Archived decisions

HAMPSHIRE COUNTY COUNCIL

Report for Information

1) Purpose of Report

1.1. The purpose of this report is to provide the Panel with a mid year review against the agreed annual strategy plan for the Built Estate in 2008/09.

2) Contextual Issues

2.1 On the 2 April this year the Panel received a report setting out the key objectives against the Strategy for the Built Estate. That report outlined a ten point annual strategy plan for 2008/09 which was approved by the Executive Member for Policy and Resources on the 9 April 2008. The Strategy for the Built Estate establishes the framework by which the County Council manages priorities in respect of the asset base and maintenance liabilities for its land and property holdings. The principal objectives of the strategy are to:

· Direct resources to the highest and most significant liabilities for core properties within the built estate

· Establish a robust Health and Safety Corporate Risk Assessment that helps to ensure buildings are safe to occupy

· Continue to develop long term strategies to address the backlog of repairs and maintenance liabilities

· Maximise the opportunities for planned maintenance regimes as opposed to reactive patch and mend repairs

· Maximise the opportunities for capital receipts

· Ensure investment opportunities are linked to effective procurement practices that offer best value

· Ensure buildings are accessible and remain open for business

· Maintain strong links with schools through the SLA and to ensure that schools have access to corporate property advice

2.2 The following sections of this report provides an update on each of the ten key areas of the Annual Strategy Plan (see Appendix 1) for 2008/09. The Annual Strategy Plan has been updated to include the work of the "Hampshire Workstyle" initiative.

3) Financial Framework

3.1 Capital Expenditure: The overall allocation of capital funding is reduced for 2008/09, mainly due to a down turn in the available New Deal for Schools (NDS) funding from the Department for Children, Schools and Families (DCSF). Total capital funding for 2008/09 stands at just over £29m and this is set to fall further over the next three years by nearly £7.5m to around £23.5m in year three. The available capital expenditure has to be seen against the background of a backlog of repairs and maintenance in the built estate of nearly £450m over the next five years. The challenge over the next three years will be to balance the distribution of available capital resources across a range of competing priorities at a time of declining budget provision.

3.2 Revenue Expenditure: Essentially the revenue budget is spent on recurring maintenance work aimed at keeping the buildings operational and open for business. The bulk of the revenue expenditure is spent on reactive day to day repairs, servicing and vandalism reinstatement. The Panel receives regular detailed reports throughout the year regarding the capital and revenue expenditure. A separate report on the decision section of the agenda provides more information on vandalism expenditure.

3.3 The investment of capital expenditure is helping to manage some areas of recurring revenue maintenance. For example the investment in SCOLA recladding and window replacements is estimated to have now reduced the annual redecoration costs by up to £1 million.

4) Managing the Backlog of Repairs and Maintenance

4.1. The Panel received a detailed report regarding the backlog of repairs and maintenance at its meeting in July 2008.

4.2. Given the size of the County Council's built estate and its age profile, the 5 year repairs and maintenance liability of nearly £450 million is consistent with the Audit Commission's prediction of the "maintenance time bomb" in local authority estates throughout the country.

4.3. With the average annual NDS and capital repairs expenditure for each of the next three years remaining at around £26 million, the backlog position is likely to remain high for some years to come. The Panel does have an overarching plan comprising intelligence gathering, planning and investment strategies that will help to ensure the backlog position is managed, buildings are safe to occupy and remain open for business. Building Schools for the Future and the Primary Schools Capital investment strategies will provide major opportunities in the future for tackling the backlog position at schools. Hampshire Workstyle will provide opportunities for future rationalisation of the Corporate estate and so help to manage down the backlog position for this section of the estate.

5) Risk Management Strategy for the Built Estate

5.1. Whilst risk cannot be eliminated it is being managed through a recognised corporate risk strategy in the County Council and long term risk management strategies that have been in place for the last ten years. Over £100 million has been directed at health and safety strategies for the built estate over this period.

5.2. Essentially, the risk management strategy for the built estate is about making continuous year on year improvement through an agreed agenda. Capital investment is made according to an agreed risk order and published improvement plans, about which the Panel receives an annual report. Having built a strong property health and safety platform over the last ten years, the key now, and for the foreseeable future, is to develop further risk based strategies that will support planned capital investment programmes as opposed to reactive strategies.

6) Developing Opportunities for Capital Receipts.

