15 Asset Management of Local Authority Land and Buildings – Good Practice Guidelines
3.ASSET MANAGEMENT PLANNING
3.1This section covers five areas:
• Asset Management Plans (AMPs)
• Responsibilities for AMPs
• Implementation of an AMP
• Audit and Review of AMPs.
3.2The previous section noted the definition of asset management as optimising the
utilisation of assets in terms of service benefits and financial performance. Consequently,
asset management planning is the systematic planning and documenting of how this is to be
3.3A principal reason for developing asset management planning is to raise awareness of the
financial resources invested in property assets and to develop strategies and programmes to
ensure that they are deployed in the most effective way to meet the authority’s corporate and
service objectives. In some cases this will mean ensuring that financial resources devoted to
property assets are delivering better value than if they were invested elsewhere. There is an
“opportunity cost” of locking financial resources in property and property assets should only
continue to be held if they meet the current objectives (including financial) of the authority in
the most cost-effective way.
ASSET MANAGEMENT PLANS (AMPS)
Aims of AMPs
3.4The main overall aims of AMPs are:
• To ensure efficient, effective and sustainable use of land and buildings.
• To minimise the opportunity cost of holding land and buildings and to protect the
value of council assets.
• To ensure that expenditure on land and buildings maximises value for money.
• To ensure that the use of assets contributes to the process of service improvement.
Asset of Local Authority Land and Buildings – Good Practice Guidelines 16
• To provide innovative accommodation solutions to service needs.
• To ensure an explicit, co-ordinated approach to asset management across the
authority, reflecting service needs (determined from stakeholder consultation).
• To ensure the financial return from investment and surplus properties is maximised
in an appropriate manner to meet financial requirements.
Objectives of AMPs
3.5More specifically, the main objectives of an AMP are:
• To make co-ordinated local decisions on spending priorities.
• To be an integral part of the local authority business process and ensure national
and local aims, objectives, and policies are linked to implementation.
• To achieve commitment to action programmes.
• To provide a useful management document on property asset strategy..
• To provide assurance to stakeholders that assets are being managed in accordance
with service needs.
• To provide a regular review of property assets to identify areas where
improvements can be made.
• To identify specific opportunities for innovation.
• To provide a framework for prioritising capital projects.
• To assist in the development of partnership projects/private sector partners.
• To identify assets suitable for investment or disinvestment.
• To identify opportunities to increase income and decrease expenditure.
Key Issues Associated with AMPs
3.6There are a number of key issues which are associated with the production of AMPs.
17 Asset Management of Local Authority Land and Buildings – Good Practice Guidelines
3.7They ensure a systematic and co-ordinated approach. If the overall objective of
optimising asset utilisation is to be achieved, an explicit, systematic and co-ordinated
approach is required. This is of particular relevance to local authorities, each of which have
multiple objectives and various committees/ departments seeking to meet these various and
sometimes conflicting objectives. Furthermore, in a restricted spending environment, it is
essential that any creative opportunities in the portfolio are exploited. Systematic analysis
and preparation of a plan will improve the likelihood of these opportunities being identified.
Box 3.1 gives an example drawn from the case studies in the Research Project of the
consequences of an uncoordinated approach.
Departmental level planning
Where asset planning is undertaken at departmental level only, corporate priorities are
overruled by short term departmental needs. An example would be the retention of a surplus
old persons’ home for the alternative short-term accommodation needs of the Social
Services department instead of the sale and realisation of capital receipts for the wider
benefit of the authority. Localised planning makes corporate prioritisation of an authority’s
asset programme extremely difficult.
