Comments - Estate Management - 23 December 2020

STATES OF JERSEY

REVIEW OF ESTATE MANAGEMENT (P.A.C.1/2019): COMMENTS

Presented to the States on 23rd December 2020 by the Public Accounts Committee

STATES GREFFE

2019  P.A.C.1 Com.

COMMENTS

Background

Following recent changes to its membership, these comments serve as an update on the work  of  the  Public  Accounts  Committee  (PAC)  in  respect  of  the  Government's management of the public land and property portfolio.

PAC's Estate Management Follow-Up Review' was launched on 15th June 2020 to assess the progress on overall arrangements of the Government's strategic property function since its restructure under the OneGov arrangements, with funding having been approved in the Government Plan. The previous PAC had undertaken work in this area and presented a report on Estate Management in February 2019, with the Executive Response published in April 2019. This followed on from the former C&AG's Report on Operational Land and Buildings in June 2018, and a PAC Comments Paper on this issue on 27 February 2020 detailing its work to date.

At the time of the former PAC Chair Senator Sarah Ferguson stepping down from the PAC on 20th October 2020, the Estate Management Follow-Up Review had reached a critical stage, having concluded the evidence gathering. This included submissions from various organisations, including schools and Andium Homes, and held public hearings with the  Chief  Executive  and  Acting  Director  General  for  Growth,  Housing  and Environment (now Infrastructure, Housing and Environment) on this subject.

The newly formed Public Accounts Committee, chaired by Deputy Inna Gardiner , subsequently considered the comprehensive summary of work to date contained in the PAC's handover Legacy Report.

Key Issues

After initial consideration of this topic, the committee has established a number of key matters that, amongst others, it will explore in the next phase of its work. These are as follows:

• There remains a lack of clarity around the success and implementation of the Infrastructure,  Housing  and  Environment  (former  Growth,  Housing  and Infrastructure) Department's Target Operating Model (TOM). PAC will hold the Chief Executive (permanent or interim post-holder) to account for ensuring that the Infrastructure, Housing and Environment (IHE) Department TOM is finalised  and  implemented  in  2021.  Furthermore,  that  the  Department  is working to create a clear and organised set of priorities within the TOM that align with the aims and values set out in the approved Estate Management Strategy.

• The completion and implementation of a comprehensive Estate Management Strategy, and the accompanying Corporate Asset Management Plan (i.e. the operational level implementation plan of the strategy), is a matter of utmost urgency and essential for Post Covid recovery.

• The work of the Corporate Asset Management Board has been compromised because the Estate Management Strategy has not yet been formally approved.

It has therefore not been able to fully embark on the role of coordinating, prioritising,  allocating  and  developing  the  property  needs  of  the  various elements of the Government and States of Jersey consistent with the approved Estate Management Strategy. This will be a priority for the PAC to examine in 2021.

• Insufficient  progress  has  been  made  regarding  the  implementation  of recommendations  made  by  the  C&AG  regarding  the  States  of  Jersey Development  Company  (SoJDC).  There  is  uncertainty  created  about  the appropriateness of the roles requested of and carried out by SoJDC in respect of the public estate.

• The PAC is concerned that the current underinvestment and lack of joined-up approach to property maintenance will only increase the States' liability and potential risks to the public.

• The asset management system, Concerto, is not utilised to its full potential to maximise its benefit. The PAC will urge the IHE and property division to ensure that the potential for the asset management system (Concerto) is fully utilised, to ensure maximise the value for money and aid a co-ordinated approach to property management and maintenance.

• While assessments have been made to date, further action is required to ensure States-owned properties comply with disability legislation, and the PAC is looking forward to receiving comprehensive action plans that will bring this into effect.

• The Estate Management Strategy should incorporate sustainable wellbeing as well as monetary value in order to be consistent with the Public Finances Law. The PAC will be looking for the Estate Management Strategy to evidence prioritisation of properties and land based on their value to the community as well as potential financial value.

• At the time of the final drafting of these comments we are aware that a draft Estate Management Strategy has been presented to the Council of Ministers on 9th December 2020. This draft strategy requires appropriate and thorough review by this committee.

Impact of COVID-19

The Covid-19 pandemic has had a significant impact on progress in some areas of property and asset management. Nevertheless, the PAC considers it to be important that a follow-up review should seek to ascertain what work has been done to produce a comprehensive  property  strategy  linked  to  corporate  objectives,  maintaining deteriorating buildings and considering sales of non-necessary buildings/land in line with the Common Strategic Policy and Government Plan. This will be of critical importance to post-pandemic financial policy, to make sure we are making the most of our vast portfolio of property assets for the benefit of the public, be that through disposals and/or to underpin borrowing.

Next Steps

The PAC remains committed, as a matter of urgency, to this Review and to holding Government  officials  to  account  for  the  delivery  of  a  comprehensive  Estate Management Strategy.

The Committee has requested a briefing from senior officers in early January 2021 on the Strategy presented to the Council of Ministers on 9th December 2020. This will be the start of the next phase of what will be a thorough, publicly involved Review with a number of public hearings and published written submissions gathered through targeted requests  for  information  and  answers  to  questions.  The  PAC  will  question  all departments on their views of land and property management in their department and will press for a joined-up approach to property maintenance.

The Committee will also seek further evidence and information from relevant senior public sector officials, public land and building users, States owned entities and arm's length organisations.

We expect to present a final comprehensive report by Quarter 3 of 2021, with updates on progress provided in between.

Appendix 1: Key Dates During the Development of the Estate Management Strategy

Appendix 2 – Terms of Reference for PAC's Estate Management Follow-Up Review'

1. To assess the progress on establishing a Corporate Asset Management Group by the Government as recommended by the Comptroller and Auditor General's (C&AG) Report on Operational Land and Buildings in June 2018, and the subsequent PAC report on Estate Management in February 2019.
2. To assess the progress on overall arrangements of the Government's strategic property function since it has been restructured under the OneGov arrangements and has funding approved in the Government Plan.
3. To assess the progress on developing a comprehensive property strategy linked to corporate objectives, maintain deteriorating buildings and considering sales of non- necessary buildings/land in line with the Common Strategic Policy and Government Plan).
4. To assess the progress on developing a comprehensive asset management system for all States property assets.
5. To assess the progress on consulting and engaging with stakeholders including plans to develop a robust process for consultation with community and stakeholder groups as part of all property proposals (in line with the recommendations of the PAC in its report of Estate Management in February 2019).