Meeting documents

General policies - applicable to all properties

This part of the general policies covers the way in which the Council's property interests are recorded and how properties are allocated to occupiers. It also confirms the delegated authorities that are in place and the way in which the asset register is maintained. Although the majority of this is internal to Property Services, service areas also have a responsibility to ensure that records are kept up to date, not only by being the local `eyes and ears' but by notifying Property Services where changes are undertaken that are initiated from outside Property Services.

In all dealings with property the Council will seek to adopt notable practice in terms of asset management planning, see CP4 above. The Council, through Property Services, will comply with central government requirements for asset management planning and develop its own asset management or estates strategy.

The latest AMP has been published alongside this policy to give effect to the Property Holdings Review arising from the aspiration to create capital receipts.

There are no plans to produce plans for individual service areas, although best value reviews, improvement projects etc have property implications. Also the service planning process impacts on property ownership.

Property Services will produce key performance indicators (KPI's) as required under asset management plans and any other Council wide or central government requirement.

The whole area of KPI's is currently under review and recommendations will be made to the Property Board on the basis of current consultations being undertaken by COPROP and others. The indicators in the current AMP reflect the current requirements and will be developed as part of this consultation.

Additionally the Property Services balance scorecard is populated with a view to reflecting corporate objectives.

Management of the Council's property as defined in Section 1 (CP1) is delegated to the Divisional Director (Property and Facilities) under the scheme for delegations approved by the Council. Such delegations will be exercised in accordance with the principles of good estate management having regard to operational requirements.

Delegated authorities are dealt with in the Council through a scheme of delegations. The management of property is delegated to the Divisional Director (Property and Facilities) under the scheme.

Individual arrangements apply for schools however paragraph 4.1 of the financial regulations for schools provides "The governing body cannot dispose of or acquire any land and buildings or any interest therein."

Paragraph 9 of the regulations sets out the arrangements for contracts for building work to be dealt with under delegated budgets. Such work can be dealt with by the school wheras non delegated budgets come under the normal arrangements.

Property Services operates a scheme by which the overall delegation to the Divisional Director (Property and Facilities) is further delegated to service managers, team leaders and individual members of staff within the division.

These arrangements take the form of a further delegation from that provided in the Council scheme to allow service managers and staff to deal with day to day matters in accordance with the internal procedures. The scheme of delegations is set out in Appendix 2.

Property Services will develop and maintain accurate and comprehensive records of all its property ownership including property in the course of acquisition and properties that have been sold.

Information held by Property Services will be treated confidentially but will be made available where possible. Property Services will continue with the development of these records, both within the division and corporately.

Records of ownership will also form the basis of the Council's asset register and schedules attached to the various property insurance policies as well as details of land holding powers and allocations amongst occupying departments.

Where projects are undertaken outside Property Services, project managers must ensure that the property records are up to date by informing the Asset Review group in Property Services.

Property Services include a small team responsible for maintenance and development of records held in the division. The development work, in particular the roll out of information held on a map based GIS is continuing alongside a major project to register all the Council's property interests at the land registry. This land registration project is currently funded from the capital programme and will result in large benefits across the Council. Property Services has made good progress and it is likely that the registration programme will be completed substantially by the end of FY 2008/09.

There is also a project to establish a corporate GIS and Property Services are taking a lead role in this project.

The series of core databases and the GIS provide the central location for much of the information needed for performance measurement and key performance indicators under asset management planning and other initiatives, in particular CPA/CAA.

The recording of assets owned by the Council is also a requirement under financial regulations 12 & 13 and code of practice 9. Financial regulation 13.1 places a responsibility on SERVICE AREA to be responsible for the custody of buildings, equipment etc and for general security. Maintenance and other property management issues remain the responsibility of Property Services.

Records of property ownership will be developed to include the land holding powers under which the asset was originally acquired and/or the statutory purposes for which it is currently held.

All land and property acquired by any local authority must be acquired for a specific purpose and pursuant to the provisions of a specific piece of legislation. There is a general sweeping up provision under which land may be held for the general benefit of the area, however more specific powers are used in the majority of cases, for example education acts for schools and highways acts for roads.

