PowerPoint(357kb)

DTLR GO Training 2002:Capital Strategy and Asset Management

Plan Assessment

DTZ Pieda Consulting

on behalf of

DTLR

Content

Contextual background to Capital Strategies and Asset Management Plans

What is a ‘Capital Strategy’ and ‘Asset Management Plan’?

Assessment of Capital Strategies and Asset Management Plans

Contextual Background to Capital Strategies and Asset Management Plans

DTLR Overview of the CS and AMP assessment process

Key Outcomes of Assessment

Better use of resources and assets

Progress

Fair and consistent assessment

Good and helpful feedback to support first two outcomes

DTLR Overview of the CS and AMP assessment process

Performance Measurement

- what are we looking for?

Corporate working illustrated

Cross-cutting and partnership working

Framework for performance measurement

Progress and change

Why all the Fuss about Capital and Assets?

Assets consume large amounts of local government revenue and capital

Increasing “fixed” public liabilities that government may not be able to meet (pensions, maintenance of the public estate)

Concerns that the service and financial returns from capital deployed in LA’s may not be fully optimised

The Best Value/Modernisation/Change Agenda

Central Government desire to introduce new LA flexibilities (through the Prudential regime) - evidence of good practice in capital and asset planning would be a pre-requisite

Single Capital Pot: Purpose and Objectives

White Paper Modern Local Government - In Touch with the People’ (1998) promised new cross-service allocation of capital to LA’s - single capital pot

A clear and transparent process

Rewards strategic planning and good performance

Balance between local decision making and national priorities

Improved outcomes and better services through: better planning and greater predictability about funding more LA autonomy, accountability and spending responsibility improved corporate and strategic working better use and management of assets

Performance Assessment Framework (White Paper, 2001)

Bulk of LA financial support will be distributed through the single capital pot

Comprehensive Performance Assessment (CPA) framework is the means for identifying LA’s level of performance. To be introduced over late 2002/ to late 2003

AC developing methodology but will bring together performance indicator data; Service based inspections/assessments and audit reports; corporate governance assessment undertaken in consultation

with LA and incorporating some self assessment/peer review

LA’s to be assessed under the CPA as falling into one of five categories (to be announced)

Performance Assessment Framework (White Paper, 2001) continued

‘High Performers’ will benefit from additional future freedoms - less financial ring-fencing, fewer planning requirements, lighter inspection regime, financial freedoms for borrowing, investing,trading, charging and setting spending priorities

As from 2002 no further AMP or CS required for LA scoring ‘Good’ (although considered that they would still be needed for council’s own purposes)

pPI’s and basic property statistical data will still need to be submitted for CPA purposes

Capital Strategies will be a requirement under proposals for the future Prudential Code

DETR Research on Asset Management (1999): Overall Conclusions

Strategic asset management not yet well developed in LG

Few formal AMP’s produced

Good practice in “new” capital prioritisation and capital projects

The deployment of “existing” capital is not often comprehensively challenged

Limited performance measurement

Recognition that information systems are a prerequisite for performance measurement

Limited consistency and fragmented data but this is being addressed

No significant difference in approach between types of local authorities

A strong case for good practice guidance

DETR Good Practice Guidelines (2000)

Contents:

Asset Management

Asset Management Planning

Capital Projects

Performance Measurement

Data Management

Quick Start

Hot Property (Audit Commission April 2000)

Followed the Audit Commission Report in 1988 on Local Authority Property Management which was highly praised but largely ignored!

A very clear guide about what the AC is looking for in terms of improving performance in asset management


Recommendations for Managers build understanding of the strategic importance of

property identify responsibility for strategic asset management prepare council wide asset management plans property should be considered in every service BV review challenge the need to hold non-operational assets use property in the wider corporate interest consider innovative new working practices in office/other

accommodation subject property services to BV review and challenge investigate joint use and exploit the use of ICT


Recommendations for councillors ensure property contributes to continuous service

improvement make property a cabinet level issue promote property sharing with other organisations


Recommendations for Government ensure departments pursue a “joined-up” approach to

asset management incorporate a few asset national best value indicators accelerate alternatives to the existing system of capital

controls

What is a ‘Capital Strategy’ and an ‘Asset Management Plan’?

