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Corporate Asset

Management Strategy

2016-2020

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Corporate Asset Management Strategy 2016-2020

CORPORATE ASSET MANAGEMENT STRATEGY

2016 - 2020

Contents 1.0 Foreword

2.0 Background

2.1 Corporate Landlord 2.2 Corporate Landlord Model

3.0 Corporate Asset Management Review

Strategies, Plans and Programmes which impact upon Physical3.1 3.2 Highways Investment Programme Housing Investment Programme3.3 Schools Investment Programme3.4

4.0 Asset Challenge Process

5.0 Governance

6.0 Key Stakeholders

7.0 Programmes for Future Reporting/Updates

8.0 Action Plan

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CORPORATE ASSET MANAGEMENT STRATEGY 2016 – 2020

1.0 Foreword

Sandwell MBC continues to face an extremely challenging financial position with a cut in Revenue Support Grant funding of £48m by the end of the current Parliament. When combined with increasing costs, the Council will have to find savings of £61m across the next 4 years. To meet these reductions in funding, it means that to survive, a number of our services will have to be delivered in different ways in the future. That’s the difference between keeping a service and that service disappearing.

As a Council we have adopted the Facing the Future strategy which aims to radically change the way we work in many areas, asset management being instrumental in this so we don’t just impose percentage cuts across the board. This means things like, for example, encouraging residents to do more business with us online, which is much cheaper than traditional face-to-face or other methods but this has an impact on how many assets we need to maintain.

The 'Facing the Future' programme aims to protect front-line services to the people of Sandwell by transforming the way we deliver services and growing the funding we generate locally. A key element of this transformation programme is the need to make best use of all of our assets.

The cut in our budget has also seen a reduction in our workforce and coupled with our IT strategy that promotes modern flexible working, this in turn has lead us to review our present and future office accommodation requirements a simple equation less staff, less accommodation required.

It hasn’t all been depressing news; we have made significant investment over the term of the last Strategy to invest in new leisure facilities in West Bromwich, Wednesbury and Tipton. We have and will continue to expand a number of our schools to meet pupil demand.

We continue to encourage developers into Sandwell so we can increase the business rates and Council Tax we get from new companies and new homes.

Sandwell has planed the council’s budget over the medium term for many years now, and this puts us in a better position than many other councils. The council is confident that we are in a strong position and we’re confident that we can continue to protect the services that our residents value, despite continued cuts.

Cllr Steve Eling

Deputy Leader of the Council

& Cabinet Member

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Corporate Asset Management Strategy 2016-2020

CORPORATE ASSET MANAGEMENT STRATEGY 2016 – 2020

2.0 Background

The Corporate Asset Management Strategy will support the Council’s core priorities, as expressed in our Scorecard, of Great People, Great Place, Great Prospects and Great Performance to continue to make Sandwell a better place for the people that live and work here. This Strategy will challenge why the council holds assets and explore alternative models and approaches in order to achieve the best use of Council Assets to deliver the best possible services at least cost to our citizens.

The Corporate Asset Management Strategy will encompass all of the Council’s physical assets into an aligned strategy and process informing planned programmes and projects ensuring best use of assets. Since the 2013 strategy was published the economic climate and its impact on Sandwell is still providing significant challenges. In response the Council is continuing to make significant changes, in its provision of assets in support of service provision to continue to meet the demands and requirements of its citizens. The Council will look to safeguard as many services as possible by creative use of its assets and doing things differently.

The Strategy will review all physical assets across all Directorate portfolios of the council to determine asset requirements in the medium and longer term. These requirements will allow the Council to plan appropriately around retention, reuse, or ultimate disposal of assets. The provision of suitable assets to meet ‘Medium’ and ‘Long-Term’ requirements of services is challenging given the economic environment in which the council finds itself and with constant churn within service area provision. This Strategy will;

Assess current Council Assets and challenge why we hold them.

Provide relevant data in to make of informed decision Prioritise assets accordingly based on relevant data Identify service requirements around physical assets Challenge service requirements – including new ways of

working Provide assets that are fit for purpose and sustainable long-

term. The on-going rationalisation of property assets will continue to support financial efficiency savings and contribute to the council’s ‘Facing the Future’ programme.