Where an asset is transferred from one holding power to another then a formal appropriation will be carried out. See GP7 below.

Code of Practice 9 requires the Divisional Director (Property & Facilities) to maintain a record of all properties owned by the Council which details, amongst other things

• The holding committee (Divisional Director)
  
• purpose for which held
  
• location

Where a property is no longer required for the purpose for which it was originally acquired it will be dealt with in accordance with the surplus land procedure (Appendix 1). Where an alternative use is identified rather than the property being sold then the property will be appropriated formally to the new holding power. Such appropriation will take place at a value assessed by Property Services and such appropriation recorded on the property database.

Property that is declared surplus and no alternative use identified will be allocated as such and dealt with in accordance with the surplus land procedure and the specific policies below.

Where any land is appropriated a debt charge equivalent to the value assessed above will be recorded in the Council's balance sheet.

The statutory purposes for which a local authority can acquire and hold land are too numerous to be included in this document, but it is not lawful for the authority to hold land unless that power is specifically conferred on it. There is however a general power under the Local Government Act 1972 to hold and use land for the benefit of the area.

See section 6 below and Appendix 1 for details of the mechanism for sales of property.

Valuations will be carried out to record the appropriation in the same way as the value of assets is assessed for the purposes of ongoing retention by a service.

See also reference to Code of Practice 9 above.

The property database will include records of the allocation of all property interests to the occupying service area. The commercial estate is a self contained business unit and all commercial estate holdings are notionally allocated to the Divisional Director (Property and Facilities).

Changes in allocation will be dealt with under the provisions of the surplus land procedure. Agreed changes will be the subject of a revised valuation and entry in the asset register.

Appropriations and allocations will normally take place at the same time.

Reallocation of a property may involve a corresponding reallocation or virement of any existing budgets associated with the property in question.

As well as the formal land holding powers under which a property is acquired or held all property is allocated to a service area. In the case of changes very often a reallocation will follow an appropriation but these are not necessarily linked.

Allocation of properties to a service area will be recorded on the database and GIS data is also being developed to allow map interrogation of property assets by service area allocation.

See also reference to Code of Practice 9 above.

As part of the development of these records and in order to confirm the base position, the current allocation will be reported to all service areas for agreement prior to the situation being reported to the executive and/or Council.

Rental and/or capital valuations will be undertaken within Property Services in accordance with the delegations in place within the division and the relevant professional standards including those of CIPFA and the Royal Institution of Chartered Surveyors (RICS).

Valuations of property interests are required for a number of reasons. The procedures in place in Property Services provide for all valuations to be undertaken in accordance with the relevant professional standards and for all valuations to be approved by a member of the RICS.

Property Services will maintain a register of the Council's property assets and make such register available to the Divisional Director (Finance) for incorporation in the Council's accounts.

The register of all Council's assets is maintained by the Divisional Director (Finance). In relation to property the register comprises valuations undertaken by Property Services. Such valuations are undertaken in accordance with the requirements of CIPFA and provide for a formal revaluation to be undertaken at least once every 5 years. Where there is a change of circumstances (eg an extension to an existing establishment or a reallocation) a formal revaluation will be undertaken at the time of such change and included in any appropriation.

Property Services in conjunction with the Property Law Team in Legal Services will maintain templates of standard leases and documents to be used in all transactions involving properties. All transactions should be in writing.

All agreements in relation to property should be in writing and generally handled by Property Services. The exceptions to this are room bookings and casual hirings eg football pitches where the occupying service will deal with the arrangements direct. In these cases the form of any document should be approved by Property Services in template form.

Property Services has developed a series of standard leases to reflect current law and practice and will keep these up to date in the light of evolving legislation and practice.

All rents and other fees payable under the terms of any lease or other occupational document will be invoiced and accounted for within Property Services. Amounts will generally be credited to the service area to which the property has been allocated.

Property Services operate a dedicated property management system (ECS) with automated links to the Council's financial management system. ECS is written specifically for property management purposes and includes such things as service charge calculations, the automatic generation of interest on late payments and invoices for the reimbursement of fees incurred. Amounts invoiced by this method are entered onto the main FMS monthly in arrears and will appear on client reports in the usual way. Financial arrangements for casual lettings, room bookings etc should be raised by occupying departments using the Council's central sundry debtors system.