Capital Strategy and AMP submission requirements

Documents required: Context Sheet Capital Strategy Asset Management Plan, including 5 national pPI’s

Timetable: Submission date 31st July 2002 GO assessment completed end October 2002 Single capital pot allocations end December 2002 Written GO feedback to LA’s by 20th January 2003

Capital Strategy and AMPWhat’s new for 2002?

Upgrading of some secondary criteria to primary criteria and new, additional secondary criteria

Stronger focus on performance and outcomes whilst still needing processes

Evidence of member and corporate management involvement

Efforts to refine and define: Proportionality Consistency in assessment

Context Sheet

High level contextual, statistical and financial information Maximum 2 sides A4

Gross and net revenue budgets

Fixed assets info and analysis as per consolidated balance sheet in statement of accounts

Number, GIA, type and value of assets by main service areas

Backlog maintenance value by main service areas

Summary 3-5 years capital programme and capital sources

LA’s likely future approach towards ‘unsupported borrowing’

Brief details on area, population and characteristics of LA area

Capital Strategy

Purpose: Should provide clear strategic guidance about the council’s

capital objectives, priorities and spending plans and demonstrate how the deployment of capital resources (including capital in assets) is directly linked to and contributes to the achievement of the council’s corporate and service objectives

A key document which pulls together all the key strategic capital requirements emerging from service strategies

Determines priorities between capital needs and looks for opportunities for cross-cutting, joined up investment

Maximum 6 sides A4

Capital StrategyCovers:

Statistical and financial information on assets and capital spending plans

All aspects of capital expenditure including where LA has significant influence on others

Revenue implications of capital investment Framework for management and monitoring of capital programme Informs bidding for additional capital resources and LA’s approach

to external funding opportunities Corporate wide procurement policies Links to partners (public and private sectors) and the community Links to service plans and best value reviews Processes (eg generation, appraisal and prioritisation of capital

project options; monitoring and evaluation of projects; corporate property review to increase efficiencies and release resources)

Asset Management Plan

Purpose: The LA’s corporate document detailing existing asset

management arrangements and outcomes and planned action to improve corporate asset use.

The AMP process enables the CPO to define and provide for the longer-term corporate need and to challenge existing asset use.

Describes the AMP processes

Covers all property interests excluding details of housing and education assets, highways and transport infrastructure, vehicles, plant and equipment

Maximum 20 sides A4

Asset Management Plan

Corporate requirements of AMP and the CPO role To address the role and contribution of the LA’s property assets as

a a corporate resource supporting the delivery of corporate and service objectives

Clear understanding of LA’s business and service aims supported by a clarification of the contribution assets make to these aims

Considers major corporate drivers for future change and their property implications. A planned programme for dealing with anticipated changes that is achievable, costed and appraised

Plans ahead for future property use and need, includes revenue consequences of capital decisions and whole life costs

Develops and implements appropriate performance measures (national and local)

Asset Management PlanFormat

Organisational arrangements for corporate asset management

Consultation - how stakeholders views inform asset management

Data management - how asset data is collected, recorded, managed and used to support performance management

Performance management and monitoring - how asset management information is used to deliver performance improvements and is linked to corporate and service objectives

Programme and plan development and implementation

Performance information - national pPI’s and local PI’s

National Property Performance Indicators

Excludes Highways and transport infrastructure, vehicles, plant and equipment from all pPI’s

Housing and schools excluded from all pPI’s except pPI 3

LA property organisations involved in annual preparation of pPI’s

As quality and comparability of pPI information improves the pPI’s may be integrated within Best Value measures

National Property Performance Indicators Condition

1A % gross internal floor-space in condition categories A-D

1B Backlog of maintenance by cost expressed as a % in priority levels in 1-4 and by value

IRR2A,B,C Current internal rate of return (IRR) for the portfolio expressed as an average for A

