicles in use are as follows:

Vans 215 Cars 97 Tippers 74 Kerbside Collection Vehicles 23

To determine scope for future fleet reduction, all vehicles in the fleet have been assessed individually based on their usage, location and type. Analysis of this data has identified that there is scope to reduce the fleet by approximately 10%. This is based on vehicles with low utilisation and/or low mileages, and also where the potential exists to share vehicles.

Whilst every service in the Council is currently considering service redesign options to support fleet reduction objectives, the main areas which are being targeted are ARA, Housing Asset Services, Outdoor Amenities and Waste Management.

65 Progress to date

A review of the Council’s Fleet Management arrangements was carried out in 2018/19. A number of recommendations are being taken forward, putting in place new arrangements. Where possible, services will be encouraged to share fleet, facilitating a shift to a more efficient, greener and modern fit for purpose fleet, which reflects the future requirements of the Council.

Future objectives

Consider the implementation of a double shift system in Waste Management, to allow for a reduction of approximately 13 vehicles from our existing fleet.

Examine service redesign options in other Council services to support fleet reduction objectives.

Invest in a greener, more efficient fleet to improve air quality through lower emissions and reduce running costs and working to the Scottish Government’s target of 2032 for all new vehicles to be zero emission.

The Scottish Government has set a date of 2032 for all new vehicles on the road to have zero emissions. Recent years have seen impressive advancements in technology since the introduction of electric vehicles as a mainstream alternative to petrol and diesel vehicles, with new electric cars now capable of 185 – 300 miles.

To support local authorities in changing to electric vehicles, the Scottish Government, via Transport Scotland, is providing ongoing annual grant funding to cover the increased cost of purchase or the full cost of leasing.

The financial benefit of changing from a petrol/diesel vehicle to electric is that there are lower operating costs as fuel costs are removed or significantly lowered, there is no road tax and, with fewer mechanical components, maintenance costs are reduced.

In the transition to an electric fleet, it is acknowledged that the main barrier is capital costs. For example, directly replacing the type of diesel buses used by the Coalfield Community Transport would cost £82,000. The cost of the electric equivalent is £171,000.

Demand for electric vehicles is increasing and it is expected that this will result in a reduction in future prices. The position will continue to be monitored by Transport Services to inform the strategic vehicle replacement programme.

Progress to date

Five electric vehicles were purchased in 2018, bringing the total number of electric vehicles to 15.

66 Future objectives

A further 26 electric vehicles are on order, which will increase the total number of electric vehicles operated by the Council to 41. This will deliver an increased annual saving of approximately £30,000 and reduce CO2 emissions by an estimated 28.25 tonnes.

There are a further 115 existing vehicles where benefit would be gained from converting to electric over the next three years. Discussions are ongoing with Transport Scotland to secure additional grant funding in 2019/20 and beyond to accelerate fleet conversion and allow the Council to deliver improved air quality and reduce fleet costs.

Outcome measure: % utilisation of fleet vehicles Number of electric vehicles in the fleet

THE END

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