3.8AMPs should be tools for all types of Councils. Local authorities vary in their approach to
managing property assets. At one extreme is the highly centralised approach where property
responsibilities are held centrally. At the other are the devolved systems, where individual
committees/departments are responsible for their own property. In centralised systems an
explicit asset management plan (AMP) will provide a forum by which the “centre” can
inform committees/departments what the corporate intentions and direction of the authority
are in relation to property assets. In the case of devolved responsibilities for asset
management, an AMP is needed to ensure that assets are managed in line with the authority’s
core objectives. AMPs are important tools for implementing good asset management in all
types of authorities. The Plan is one of the four main steps in the asset management process
which are identified earlier in these guidelines (Figure 1.2), namely to:
1. Identify objectives, aims and policies
2. Prepare plan
3. Implementation of plan
4. Audit and review the plan and its programmes.
3.9Barriers to authority-wide asset management. Set out in Box 3.2 are two perceived
barriers to authority-wide asset management planning highlighted in the DETR Research
Project. These Guidelines are aimed at addressing the barriers as well as setting out good
Asset of Local Authority Land and Buildings – Good Practice Guidelines 18
Perceived barriers to authority-wide Asset Management Planning
1. A culture of powerful front-line services ‘owning’ the property they occupy/use, which
in some authorities feeds down to individual sections of departments. This is not
only undermining an authority-wide strategic approach but is also hindering co-
ordination at service department level.
2. Uncertainty in the level of funding beyond the next 12 months, because of the annual
nature of local government financing, does not support long term planning.
3.10AMPs relationship with other council documents. The following diagram, Figure 3.1,
explains how the AMP fits into the wider picture in relation to the Best Value Performance
Plan and the Capital Strategy. It must also be remembered that the Council’s Asset
Management Plan should cover all its land and building assets including housing and schools.
However, these two services will be covered by their own asset documents (Housing
Investment Programmes and DfEE Asset Management Plans). Whilst it will not be
necessary to repeat the content of these other asset documents in the AMP, it will be
necessary to adequately co-ordinate the content of the AMP with those documents and cross-
reference them in the AMP.
19 Asset Management of Local Authority Land and Buildings – Good Practice Guidelines
How AMPs fit into the wider picture
Stakeholder Input Central Government
Best Value Performance Plan
1. Overview of property aims,
objectives and strategies Asset
2. Statement of current portfolio 3. Management
3. Key areas for change
4. Preferred options for key areas
5. Implementation Programmes 4. Plan
Programmes & Action
Content of AMPs
3.11This Guidance is intended not to prescribe the exact format of an AMP but to set out the
considerations in working towards one. Whilst the DETR is likely to use a Council’s AMP
as one of the mechanisms for measuring, it will be left to the authority to decide what is
appropriate in its own circumstances. The following pages focus on the overall content of an
Asset of Local Authority Land and Buildings – Good Practice Guidelines 20
3.12An AMP should comprise 5 main sections:
Overview of property aims, objectives and strategies
Statement of current portfolio
Key areas for change
Preferred options for key areas
Overview of property aims, objectives and strategies
3.13The first section should address how the Authority’s core objectives, as well as changes
in services, will impact property asset requirements over the relevant time-scales. All
relevant stakeholder requirements should be taken into account, as well as other resource
strategies and their implications for property. It captures all the initiatives underway and
draws out the property implications. It is an authority-wide document that sets the
organisation’s high level objectives for managing property assets and could be considered
part of an authority’s capital strategy. Box 3.3 lists some of the most frequently occurring
objectives found in the case study authorities.
Frequently recurring objectives that relate to land and property include:
• minimising cost in use,
• optimising the utilisation of land and buildings.
• generating capital receipts
• maximising return on investment
• managing properties in the most economic, efficient and effective manner
• ensuring that properties are appropriate for the delivery of the authority’s services and
• other less specific and less measurable objectives identified include:
• improving the quality of investments
• ensuring accessibility to all
• ensuring that users recognise opportunity costs of property
3.14Some key points to remember when identifying aims, objectives and strategies are:
21 Asset Management of Local Authority Land and Buildings – Good Practice Guidelines
• Ensure there is an explicit link to the Best Value Performance Plan.
• Identify property implications of the Council’s core objectives and link property
objectives directly to core objectives wherever possible.
• Keep stakeholder consultation simple, starting with internal stakeholder
• Use corporate, service and other related plans, if available, as a basis.
• Take account of any previous internal or external audits or reviews.
• Challenge why each property and each category of property continues to be held,
via an objective review.