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CORPORATE ASSET MANAGEMENT STRATEGY 2016 - 2020

2.1Corporate Landlord

The ‘Corporate Landlord Model’ is about,

‘Asset Led Transformation’, that is, aligning built assets to support the delivery of the Council’s vision, strategy and priorities The Corporate Landlord model has three distinct elements; Estates Strategy Determining the asset base, values and liabilities, their use and management to prioritise assets to support delivery of the vision, strategy and socio-economic development priorities, and generate cash benefits Accommodation Strategy Ensuring efficiency in the use of our accommodation through agile working propositions and using this to accelerate the council’s overall transformation process – linked to the Information Technology and Human Resources strategies.

Property Operating Model Developing improved links between the client relationship managers and technical service delivery, to optimise the specification of assets and their development and management The current model is at Phase 1 and during the lifetime of this Strategy will roll into, Phase 2, (as explained further in 2.2 below). This will have a greater impact on how the council can effectively

assets that are fit for purpose and sustainable long-term.provide

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CORPORATE ASSET MANAGEMENT STRATEGY

2016 - 2020

2.2 CORPORATE LANDLORD MODEL

PHASE 1

PHASE 2

SERVICE AREA REMIT

PROPERTY RELATED BUDGETS, e.g. Rent, Rates, Utilities, Repairs &

Maintenance, etc.

PROPERTY RELATED BUDGETS, e.g. Rent, Rates, Utilities, Repairs &

Maintenance, etc.

Corporate Landlord

Strategic Asset Management Across all Physical Assets

Initial transfer of various Office Accommodation buildings outside the existing office accommodation portfolio in to Corporate Landlord.

Property Related Budgets - Transferred to Corporate Landlord

Operational Day-to-Day Management of all Physical Assets Transferred to Corporate Landlord (NB: Excluding Depots, Highways,

Schools and Housing) Service Areas

Operational Day-to-Day Management Across all Physical

Assets

Property Related Budgets - retained by Service Areas

NB: Provision of Serviced Accommodation to a wide range of Operational Services, allowing Services to focus on service delivery and Corporate Landlord to be responsible for ‘Bricks and Mortar’.

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Corporate Asset Management Strategy 2016-2020

CORPORATE ASSET MANAGEMENT

STRATEGY 2016 - 2020

3.0 Corporate Asset Management Review 3.1 Strategies, Plans and Programmes which impact upon Physical Assets

Corporate Asset Management Review

Capital Spend/Profile

Capital Programme Capital Receipt

Target

R&M Planned

Maintenance Programme

Repairs and Maintenance

Statutory Compliance

Energy Operational

BSF/PFI

ICT

ICT Strategy ICT Desktop Roll

out Modern Flexible

Working

Schools Capital Programme

Housing Investment Programme Highways Investment Programme

Fleet

Fleet Management Integrated

Passenger Transport

Taxi Licensing

Built Assets OAIP Programme Town Hall Strategy VBL Strategy Legacy Assets TNRP (Tenanted Non-

Residential Property)

Other Operational Assets

Service Led Strategies

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Corporate Asset Management Strategy 2016-2020

CORPORATE ASSET MANAGEMENT

STRATEGY 2016 – 2020

R&M Planned Maintenance

Programme Repairs and

Maintenance Statutory Compliance Energy Operational BSF/PFI

The council has an aging asset base which requires significant investment to make it sustainable in order to continue to support service provision. As part of a corporate approach the Corporate Landlord function will through an asset rationalisation exercise identify the most appropriate assets to retain and invest in as well as identifying assets that are surplus or beyond economic repair.

Assets OAIP Programme Town Hall Strategy VBL Strategy Legacy Assets TNRP Other Operational Assets

Service Led Strategies

There are a number of on-going Asset Based projects which encompass the majority of the council’s physical assets. A co-ordinated approach using the Corporate Landlord model is required In order to achieve maximum efficiencies across the council’s estate.

