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

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DTLR GO Training 2002Capital Strategy and Asset
Management Plan Assessment

• DTZ Pieda Consulting
• on behalf of
• DTLR

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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

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Contextual Background to Capital Strategies and
Asset Management Plans
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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

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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

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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

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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

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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)

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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

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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

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DETR Good Practice Guidelines (2000)

• Contents
• Asset Management
• Asset Management Planning
• Capital Projects
• Performance Measurement
• Data Management
• Quick Start

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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

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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

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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

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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

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What is a Capital Strategy and an Asset
Management Plan?
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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

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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

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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

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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

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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)

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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

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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)

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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

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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

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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

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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

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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

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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.

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Assessment of Capital Strategies and Asset
Management Plans
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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)

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Assessment Criteria Capital Strategy
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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

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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

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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

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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

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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

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Assessment Criteria Asset Management Plan
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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

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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

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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

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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

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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

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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

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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

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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

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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

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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.

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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