Hampshire County Council

Executive Member, Policy & Resources Item

9 May 2002

Property Management Strategy and Objectives

Report by the Director of Property, Business and Regulatory Services

1

Summary

1.1

The following decisions are sought:

That:

1. approval be given to the 5 policy objectives set out in paragraph 2.2

2. the principle of sustainability be at the heart of property management

policies

3. the significant achievements in meeting the targets for 2001/2 be noted

4. the strategies and priorities for 2002/3 as set out in Section 4 be endorsed

5. approval be given to the strategy for the vacant properties listed in

paragraph 4.5.

6. the capital receipts and In/Out target be increased to £25m over the next two years

7. this report, together with a financial statement (to be agreed by the Director of Property, Business and Regulatory Services and the County Treasurer, in consultation with the Leader) be circulated for information to all County Councillors.

2

Reason(s)

2.1

Not applicable

3

Other options considered and rejected

3.1

None

4

Conflicts of interest declared by the decision-maker or a member or officer consulted

4.1

Not applicable

5

Dispensation granted by the Standards Committee

5.1

Not applicable

6

Reason(s) for the matter being dealt with if urgent

6.1

Not applicable

Approved by:

..........................

Date of decision:

.........................

Councillor T K Thornber

Hampshire County Council

Executive Member, Policy & Resources Item

9 May 2002

Property Management Strategy and Objectives

Report by the Director of Property, Business and Regulatory Services

1

Introduction

1.1

This report provides the annual review of the major policies and objectives for County Council`s property holdings and seeks approval for key strategies and projects for the year ahead.

1.2

The County Council has extensive property assets from which the majority of its services are provided and a flow of capital receipts has been generated for reinvestment on other services and facilities. The effective management of this asset base relies on the application of sound medium and long term policies.

1.3

The policies and objectives which the County Council has adopted consistently for a number of years has enabled complex long term projects to be delivered along with a wide range of projects within the Capital Programme which varies from year to year.

1.4

The Strategy for the Built Estate is the annual corporate plan of schemes and projects which are budgeted for on an annual basis. This was approved at the last meeting. This report identifies key property objectives, reviews performance in 2001/2002 and identifies key projects for the next twelve months.

2

Policy Objectives - Asset Management

2.1

The objectives and outcomes from Property Management need to support the corporate objectives of the County Council, particularly with regard to their wider environmental impact.

2.2

The strategic policy objectives of the County Council have been established over a long period of time and have focused on the following key areas:

(i) to ensure the effective and efficient use of land and property through systematic Land and Property reviews

(ii) to implement planned programmes of refurbishment, adaptation and maintenance to best meet changing requirements and other statutory adjustments for effective service delivery

(iii) to deliver programmes of disposal of surplus land and property including In/Out schemes which enable capital re-investment in replacement or new facilities.

(iv) to achieve high quality schemes and urban design in the provision of sustainable new buildings and development by third parties when surplus land is sold.

(v) to acquire additional or replacement land required for service delivery, development projects or investment purposes.

It is recommended that these five objectives be endorsed.

The Cabinet has already approved the County Council's updated Sustainable Development Strategy. The objectives in this report are complementary to those in the Strategy. In particular the development of key quality schemes on County Council sites and on those sites for disposal have been well established. An outline of the key issues is attached in Appendix 1.

2.3

Increasingly, the above objectives have been adopted by Central Government as guidance such as in the preparation of Asset Management Plans and in securing Best Value. The Asset Management Plans will now be used in part by Central Government to establish levels of capital funding and Best Value Fundamental Performance Reviews of Property Services which commence in the spring of 2003.

3

Achievement of Policy Objectives 2001/2002

3.1

This section of the report considers and reviews the actions and performance against the objectives established 12 months ago. Overall performance has been good.

