REPORT OF THE

Cabinet/Leader

PART I

134 CAPITAL STRATEGY AND ASSET MANAGEMENT PLAN

1. As previously reported to Council in September 2001, the Government has introduced the concept of a capital pot as part of which local authorities are required to prepare a Capital Strategy and a Corporate Asset Management Plan to its specification and submit the documents each year to their relevant Government Office of the Region by 31 July. As the Capital Strategy and the Corporate Asset Management Plan (AMP) are policy plans it is necessary for full Council to approve them, and copies of the drafts are attached for this purpose. The drafts were prepared by a corporate Asset Management Group of officers led by the County Treasurer and Director of Property, Business and Regulatory Services, and subsequently scrutinised by Cabinet. The successful 2001 versions of the documents have been revised to reflect developments since July 2001, feedback from the Government Office for the South East (GOSE) and further detailed prescription about their content from the Government. The focus has been sharpened to highlight the outcomes from the Council's asset management processes over the last year particularly in the draft corporate AMP. Many of the examples of Hampshire's good practice have been updated and included for the first time are the Council's results for the Government's national property performance indicators.

2. The Capital Strategy is intended to show at a strategic level how the management of our assets, including capital investment, enables the Council to achieve its objectives and includes an initial "context" section specified in detail by the Government. The Capital Strategy should cover all the County Council's services. In contrast the Government specifies that the more detailed corporate AMP should exclude education assets, highways and transport infrastructure, vehicles, plant and equipment. Whilst it is sensible to avoid duplicating the Education AMP and the Local Transport Plan (LTP) the Cabinet feels nonetheless that it undermines the Government's concept of a single capital pot covering all its support for local authorities' capital investments. The exclusions also reduce the usefulness of the corporate AMP for local authorities in managing their assets. The Cabinet also considers that the Government's ever increasing requirement for detailed description and examples is at odds with its strict limits on the volume of the documents. It is inappropriate to adopt a one-size fits all approach when dealing with the scale of the County Council's activities compared with those of smaller authorities.

3. Once submitted, the documents will be assessed by the Government as part of its process for allocating borrowing approvals for capital expenditure (i.e. the capital pot). At present 95% of the single capital pot will be allocated according to local authorities' needs, either by reference to plans, such as the Education AMP and the LTP, or by formula in the case of Social Services and other services. The remaining 5% will be allocated at the discretion of Ministers but it is of some concern to the Cabinet that the Government has indicated its intention to increase this discretionary element, possibly in 2003/04. A decision on this is likely to be announced in December 2002 at the same time as the outcome from the assessment process and the non-discretionary borrowing approvals for 2003/04.

4. The Government has confirmed that it will relax the requirement to submit capital strategies and corporate AMPs to local Government Offices from July 2003 for those councils whose documents are assessed at the highest rating of "good" in the July 2002 round. However such councils will still be expected to keep their capital strategies up to date for their own purposes, particularly for use in consulting and informing stakeholders. The Government has also indicated that it views corporate AMPs as part of sound asset management practices. Whilst "good" rated councils will not have to submit corporate AMPs, all councils will still have to provide data each year on property performance indicators, asset numbers, values and condition data. In effect therefore the "relaxation" will only extend to not having to submit documents - much of the work required to prepare them will still be necessary.

RECOMMENDATION

That the attached Capital Strategy and Corporate Asset Management Plan be approved for forwarding to the Government Office for the South East by 31 July 2002.

T. K. THORNBER CBE

Chairman

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