Agenda item

Purpose: To receive and comment on the draft AMP prior to its presentation at Executive. 

The Committee considered the Corporate Property Asset Management Plan (AMP) (Agenda Item 5).

The AMP had been approved at Management Board, but had yet to be presented to the Executive for approval.

The value of the 83 property holdings within Community Services was felt to be low at £17.7m.  Although it was noted that the values were based on accounting criteria and did not necessarily reflect open market value.  Steve Broughton agreed to provide an explanation of the valuation process and the actual definition of what constituted a property holding. 

It was suggested that it would be useful to include any mortgages against the property holdings across the Council to identify the net value after borrowing.  Andy Walker advised that £49m of long term borrowing was reported at year end, this showed that much of the asset base was fully financed.  The Council’s borrowing limits were deemed acceptable by the Public Works Loan Board (PWLB). 

Steve Broughton advised that buildings were valued every five years.  However, if there was a significant change to a property’s circumstances then the valuation would be reassessed.  Valuations were mostly obtained for insurance purposes.  Andy Walker added that the existing strategy was to acquire buildings on a freehold basis which was felt to achieve a stronger balance sheet. 

Condition surveys were also undertaken every five years but were conducted separately to valuation reviews.  It was suggested that it would be sensible for properties to be valued immediately after a condition survey was carried out. 

It was queried whether there was potential to remortgage properties or release equity and Andy Walker agreed to provide a formal response on this point.  Although it was noted that this would increase borrowing costs, also use of this funding would be restricted and could not be used for revenue expenditure. 

Steve Broughton explained that a property could be purchased for investment purposes, but this had not been pursued and rental income could not be obtained from such an enterprise. 

Information on property disposals was included in the AMP in compliance with CIPFA (the Chartered Institute of Public Finance and Accountancy) standards.  However, Members felt this was not sufficiently detailed to be the disposal policy and Steve Broughton agreed to look at the inclusion of further detail on disposals.  The disposal programme was updated as and when necessary, was presented to Corporate Board and Management Board, and was monitored by the Property Development Team.

Use of and the management of properties was decided by the service area who owned the asset.  Property acted on their instructions.  Members felt that a wider consideration would sometimes be required and the AMP needed to include reference to a consideration of the corporate good. 

The AMP was a high level document which related to property assets only and this would be made clear throughout the document.  This followed a resolution of the Select Committee when this topic was previously discussed. 

Members felt the document was well laid out, but clarity was requested to be included to explain what was meant by the term – lean portfolio, which was a strategic aim of the AMP. 

The existing database, Premise, was procured in the time of Amey West Berkshire and was not performing well.  Therefore work was ongoing to establish whether the Councils financial system, Agresso, could instead hold the Asset Register at zero cost.  Clarification was awaited to confirm if Agresso could meet the specification and if so it was hoped that this could be in place from April 2011.  It was also hoped that data could be migrated from the old database to the new, but there was a risk that this would not be possible. 

Members queried if there was potential to have sight of the full Asset Register or at the very least a sample and Steve Broughton was of the view that it would be possible to append it to the AMP and be made available, pending approval of the Register by Management Board.  Clarity was sought on whether car parks were included as assets and John Ashworth agreed to confirm this point. 

The Select Committee agreed that the AMP and the Asset Register needed to be closely synchronised. 

Further questions followed from Members and Steve Broughton made the following points in response:

·                    There were few instances where bad debts had to be pursued and two recent occurrences had both been resolved. 

·                    Approximately five properties were currently vacant.

·                    There was a rolling programme of rent reviews in place, but they could also be carried out as and when necessary.

John Ashworth thanked Members for the useful feedback.  A key piece of work at this time was to establish if Agresso could be used for the new Asset Register.  In future, it was possible that requirements would change, particularly due to the financial climate and it was therefore important to increase dialogue with service areas regarding the management of property assets. 

Moveable assets were then discussed and Andy Walker advised that a number of inventories held this information.  ICT equipment was felt to be covered within the ICT Strategy.  The Highways AMP was in place and this covered information on road condition etc.  It was felt that the Highways AMP could be returned to by the Select Committee and investigated at a later date.  This could include discussion of all land included in the document. 

RESOLVED that:

(1)       Steve Broughton would:

·        provide an explanation of the valuation process undertaken;

·        provide a definition of what constituted a property holding;

·        give consideration to linking the timings of condition surveys and valuations;

·        look at the inclusion of further detail on disposals;

·        include reference to considering the corporate good of properties/assets owned by service areas;

·        include further detail to explain the strategic aim to have a lean portfolio;

·        investigate whether the Asset Register could be appended to the AMP. 

(2)       Andy Walker would provide a formal response to the question of remortgaging properties/releasing equity. 

(3)       John Ashworth would confirm whether car parks were included as assets in the Asset Register. 

(4)       The AMP and Asset Register needed to be closely synchronised.

(5)       Consideration would be given to adding a review of the Highways AMP to the work programme.