Statement of Current Portfolio
3.15This section should summarise the position of the current property portfolio, in terms of
how the properties perform against requirements. It may summarise property asset
performance in relation to any targets that have been set. It should also summarise progress
made since the previous AMP. It will be in this section that an annual performance review
(the output of a performance measurement system} will feed into the AMP and will be used
to inform the future strategy for the local authority’s property assets.
3.16Some key points to remember when reviewing the current portfolio are:
• Whilst the data for the review will be drawn from a database of individual
properties, keep this review at the strategic level, only referring to individual
properties where necessary.
• Make a start, even if available information is limited and have to be made.
• Over time, move towards a more objective assessment using the performance
review against targets as data becomes available.
• Summarise the position on a category by category basis.
Examples of issues that might be covered in the review are listed in Box 3.4.
Examples of Issues Covered in the Statement of the Current Portfolio
Asset of Local Authority Land and Buildings – Good Practice Guidelines 22
• General description of portfolio by category of property
• Overall condition of the portfolio by category of property and category of condition
• Overview of running cots by category of property including maintenance
• Utilisation in relation to original requirements
• Value of portfolio
• Review of any capital projects completed since the last review focusing on their performance
• Review of performance of each category of property, in relation to existing standards and
• Degree to which service and financial objectives are currently being met by category of
property (sub-divided if necessary)
• Improvements in performance since last review
• Areas requiring improvements before next review
• Appendix listing all properties.
Key Areas for change
3.17This section should look into the future to predict what requirements will be in five to
ten years’ time, taking into account future changes in, for example, service delivery, IT,
working practices, etc. The future should then be compared with the present position.
3.18Some key points to remember when identifying key areas for change are:
• Identify areas of mismatch taking into account corporate priorities, resources and
• Review projects already in the development stage to ensure they remain
• Identify realistic options for each key area, keeping them down to a few in
• Undertake a preliminary assessment of possible options for each key area of
• Record the financial and service justification for selection, using simple but robust
Preferred options for key areas
23 Asset Management of Local Authority Land and Buildings – Good Practice Guidelines
3.19This section identifies options to address the key areas for change and appraises these
options. It will then identify the preferred option or options for each key area that will be
pursued during the current year. It should identify priorities taking into account the
corporate as well as the service perspectives.
3.20Some key points to remember when identifying the preferred options for key areas are:
• Consider authority-wide priorities and what resources are available.
• Establish explicit mechanisms for determining priorities, which take into account
strategic as well as local service objectives.
• Use an explicit approach to evaluate the preferred options and resource
implications, including the “do nothing” option where appropriate.
• Keep a record of each option appraisal.
3.21This section identifies what actions should be undertaken to implement the preferred
options, by whom and by when. It is here that the planned programmes such as the
programme for disposals, property review and planned maintenance programme will feed
into, and from, the asset management plan. It may also identify the critical success factors,
which will be used to assess how well these programmes attain their purpose and these
factors will clearly link to performance measures.
3.22Some key points to remember when setting out the implementation programme:
• Set out activities and allocate responsibilities explicitly for each activity.
• Identify target time-scales explicitly.
• Feed existing programmes, such as planned maintenance programmes, capital
receipts and property review programmes, into this implementation programme.
• Include a systematic programme of property review in the implementation
programme, aimed at asking fundamental questions about the allocation of
resources in line with the Best Value requirement to challenge the authority’s
3.23Box 3.5 below sets out an example of the asset management planning process in action
in Composite Council, constructed from the case studies.
Asset of Local Authority Land and Buildings – Good Practice Guidelines 24
Asset Management Planning in Composite Council
Composite Council was constructed from the case studies as an example of how a good
practice authority might act.
1. Prepare overview of property aims, objectives and strategies
• In September, the corporate property officer (CPO) reviews the Best Value
Performance Plan, corporate plan and council’s core objectives to identify property
implications, setting these down explicitly in a document.
• In December, the CPO meets with each service department to discuss the property
implications of their service plans for the coming year.
• In December CPO discusses the financial context with the Head of Corporate
Finance regarding the commercial portfolio.
• The CPO considers any previous internal or external audits or property reviews, to
identify property implications for the coming year.
• The CPO considers the programme of fundamental reviews and which areas of the
property portfolio should be challenged in the coming year.
