Agenda item

Report of the Corporate Director for Growth and City Development

Councillor Steve Battlemuch, the Portfolio Holder for Skills, Growth, Economic Development and Property, Nicki Jenkins, Director of Economic Development and Property, and Beverley Gouveia, Development and Disposals Manager, presented a report setting out the progress made on implementing Theme Two of the Together for Nottingham plan, which was the associated asset rationalisation programme. They highlighted the following information:

(a)  the Council owns over 3600 property assets, with an asset value of over £1bn. These are split over the General Fund, the Housing Revenue Account (HRA) and the Bridge Estate. These properties can categoried as operational, commercial, investment, and community;

(b)  the Asset Rationalisation Programme aims to generate sufficient capital receipts by selling Council-owned property assets to meet the current commitments within the capital programme and reduce levels of borrowing, therefore the Council needs to:

·  accelerate the sale of those properties currently declared surplus and on the programme;

·  increase the number of assets for disposal onto the programme; and

·  provide assurance on the way in which assets are sold;

(c)  the first two years of the plan achieved a level of capital higher than forecast, however the economic shocks experienced in the autumn of 2022 and a delay in the sale of two high-value assets saw a reduction in the forecast mid-year;

(d)  within the eleven actions of the Assessment Management Plan, eight actions are complete and three are still in progress. Overall the plan is still rated as ‘amber’ on the Theme 2 - Asset Management Risk Register (see Appendix 2 of the report) due to the need to develop a forecast for the duration of the Council’s Medium-Term Financial Plan (MTFP);

(e)  the Council has received £56m in Capital Receipts to date from asset disposal;

(f)  the future years forecast gives a current total pipeline value of £28m, which when risk adjusted comes to £13m;

(g)  the three methods of asset disposal are either selling the properties at auction, on the market, or through special purchase;

(h)the Theme 2 - Asset Management Risk Register and forecasts are monitored and adjusted where necessary on a monthly basis;

(i)  a review of high value and operational assets has begun to identify additional properties to expand the pipeline over time;

(j)  the Corporate Landlord Transformation Programme brings together the management of all property land and assets into one centralised function, except schools, HRA residential properties, car parks, and markets. The second phase of the programme requires the confirmation of wider assets within services to transfer into the Corporate Landlord function;

(k)  the Portfolio Holder for Skills, Growth, Economic Development and Property is awaiting a handover from the Leader of the Council regarding the Corporate Landlord arrangements and will take over the Asset Rationalisation Board;

(l)  income generation from asset disposal is key to funding the Council and its programme delivery;

During the discussion and in response to questions from the Committee, the following points were raised.

(m)a review into the methodology of how assets are valued will take place to ensure the Council gets the best value for the disposal of assets. There have been examples of where properties have not been disposed of due to the expected value being below what the Council expected;

(n)  the Council will learn from the experiences of other local authorities which have suffered financial difficulties, but have not generated sufficient income from asset disposal to help pay off those debts;

(o)  there needs to be a distinction between the Council’s Net Debt and the Gross Debt when making decisions around asset disposal.

Resolved to take assurance in the governance and control measures in place to manage the risks identified within the programme.