REPORT TO: POLICY AND RESOURCES COMMITTEE ON 28TH MARCH 2007

Transcription

1 ITEM:13 PAGE: 1 REPORT TO: POLICY AND RESOURCES COMMITTEE ON 28TH MARCH 2007 SUBJECT: BY: ASSET MANAGEMENT CHIEF FINANCIAL OFFICER 1. REASON FOR REPORT 1.1 This report provides details of progress over the last year in implementing the corporate asset management framework and in preparing asset management plans. 1.2 This report is submitted to Committee in terms of Section A(37) of the Council s Administrative Scheme relating to policies and practices of asset management. 2. RECOMMENDATION 2.1 The Policy & Resources Committee is invited to: Note the introduction of a corporate asset management framework that integrates asset management with financial planning. Note the progress made in, and timescales for, developing asset management plans for all asset categories. Note that a separate report on property performance will be prepared at the end of each financial year. 3. BACKGROUND 3.1 Asset management is a key element of the Council s strategic planning arrangements. As asset management is developed and implemented across the Council, asset management plans will play an increasing role in the development of the Council s capital and revenue investment strategies. 3.2 On 29 March 2006, the Policy & Resources Committee noted that asset management plans would be required for the following asset categories (para 9 of the Minute refers): Council Housing (Moray Housing Business Plan & Standard Delivery Plan) Transport Infrastructure (Roads Asset Management Plan) Land & Buildings (Property Asset Management Plan incorporating SEMP) Fleet Management (Vehicles Asset Management Plan) Computers & Associated Equipment (ICT Strategy & Action Plan)

2 PAGE: 2 The Committee also noted that the Asset Management Working Group would bring forward a corporate framework for the development of asset management plans during the financial year A key feature of this framework was the integration of asset management with financial planning. Corporate Asset Management Framework 3.3 Development of the corporate asset management framework was completed in May 2006 and rolled out to service departments over the following months. A copy of the framework is available in the Members Library and on request from Committee Services. 3.4 The introduction of the corporate asset management framework has provided a firm foundation to the Council s capital planning arrangements. Determining investment needs through the corporate asset management process will facilitate the production of a single combined Capital Strategy and Asset Management Plan covering all asset categories. Good progress was made towards this through the investment needs process adopted for the most recent 5-year Capital Plan. It is proposed that the first fully integrated document be prepared for the 5-year period commencing 1 st April 2009 and be reviewed and rolled forward annually thereafter. 3.5 By challenging the capital investment needs identified through the financial planning process, whilst balancing service needs with corporate objectives, the Asset Management Working Group informed the recommendations made to Service Development Group in respect of the capital programme. Scrutiny and challenge by such a group is recognised as good asset management practice. Moray Housing Business Plan & Standard Delivery Plan 3.6 The Community Services Committee approved the Moray Housing Business Plan and Housing Standard Delivery Plan on 30 March 2005; the Delivery Plan being submitted to Communities Scotland the following month and accepted by them in The purpose of the plan was to demonstrate how the Scottish Housing Quality Standard would be achieved by The Business Plan is reflected in the development of the HRA Budget and associated Investment Strategy for The Council has exceeded the milestones set out in the Delivery Plan. Progress is reported regularly to the Community Services Committee. Roads Asset Management Plan 3.7 On 21 June 2006, the Environmental Services Committee agreed to support a Stage 2 Efficient Government Fund (EGF) bid for a National Roads Asset Management Framework being promoted by the Society of Chief Officers of Transportation in Scotland (SCOTS) (Para 10 of the Minute refers). The August 2006 bid was unsuccessful. As a unified approach is the most effective way to develop roads asset management plans, SCOTS are considering how this might still be taken forward, albeit at a lesser pace and to a lesser extent than proposed in the EGF bid. SCOTS are in discussion with Transport Scotland to see how they might assist this process.

