Disposal Strategy
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Disposal Strategy
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Purpose & objectives
Strategy drivers
Strategy deliverables
Adopted approach & strategy
Ownership of the strategy & corporate governance
Expected benefits & links to corporate objectives
Conclusions
Recommendations
25/01/10
19/04/10
Corporate Property Group
20/04/10 Asset Management Capital and Investment Group
18/05/10 Cabinet
Sally Elliott BSc M.R.I.C.S. M.B.A.
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Disposal Strategy
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Purpose of the Strategy
The purpose of this strategy is to ensure that BCBC always achieves:
The strategy sits under and supports our Asset Management Plan (AMP) 2021. The
AMP 2021 identifies that our property strategy is to rationalise our portfolio and always to obtain the best outcome to help deliver Council objectives. This will require balancing the best price reasonably obtainable to support the Capital Programme and reducing our revenue liabilities against the benefits being offered through alternative uses.
This disposals strategy works to always achieve the best disposal out come for
BCBC.
BCBC Corporate property vision 2021
Starting from :
900+ Assets including:
400+ buildings
£62m backlog
£15.1m annual running costs
Retain and maintain
Release and generate capital
Invest and
Remodel
Going to:
Lean
Sustainable
Fit for purpose
Delivering the Best
Local Service in Wales
2009 Direction of Travel 2021
Disposal Strategy Objectives
To enable actual and latent capital value tied up in potentially surplus assets to be realised
To reduce liabilities
Unlock development and regeneration benefits, and
Maximise the proceeds or land use benefit from particular disposals for the benefit of BCBC and its community including Community Asset Transfer.
The Disposal strategy is supported by the tools and models contained in the AMP
2021 including the vacant and surplus property protocols, The Geographical Review
Process, Service Asset Management Plans and the Community Asset Transfer guidance document.
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Disposal Strategy
The Corporate Plan
Supporting delivery of the community themes
Corporate programmes and Directorate service plans and projects including:
Schools modernisation
Vulnerable children
Active and Healthy living programme (Sports and Recreation Review)
Adult and Healthy living (Adult Social Care)
Customer Care Programme
Sustainable communities - Unlocking regeneration benefits
Efficiencies programme
Office accommodation Strategy
Partnership working/ Shared services
Community Asset Transfer
Partnership working
Fiscal challenges and the operational efficiencies agenda
Funding to support the Capital programme – In particular to fulfil the requirement to generate additional capital receipts of £3.3m between
2010/11 and 2012/13 to meet the requirements of the Council’s capital programme as approved by Council on 10 th February 2010.
Releasing Revenue money through efficiencies – releasing ongoing liabilities.
The requirement for a lean, sustainable estate (AMP 2021)
Legislation and national policy guidance:
Section 123 of the Local Government Act 1972 – Consideration should not (except with the consent of the Secretary of State) be less than can reasonably be obtained.
General Disposals Consent 2003 - under the General Disposals Consent 2003
Local authorities can sell or lease general fund assets at less than best consideration subject to a value limit of £2m in cases where it can demonstrate and attribute value to wellbeing benefits that would arise.
Quirk Review (DCLG 2007)
Making the Connections (WAG 2004-2009)
Capital Receipts
Income
Reduced Liabilities
Regeneration benefits
Positive Community Asset Transfer and Partnership working
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Disposal Strategy
Due to the diverse nature of our property holdings and legal ownership, changing service requirements and corporate priorities it is clear that “one size” will not fit all.
Therefore this strategy is necessarily dynamic, focused around a set of three key inter-relating work strands:
Potential disposal opportunities will arise in a number of ways. In order to maximise these opportunities it is a key element of this strategy that the Corporate Property
Officer and his staff work directly with service providers and relevant officers to provide targeted, professional property skills in the following areas:
Corporate Programmes, Directorate Service Plans and Projects – As identified in the AMP 2021 virtually every programme has a property impact.
This property impact needs to be informed and challenged to maximise proceeds from land use benefit.
Asset Challenges and Reviews as identified in the AMP 2021 asset challenge and review tools and processes identify opportunities to reduce liabilities, realise potential for generation of capital receipts and community asset transfer and partnerships. The approaches adopted include: o Geographical Reviews o Service Reviews o Area Asset Management Planning
Planning
To ensure disposal opportunities and outcomes are maximised: o Monitor Planning applications affecting our assets
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Disposal Strategy o Consider, challenge and submit Local Development Plan and candidate site applications o Master planning involvement
Property Management
Maximising disposal opportunities and outcomes through informing and challenging on: o Requests for variation of covenants o Five yearly asset valuation processes (considering development/alternative uses). o Approaches from outside parties. e.g. developers, adjoining owners. o Entering into development partnerships such as asset backed vehicles or local housing companies. o Request from a community group or public body to the transfer of an asset.
