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DTLR GO Training 2002: Capital Strategy and Asset Management Plan Assessment

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Title: DTLR GO Training 2002: Capital Strategy and Asset Management Plan Assessment


1
DTLR GO Training 2002Capital Strategy and Asset
Management Plan Assessment
  • DTZ Pieda Consulting
  • on behalf of
  • DTLR

2
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

3
Contextual Background to Capital Strategies and
Asset Management Plans
4
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

5
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

6
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 LAs 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

7
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 LAs -
    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

8
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 LAs 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
  • LAs to be assessed under the CPA as falling into
    one of five categories (to be announced)

9
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 councils own purposes)
  • pPIs 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

10
DETR Research on Asset Management (1999) Overall
Conclusions
  • Strategic asset management not yet well developed
    in LG
  • Few formal AMPs 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

11
DETR Good Practice Guidelines (2000)
  • Contents
  • Asset Management
  • Asset Management Planning
  • Capital Projects
  • Performance Measurement
  • Data Management
  • Quick Start

12
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

13
Hot Property (Audit Commission April 2000)
  • 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

14
Hot Property (Audit Commission April 2000)
  • Recommendations for councillors
  • ensure property contributes to continuous service
    improvement
  • make property a cabinet level issue
  • promote property sharing with other organisations

15
Hot Property (Audit Commission April 2000)
  • 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

16
What is a Capital Strategy and an Asset
Management Plan?
17
Capital Strategy and AMP submission requirements
  • Documents required
  • Context Sheet
  • Capital Strategy
  • Asset Management Plan, including 5 national pPIs
  • Timetable
  • Submission date 31st July 2002
  • GO assessment completed end October 2002
  • Single capital pot allocations end December 2002
  • Written GO feedback to LAs by 20th January 2003

18
Capital Strategy and AMPWhats 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

19
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
  • LAs likely future approach towards unsupported
    borrowing
  • Brief details on area, population and
    characteristics of LA area

20
Capital Strategy
  • Purpose
  • Should provide clear strategic guidance about the
    councils 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 councils 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

21
Capital Strategy
  • Covers
  • 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 LAs 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)

22
Asset Management Plan
  • Purpose
  • The LAs 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

23
Asset Management Plan
  • Corporate requirements of AMP and the CPO role
  • To address the role and contribution of the LAs
    property assets as a a corporate resource
    supporting the delivery of corporate and service
    objectives
  • Clear understanding of LAs 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)

24
Asset Management Plan
  • Format
  • 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 pPIs and
    local PIs

25
National Property Performance Indicators
  • Excludes Highways and transport infrastructure,
    vehicles, plant and equipment from all pPIs
  • Housing and schools excluded from all pPIs
    except pPI 3
  • LA property organisations involved in annual
    preparation of pPIs
  • As quality and comparability of pPI information
    improves the pPIs may be integrated within Best
    Value measures

26
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
  • IRR
  • 2A,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 costs
  • 3A,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
    Unitariesgt100,000 and Districts,
    Boroughsgt50,000)
  • 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

27
Other Service Delivery Assessments
  • LAs 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

28
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

29
Exercise 1 Benefits of better capital and asset
management planning
  • List your perceptions and expectations of how
    LAs performance and service delivery should
    improve through the better planning and
    management of their capital and property
    resources.

30
Assessment of Capital Strategies and Asset
Management Plans
31
Assessment Basis of CS and AMP
  • Assessed by GOs 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)

32
Assessment Criteria Capital Strategy
33
Assessment Criteria Capital Strategy
  • Primary Requirements
  • provides clear strategic guidance about the
    councils 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

34
Assessment Criteria Capital Strategy
  • 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 BVRs 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

35
Assessment Criteria Capital Strategy
  • Secondary Requirements
  • sets out sufficient information to inform all
    bidding for capital resources
  • outlines the LAs 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

36
Assessment Criteria Capital Strategy
  • 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 LAs approach regarding the effective
    management, measurement and monitoring of the
    councils capital programme

37
Assessment Criteria Capital Strategy
  • 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

38
Assessment Criteria Asset Management Plan
39
Assessment Criteria Asset Management Plan
  • Primary Requirements
  • 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 LAs assets
  • Forum
  • progresses AMP and ensures officer and council
    approval
  • ensures AMP is informed by and supports key
    corporate and service objectives
  • meets regularly

40
Assessment Criteria Asset Management Plan
  • Primary Requirements
  • 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 pPIs
  • members are informed of capital programme
    progress and performance

41
Assessment Criteria Asset Management Plan
  • Primary Requirements
  • Programme and plan development and implementation
  • AMP outlines the proposed programmes which are
    intended to meet the councils 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

42
Assessment Criteria Asset Management Plan
  • Secondary Requirements
  • 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

43
Assessment Criteria Asset Management Plan
  • Secondary Requirements
  • Consultation
  • Evidence 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

44
Assessment Criteria Asset Management Plan
  • Secondary Requirements
  • 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

45
Assessment Criteria Asset Management Plan
  • Secondary Requirements
  • 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 PIs 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

46
Assessment Criteria Asset Management Plan
  • Secondary Requirements
  • 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 councils approved 3-5 year
    strategic action plan based on this gap analysis

47
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

48
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 LAs CS and AMP submissions
  • Strict application of deadline guidance
  • Stage 2 Contact with LAs
  • GOs 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.

49
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 LAs
  • Single Capital pot timetable
  • Proforma letter
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