3 PAGE: Environmental Services have incorporated asset management principles into their performance reporting and are investigating the potential benefits of introducing new asset management software to support the management of the roads infrastructure. These investigations include the potential for developing this as a shared service. 3.9 Due to the absence of a national framework, a date has yet to be agreed for developing the Moray Roads Asset Management Plan. Property Asset Management Plan 3.10 The Asset Management Working Group is overseeing the development of a corporate Property Asset Management Plan. Educational Services developed a School Estate Strategy and Asset Management Plan in November (The school estate accounts for approximately three-fifths of the Council s operational properties.) This plan is under review and will form an important input to the wider Property Asset Management Plan. It is proposed that the first Property Asset Management Plan will cover the financial years and that it will be reviewed and rolled forward annually Correct asset classification helps identify appropriate asset goals and objectives. As part of the essential preparation for developing a Property Asset Management Plan, the Asset Management Working Group has reviewed the classification of all Council land and property holdings. This has resulted in a number of changes, the most significant of these being the transfer of the industrial portfolio from non-operational to operational. This change reflects the portfolio s economic development objectives On 24 May 2006, the Policy & Resources Committee approved a suite of property performance measures covering revenue costs, condition, sustainability, suitability and sufficiency (Para 11 of the Minute refers). The Council is participating in a facilitated benchmarking service for these indicators being run by the Institute of Public Finance and the Federation of Property Societies. The first annual report in relation to property performance will be prepared following the end of the current financial year A methodology for assessing the suitability of operational buildings was developed and implemented during the financial year in order to support the production of the new statutory performance indicator for suitability. The information gathered is being analysed and the results, which will be included in the annual property performance report, will inform the development of the Property Asset Management Plan The Asset Management Working Group has identified a need to centralise nonschool repairs and maintenance budgets in order to ensure that all Council buildings are maintained to an appropriate minimum standard; budgets are matched to Council priorities; and, best practice is achieved in the procurement of repairs and maintenance for buildings. Consolidating the budget in this way will ensure that: the budget is allocated primarily to commitments arising from legislative cyclical maintenance requirements; an element is held for response repairs; and, the balance is used to develop a programme of maintenance that is based on condition surveys. The level of budget required to maintain the

4 PAGE: 4 Council s portfolio of buildings to this standard will be reviewed and reported as part of the financial planning process for 2008 onwards. The Asset Management Working Group will identify any buildings considered to be uneconomical to maintain and develop proposals to deal with these. Vehicles Asset Management Plan 3.15 The Stage 1 EGF bid submitted by Grampian Police on behalf of the Grampian Joint Public Sector Group (Grampian Police, Grampian Fire & Rescue Service, NHS Grampian, Aberdeen City Council, Aberdeenshire Council and Moray Council) in relation to rationalising vehicle procurement across the group was unsuccessful. Fleet Services are working with a range of Scottish local authorities to investigate the potential synergies and economies of scale to be gained from the formation of a wider Scottish Transport Procurement Partnership. It is envisaged that this partnership would be responsible for all aspects of procurement in relation to fleet management Service Level Agreements are being developed with client departments to reinforce Council policy that all vehicle procurement is undertaken via Fleet Services and to ensure that the acquisition, use and disposal of vehicles are dealt with in the spirit of Efficient Government and according to best asset management principles Fleet Services have a 10-year rolling programme for vehicle and plant replacement in place. This programme will be developed into a Vehicles Asset Management Plan for the financial years The plan will be reviewed and rolled forward annually. ICT Strategy and Action Plan 3.18 The first ICT Strategy & Action Plan was prepared for the financial years Since then, the plan has been reviewed and rolled forward annually. Officers are currently reviewing the plan, developing it in accordance with the principles of good asset management, and extending it to cover a 5-year period. The full ICT Strategy and Action Plan for financial years will be presented to Committee early in the new financial year. The ICT Action Plan element of the wider plan is the subject of a separate report to this Committee. 4. SUMMARY OF IMPLICATIONS (a) Corporate Development Plan/Community Plan/Service Improvement Plan The recommendations contained in this report support Working Principles 3 (sound governance at a strategic, financial and operational level) and 4 (sound management of resources) of the Council s Corporate Development Plan. Working Principle 4 includes a commitment to review and develop asset management plans to ensure that the Council s assets perform effectively and meet legislative requirements.

5 PAGE: 5 (b) Policy and Legal Asset management is undertaken in the context of the requirement to achieve Best Value under the Local Government in Scotland Act The integration of asset management with financial strategy is a requirement of the Prudential Code. Asset management is one of the workstreams identified in the Efficient Government Agenda. (c) Resources (Financial, Risks, Staffing and Property) There are no resource implications arising directly from this report. However, the identification of capital and revenue investment requirements through the asset management process will have significant funding implications. These will be dealt with through the budget setting process. The centralisation of repairs and maintenance budgets for non-school buildings is expected to provide greater value for money. (d) Consultations All members of the Asset Management Working Group have been consulted during the preparation of this report and have agreed its contents. Asset Management Working Group members are the Chief Financial Officer (Chair), Chief Housing Officer, Head of Direct Services, Head of Estates Services, Educational Resources Manager, Property Manager, Principal Accountant (L Paisey) and Asset Management Coordinator. 5. CONCLUSION 5.1 This report provides details of progress in developing the Council s corporate asset management arrangements and in preparing asset management plans. The Committee is invited to note the introduction of a corporate asset management framework that integrates asset management with financial planning; the progress made in, and timescales for, developing asset management plans for all asset categories; and, that a separate report on property performance will be prepared at the end of each financial year. Author of Report: Ref: Andrew A F Gray, Asset Management Coordinator P&R/ /aafg/288394