MINUTES OF PROCEEDINGS OF THE FINANCE & RESOURCES COMMITTEE MEETING OF ARMAGH BANBRIDGE AND CRAIGAVON DISTRICT COUNCIL

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1 MINUTES OF PROCEEDINGS OF THE FINANCE & RESOURCES COMMITTEE MEETING OF ARMAGH BANBRIDGE AND CRAIGAVON DATE: 2 October 2014 TIME: VENUE: CHAIR: VICE CHAIR: 6.00 pm The Council Chamber, Civic Building, Banbridge District Council, Downshire Road, Banbridge Councillor C Lockhart Councillor J Nelson MEMBERS PRESENT: Councillors M Baxter G Keating (6.06 pm) C Black S Nicholson M Cairns P Rankin D Causby C Seeley P Greenfield J Speers (6.06 pm) A Hatch M Tinsley (15) D Jones APOLOGIES: Councillors D Beattie I Burns M Campbell S Doyle K Haughian OFFICERS IN ATTENDANCE: Mr R Wilson, Chief Executive Mr E Kelly, Change Management Officer Mr G Coulter, Head of Finance Mrs S Currans, Head of Human Resources Mr J Hayes, Head of Building Control, Armagh City & District Council Mrs Elaine Gillespie, Head of Community Planning, Banbridge District Council Mr Lewis Porter, Principal Administrative Officer, Craigavon Borough Council 1

2 DEMOCRATIC SERVICES: Mrs C McCully, Member Services Officer, Banbridge District Council 1. DECLARATIONS OF INTEREST No declarations of interest were declared. 2. ASSET MANAGEMENT PREVIOUSLY CIRCULATED: report from the Head of Finance FR The Head of Building Control, Armagh City & District Council took Members through the report. Councillors Keating and Speers joined the meeting at 6.06 pm. THANKS: were expressed by the Chair to the Head of Building Control for his report. UNDERTAKEN: by the Head of Finance on the request of Councillor Baxter to provide Members with details on Council loans. Queries from Members were answered as follows: Condition surveys had been completed on all buildings. The Council must ensure appropriate budgets were in place to ensure buildings were maintained to a satisfactory standard and priority would be given to those buildings which were essential for service delivery. Consideration would be given to options for insurance valuations for the new Council. Collaborative insurance was being considered by the Services Committee. From 1 April 2015 there would be a new committee system and new governance in place. The Strategic Assets Steering Group would meet on a semi regular basis. It was important that officers received guidance from Members on asset management. 2

3 SUGGESTED: by Councillor Speers that the Council considers self-insurance. He suggested that if an asset value was provided then a risk could be determined and the assets could be categorised with a view to reducing the Council s insurance bill. STATED: by Councillor Hatch that general principles should be agreed regarding contracts to ensure local businesses are included in the tendering process. RECOMMENDED: on the proposal of Councillor Causby, seconded by Councillor Speers that:- (a) Further detailed reports as listed below be brought for consideration and approval at the appropriate time: - Asset Management Plan, - Transfer of Assets from Third Parties i.e. Neighbouring Council, DRD and DCAL, - Maintenance Strategy, and - Condition of Council Building Stock. (b) (c) To commence the strategic review of land and property across the Council a workshop be held at the appropriate time to seek Members views. A Strategic Assets Steering Group be set up following the above workshop. (The Head of Finance, Head of Building Control, Armagh City & District Council, Head of Community Planning, Banbridge District Council and the Principal Administrative Officer, Craigavon Borough Council left the meeting at this stage (6.30 pm)). AGREED: on the proposal of Councillor Baxter and seconded by Councillor Jones that the meeting moves Into Committee for consideration of the next item. 3. CONFIDENTIAL ITEM REMOVED AGREED: on the proposal of Councillor Baxter and seconded by Councillor Black that the meeting moves Out of Committee and recommends the decision made In Committee. The business having been completed, the meeting ended at 7.30 pm. 3

4 SIGNED: CHAIRMAN CHIEF EXECUTIVE DATE 23 October

5 FR Report to: Finance and Resources Committee Date: 2 October 2014 Agenda Item No. 3 Reporting Officers: Jonathan Hayes, Head of Building Control, Estates and Asset Management, Armagh City and District Council Elaine Gillespie, Head of Community Planning, Banbridge District Council Lewis Porter, Principal Administrative Officer, Craigavon Borough Council ITEMS FOR DECISION 1.0 ASSET MANAGEMENT Purpose Decisions Required: It is recommended that Members consider the content of the report and agree that:- (a) Further detailed reports as listed below are brought for consideration and approval at the appropriate time: Lead Officer - Asset Management Plan, - Transfer of Assets from Third Parties i.e. Neighbouring Council, DRD and DCAL, - Maintenance Strategy, and - Condition of Council Building Stock. (b) To commence the strategic review of land and property across the Council a workshop is held at the appropriate time to seek Members views. (c) A Member lead Strategic Assets Steering Group is set up following the above workshop Jonathan Hayes, Head of Building Control, Estates and Asset Management, Armagh City and District Council Elaine Gillespie, Head of Community Planning, Banbridge District Council Lewis Porter, Principal Administrative Officer, Craigavon Borough Council 1.1 BACKGROUND From 1st April 2015, Armagh Banbridge and Craigavon District Council will have a portfolio of approximately 158 buildings from which it will deliver services to the community as well as owning over 8,000 acres of land. Page 1 of 5