In addition there are a number of on-going Service Led strategies with various projects underway, these will continue with Corporate Landlord involvement. There are also a number of service led reviews which look to consider specific elements of the council’s asset base e.g. Historical Buildings Review, the Adult Social Services review etc. TNRP (Tenanted Non-Residential Property) / Surplus Land has previously undergone various reviews over the last few years culminating in the rationalisation of various underperforming assets. However given the financial and economic issues facing local authorities a further review of this element of the portfolio will be undertaken to identify any possible rental growth in support of increased revenue opportunities.

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Corporate Asset Management Strategy 2016-2020

CORPORATE ASSET MANAGEMENT

STRATEGY 2016 - 2020

ICT ICT Strategy ICT Desktop Roll out Modern Flexible Working

The council’s ICT Strategy and its subsequent roll-out will be key in providing the most appropriate tools in order to deliver excellent services. The ICT strategy will also aid greater flexible working for services supporting on-going rationalisation of the council’s physical assets.

Capital Spend/Profile Capital Programme Capital Receipt Target

Whilst the overall level of capital expenditure incurred by local authorities has decreased markedly in the last two years, the resources available for capital investment are still significant. In the period 2016/17 – 2019/20 total resources including; borrowing approvals, receipts from the sale of assets, government grants, lottery / European funds and private sector contributions are expected to be around £349m. The effective use of these resources is intrinsic to the fulfilment of the strategic vision of both the council and its partners. It is recognised that a strategic approach to ensure that funds are invested in capital projects that support the longer term objectives of the council, its partners and to ensure value for money is a key indicator for the success of this strategy. The council’s capital receipt target helps support the council’s Capital Programme, receipt target currently £5m p.a. Given the council does not have an infinite supply of surplus assets the demand of the capital programme must align with the supply of the on-going receipts. In addition to provide a sustained capital programme it’s critical that receipt targets are set at realistic levels.

Fleet Fleet Management Integrated Passenger

Transport Taxi Licensing

Sandwell Councils Fleet Management and Vehicle Maintenance service provides a variety of services for the council and the public and partner organisations. It is envisaged that Fleet Services, with its specialist skills, could play a pivotal role in future income generation for the local authority. Fleet Services currently maintain and repair a wide range of vehicles, ranging from small cars and vans, to refuse collection vehicles and road gritters. The Fleet Service plans to extend its income generation to utilise the M.O.T. testing facility. Further expansion of services could be achieved by a shared service offering of vehicle repair and maintenance to neighbouring local authorities

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Corporate Asset Management Strategy 2016-2020

CORPORATE ASSET MANAGEMENT STRATEGY 2016 - 2020

There are three specific Programmes that currently fall outside the Corporate Landlord remit. However these programmes will form part of this CAM Strategy 2016/20 in order to provide a corporate view across the whole of the council’s physical assets. 3.2 Highways Investment Programme Movement for Growth: The West Midlands Strategic Transport Plan sets out the vision, priorities, approach and commitment to building a world class, sustainable regional transportation infrastructure. It is the transport plan for the emerging Combined Authority. Movement for Growth recognises that it is essential to maintain existing assets fit for purpose and resilient to climate change. Properly funded, effective maintenance of highway infrastructure assets including roads, pavements, structures, traffic signals, street lighting and signs etc underpins the whole transport system.

The council’s Highway Asset Management Plan 2014/15, last approved by the Cabinet Member for Highways and Environment on 12 November 2014, sets out the framework for how we invest in, manage and operate the highway infrastructure to meet

minimum legal obligations high public expectations for safe, reliable and convenient travel; and

the wider objectives of regional transport policy and strategy.

The HAMP sets out an Asset Information Strategy and data Management systems that underpin delivery of the HAMP across the various asset classes and functions. The Highway Authority also has a duty to improve and renew highway network assets to ensure the effective movement of traffic flow and reduce road traffic accidents. This work is undertaken through an £8m to £10m of mainly Government funding for highway maintenance work, congestion reduction schemes and road safety schemes. A sustained long term programme of investment in safety schemes has been instrumental in halving the number of casualties on Sandwell roads from 1,639 in 2000 to 880 in 2014. Highway improvement programmes and major schemes are significant investments that must be delivered while maintaining the operation of the highway network. Typically the implementation process takes between 3 and 5 years to complete.