3.2

Disposal of Surplus Land and Property - Targets

Throughout the year, continuing progress has been made in delivering the programme of sales which are categorised either as Capital Receipts or In/Out schemes. The process of disposal is the same for both categories and to be effective requires a long term perspective to be taken. This is to ensure that planning and other statutory approvals are secured and as much uncertainty over physical, legal and ownership issues are removed so as to maximise capital receipts and influence the quality of the resulting development.

The sale and development of the County Council`s Major Development sites for which outline planning consent exists is now nearing completion.

These projects have generated Capital Receipts for re-investment by the County Council in excess of £150m during the last ten years. However, as the availability of the sites comes to an end and in response to changes in planning, statutory approvals and service requirements, the nature of development opportunities is shifting away from capital receipts schemes to those in the In/Out programme. The importance of developing future opportunities for major receipts is discussed in Section 4 and should not be underestimated.

3.3

Capital Receipts - Regeneration and new business

A total of £9.2m was received in 2001/2. In addition, legal documentation was completed for the sale of Site 1, Binfields, Basingstoke for £5.635m with the total purchase price being held under a deed which will become operative when the detailed planning application submitted to Basingstoke and Deane Borough Council is approved.

The completed receipts involve a larger number of small development sites than has previously been the case. Notably, the first sale on the North Binfields Development Area was completed, this site having been opened up following the successes in obtaining planning consent (after referral to the Government Office for the South East) and the completion of the primary infrastructure using Development Account funding. This subsequently lead to very strong financial offers for the first and second sites which will be serviced by the infrastructure provided. The sale of the County Council`s Beeston House site, Cross Street, Winchester has achieved a very strong receipt and will lead to the development of 25 apartments which accords with the County Council`s wider planning policies for urban living, design and sustainability.

Elsewhere the completion of sales of County Council land at Alma Road, Romsey and Segensworth will enable important retail and employment development to proceed which have been the subject of extensive local consultations in the assembly of the projects. Both projects provide further evidence of the County Council's assets being used in a strategic sense to help regeneration and support new businesses in Hampshire.

3.4

In/Out Schemes - Recycling assets

During the year a total of £12.5m was received from the sale of County Council land for which In/Out resolutions had been made. Notably, this included the completion of the sale of the former Wyke Mark Elderly Persons Home in Winchester which formed part of the County Council`s major programme of reinvestment in residential accommodation for elderly people in Hampshire.

The completion of the sale of The Drove and Croye Close land occupied by the John Hanson School has meant that the construction of the new secondary school at Floral Way, Andover which is nearing completion, will be fully funded from the capital receipts and £1m grant aid from the DfES without any call on the County Council`s Capital Programme. This receipt came to £14.8m which is the largest of its type so far.

The successful sale of land held in trust at Orchard Close, Hayling Island has enabled the provision of funding towards new respite care facilities which form an important part of the County Council`s services for people with learning difficulties.

3.5

Land and Property Review -

The systematic review of all of the County Council`s land and property assets is nearing completion and the outstanding reviews which include Planning and Transportation, Recreation and Heritage (excluding Libraries) and the County Farms Estate will be completed in the forthcoming financial year. This year information gained from the Social Services and Education reviews has been used to identify potential disposal opportunities, and also sites to be promoted for Key Worker Housing schemes. Systematic reviews of Land and Property holdings remain a key feature of future work programmes.

3.6

Acquisitions -

The acquisition of Serles House from the Ministry of Defence was successfully completed which has enabled the occupation of the Regimental Museum Trust and the Memorial Garden Trust to continue and for the County Council to make use of the remaining parts of Serles House. The acquisition of Serles House demonstrates the value of the County Council acquiring facilities to secure its wider corporate objectives and the support of local people.

There are some 300 property interests which need to be acquired for the SHRT project with an estimated total budget for compensation of £18m from the total funding package. Major landowners include Gosport Borough Council, Fareham Borough Council, the Ministry of Defence, Crown Estates and Railtrack. There are several businesses which will be affected and these need to be relocated.

