REPORT TO CABINET 12 March 2008

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AGENDA ITEM NO:

14


BOSTON BOROUGH COUNCIL



REPORT TO
CABINET


12

March

2008



SUBJECT:


ASSET MANAGEMENT PLA
N


UPDATE

REPORT



PART 1


PORTFOLIO HOLDER:

COUNCILLOR
JORDAN



CORPORATE
SERVICES AND
HUMAN
RESOURCES








REPORT BY:



DIRECTOR OF DEVELOPMENT



Reason
f
or Report:

To update Members
about

the performance of the Council’s
Operational and
Income
generating

property
assets
.



Recommendation(s):

That
Members:




Receive the

report

as required by the Council
’s adopted Asset Management Plan
.


Reasons for Recommendations:


To comply with the
Council’s current
Asset Management Plan
.


Alternative Options:


Not to receive
this report
.


Implications:


Where the implications of any of the below mentioned matters are

discussed in the report the
relevant paragraph number of the report is shown


Personnel

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




Not Applicable

Environmental

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



Not Applicable

Community Safety and Cohesion

Not Applicable









Strategic asset management is the activity that seeks to align the
asset base with the
organisation’s corporate goals and objectives. It ensures that the land and building asset
base of an organisation is optimally structured in the best corporate interest of the
organisation concerned
.”


Public Sector Asset Management G
uide
(January 2008)


1

Introduction


1.1

Strategic Asset Management in Local Government is
vital

if local authorities are to support the
Government create and sustain stronger, safer and more prosperous communities. On 4 February
2008, the Minister for Local
Government
launched ‘
Building On Strong Foundations:

A
Framework for Local Authority Asset Management
’ in wh
ich he states:



Effective asset management plays a major role in delivering better outcomes for citizens,
creating a sense of place and generating
efficiency gains. Asset management should
underpin, and

contribute to, delivery of the
local vision and priorities as set out in the
Sustainable Community Strategy, the Local Area Agreement and the Local Development
Framework
.


Communities and Local Gover
nment, (
February
2008:6)


1.2

Being able to demonstrate effective asset management is an integral part of the Council’s ‘Use of
Resources’ assessment and from 2008/09 will feature heavily within the Comprehensive Area
Assessment Framework.


1.3

At the local level

therefore

it is essential that the Council uses its assets to support both the delivery
of its own priorities and the priorities of the community. Given the adoption of a new Community
Strategy, the Council’s internal Improvement Plan,
the Sports Strateg
y,
the current position of
‘Property

Services
’ within the Lincolnshire Shared Serviced Partnership and not least the very
recent launch of the two key documents set out
above
, a fundamental revision of the Council’s
Asset Management Plan will commence at t
he beginning of 2008/09 to provide an Asset Strategy
that
will be

‘fit for purpose’ within the
future context of the Council’s operation.


1.4

Currently however, t
he Council’s
October 2005
Asset Management Plan,
adopted in January 2006
,
contains a requirement
for the Corporate Property Officer to conduct an annual review of the
Council’s
property portfolio, with the findings being submitted to

the Overview
and

Scrutiny
Committee

prior to submission to Cabinet.



2

Local Position


2.1

Since
the Council received
a “good” rating, the highes
t possible, for its 2003 Asset Management
Plan,
its
annual

submission

to the regional office

was

waived

by
the
Government Office

for the East
Midlands
.
In October
2004,
the requirement to submit
performan
ce indicator data
to the
Government Office was also removed
.



2.2

The requirement for the Corporate Property
Officer to

report to both Overview and Scrutiny and
Cabinet was built in to the 2005 Asset Management Plan as the control for ensuring that the Council
was able to evidence e
ffective asset management within its annual Use of Resources Assessment.
The following sections highlight key performance area
s
.





3

Acquisitions

3
.1

For the period 1
April 2006 to 31 December 2007
, the Council increased its operational portfolio
through

the acquisition of Plot 15 Endeavour Park.

Plot 15 was purchased from Broadgate Builders
for £220,000 to facilitate the development of Boston Enterprise Centre.



4


Assets Pending Disposal


4
.1

A list of all land and property
approved for and pending
disposal is set out
at
below
.


LAND/PROPERTY

28 sq.m. Land, High St Car Park

Former Public Conveniences, Kirton

Land at rear of 56 King Street

1,040 sq yds Alfred Street

880 sq. yds Alfred Street

Substation Site, Alfred Street

Approximately 86 sq.m.

of land adjoining 1 Charter Close, Boston

Approximately 1,600 square yards, Fishtoft Road, Boston

Cemetry Lodge, Marian Road

Cemetery Lodge, Horncastle Road

Assembly Rooms, Fish Hill, Boston

14 Field Street, Boston



5


Income Generating Portfoli
o


5
.1

During the financial year 2006/07, the Council received £253,336.00 from its income generating
asset portfolio.