Highways Investment Programme

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Corporate Asset Management Strategy 2016-2020

The following investments in major highway improvements have been delivered over the last 10 years.

£30m – Road Safety and Casualty Reduction Schemes over a 10 year period

£80m – Highway maintenance and renewal programmes over a 10 year period

£5m - Bus Showcase Routes to improve journey times, bus frequency and bus reliability.

£5m - Cradley Heath Bypass to remove the majority of through traffic from Cradley Heath Town Centre

£8m - Red Route improvement to reduce congestion and accidents

£20m – Owen Street Relief road to replace a level crossing with a tunnel

£3m – A4100 Reddal Hill Road Improvements to alleviated congestion along this key Black Country route.

£25m – A41 underpass at West Bromwich to improve access to the town centre.

£3m – Smarter Network Smarter Choices programme to encourage the use of alternative transport for journeys to work

£16m classified road resurfacing programme 2015/16 to 2020/21 supported by £7.3m Local Highway Maintenance Challenge Funding

Proposed Future Schemes; Woods Lane Access, Level Crossing, Lower high Street –

Cradley Heath – 2016-2018 Carters Green/A41 Congestion Improvements - 2018-

2020

Birchley Island Capacity Improvement to Facilitate Regeneration – 2016-2020

Bescot Sidings Access Scheme to enable Development – 2017-2020

Work to Facilitate Hagley Road Sprint Bus Scheme – 2017-2018

Enabling Work for Wednesbury to Brierley Hill Metro – 2018-2022

Black Patch Regeneration Access Road – 2019-2021 M5, Junction 1 Capacity Improvement Scheme – 2019-

2023 West Bromwich Network Improvement Scheme –

2018-2022

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Corporate Asset Management Strategy 2016-2020

CORPORATE ASSET

MANAGEMENT STRATEGY 2016 - 2020

3.3 Housing Investment Programme Our latest Housing Revenue Account (HRA) business plan covers the 30-year period 2015/16 to 2045/46. The plan concentrates on those activities relevant to the management of the council's housing related assets and the challenges facing key service delivery areas and the delivery of our investment programme, Our Objectives Apart from the overarching aim to ensure that we continue to operate a sound and viable business plan, the plan identifies the following priorities:

Support the delivery of the council’s strategic aims and objectives

Protect the income stream and reduce inefficiencies and duplication

Protect and increase the asset base, delivering new council homes

Deliver stronger neighbourhoods and communities

Maintain high satisfaction levels with core landlord services

Improve the overall customer experience, in particular towards enabling the channel shift to on-line service provision.

Financial overview This HRA Business Plan has been developed at a time of significant national policy change, seen through the provisions of the Localism Act 2011 and within that, the implementation of Welfare Reform. Critically, it reflects HRA reform in respect of self-financing and the revised regulatory framework A summary of the projected HRA budgets from 2015/16 to 2019/20 is shown below. The key assumptions are as follows:

1) Annual rent reductions of 1% 2) That new build properties will be let at affordable rents 3) A revised bad debt provision that better reflects current performance and removes the previously assumed impact of universal credit 4) Revenue expenditure in line with current plans with no additional savings target being applied 5) £186m available across the next 8 years for investment in new build housing stock as part of a capital programme of £411m across the same period

Housing Investment Programme

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Corporate Asset Management Strategy 2016-2020

CORPORATE ASSET MANAGEMENT STRATEGY 2016 - 2020

These projections allocate the following resources to capital expenditure:

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Corporate Asset Management Strategy 2016-2020

CORPORATE ASSET MANAGEMENT STRATEGY

2016 - 2020

3.4 Schools Investment Programme The Schools Capital Programme 2015-18 looks to continue with the provision of new school places. The proposed projects reflect the funding levels and priorities identified by the Government to create new school places and maintain existing school buildings. The main driver for Sandwell continues to be the impact of the rise in the birth rate. By September 2018, it is projected that there will be a need to provide an additional 3 forms of entry (FE), as well as 3 temporary bulge classes in primary schools across Sandwell to keep pace with demand. There is also a need to begin feasibility on secondary provision to ensure the council can meet the demand for places over the next 10 years. It is anticipated by 2025 at least 29 secondary forms of entry based on current projections (although this is under review as increased migration and retention could increase this need still further) will be required.