An approach was made in November 2001 to all parties having an interest in the land concerned and negotiations have commenced with a significant majority of landowners and occupiers. Three standing properties have been acquired in the 2001/2002 financial year comprising the Bedding Shop at 2 North Cross Street, Gosport and two dwelling houses, the total cost of which amounted to around £450,000. The aim is to acquire the maximum number of interests by financial close on the project expected in autumn 2003. Dedicated resource is needed to maintain momentum on the project to avoid any slippage in the overall programme.

3.7

Development Account -

As a result of approvals given by the Asset Management Sub-Committee in 2000/2001, a system of access roads and other infrastructure has been provided to the Binfields Development Area and assisted in the marketing of the first development opportunities. The subsequent phases of disposal at Binfields opened up by this investment will form the bulk of the Capital Receipts Programme for the next two years.

3.8

Vacant Properties -

Good progress continues to be made towards securing the re-use or disposal of vacant buildings. The current Vacant Property Schedule contains 38 entries compared with 66 in the Schedule as at June 1998. Major properties recently removed from the Schedule following their disposal include Wyke Mark in Winchester and the Alma Road Depot in Romsey.

3.9

Procurement -

With the rapid expansion of the County Council`s Capital Programme, Capital Receipts and In/Out disposals, it has been important to ensure that a cost effective mix of professional services has been provided. Partnering arrangements for professional services have, or are about to be completed for landscape architecture, planning and urban design, transportation planning and structural engineering. These partnering initiatives fit with the preparatory work which is under way for the Best Value Reviews of Property Services from 2003 onwards, and have brought on line more capacity at a time when recruitment of suitably skilled staff is difficult.

3.10

Overall performance against targets and key projects has been good but the time required to achieve key planning permissions and the hurdles to be cleared suggest a lengthening of the process from inception to completion and receipt of the capital on major disposals.

4

Strategy and Priorities for 2002/2003 - A Performance Framework

4.1

It is proposed that the following will form the strategic priorities for the 2002/2003 financial year and represent the overall performance framework for these activities.

4.2

Disposal of Land and Property - Targets

The continuing delivery of the core objectives of the Capital Receipt and In/Out programme totalling over £22m. (NB: Increased to £25m. by Leader's recommendation at meeting on 9 May 2002).

Whilst proceeds from the sale of land at Binfields, Basingstoke will provide the core of capital receipts until 2004/2005, work is now being undertaken to secure planning consent for the development of the County Farms` land at North Popley as the next major development site as part of the urban regeneration proposals for the wider Popley area. In addition, representations have been made as part of the Local Plan process and to advocate the selection by the Borough Council of land at Manydown to the west of Basingstoke as the preferred location to implement the proposed Major Development Area.

In order to continue to deliver the required stream of strong capital receipts, it will be necessary to continue to remove, where possible, uncertainty faced by prospective developers through the preparation of detailed design and development briefs and to secure planning consents before disposals are progressed. In the medium term this strategy is critical to future flows of receipts. It is also important to note the part played by the team undertaking this work.

4.3

Planning Issues -

The Local Planning Authorities in Hampshire are increasingly requiring the preparation of development guidance of the form which the County Council has been using for a number of years. This, together with the introduction of new Central Government guidance favouring brown field development and higher densities of residential development, mean that extensive work is required to provide the desired flexibility in the alternative use of the County Council`s many land and property assets. It will be important to identify opportunities for the use of land to meet the County Council`s wider strategic objectives such as the future use of the County Council`s land at Bushfield.

4.4

Acquisitions - Momentum

A large number of acquisitions will be required in order to implement the County Surveyor`s enhanced capital programme ranging from minor acquisitions for traffic management schemes to land assembly for proposed By-Pass schemes. Also, negotiations and acquisitions will be required for approximately 300 property interests within the next eighteen months in respect of the SHRT1 project.