5
.2

Increases in rent
in respect of these assets
are made wherever tenancy
, lease and licence
agreements allow, either at rent review or

upon renewal, and are usually
made
on one of the
following bases:
-


a)

At Market Rental Value

b)

As a percentage of the previous year’s rent (stepped rent)

c)

In line w
ith the Retail Price Index


5
.3

Of the 64 assets currently within this portfolio, the followin
g were void as at 31
st

January 2008.




Unit 7 Redstone


void since 09/11/07, rent
al loss accruing at a rate of £208.33
per

month



Uni
t 10 Riverside


void since 31/5/07, rental loss accruing at a rate of £208.33
per

month



Unit 16 Riverside


void since 15/9
/07, rental loss accruing at a rate of £208.33
per

month



Grazing Land, Havenside
Nature Reserve



void since November 2007, rental loss
accruing at a rate of £350 per annum



Whilst the former Tourist Information Centre was also vacant at 31 January 2008,
Heads of Terms
have been agreed with a prospective tenant who is awaiting relevant permissions for Change of Use
and Listed Building Consent before entering into a formal lease with the Council.





5
.4

Vacant industrial units are advertised periodically th
rough the local media to try and encourage full
take up of income generating assets.



6

M
unicipal Buildings


6
.1

The aggregate rent
payable from
tenants who occupy accommodation within the Municipal
Buildings
at 31 March 2008 will stand at
£100,395

with settlement of the County Council’s rent
r
eview still pending. The re
nt due (and collected) for the period 1 April 2006 to
31 March 2007 was
£100,671
.

The rental figure due for 2007/08 is less than that due for the previous financial year
because the

Council has taken back into management an office previously occ
upied by the Primary
Care Trust for use by our own staff.



7



Key
Performance
Areas


7
.1

Asset

Condition



Each of the Council’s operational and non
-
operational assets are categorised
annu
ally according to their condition, fitness for purpose and operating efficiency. The condition
definitions used are:


A
: Good


Performing as intended and operating efficiently

B
: Satisfactory


Performing as intended but showing minor deterioration

C
: Po
or


Showing major defects and not operating as intended

D
: Bad


Life expired and/or serious risk of imminent failure


As at 31 March 2007, 94.37% of the Council’s operational and non
-
operational assets were in good
or satisfactory condition.



7
.
2

Backl
og Maintenance



traditionally backlog maintenance has been reported to the Committee,
however, as a consequence of the
whole scale remodelling

of the Repairs and Maintenance
Programme which was undertaken as part of the Zero Based Budgeting exercise, it i
s not currently
possible to report a figure for backlog maintenance. An accurate picture of backlog maintenance
will be developed as part of the formal Asset Strategy development process which will commence at
the beginning of 2008/09.


7
.3

Operating
Cos
ts per m
2

(Gross Internal Area
)



Appendix
1

sets out the range of operating costs
for
the Council’s
operational
property
asset
s (where these can be accurately calculated) in relation
to Energy use (gas and electricity), Water consumption and Repairs and M
aintenance. Costs range
between:




Ene
rgy
-

£4.60
-

£24.91 per sq.m
.



Wa
ter
-

£0.67
-

£60.98 per sq.m. a
nd



Repairs and Maintenance
-

£0.73
-

£43.34 per sq.m.



8

Financial Implications

8
.1

There are no additional financial implications to this report over t
hose contained within the Council’s
Medium Term Financial Plan.



***




9

Risk Management

9
.1

There are no un
mitigated

risks associated with this
.



10

Conclusion

1
0
.1

The Property Services section continues to monitor the
property a
sset
s

of the Council
and
see
ks to
ensure that good practice is followed across all sections

to maintain a high quality and well
managed portfolio
.


Consultations

CMB

Financial Services Manager



Reference:
CAB/120308
/AMP
/
ASF/554



Statutory List of Background Papers

under the Local G
overnment Act, 1972 Section 100D, which
discloses facts or matters which the report is based and which have been relied on to a material extent in
preparing this report (but excluding published works and documents containing exempt information)


Title of D
ocument

Ref No.

Where available for public inspection


Building
on

Strong Foundations: A

www.communities.gov.uk/documents/localgovernment/pdf/20

Framework for Local Authority Asset

Management


Public Sector Asset Management Guide


www.publicsectorassetm
anagement.com

(Jan 2008)