• From all of the above, the CPO prepares a statement setting out the property aims,
objectives and strategies identified, by the end of January.
25 Asset Management of Local Authority Land and Buildings – Good Practice Guidelines
2. Prepare statement of current portfolio
• In October/November, the CPO reviews the current portfolio, on a category by
category basis, by investigating readily available property data on properties, value,
use, condition and suitability, etc. from the performance measurement system,
looking at whether targets have been met for the year.
• CPO discusses the current portfolio’s performance with service departments as part
of their meeting in December (see above).
• CPO discusses the current performance of the commercial portfolio with the Head of
Corporate Finance as part of their meeting in December (see above).
• CPO prepares a review of the current portfolio, identifying which areas meet needs,
but in particular identifying areas of concern, or where further investigations should be
3. Identify key areas for change
• Following the series of meetings in December, the CPO identifies the areas of
mismatch between requirements and the current portfolio, bearing in mind corporate
priorities, resources and time-scales.
• The CPO reviews the current projects in the capital programme to ensure that they
remain appropriate to the future needs and in line with current priorities.
• The CPO considers each key area and identifies possible options, undertaking a
SWOT analysis for each on a pro forma and undertaking investment appraisal, where
appropriate. Departments are consulted, where relevant.
• Following this analysis, the CPO identifies one or two realistic options for each key
area and sets them out in a table.
Asset of Local Authority Land and Buildings – Good Practice Guidelines 26
4. Identify preferred options for key areas
• In September, the CPO prepares a framework for prioritising projects, based on the
corporate core objectives identified in 1. above.
• This is passed for approval to the strategic management team (eg. Chief Officers)
and then circulated to all service departments, prior to the meetings in December.
• Following 1., 2. and 3. above, the CPO reviews the options in the light of the
corporate priority framework, scoring each option on a simple pro forma, including the
“do nothing” option. Where appropriate, the options are subjected to investment
• The CPO prepares a schedule of options, which are to be actioned in the coming
• This schedule of options is passed for approval to the strategic management team. in
5. Set out implementation programmes
• The CPO considers the schedule of action, and groups activities into programme
areas in an appropriate manner, identifying and allocating responsibilities and time-
scales for each programme area. This includes all existing programmes including
property review and the disposals program.
• The implementation programmes are passed for final approval, along with all of the
above documents prior to the beginning of the new financial year.
Scale of AMP
3.24An AMP should be fit for purpose. It will be up to each authority, to determine the
precise size, nature and contents of the document based on its unique circumstances. A short,
succinct document for a small district local authority, which has limited property assets,
should be appropriate. A larger county or urban authority with an extensive and valuable
portfolio is likely to require a more extensive document.
3.25Short, medium and long time frames. The AMP should define the period that it covers.
While the AMP will be related to other corporate plans of the authority, the long lead times
and gestation period for property projects and the “permanent” nature of property assets may
necessitate that the AMP takes a longer view than other plans. This will require taking
account of long-term trends and making assumptions about service delivery, property use,
27 Asset Management of Local Authority Land and Buildings – Good Practice Guidelines
costs, values and other property related issues in the future. While the period covered by the
AMP is not prescribed, it is suggested that the statement of aims and objectives should give
the direction for the asset base in the long term (say, 5-10 years ahead), as well as
considering service requirements in the short (1 year) and medium (2-5 years) period. The
sections on key areas for action and preferred options for key areas should set out short,
medium and long-term issues. Implementation programmes are more focussed on the short
term - what steps should be taken this year.
RESPONSIBILITIES FOR DEVELOPING AN AMP
3.26The combined responsibility of service departments and the corporate centre. Section 2
has already covered this issue but nonetheless it is worth repeating here. As the Audit
Commission (1998) stated ‘Good property management is not an end in itself. It must
clearly respond to the policies and objectives of the service areas. These in turn, will relate
to the policies of the council as a whole.’ This can only be achieved by an integrated
approach. Therefore, effective asset management is a process which will be a combination of
both a “bottom-up” and “top down” approach, with service departments driving forward their
requirements and the corporate centre setting the overall direction and framework, and
pulling together all the elements. This integrated approach should also apply to the provision
of property services (for example, estates, maintenance and building surveying, architecture,
mechanical and electrical engineering).