The programme will deliver 465 new primary places in 8 schools by 2018 thus ensuring the council can continue to meet the demand for places across the borough. The programme aligns to service needs so that the Council is able to meet its statutory responsibility of ensuring every child in Sandwell has access to a good school place by seeking to build on its commitment to expand successful and popular schools.

The proposed programme supports the Authority’s continuing strategy to expand good and outstanding schools which are easier to expand, and are located in areas of high demand for pupil places. There are also implications in the Education White Paper for the ownership of land if all schools become Academies – i.e. a potential ‘land grab’ by the DfE which would remove all flexibility for land swaps in years to come for new builds. The potential conversion of all schools to academy status will also affect the amount of rates received. As charitable trusts, academies have a much reduced rates bill. The revenue implications are potentially £1.5m. NB: Increased housing provision across the borough will impact on the required school places.

Schools Capital Programme

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Corporate Asset Management Strategy 2016-2020

CORPORATE ASSET MANAGEMENT STRATEGY

2016- 2020 4.0 Asset Challenge Process Asset Challenge Process The council through its Corporate Landlord function sets out to challenge all future requirements around Physical Assets. Historically, Corporate Landlord through its Thematic Asset Managers has supported service areas when considering physical asset requirements in order to support on-going service function. Looking ahead Corporate Landlord will play a more active role in shaping future service requirements around physical assets and predominantly property assets which will need to reflect a more agile and greatly reduced workforce. Given the on-going budget pressures across the council, there will be a greater need to have a property portfolio that;

Meets service demands and customer expectations, Fit for purpose, Sustainable, In good repair condition

This Strategy will challenge why the council holds assets and what alternatives are possible in order to achieve the best use of them to deliver the best possible services at least cost. Making sure that all assets are flexible and offer a range of varied function in order to maximise usage, will be an important element of the strategy. (Assets are ‘sweated’).

WHY DO WE HOLD THE

ASSET?

Consider Service Requirements

CHALLENGE SERVICE REQUIREMENTS

Assess Relevant Asset Data

Prioritise Asset

‘Evaluate relevant data to provide Priority

Score/RAG rating for Asset to inform decision making

processes’

Rationalise Priority Score/ RAG rating to inform;

-Retain/Refurb/ Extend

- Surplus/Dispose

- Consider New Asset

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CORPORATE ASSET MANAGEMENT STRATEGY

2016 - 2020 5.0 Governance Current Arrangements The day to day management and responsibility of the council’s physical assets currently sits across a number of Elected Members portfolios. The overall responsibility of Strategic Asset Management lies with the Elected Member for Finance and Resources. The Corporate Landlord Services, being part of the Assistant Chief Executives Directorate, has enabled Corporate Landlord to drive and deliver the vision set out by the Elected Member for Finance and Resources by helping to consider, shape and inform all council decisions in connection with physical assets. Property Assets As part of the current governance arrangements around Property assets the Council has a Land & Asset Management Committee of Cabinet. The Land and Asset Management Committee consider and recommend all matters relating to the effective use of land and property assets within the Borough to Cabinet for approval; e.g. disposals, acquisitions, lease agreements etc. The Land and Asset Management Committee are supported by an officer group represented by a number of service directorates from across the Council. All Land and Asset Management Committee reports are supported by Corporate Landlord through Thematic

Asset Managers whose role is to support services in the preparation of reports and to present the report to the group. This process informs the best strategic fit for Council property assets. Asset Management All Asset Management matters across all physical assets are informed initially by a Corporate Landlord Officer Group, again with a broad section of service directorates across the council. The officer group then reports to the Corporate Landlord Steering Group, consisting of the relevant Directors with portfolio responsibility and chaired by either the Chief Executive or Assistant Chief Executive.