4.5

Vacant Properties - The way ahead

Of the properties currently on the Vacant Property Schedule, see Appendix 2, 16 are either being sold or preparatory work is being undertaken which will lead to a sale. A further 15 properties are earmarked for County Council re-use or re-letting. The future of the remaining 7 properties is being explored including the following properties for which sustainable proposals are being sought:

Chesapeake Mill -

Work has started on the preparation of a Brief which will be used to invite expressions of interest in this building. Whilst the County Council continues to undertake essential repairs and maintenance to the structure, it will be important to identify a sustainable use that recognises the importance of the building, but also has sufficient commercial viability to allow capital investment in refurbishment/restoration to take place. Once a draft Brief has been finalised, Winchester City Council (as the Local Planning Authority) will need to be consulted.

Fort Gilkicker -

Now that the Phoenix Trust has withdrawn its interest, enquiries are being made to establish the likely extent of grant aid that might be made available for a similar scheme of restoration if promoted by the Council and another private sector partner. This will allow a realistic assessment to be made of the viability of any proposals that might be received. It will also be important to establish that existing legal and planning agreements can still be relied upon prior to inviting new interest in the project, and this is also being investigated.

Gosport Railway Station -

This Grade II* listed structure is owned by the County Council, and latterly was considered for inclusion within the South Hampshire Rapid Transit scheme. However, this has now been discounted in favour of an alternative route that provides direct access to the nearby St Vincent College. The station is of significant historic interest and over the years proposals have been received for various alternative uses, (including museum proposals), but none of these have offered a financially viable solution.

However, with the regeneration of the nearby redundant St George`s Barracks and Clarence Yard areas, the time may be right to pursue a mixed use of the station site and to encourage private sector investment in a scheme which not only protects and enhances the importance historic features of the site, but is also financially viable

Basing House and Grange Farm, Old Basing -

The public consultation exercise has been completed on the future of Basing House and Grange Farm which has resulted in strong support for the County Council`s proposals to enhance the site and the facilities available for visitors. The proposals envisage the restoration of the buildings at the site which will then be used for display and education purposes, together with the provision of a shop and tearooms. The principle that Grange Farmhouse be sold to generate funding for the project has generally been accepted by consultees and expressions of interest invited.

A detailed scheme is now being prepared with the intention that this be reported to a future meeting, together with the outcome of the marketing exercise.

4.6

Non Domestic Rating -

It will be necessary to build on the detailed preparatory work which has been carried out for approximately 900 rating appeals, the determination of which has been delayed as a result of priorities facing the Valuation Office to complete a large number of farm valuations following from the outbreak of Foot and Mouth disease in 2001.

4.7

County Farms Review - New Opportunities

Recently introduced changes in tenancies and the forthcoming review of the Estate provide opportunities for the rationalisation of the Farm Estate to provide a more structured range of employment, educational and recreational activities, as well as enhancing the landscape and creating habitats. In the medium to long term it will also help to generate further and substantial capital receipts, including the proposed development of land at North Popley.

4.8

Gypsy and Traveller Management - Review

Negotiations are underway with Hampshire Constabulary and District Councils aimed at securing improvements in the management of unauthorised encampments on publicly owned land which have become more difficult to manage and have resulted in high clean-up costs for the Councils involved. A review is in progress on the future use of the Peak Copse Gypsy Site at Dummer. Arrangements are also in hand to re-establish a site warden presence at the Star Hill Gypsy Site in order to comply with the requirements of the ground lease. Initiatives include the provision of additional support to the County Council`s Education Welfare Officers and for the provision of `beat bobbies` to serve the Tynefield Gypsy Site at Whiteley.

4.9

Key Worker Housing - Outcomes

Approval of the Key Worker Housing Strategy in December 2001 has allowed feasibility work to proceed on a number of pilot projects which it may be possible to promote on exception sites (identified through the Property Review) in partnership with Housing Associations. Discussions with potential partners are underway and `host` schools are being consulted in respect of the projects under consideration which are located on established school sites. It is anticipated that the first planning consents will be sought later this summer and details of individual schemes will be brought forward for approval over the next few months.

In parallel to these exception sites, negotiations are well advanced concerning the transfer of several individual houses to Housing Associations for key worker housing provision and an exciting opportunity to utilise a former hostel close to Waterlooville town centre is also being explored. A detailed report will be submitted in the near future.