All documents must be signed by the appropriate authorised signatory. The Council's seal will only be authenticated in approved cases.

The signatory to any contract will generally be the Property Law Manager or authorised deputy. Leases, freehold transfers and the like require to be sealed and the Council's seal is held by the Solicitor to the Council and will only be authenticated in approved circumstances for which proper delegation is in place.

In the case of acquisitions the holding powers will need to be stated.

Where it is necessary, either due to workload or the specialist nature of a project, to employ a consultant to carry out work Property Services will appoint such consultant according to the current procurement rules.

Any fees and costs associated with the appointment of a consultant will be treated as an additional scheme cost.

Contract Standing Orders cover the appointment of consultants and set out the procedures to be followed according to the anticipated cost of any appointment.

Consultants are usually required where the nature of the project is outside the scope of expertise of Property Services staff, or where workload pressures dictate that a project cannot be dealt with in an acceptable timescale given the requirements.

Consultant's fees will generally form part of the overall scheme cost.

Part B Management of Existing Properties

Part 2 of this section deals with the roles and responsibilities of both Property Services and occupiers in managing existing properties. This includes arrangements for dealing with maintenance, condition surveys and outgoings such as utilities, rates and insurance.

A fully inclusive annual revenue charge will be made against each service area for the occupation of each asset. The charge will be fully inclusive of all property costs.

The components of the asset register form the basis for a revenue charge to services which effectively comprise the cost of occupation. At present this is not real in that no budget exists to fund such charges however as part of the implementation of this policy budgets will be allocated from which the charges will be paid. Any revenue charge will be fully inclusive and include all property outgoings including

• Rates
  
• R&M
  
• Utilities
  
• Staff/FM

This policy will need to have regard to other policies relevant to the above factors. The above reflects good business practice and will help to incentivise rationalisation and encourage the effective use of property assets.

Property Services undertake a programme of condition surveys which will provide detailed information concerning the condition of buildings and their individual elements. The results of these surveys will form the basis of decisions concerning prioritisation of maintenance responsibilities which will ensure that the maintenance of all land and buildings is effectively targeted.

Completed surveys are sent to the occupier together with a summary of any urgent items. Surveys are updated on an annual basis in conjunction with building occupiers.

On a day to day basis occupiers will report any issues regarding disrepair or any other irregularities to Property Services.

Condition surveys provide a comprehensive assessment of the condition of every element of buildings. The results are stored on the property database and used as a major source for property decisions. These surveys are updated annually in liaison with building occupiers to identify any points of concern as well as to keep the detailed information in the conditions surveys up to date. On a more day to day basis occupiers are responsible for reporting faults and the need for day to day repairs and occupiers are also encouraged to be the local eyes and ears to notify Property Services of any other property matters that may require to be investigated.

Outside the requirements for condition survey visits it is not considered that there will be a need for regular inspections although individual inspections may be necessary for specific purposes. Occupiers will give Property Services and other staff access on reasonable notice taking into account any operational requirements.

Specific inspections may be necessary for such things as eg, reassessment of the insurance reinstatement cost particularly where circumstances have changed.

As part of the programme of condition survey visits outlined above Property Services will attempt to identify any encroachments and possible claims for adverse possession and deal with any occurrences in a way that protects the Council's interests.

Occupiers of property are required to monitor and report any potential cases to Property Services in order that appropriate action may be undertaken in an acceptable timescale.

Encroachments include boundary adjustments undertaken by adjoining owners without regularisation and the unauthorised occupation of land by third parties. Adverse possession describes the legal status of an occupier who may have acquired rights to remain in property over a period of time despite having no documentary title.

It is impractical to carry out regular and routine inspections of all boundaries and it is therefore important that all officers of the Council are vigilant and report any discrepancies to Property Services without delay. Financial Regulation 13.1 and Code of Practice 16 (Security) oblige service area to be responsible for the custody of all buildings. It is important that these matters are actioned in a timely manner in order to protect the Council's interests.