Industrial, B Retail and C Agricultural investment property

Management costs3A,B Annual Management costs per sq. m.GIA expressed as an average for A operational

property and B non-operational property

Running costs 4A,B,C,D Annual revenue costs per sq. m. GIA for operational property expressed as an

average for A repair and maintenance, B energy, C water, D CO2 emissions in tonnes of carbon dioxide per sq. m. GIA

Capital projects (Counties, Mets & Unitaries>£100,000 and Districts, Boroughs>£50,000)

5A % of project costs where outturn falls within +/-5% of the estimated outturn, expressed as a %age of the total projects completed in that financial year

5B % of projects falling within +5% of the estimated timescale, expressed as a %age of the total projects completed in that financial year

Other Service Delivery Assessments

LA’s to be graded on service performance in Transport, Housing, Education and Social Services

Grading on a five point scoring scale (SS may retain current starring system):

Well below average 0 Below average 1 Average 2 Above average 3 Well above average 4

Other Service Delivery Assessments

Means of service assessment: Transport - LA LTP and annual progress report Education - School AMP Housing - Housing Strategy and Business Plan Social Services - new DOH performance assessment framework

Services to be weighted to reflect the relative size of SCP contributions. Weightings yet to be announced.

Total LA service assessment score = sum of weighted service performance scores

Exercise 1: Benefits of better capital and asset management planning

List your perceptions and expectations of how LA’s performance and service delivery should improve through the better planning and management of their capital and property resources.

Assessment of Capital Strategies and Asset Management Plans

Assessment Basis of CS and AMP

Assessed by GO’s as one of the following: good satisfactory poor

Assessment based upon pre-set primary and secondary requirements (further supported by the ‘Interpretation Guide)

Grading system: Does not meet all primary criteria = POOR Meets all primary requirement criteria but meets less than 75% of

the secondary requirement criteria = SATISFACTORY Meets all primary requirement criteria and meets more than 75%

of secondary requirement criteria = GOOD (so long as at least one criterion in each group of secondary requirement criteria is met)

Assessment Criteria: Capital Strategy


Primary Requirements

provides clear strategic guidance about the council’s capital objectives, priorities and spending plans and demonstrates that these are directly linked to and consistent with key corporate and service objectives; identifies council-wide cross-cutting activity and initiatives

describes the framework in place for ensuring the CS is a corporate document

identifies all key aspects of capital expenditure within the LA and in those areas where the LA is able to apply significant influence on others use of capital resources


Primary Requirements (continued)

explains the approach for prioritising capital project proposals

explains how revenue implications of capital investment are taken into account

is informed by outcomes of BVR’s and other relevant reviews and improvement/development plans

identifies how relevant stakeholders’ and partners’ views are sought and inform the working and development of the CS

identifies key partners and describes partnership working


Secondary Requirements

sets out sufficient information to inform all bidding for capital resources

outlines the LA’s approach to PPP/PFI and to other means of alternative capital funding

addresses corporate policies on procurement strategies (ref BV guidance and Egan report)

identifies how partnership working is being processed with other councils and relevant organisations


Secondary Requirements (continued)

Evidence that: performance measures and benchmarking are used to describe

and evaluate how deployment of capital resources contributes to the achievement of corporate and service objectives

the results of performance measurement and benchmarking are communicated to stakeholders where relevant

results of performance measurement and benchmarking are used to seek service improvements and target service delivery

performance measurement activities relate to capital projects and to the influence of grants and partnerships

a corporately agreed 3 year strategy explaining the LA’s approach regarding the effective management, measurement and monitoring of the council’s capital programme


Secondary Requirements (continued)

Evidence of: development and/or delivery of key priorities and targets

to achieve cross-cutting objectives such as regeneration and sustainable development

cross-cutting activity leading to improved outcomes, including consideration of and, where appropriate, adoption of innovative solutions

Assessment Criteria: Asset Management Plan



Organisational arrangements CPO identified Roles and responsibilities of CPO clear, explicit and communicated CPO reports and is accountable to a strategic decision-making group

at officer and member levels evidence of a cross-service, senior management forum including