Lastly, proposals are being made on behalf of the County Council to include appropriate Key Worker housing policies in all the emerging District Local Plans. On the disposal of County Council development sites, the possibility of substituting some Key Worker housing for an element of the social housing requirement is now being promoted.

By proceeding in this measured way with a number of different initiatives, it should be possible to provide a range of houses and flats for Key Workers at sub market rents without the need for a direct County Council subsidy (which some other authorities are being forced to consider) and without using surplus land that is suitable for open market housing thus reducing planned capital receipts.

4.10

Early Years Provision - Next Stages

Negotiations are underway on sites where opportunities have been identified for the provision of Early Years educational facilities as set out in the property and capital funding strategy endorsed by the Executive Member for Education at his meeting on 22 March 2002, which highlighted the issues of surplus accommodation in existing school buildings, temporary buildings and future land use.

4.11

Asset Valuations - `catching up'

A rolling programme of Asset Valuations is continuing, including that of the Corporate Estate and Development Account properties with the Libraries properties to follow. In line with the comments made by the District Auditor in the Management Letter, the financial statements identified in the rolling programme will be brought up to date.

4.13

Office Accommodation - Utilisation of Assets

There is severe pressure on space within the Corporate Office Estate, especially in Winchester. This has been alleviated by the purchase of Acquitaine House in St Clement Street, which was completed on the 12 April. However, significant pressure will remain and over the next year it will be necessary to identify further solutions to address this issue.

Prior to the acquisition of Serle`s House, a detailed condition assessment was undertaken. The work now necessary includes fire precautions, repairs to brickwork and structural elements, and other external works to protect the fabric of the building. These basic elements of work can be programmed over the next two financial years. There is also a need to put in place a phased programme of internal redecoration, access improvements, and upgrading of ancillary facilities, including the kitchen. A separate report on office accommodation issues will be available for the next meeting.

5.

Strategic Framework for Property

5.1

The breadth of the activity in this report demonstrates the strategic importance of many of the property management activities. It is recommended that the activity and projects identified in this section be endorsed as key activities for the coming twelve months.

5.2

The Executive Member at the last meeting approved the Strategy for the Built Estate and various procurement initiatives. This represented one of the largest repair and maintenance programmes the County Council has ever planned. The approval of the objectives and performance targets and framework in this report, will be factored into the update of the Asset Management Plan and Corporate Strategy for approval late this year, and complete the Councils Strategic framework for Property.

6

Resources

6.1

At its meeting on the 28 February, the County Council approved budgetary provision for the anticipated external consultants fee expenditure required to bring forward sites for development, both capital receipts and In/Out, some of which were identified in the Land and Property Review or have arisen from the Service Committee Reviews. Meeting the targets established above and providing the outcomes mentioned will stretch the department's resources throughout the year.

Recommendation(s)

It is recommended that:

1

Approval be given to the 5 policy objectives set out in paragraph 2.2

2

The significant achievements in meeting the targets for 2001/2 be noted

3

The strategies and priorities for 2002/3 as set out in Section 4 be endorsed

4

Approval be given to the strategy for the vacant properties listed in paragraph 4.5.

1.

County Council Projects:

Key Initiatives:

- energy conservation measures

- sustainable materials

- use of recycled materials

- recycled water

- solar energy

- waste and energy management

e.g. Binfields Primary School,

Alton Day Centre

2.

County Council Site Disposals:

Key Initiatives:

- Transportation (integrated public transport
Green and School Plan etc.)

- Planning obligations - making optimum use
of existing facilities

- Bringing previously developed land into
beneficial use

- To meet minimum density levels of residential
development as set out in PPG3

- Sustainable drainage systems - to be
incorporated in future major County Council
development sites

- Sustainable transportation strategies

- Scheme design - developers encouraged to use
recycled building materials and create buildings
with low energy consumption and high
insulation levels

e.g. North Binfields
Popley
Manydown