The repairs and maintenance budget is provided to deal with all responsive repairs to property. Planned maintenance will normally be undertaken in accordance with an allocation from the capital programme although other external sources may be available. Specific provision will need to be made in certain circumstances to deal with new legislation etc. In the case of certain properties maintenance budgets have been devolved to the occupiers.

Both the planned and responsive maintenance budgets are set each year as part of the overall budget process. Planned maintenance will be prioritised largely using data from condition survey and take into account where possible the results of liaison with building occupiers as part of the process. The prioritisation of repairs and maintenance will also have regard to any backlog recorded and also the normal life expectancy of any particular component as well as the suitability of the property for the occupier. Requirements over and above these usual standards, either in terms of timing or quality, may be considered on a fully recharge basis.

Property Services will operate a helpdesk facility and a rota of duty surveyors ensuring access to appropriate advice during normal office hours. In emergencies occupiers can contact Council connect.

The vast majority of responsive maintenance will be generated from occupiers by contacting the helpdesk. In the case of minor works the matter will normally be dealt with by raising an order against one of the Council's regular contractors. In more substantial cases it may be necessary for the surveyor to visit before deciding on remedial action.

Property Services will maintain a programme of planned maintenance to undertake cyclical repairs and decorations to all properties.

Planned maintenance covers such things as regular redecoration, particularly of the exterior of buildings and periodic maintenance to prevent deterioration, for example replacing the covering of a flat roof at pre determined intervals.

Such works will be programmed using condition survey and other data held on the property database.

GP 22. Legal and Statutory Requirements

The Council will ensure that all legal and statutory requirements placed on it or on any tenant or other occupier, in relation to the use, occupation or management of property will be complied with.

In the case of requirements that become the responsibility of the occupier, Property Services will ensure that such occupiers are fully aware of any additional responsibilities.

It is important that the Council not only complies, but is also seen to comply with all obligations. New legislation is constantly imposing additional obligations on property owners and occupiers.

Where additional responsibilities are imposed and this cannot be complied with from within existing budgets a submission will be made for an allocation from the capital programme.

It is also important to make sure that occupiers are aware of the circumstances and put in place processes to deal with such responsibilities at a day to day level. Where necessary training will be given to building managers and specific documents issued to cover any responsibilities.

The Council carries block insurance policies to insure all land and property and Property Services will ensure that cover is maintained in relation to all relevant property. Where the responsibility to insure rests with a third party, for example a tenant, Property Services will ensure that such insurance is in place. Where the cost of Insurance can be passed on to the tenant, this will be invoiced as additional rent or service charge as appropriate.

For operational property occupying service area will receive a charge for the cost of insurance including an additional amount as a contribution to self insurance of any excesses.

Claims must be submitted to Property Services and the insurance officers without delay in order to ensure that claims can be substantiated. In the case of emergencies essential works will be put in hand immediately.

Actually putting in place and maintaining the insurance cover is the responsibility of the Council's insurance officers, with Property Services ensuring the adequacy of the cover. The level of cover is indexed annually to reflect increases in building costs and each time there is a change in circumstances a complete reassessment is carried out. Where alterations, extensions etc are carried out by schools or other service area using delegated budgets it is important that the insurance consequences are considered at the outset. In particular where there is a building contract the responsibility for Insurance may be with the contractor during the course of the contract but it is possible under the terms of the contract for the Council to be responsible for such insurance during the building period.

In certain cases, particularly the major developments and some old leases, the tenant or some other third party will be responsible for carrying the insurance. In these cases Property Services will write to obtain confirmation of cover on an annual basis.

Where the insurance is under the Council's block policy the vast majority of leases provide for the cost to be recharged to the tenant as additional rent or as part of any service charge. As soon as the costs are known an additional Invoice is generated for these amounts.

In order to adhere to the policy terms it is important that any potential claim is reported to Property Services immediately.

In view of the perceived high risk in insuring some categories of buildings insurers impose high excesses in relation to these properties. Lowering of these excesses would result in vastly inflated premiums and so the Council operates what comprises in effect an element of self insurance to fund any excesses imposed as part of a claim. This self insurance is funded by increasing the charges to occupiers above that which the Council pays the insurance company.

