Property Asset Strategy
PROPERTY ASSET
STRATEGY
BUCKINGHAMSHIRE
COUNTY COUNCIL
Contents
Contents
INTRODUCTIONS TO THE PROPERTY ASSET STRATEGY ................................................... 3
.................................................................................................................................................... 4
INTRODUCTION......................................................................................................................... 4
.................................................................................................................................................... 5
PURPOSE OF THE STRATEGY................................................................................................. 5
Property Asset Strategy Vision – operational assets ................................................................... 6
Property Asset Strategy Vision – Surplus/non-operational assets ............................................... 7
.................................................................................................................................................... 8
Decision Making .......................................................................................................................... 8
Delivery options........................................................................................................................... 9
Key elements to consider ............................................................................................................ 9
Outcomes sought ........................................................................................................................ 9
Risks and considerations .......................................................................................................... 10
2
Foreward
INTRODUCTIONS TO THE PROPERTY ASSET STRATEGY
Peter
HARDY
This strategy refreshes the approach the
Council takes to its property assets, focusing
improving efficiency of the estate and a more
commercial approach to management of the
portfolio
Cabinet Member – Finance and Resources
Gill
HARDING
Place service has concentrated on
transforming the property service into a
leaner structure, designed around delivery of
this strategy and a more commercial mindset.
Interim Service Director – Place Service
Ian
BOLL
I am excited to be delivering this new
strategy and transforming opportunities to
deliver savings and increase income for the
Council into tangible deliverables.
Senior Manager – Property and Major Projects
3
Introduction
INTRODUCTION
The Council requires property to provide services through direct service delivery, outsourced
delivery vehicles, and to accommodate back office staff and functions.
The Council has operated a long term policy of disposal of surplus property assets, currently
through the 2011 Property Asset Management Plan & 2012 Agricultural Estate Asset
Management Plan.
Since 2010 the Council has sold £25m of surplus property assets. Disposal of assets has
generally been at market rate on an ‘as is’ basis with the Council protecting its interests through
overage, or with planning permission gained for the site.
The market rate would typically reflect a developer’s ability to achieve a 20+% profit margin on
completion of the development.
Income from the disposal of surplus property has supported service led property improvement
programmes or underpinned the Councils Medium Term Plan capital programme.
In addition, a number of properties have transferred to communities as part of alternate service
delivery models or to Academy status schools.
A number of sites within the Corporate and Agricultural estates have been held as strategic
assets for the Council to gain from future increases in land value due to development potential.
The Property Asset Review 2013 identified that the number of opportunities were now limited in
number due to the continued disposal programme.
The limited remaining opportunities for disposal together with a declining revenue income for the
Council has prompted a review of the Council’s Property Strategy.
The Property Asset Strategy has been developed in parallel with the Capital Investment
Strategy.
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PROPERTY ASSET
STRATEGY
PURPOSE OF THE STRATEGY
The purpose of the Property Asset Strategy is to ensure all property asset management
decisions including investments and disposals are in line with Council priorities and service
delivery strategies, consider risks and represent value for money.
The strategy provides a clearly defined framework for the Council to manage its land and assets
The strategy is aligned to the Corporate Landlord approach to property management with its
centralised, streamlined operating model.
The strategy embraces a new proactive approach to income generation from the estate,
embracing a more entrepreneurial approach to property development and investment.
The strategy focuses on the medium term plan period 2014-2018 and takes into account the
emerging Future Shape transformation strategy which includes a comprehensive revision and
restructuring of the way Council delivers services. Long lead in times to developing property
solutions and the recognition of property as a key corporate resource means that this strategy
needs to take a long term view beyond the MTP period, at least ten years ahead.
The strategy presents a governance structure in line with existing Council decision making
processes. It is intended that the Property Asset Strategy should be dynamic and under constant
review to capture and reflect changes in policy, circumstances or priority and formally reviewed
every four years in line with the Capital Investment Strategy. This will be accompanied by a
yearly reviewed Portfolio Plan and reporting to Members.
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Property Asset Strategy Vision – operational assets
The vision for Property is to operate a lean, well planned asset portfolio used to deliver joined-up
services appropriate to meet service and customer requirements.
The Corporate Landlord approach to property management is due to commence on 1 April
2014; this new approach centralises the management of property to provide a more holistic
management approach to current and future property needs.
This will target efficient service delivery to customers aligning current and future accommodation
demand with revised supply through rationalisation of the existing estate, the development of
new, flexible assets for future service provision and ensure best value from operation of the
estate.
It is important that Property is recognised as a corporate resource and to break the link that
currently exists between services and assets, instead providing flexible spaces to maximise
operational efficiency and treat property provision on a corporate and commercial basis.
To support flexible property the Council has adopted the principles of New Ways of Working to
optimise the use of space to deliver services from and promote efficient working through the
adoption of facilitating technology for flexible working and home working. The performance of
NWOW is essential to managing space and driving out the operational efficiencies. It is also key
to understanding accommodation and therefore budget requirements of services and business
under Future Shape.
Planning for future property requirements should be fully aligned to the Councils Strategic Plan,
Medium Term Plan and Capital Investment Strategy. A key function of the Corporate Landlord is
to ensure that future service requirements are fully understood and planning for future property
needs is undertaken to ensure optimal provision.