CPO, reps from major service areas and finance directorate forum has terms of ref including strategic management of LA’s

assets Forum:

progresses AMP and ensures officer and council approval ensures AMP is informed by and supports key corporate and

service objectives meets regularly



Data Management a record is held and maintained of basic core data on all assets the validity of this information has been tested AMP demonstrates a clear understanding of data required to

manage the performance of the property portfolio statistical information about condition and maintenance backlog

is supplied

Performance management, monitoring and information annual (min) property performance plan to members and chief

officers AMP includes information on all five pPI’s members are informed of capital programme progress and

performance



Programme and plan development and implementation AMP outlines the proposed programmes which are

intended to meet the council’s property related requirements

a methodology exists for option appraisal and corporate prioritising between projects

a 3 year capital programme including a forecast of capital receipts is developed

output/outcome targets are set for programmes and plans requiring capital investment



Organisational arrangements for corporate asset management Evidence that the CPO/Asset Management Forum routinely

challenges and reviews assets and property services to achieve the most effective management, planning and use of assets. Key findings reported to chief officers and council

Evidence that the CPO/Asset Management Forum takes into account stakeholder information re property and property services

cabinet member holds responsibilities for property resource CPO contributes to CS and other relevant corporate and business

planning Reference to property assets in other corporate policies and

strategies Evidence of cross service property use, shared use and/or co-

location



ConsultationEvidence that: processes being developed to obtain feedback from

services, users and occupiers

consultation findings are used to influence the continuous improvement of property and property services’ performance



Data Management full survey undertaken of future data requirements for

property portfolio programme of necessary improvements is identified commenced development of data system for intermediate

data UPRN system, or a preferred alternative, is in place approach is developed for the centralised co-ordination of

property management information which integrates with financial information

a review has been undertaken of users training needs and a system is in place for satisfying these needs



Performance management, monitoring and information Clear evidence that: local performance measures are being developed and used linking asset use

to corporate objectives processes are being developed to compare performance and

competitiveness of property and property services with other similar organisations and other providers

performance measures and monitoring take into account stakeholder consultation and user findings

performance measurement feeds into a process of continuous improvement local PI’s are used for measuring and monitoring surplus property and space

utilisation written report to members and chief officers on maintenance backlog actions information being collected on ‘suitability’ of assets



Programme and plan development and implementation the property implications arising from council objectives have

been identified there is a service wide understanding of the corporate

ownership of assets a thorough investigation and analysis has been undertaken

of the gaps between the future requirements and the current provision and performance of present property assets

options for closing these gaps have been identified and appraised

the AMP outlines the council’s approved 3-5 year strategic action plan based on this gap analysis

Exercise 2: Practical CS and AMP assessment

Take the example CS or AMP given and assess it as Good, Satisfactory or Poor using the:

Assessment checklist Assessment ‘Training Notes’ Assessment Interpretation Guide

In groups Appoint group spokesperson Report back on flipchart

good, satisfactory or poor explanation of assessment under each criterion group heading group observations about implementing the assessment

process

Consistency in Assessment

Each GO to nominate a lead assessor officer responsible for developing CS and AMP consistency management process, to be submitted for DTLR approval

The consistency process may adopt the following suggestions:

Stage 1: Receipt of LA’s CS and AMP submissions Strict application of deadline guidance

Stage 2: Contact with LA’s GO’s may request additional information from LA by telephone

where considered necessary for amplification or clarification. This should always apply in the case of the potential failure of a primary criteria on account of inadequate detail or information.

Consistency in Assessment

Stage 3: Consistency meeting in each GO General overview by lead assessor Second peer review of ‘Poor’ and ‘Good’ assessments General internal consistency meeting and final consensus, may be

sent to DTLR for info.

Stage 4: Draft final assessments to DTLR DTLR regional pattern overview and analysis

Stage 5: DTLR moderation meeting for lead assessor officers Final agreement including any necessary moderation between

regions

Stage 6: Feedback of assessments to LA’s Single Capital pot timetable Proforma letter

PowerPoint(357kb)

Documents

capital strategy

management of assets

asset planning

new capital prioritisation

level of performance

deployment of existing

good performance balance

consistent assessment