The provisions for the payment of property outgoings such as rates, utilities, insurances and maintenance are far from consistent. Efforts will be made to rationalise and improve this area in the future as part of the arrangement to account for the cost of occupation. In the meantime in order to identify total expenditure and income on a property by property basis all postings to Agresso must include the Property Services Reference Number (PSRN) as the third attribute.

There are different arrangements for the payment of property outgoings at present. Day to day responsive maintenance is funded from the Property Services repairs and maintenance budget. Some buildings in multiple occupations are managed by the facilities management area in Property Services, wheras in individually occupied buildings many of the services are funded and managed directly by the occupiers.

There is always going to be a line that needs to be drawn between property and non property Expenditure. As part of any rationalisation accurate definitions will be made so that transactions can be categorised correctly.

In order to be able to identify all transactions in relation to a particular property it is imperative that postings include the appropriate attribute. Individual properties can be identified using the job code derived from the unique property identifier or PSRN. This attribute is the third attribute on Agresso and titled `PropCode'. Outgoings will be paid by Property Services and recovered as part of the overall occupation charge.

Where the Council owns a property and also supports the occupier by grant aid or other means all such grants shall be transparent to the occupation of the property. The arrangement for dealing with these concessionary lettings has been approved by the management board and will shortly be embodied in a published document.

The Council has various organisations that occupy Council owned property and who also receive financial help in the form of grant aid towards property and other costs. In these circumstances it is important that the terms of the occupation reflect the full value of the property and that the grant or subsidy is identified separately.

The concessionary lettings scheme achieves this by quoting the full rent in the lease and then immediately crediting the subsidy that is being paid by the service area that is sponsoring the organisation. The tenant is then left to pay the net amount from its own resources.

In the particular circumstances of these occupations the responsibility for repairs and maintenance may be retained by the Council.

In all aspects of the management of the Council's property regard will be given to the Council's aims and objectives and improvement priorities.

Operational property is held primarily to enable service delivery however wherever possible the wider aims and objectives will be supported.

Non operational property, particularly the commercial estate, also provides opportunity to support the wider objectives of the Council, for example by supplementing the powers of the Council as planning authority.

Further examples of the way in which the Council's objectives can be enhanced through property management include income generation which can be used to provide resources for service delivery and the use of underutilised property, particularly upper floors, for residential purposes.

All such initiatives need to remain financially viable, and any alternative use which results in a loss of value will be required to be funded by the appropriate service area.

This overall property policy will have regard where possible to all other policies and working documents developed to cover specific circumstances.

Across the breadth of Council services there are a large number of individual policies and practices governing individual aspects of service delivery. The property policy will supplement all such specific matters of guidance.

Part C. Management of Changing Requirements

This section covers how to deal with changing circumstances where for example there is an operational requirement to expand a particular holding, deal with the reallocation of surplus land or ultimately buy or sell property to maximise return or performance.

Property Services will advise and participate in all best value reviews, improvement projects, individual service plans and any other individual strategy or initiatives from property occupiers.

Property Services will promote ongoing review of property interests where required.

Each service is responsible for the production of service plans and these provide a statement of service objectives for the forthcoming year. Property Services should be involved in such plans to the extent that property is affected. The Asset Review group within Property Services will be the first point of contact. It is the responsibility of all property occupiers to involve Property Services at an early stage in these projects.

The Asset Review group will also promote a programme of regular reviews of all property interests either by service area, geographically or through some other selection criteria. Such reviews will look at all aspects of the occupation including for example running costs, utilisation and taking into account occupiers aspirations.

Property that is no longer needed by a particular service area will be declared surplus and dealt with in accordance with the surplus land procedure.

See Section 6 and Appendix 1.

Where a property is no longer required by the service area to which it has been allocated, the service area is required to declare it surplus. In these cases the property will transfer to non operational - surplus and be dealt in accordance with detailed arrangements set out in Section 6 and the surplus land procedure (Appendix 1). This will include the property being notionally allocated to Property Services with all associated expenses being funded from the repairs and maintenance budget. This budget will accept virements relating to any property or service budgets held by occupiers at the time the property is declared surplus.