The Corporate Landlord approach will fully integrate asset management planning with business
planning at both corporate and service levels. As the Future Shape transformation strategy
develops it will also consider the commercial opportunities for shared location and income
generation. Getting a greater understanding of all the property requirements, including
residential care, commercial depots, arm’s length functions etc. is key to delivering property
more efficiently.
Diagram 1. Property Strategy fit with key Council plans
BCC Strategic Plan
Capital Investment Strategy
Property Strategy
Corporate
Estate AMP
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Agricultural
Estate AMP
Medium Term
Financial Plan
Service Plans
Capital
Programmes
Asset Management Plans covering Corporate Estate, Schools, Non Corporate and Agricultural
Estate, sitting adjacent to other asset plans for Highways, ICT etc, will detail the capital
programme for investment to meet customer needs and provide the mechanism for monitoring
performance of the property portfolio on both operation and non-operational investments through
a suite of KPI’s including occupancy, efficiency including energy, return on investment, delivery
to time and budget, maintenance backlog etc.
These will be produced on a four year cycle, refreshed yearly in accordance with the MTP and
performance reported on a six monthly basis to the Property Board.
Property Asset Strategy Vision – Surplus/non-operational assets
The strategy for surplus estate is to move to a business case led approach to property disposal
or development rather than the current disposal by default strategy. This applies to both the
agricultural estate and corporate estate and buildings. The aim is to achieve best value from the
property estate but with a shifting emphasis towards a more commercial, risk aware rather than
risk adverse approach.
Case by case considerations should include the following before making final recommendation:





Disposal of property
Development of property assets prior to disposal to increase income potential
Retaining ownership of property to derive revenue income
Shared development with partners or commercial tenants
Strategic Plan objectives including “Bucks special environment” and environmental
considerations including energy management and carbon footprint
Consultation with local members at all key stages in development of the business case
Surplus space within operation assets will likewise be considered for commercial arrangements;
commercial leases, accommodating partner organisations etc to generate revenue income.
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PROCESS
CONSIDERATIONS
Decision Making
The development of a robust business case is essential to successful progression of property
schemes. The Corporate Landlord approach includes a new strengthened governance structure
which will operate a new business case model for property schemes considering the full
development and whole of life operating costs of schemes, clearer benefits realisation, funding,
income and risk management plans.
Business cases will be presented to Property Board, with representation from all directorates, for
consideration ahead of recommendation from the Business Investment Group to Cabinet to
proceed.
The Property Board will have full sight of the detailed property Asset Management Plans which
will detail property provision requirements across all service areas.
Diagram 2. Property governance
Council (where in year investment opportunities arise outside of planned
expenditure)
Cabinet
Cabinet Member(s) Decision
Business Investment
Group
Property Board
Property Asset Management Plan(s)
Project Development
Service liaison
Local Member liaison
The existing disposal strategy has withheld a degree of risk from the Council by not considering
the benefits and associated risks with undertaking property development activity and retaining
property for non-operational purposes.
A change in the risk analysis for individual projects needs to be achieved to overcome higher
risk preventing potentially lucrative (or beneficial) schemes from progressing. Reporting on the
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risks and performance of assets needs to be undertaken at a portfolio level with individual
investment decisions balanced across the portfolio’s performance. Thus higher individual risks
can be balanced with lower risks across the portfolio.
This will require property decisions to be fully appraised by Finance, and Assurance in the new
Future Shape structure, with all decisions aligned to the Councils capital programmes and
considering revenue implications and cash flow issues arising.
Opportunities for investment and development of assets should reflect Council strategic priorities
and will influence the minimum acceptable rate of return on a project.
Delivery options
Currently the Property Service has limited expertise in bringing forward development
opportunities. The newly procured Estates and Asset Management contract will provide support
in recommending development opportunities, developing business cases and developing the
overarching AMP’s.
In addition, the Property Service will develop a new framework to provide access to professional
property development and project management expertise and seek to work with development
partners where appropriate for delivery.
The Future Shape programme will need to consider the distance at which any development
partner or component of the Council sits from the Corporate Landlord and whether it embraces
or partners with organisations to deliver Housing Association functions.
Key elements to consider
In adopting a more commercial approach to property management the Council will to reach out
to professional expertise to achieve its aspirations -the new Estates and Asset Management
Contract has been specifically designed with this facility in mind.
To behave more commercially, the Corporate Landlord should have full visibility of all property
transactions undertaken directly or indirectly via contract or arm’s length arrangements so that it
can assure best value decisions and plan to provide optimal service.
The Council’s Estate must be managed at a corporate level so that individual costs and risks
considered in accord with the overarching asset management plans.
Outcomes sought
The outcomes sought from this Property Strategy are;



A more strategic and commercial approach to property management to achieve greater
financial benefit to the Council through capital receipts from developments or revenue
income from its estate.
A more efficient operational estate
Greater assurance that BCC’s priorities and strategic objectives are supported by the
estate
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Risks and considerations
The key risks on a case by case basis are the risks of developments not achieving the expected
return or delivering over budget and or over time. By managing risks across a portfolio of
schemes, this strategy seeks to mitigate the risks and ensure that effective decision making and
monitoring is in place to manage risks.
There is a risk that the Future Shape programme and structure of business units, each with their
own commercial imperatives, could result in property investments outside of the Corporate
Landlord which are not aligned to the Council’s strategy. However, the location and visibility of
the Corporate Landlord has been considered by the Future Shape programme and the ongoing
design of the structure is mindful of its role.
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