6.1 In the past six months, global financial market decline has affected residential property growth and provision in the UK. As a direct result of this, house builders currently no longer require or are buying land. Consequently the County Council's Capital Receipts expectations for 2008/09 will be significantly less than anticipated. Some opportunities for specialist site disposal may be possible and the overall implications are currently being assessed.

7) Developing Hampshire Workstyle Initiative

7.1. The Hampshire Workstyle programme is being developed to complement the refurbishment of the County Council Headquarters offices and will promote and implement new flexible working and more efficient utilisation of work spaces. The programme will be rolled out over the remaining offices and so use the office accommodation asset base, for the first time, as a corporate resource. Hampshire Workstyle will facilitate improved staff networking, and provide the platform for the delivery of more efficient service outcomes. Progress reports charting the development and implementation of the Hampshire Workstyle programme will be presented to future meetings of the Panel.

8) Service Level Agreement with Schools

8.1 Collectively, schools receive over £11 million of Landlord funding each year in respect of Local Management of Schools (LMS) and Fair Funding revenue repairs and maintenance. In addition schools received around £22 million of devolved formula capital funding this year from the DCSF for investing in schools Asset Management Plan (AMP) priorities.

8.2 Corporate property advice and support is provided to schools through a repairs and maintenance Service Level Agreement (SLA). A report on the information section of the agenda describes the services provided through the SLA in more detail. The key points for the Panel to note about the school's SLA is that it:

· Provides an important gateway for schools to access the County Council's Corporate property services

· Creates a link for the County Council to influence schools with the investment of significant levels of delegated funding

· Helps to develop a strategic approach to addressing key AMP priorities

· Maintains standards in terms of property health and safety and performance

· Helps to ensure that school buildings remain open for business and are safe to occupy

9) Procurement Strategy

9.1 The procurement model and strategy for the County Council's property maintenance and construction work was presented in the Procurement Initiatives report to the Panel on 2 April 2008.

9.2 The Procurement Initiatives Mid Year Review report elsewhere on the Panel's agenda provides an update on progress with the various procurement arrangements identified in the model. These include establishing term maintenance contracts for building repairs and maintenance which will facilitate modernising the way this work is organised and the procurement of a new maintenance contract for the County Council's headquarters buildings combining building repair and engineering maintenance services.

10) Facilities Management for County Council's Headquarters' Buildings

10.1 A major piece of work is in preparation for developing a new integrated Facilities Management (FM) service for the County Council's headquarters buildings. This new FM service is part of the County Council's Corporate efficiencies agenda and is being coordinated to come on stream, in line with the opening of the new Ashburton Court Offices.

10.2 For the first time the new FM approach will integrate a range of "hard" and "soft" FM services that are currently organised separately by departments into a single service provider.

10.3 The new FM service will include, integrated reception, room booking and post room services, catering, waste collection and cleaning services, a help desk facility and centrally coordinated and managed services for printing and photocopying. These new arrangements will also require an integration of staff in departments undertaking FM duties. A further FM report will be shared with the Panel in the new year.

10.4 The existing term engineering contract which expires in November 2008 will be replaced with a new generation of contract that incorporates both building and engineering reactive repair and servicing work under the management of one main contractor.

11) Developing a Response to the Governments Climate Change Agenda

11.1 The Panel considered a report in July 2008 about Climate Change legislation that will affect the County Council's built estate for the foreseeable future. That report signalled a systematic approach to building a carbon reduction commitment into its operations through a series of corporate work streams over the next 5 years.

11.2 Subsequently, investigations have been undertaken to find out how a body of high level knowledge and expertise can be established to support the achievement of a Carbon Reduction Commitment. Meetings have been arranged with the Carbon Trust and the University of Southampton to explore how both organisations can work productively with the County Council. A report detailing progress on the establishment of such a Centre of Excellence for achieving a Carbon Reduction Commitment from the County Council's property portfolio (including schools) will be available in January 2009.

11.3 Since the report in July the Environment Secretary has announced that all state funded schools are to be included in the carbon trading scheme for Local Authorities from April 2010. This will mean that school CO₂ emissions will form part of the County Council's overall `carbon footprint' for carbon trading purposes.

12) Conclusion

12.1 Good progress has been made on all points of the 2008/09 strategic plan and a further report will be shared with the Panel to sign off the plan in January 2009.