Surplus property will then either be reallocated or sold in accordance with the surplus land procedure.

Property Services will carry out negotiations to acquire an interest in land where such interest is required in connection with a specific scheme for which a budget has been provided in the capital programme or elsewhere.

Where the possible requirement has been identified as part of any scheme it is important that Property Services are asked to investigate the ways in which such requirement may be satisfied at the earliest opportunity. Any requirement may be moved forward by the acquisition of an interest in non Council owned property however there may be other more cost effective solutions involving alternative strategies, for example a reallocation of existing accommodation.

The Council will only promote the creation of a Compulsory Purchase Order (CPO) where negotiations to acquire an interest have not been able to reach an agreement or where the proposed assembly of the site makes such a course of action the best way forward.

The Council is able, in certain circumstances, to acquire property by the use of CPO powers. Every effort will be made to acquire property by agreement but in cases where it is not possible the Council will consider using CPO powers. These powers may also be applicable in complex land assembly cases, ie where a large number of interests are required in order to acquire a site for a specific scheme. Compulsory purchase is only available where the relevant legislation allows.

Where a requirement is for a limited period or where the market for the type of accommodation is predominantly leasehold the Council will consider acquiring a Lease rather than a freehold.

Certain types of accommodation such as offices are generally available for Lease via a commercial landlord. There may be a limited market for freeholds but it may be impossible to acquire such an interest. Also certain requirements may be specialist or new and in these circumstances a leasehold acquisition may be more cost effective. In determining the length of any lease to be acquired regard should be had to how permanent such a requirement is, the level of fitting out or other capital expenditure necessary, and in the case of offices how the proposed lease would fit in with the time profile of other leases.

All disposals will be undertaken in accordance with the surplus land procedure. The presumption, in the case of former operational property, will be for a freehold disposal.

Where a property is declared surplus to requirements it will be dealt with in accordance with the surplus land procedure. Generally a former operational property will be sold outright however in certain cases it may be preferable from an estate management point of view to retain an element of control by granting either an occupational lease or a long lease with the appropriate safeguards.

For the commercial estate different considerations apply. Generally any property or part of a property that falls vacant for whatever reason will be relet on an occupational lease. Properties that have been designated as developments will generally be let, following a building agreement, on a long lease.

Section 123 of the Local Government Act 1972 generally provides for any sale to be at `best consideration'.

Disposals resulting in a capital receipt will generally count towards corporate targets. In certain circumstances, as part of the property review process, receipts from disposals will be allocated to individual services in accordance with previously defined arrangements, or form an element of the overall scheme.

The way in which receipts are treated will depend very much on circumstances. Where the disposal is as a result of a property no longer being required then the receipt belongs to the Council as a whole. Where the proceeds are part of the overall scheme viability then it is acceptable for such proceeds to form part of, for example, the cost of providing replacement accommodation.

Proposals to improve existing property either by refurbishment of existing buildings or extending the size of property will be considered as a means of making best use of resources. Such schemes will normally be funded by the capital programme but other external sources may be available.

Property Services will assist in the early stages of any such proposal in the form of estimates of land acquisition costs, building costs as well as the scheme viability, for example the likelihood of obtaining planning consent.

In specific circumstances individual services may fund expenditure and works either using the services of Property Services or by commissioning work direct. In the latter circumstances all such work must follow the procedures for devolved working set out in Appendix 2.

The consideration of changing requirements for accommodation either in a single holding or over a range of ownerships may involve making better use of existing resources by improving the existing stock. This will be considered alongside proposals for relocation and any other potential solutions.

The majority of work would be commissioned and managed by Property Services although in certain circumstances departments have an element of discretion in the use of devolved budgets. In these circumstances it is imperative that Property Services are involved in all stages of the design and construction process.

There are a number of reasons for this, notably the need to ensure that designs are formulated having regard to existing data regarding such things as the existence of asbestos and the proposals for discharging any statutory requirements for example the Disability Discrimination Act and that property records are ultimately kept up to date. The arrangements in Appendix 2 give more detailed instructions to cover this.