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CORPORATE ASSET MANAGEMENT STRATEGY 2016 - 2020

NB: Diagram below details the current arrangements when considering the strategic direction of the council’s land and property assets.

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CORPORATE ASSET MANAGEMENT STRATEGY

2016- 2020 6.0 Key Stakeholders required informing the process; Corporate Landlord will be looking to inform all physical asset related requirements. Resulting projects will include all relevant stakeholders across the council including Corporate Landlord in order to inform all physical asset related decisions;

The Corporate Asset Management Strategy 2016-2020 will encompass all council physical assets into a strategy and process informing planned programmes and projects aligning best use of assets. The following list indicates all relevant stakeholders to be included in the decision making process in support of service requirements;

Corporate Landlord; o Strategic Asset Management o Facilities Management o Building Services/Urban Design

ICT Legal Services Planning Property Services Strategic Finance

Key Stakeholders required informing overview/background Information;

All service areas with specific physical asset requirements NB: Children Services, Highways and Neighbourhood

services to inform their specific programmes. Trade Unions and Professional Associations

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Corporate Asset Management Strategy 2016-2020

CORPORATE ASSET MANAGEMENT STRATEGY

2016 – 2020 7.0 Programmes for Future Reporting/Update The council at any one time has numerous projects and programmes either underway or in the planning stage. As part of any effective asset management process these projects/ programmes/plans need to be monitored to support a successful outcome. The following projects are a selection of some of the on-going projects within the council currently. A more extensive list will form part of the subsequent ‘Asset Management Action Plan’ resulting from this Strategy.

Capital Programme 2016-2020 of £332m, including; Housing Highways Schools ICT

Whilst all projects are led by services areas in the main, Corporate Landlord takes an overview across all projects to ensure a consistent strategic approach is delivered. Corporate Landlord also act as a challenge mechanism supporting services to consider alternatives to the normal delivery process, in

doing so realising greater efficiencies whilst still delivery a quality service to the general public.

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Corporate Asset Management Strategy 2016-2020

CORPORATE ASSET MANAGEMENT STRATEGY

2016 – 2020 8.0 Action Plan An effective strategy needs to consider various elements of any organisational process in order to capture all relevant requirements. This action plan as part of the roll out of this strategy will consider and support the following;

Corporate Objectives – align all asset requirements to that of the organisation and the service alike.

Business Planning – identify service requirements around provision of physical assets in support of service delivery.

Risk Management – build in robust risk assessments and analysis as part of every review.

Property and Service Objectives – support through the provision of appropriate assets, all service objectives.

In addition the action plan will identify further specific objectives in support of the effective use of Land and Property assets, such as;

Move to Phase 2 of the Corporate Landlord Model – to provide greater cohesion around strategic asset management.

Identify Service requirements around assets for the next 3-5 years – in support of further rationalisation of

underperforming assets providing a sustainable asset base moving forward.

Building on Current Office Accommodation review –OAIP – to further rationalise the council’s office accommodation portfolio in line with other physical asset related projects.

Underlining the Importance of the Property Maintenance Account (PMA) - and its direct impact on strategic asset management.

Create Value for money solutions – in the repair, maintenance and construction of existing or potential council assets.

Improve the provision of ICT across the council – In support of modern flexible working.

Promote Cross service/ Inter-organisational projects and working – Black Country combined authority etc.

Prepare and support for the school asset base to sit outside of the Council – increase in Academies and Free Schools.

Provide the statutory health and safety compliance for assets

The above will form the basis of the council’s ‘Asset Management Action Plan’ 2016 – 2020 with updates to be reported through the governance process shown in section 5 above.

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Corporate Asset Management Strategy 2016-2020

Corporate Asset Management Strategy 2016-2020 Contact:

Strategic Asset Management Corporate Landlord Services

Assistant Chief Executives Directorate Sandwell Council House

Freeth Street Oldbury B69 3DE