Delivering: o o o o
Identification of assets for disposal
A corporate approach to unlocking disposal opportunities key data on valuation/ market trends
Identification of both long-term and immediate development opportunities including delivery options. o o o
Identifying where Property has potential for development or redevelopment and service can be relocated.
Informed Property feasibility studies and option appraisals
Considers planning use and challenge to release development opportunities o o
Maximise grant funding opportunities
Informed/ transparent community Asset Transfer
These lists are not exhaustive but form the basis of where many disposal opportunities may arise.
The Surplus Property Protocol
Before land and buildings are formally declared surplus, requirements for use for other authority purposes must be considered through the process outlined in the surplus property protocol.
Consideration should be given to other local authority services, and partner agencies where appropriate, as soon as a property is likely to become surplus.
Site Investigation and Planning
Once a property has been identified as potentially surplus the Head of Property and finance should establish whether there are any constraints on the site including:
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Disposal Strategy
Title, legal, planning, statutory authorities, etc .; Early title checks will often save abortive work later on.
Financial constraints such as the property having been the subject of funding in the past that necessitates the repayment of grant monies, or whether the property was purchased by or under the threat of compulsory purchase, in which case it will need to be established whether the Crichel Downs rules apply.
Town planning investigations to establish the authorised use and the potential for valuable alternative use.
Managing the surplus property assets
Prioritising high value, politically sensitive &/or empty buildings
Prioritise delivery of geographical review disposal recommendations
Maintain a log of potential development sites
Maintain a log of potential Community Asset Transfer buildings/ sites.
Protecting value
This may include acquiring properties or releasing restrictions on title to release additional value.
Managing and maintaining sites to retain value
Market appraisal and master planning:
Monitor and respond to market trends to maximise greatest return
All disposals should be arranged and managed by the Head of Property and finance.
Valuations
A valuation of the property for disposal should be undertaken at the earliest opportunity in the process and continually reviewed through the disposal process, to ensure delivery of best consideration. Where it is considered appropriate, for example where negotiations are taking place off market an independent valuation will be procured.
Method of disposal
Best consideration should always be obtained by the most appropriate method of disposal.
The method of disposal adopted is dependent upon the individual characteristics of each case and the benefits to be accrued from the disposal. The following is not exhaustive but covers the adopted approaches for various disposal types:
General Open Market disposals of surplus properties
The most appropriate method of disposal, for the majority of cases, will be adopted from the following
Private Treaty
Auction
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Disposal Strategy
Tender (formal or informal)
Special Purchaser and Sales to former owners under Crichel Down rules
Disposal of non-surplus properties for community regeneration/ partner initiatives
Examples include disposals for community regeneration schemes by way of asset backed vehicles.
These cases will be assessed individually as to whether it is recommended that disposals will
1. take place at the best price that can be reasonably obtained or
2. whether prices are to be discounted to achieve the outcomes of the proposed schemes. In such circumstances appropriately worded conditions or covenants would be exercised to protect the council’s interests in the transaction.
Community Asset Transfer (CAT)
Disposal by way of community asset transfer must be in line with the AMP 2021
Community Asset Transfer guidance document.
Essentially such a transfer should only take place if there is community need and demand, it is supported by a robust business case, the proposal is sustainable, the proposed use for the property meets the authority’s objectives and community strategy, there is an agreed time-scale within which a disposal is expected to be completed and certainty of funding.
The strategy will be owned by the Corporate Property Group (CPG).
The CPG reports to the Asset Management and Capital Investment Group.
Corporate Governance is provided under BCBC’s current Standing Orders
The strategy will support the process of continuous improvement in asset management, maximising disposal opportunities to achieve the best disposal outcome in meeting the challenge of the internal and external drivers and delivery of
“the best local services in Wales”
The utility of the strategy has been reinforced by the work done to date. Notably circa
£12m of capital receipts have been generated over the last 5 years and various
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Disposal Strategy assets have been transferred to the community including over 10 community centres under third sector management.
This Strategy will facilitate the strategic management of BCBC Land and property to support the corporate objectives by enabling actual and latent capital value tied up in potentially surplus assets to be realised reducing liabilities unlocking development and regeneration benefits, and maximising the proceeds or land use benefit from particular disposals for the benefit of BCBC and its community including Community Asset Transfer and
Partnership Working.
The strategy supports the long term vision of the AMP 2021 and delivery of “the best local services in Wales”
This disposal strategy is adopted to ensure that the best disposal out come is always achieved.
The actions arising from the disposal strategy are contained in the AMP 2021 annual Action Plan.
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