6 These assets will need to be properly maintained and managed to ensure that they are fit for purpose and continue to function as efficiently and effectively as possible in supporting the delivery of a wide range of services across the District Council area. In total, the land and property assets are valued at 158,000,000 (based on reinstatement insurance valuations) and their on-going running costs will form the second largest expenditure (revenue) after staffing for the Council. It s important therefore that the portfolio is managed carefully ensuring both efficiency in how money is spent on assets but at the same time recognising their fundamental roll in the delivery of effective services moving forward. Best practise from across the United Kingdom recognises that robust asset management approaches do not only provide a more effective estate, but also ensure better compliance with health and safety requirements and can create a potential for cost savings, which can release resources for other uses. 1.2 DETAIL Building Blocks to Asset Management Asset management is a systemic approach to ensuring that the Council estate directly supports Council objectives while ensuring that the life cycle costs of holding assets are minimised. It is about meeting user s needs, ensuring service and building quality standards, and achieving best value. For this to develop a coordinated approach needs to be adopted by the Council. This starts with setting the strategic direction for property by Senior Officers in consultation with Council Members, and building an effective delivery framework that ensures coordination from the top of the organisation right down to front line service delivery. Asset management should form part of the Council s vision as property has an important contribution to make in supporting the Council s strategic themes which would be identified in the Corporate Plan. To ensure these themes are recognised in a property context certain principles relating to property management should be clearly identified through an Asset Management Plan. The Asset Management Plan provides a coordinated and documented approach to ensure the Council is maximising value for money from the land and property assets that it owns, manages and maintains. This is particularly important in the current environment; where on-going property costs add up to a significant proportion of Council expenditure. These include energy, maintenance, utilisation and other serviceable costs. It is essential therefore to manage these assets carefully over the duration of their life to ensure that the facilities are both effective in serving their purpose, and efficient in their operating costs. Having a clear understanding of all land and property assets in a coordinated manner will allow for a clear and transparent understanding when making key strategic decisions and enable value for money issues to be addressed. It will also feed into wider service reviews, allowing effective option appraisal which takes into account the true cost and performance Page 2 of 5

7 of properties. The existence of an Asset Management Plan optimises the opportunities for deployment and utilisation of land, buildings and other assets. Alongside the Asset Management Plan it is important to have the right structures in place that will coordinate Asset Management across the Council. One essential component of this is a Strategic Asset Management Group. This Group would identify the key priorities for the Council estate and ensure key objectives and strategic decisions are being implemented. The group would also provide a strategic framework for Asset Management including developing recommendations regarding the acquisition, development and disposal of land and property to achieve medium term financial targets and challenging property use across the Council. Figure 1 provides an overview of the building blocks to successful property asset management. Other Council Departments (Finance, Procurement, ICT etc.) will have a key role in supporting asset management. Figure Planned Maintenance A key area that will need to be addressed at an early stage within the Council is maintenance. In the past, the majority of Councils across Northern Ireland have taken an uncoordinated approach to planned maintenance of their building stock. This historically has been accepted when there has been a small number of buildings to manage and maintain, but in a larger organisation without a more coordinated strategy there is significant danger of money being targeted at the wrong areas and a lack of adherence to health and safety requirements. Within Armagh Banbridge and Craigavon District Council work has already commenced on the development of a planned preventative approach to building maintenance. Condition surveys have been completed across all ABC Council properties. These surveys have identified the maintenance needs for the next five years and Council is now in a position to forecast the budgetary requirements for planned maintenance via a centralised approach administrated via a draft Armagh Banbridge and Craigavon District Council Maintenance Strategy. Subject to budget approval maintenance Page 3 of 5

8 and service frameworks are currently being developed. These frameworks should provide greater value for money and improved turnaround times in responding to emergency repairs while providing better legislative compliance. If the Council does not effectively plan to maintain its building stock it will almost certainly lead to further deterioration in the building stock and a greater backlog of maintenance. Not only does this mean that the eventual costs will be much greater than would have otherwise been necessary, but would also have implications for the quality of service delivery Conclusion Good property management is not an end in itself. It must clearly respond to a number of demands; customer requirements, Council aims and objectives, service changes in the future, external influences, financial position (now and future), legislation and standards. The way the Council manages its land and property assets can have a significant impact both on the quality of services delivered to the public and the local environment. Effective asset management is essential in bringing 'agility' to land and property assets so that the delivery of the Council's goals and objectives are realised in a sustainable manner, at the right time and on budget. Armagh Banbridge and Craigavon District Council will be the largest Council in Northern Ireland outside Belfast and will have a significant property portfolio to manage. It s critical that all property and land is strategically managed by developing an Asset Management Plan which is accountable to a Strategic Asset Management Group or similar committee. As property is slow to react to market conditions it will take a number of years and continuous improvement to obtain the potential benefits of effective asset management. Over the next number of months the Council will need to answer the following questions: Where we are now in terms of the property estate (both in financial terms, and suitability for service delivery)? Where do we need to get to in support of the services we will be delivering in the future? How can we effectively plan to get there? and; What are the milestones and how are we performing against them? 1.3 DECLARATIONS OF INTEREST Officers are unaware of any declarations of interest in this item. 1.4 RECOMMENDATION It is recommended that Members consider the content of the report and agree that:- (c) Further detailed reports as listed below are brought for consideration and approval at the appropriate time: Page 4 of 5

9 - Asset Management Plan, - Transfer of Assets from Third Parties i.e. Neighbouring Council, DRD and DCAL, - Maintenance Strategy, and - Condition of Council Building Stock. (d) (c) To commence the strategic review of land and property across the Council a workshop is held at the appropriate time to seek Members views. A Strategic Assets Steering Group is set up following the above workshop Page 5 of 5