3.27Establish a corporate role. Several case study authorities in this research project
suggested that a ‘bottom-up’ approach (generated by individual departments/committees) to
preparing an authority-wide asset management plan would be the most practicable. Whilst
there is recognition that service departments have an important role to play in asset
management planning, the involvement of the strategic management team and members is
essential in order to provide a steer on strategic direction and authority-wide objectives and
initiatives. Three ‘good practice’ examples of approaches to departmental asset planning are
set out in Box 3.6 below.
Asset of Local Authority Land and Buildings – Good Practice Guidelines 28
Approaches to Departmental Asset Planning
• Burnley Metropolitan Borough Council allocates responsibility for producing service
property plans to the central property team. The property plans are prepared after
extensive consultation with service departments. This provides an integrated approach
between individual departments and the corporate centre.
• In Oxford City Council and Hertfordshire County Council, a framework for preparing
property strategies is set out centrally for individual service committees to follow when
preparing their property action plans/property strategies. This enables a co-ordinated
approach that should then be collated into an authority-wide asset plan.
• One option being considered by Wirral Metropolitan Borough Council is for significant
property consequences of changes to service delivery to be explicitly set out in the
Service Plans prepared by service departments. These should then be collated into an
authority-wide asset plan.
3.28Allocate roles and responsibilities clearly and explicitly. Since strategic asset
management in local government is not yet well developed, local authorities should be
encouraged to put in place appropriate management arrangements to ensure roles and
responsibilities for corporate and service based asset management, and in particular asset
management planning, are clear and explicit. The structure of an authority has a significant
influence on its approach to asset management. Strong departmentalism has been highlighted
as one of the main barriers to achieving co-ordination. Asset management is a ‘cross-cutting’
issue and the most effective asset management occurs when asset management
responsibilities explicitly rest with a separate strategic property unit reporting to a specific
committee with corporate-wide terms of reference. The draft bill - “Local Leadership, Local
Choice” would have implications in terms of the appropriate decision-makers, perhaps
resulting in scrutiny committees with an executive making the decisions. Implementation of
3.29Make it happen. As identified in Figure 1.2, once a plan has been developed this must
be implemented as part of the asset management process. Key aspects to consider include:
• explicitly allocating responsibility for implementation programmes
• establishing project teams
• good project management
• good resource allocation
29 Asset Management of Local Authority Land and Buildings – Good Practice Guidelines
• project monitoring
• start and finish dates.
AUDIT AND REVIEW OF AMP
3.30Set a framework for change. An AMP is only a statement of intention, setting out the
current position and plans for the future based on the position at a specific point in time. It is
recognised that circumstances are constantly changing. There will be a need to respond to
increasingly rapid changing circumstances, a need for continuous improvement under the
Best Value regime and a need to develop the content of the AMP over time. Changes to the
Plan should be documented and communicated to the relevant stakeholders. Systems will
need to be developed to ensure that these changes are documented and shared.
3.31Undertake an annual formal review of the AMP. Whilst there will be on-going
amendments to the plan, there should be a formal review of the AMP on a yearly basis. This
does not necessarily require a complete redrafting of the plan, but should be a reconsideration
of all the issues. In particular, new implementation programmes will need to be set out,
bearing in mind the progress made in the year and changes in direction and requirements.
3.32Time the annual review in line with other business planning timetables. The timing of
the annual AMP review should feed into the annual business planning process. Indeed it
should not be considered a separate activity but an integral part of the overall strategic
planning of the authority.
3.33Develop a monitoring process. A monitoring process is required to ensure that the plan
is implemented and to enable problems to be anticipated rather than correcting them after
they occur. This monitoring process should be explicitly described and responsibilities
allocated, along with the timing of any reviews. A review of progress against the
implementation programme should be undertaken at least every three months.
3.34Produce an annual report on performance. A review of performance against the
implementation programme should be undertaken at the year-end. This should be included
as part of the position statement in the following year’s asset management plan.