Estate Management (follow-up) (P.A.C.3/2021): Executive Response (P.A.C.3/2021 RES.) – comments

STATES OF JERSEY

ESTATE MANAGEMENT (FOLLOW-UP) (P.A.C.3/2021):  EXECUTIVE  RESPONSE (P.A.C.3/2021 RES.) – COMMENTS

Presented to the States on 16th December 2021 by the Public Accounts Committee

STATES GREFFE

2021  P.A.C.3 Res. Com.

FOREWORD

In accordance with paragraphs 64-66 of P.56/2018, the Code of Practice for engagement between Scrutiny Panels and the Public Accounts Committee' and the Executive' (February  2018),  the  Public  Accounts  Committee  presents  its  comments  on  the Executive  Response to  its  Report:  Follow  Up  Review  of  Estate  Management (P.A.C.3/2021).

Comments

1. A substantial part of the Public Accounts Committee's (PAC) role, as set out in the Standing Orders of the States of Jersey, is to investigate the efficiency and effectiveness achieved in the use of resources by States bodies, and/or the adequacy of the corporate governance arrangements within them. The PAC assesses whether public funds have been applied for the purpose intended by the States, and whether extravagance and waste are being eradicated and sound financial practices applied throughout the States departments.

Executive Responses

2. To aid its function as described in the preceding paragraph, the Committee requests a formal Executive Response to all C&AG and PAC Reports, within six  weeks  of  their  presentation  to  the  States  Assembly  and  subsequent publication. The Executive Responses are requested of the Chief Executive Officer and the Treasurer of the States and usually include input from the Director General and/or Accountable or Senior Officers of the relevant States' body (in this case, a States Owned Entity and Government Departments). An Executive Response should include information on which recommendations of the report have been accepted, which have been rejected (and why), together with  an  action  plan  and  target  dates  for  a  named  responsible  officer  to implement the agreed recommendations. The PAC then presents the formal Executive Response to the States Assembly, with or without its own comments. It  will  usually  only  follow  up  with  comments  when  it  requires  further clarification on the Executive Response and/or is seeking further evidence.

Purpose of PAC's Comments

3. The PAC received the Executive Response to its Estate Management report on time; however, it is disappointed to note that of its 28 recommendations, seven are only partly accepted' and four are rejected' outright. Furthermore, none of the accepted' or partly accepted' or partially accepted' recommendations has been assigned to a named responsible officer. Given that a central theme running through the PAC's report and giving rise to several recommendations, was that there was a lack of clarity around key roles and responsibilities with no  recognisable  driver'  to  progress  Estate  matters,  the  Committee  is particularly disappointed at this oversight by the Government.
4. The Committee also considers that some recommendations which have been accepted  either  in  part  or  in  full  warrant  further  explanation  as  to  their implementation and/or dates for completion than provided by the Executive Response. The PAC seeks clarification from the Government on whether there is a distinction between the terms partially accepted' and partly accepted' as

stated in the Executive Response. Further, it is seeking clarification on why the rejected'  recommendations  are  not  accepted,  and  what  alternative arrangements for improving Estate Management are to be put in their place.

Regeneration Steering Group

Further Action Required: The PAC is not satisfied with the brevity and lack of detail in the response and seeks further details including a list of the Members and key stakeholders interviewed, together with summaries of their evidence, the key findings, common themes identified and recommendations. It also seeks assurance that  the  review  of  the  Regeneration  Steering  Group  included  discussions  on updating the legislation underpinning its current remit. Further, the Committee seeks to view the action plans which accompany the proposed implementation of those recommendations, by 14 January 2022.

Further  Action  Required:  The  PAC  considers  that  the  response  to  the recommendation is appropriate. It requests to be provided with the action plans and

other  evidence  as  previously  stipulated  under  Further  Action  Required'  to Recommendation 1, by 14 January 2022.

Further Action Required: The Committee considers that the response to the recommendation  is  appropriate.  It  expects  to  see  detailed  evidence  of  the recommendations action plan timetable' including named assigned senior officers, realistic deadlines and the project management process and methodology (including identification of, and mitigation plans for, risk factors), by 14 January 2022. This is to ensure that the Committee can be satisfied that there will be minimum delay to the proposed delivery date of March 2022.

Corporate Asset Management Board (CAMB)

Further Action Required: The PAC notes the response states that the Corporate Asset Management Board has a limited' role with respect to States Owned Arms- Length Bodies (ALBs). The PAC heard evidence during its review that there are no ALB  representatives  on  the  Corporate  Asset  Management  Board.  The  PAC considers this to demonstrate a lack of corporate parenting' or joined up thinking in the Government's approach to Estate Management. The Committee reminds the Government that, ultimately, all States-owned properties are owned and managed by the States and ALBs should adhere to Common Strategic Priorities and maximise benefit to Islanders.

The PAC urges the Government to review its Memoranda of Understandings ((MoU) and Schemes of Delegation with ALBs to engage them more effectively in the overall Estate Strategy implementation. A Memorandum of Understanding agreement (or equivalent) between the States and the ALBs, if not already in place, should be developed to clarify the agreed use of land and property, plus current and anticipated needs of the users, while recognising the States' ownership and ultimate authority over all such assets.

With better engagement with such bodies, the PAC is convinced that ALBs would be reminded of the overall responsibility of the Corporate Asset Management Board as defined in the Estate Management Strategy. The States, through CAMB, has the ability to reallocate use of these properties/land, if and when required. This would allow Recommendation 4 to be fulfilled as per its intention, that is, to co-ordinate, prioritise, allocate and develop property needs'.

A  further  response  from  the  Government  on  this  recommendation  is  sought, demonstrating a clear delegation of authority', making clear the financial level and change-of-use level that would be delegated to ALBs and setting out when such bodies would need to seek approval from CAMB for higher-level changes.

Further Action Required: The PAC fully accepts that under Standing Order 168, which  relates  to  Land  Transactions  on  behalf  of  the  Public  of  Jersey,  the recommendations of the Corporate Asset Management Board are reviewed and ultimately decided upon by the States Assembly. However, this does not negate the need  for  a  comprehensive  joined  up  rationale  underpinning  each  of  its recommendations, having ascertained competing needs.

In order for the PAC to see evidence of the delivery of co-ordinated and agreed recommendations',  it  requests  2  specific  examples:  the  reports  and  associated papers, plus minutes of any meetings, including those to RSG, leading up to and including the decisions on the use of Piquet House and St Saviour's Hospital. This would help the PAC understand better the process for such recommendations, taking into account the rationale and competing needs' assessments of both properties. It would help to assure the Committee that, contrary to evidence it received, CAMB

delivers centrally leadership and co-ordination on the disposal and acquisition of assets. The PAC would like to receive this additional evidence by 14 January 2022.

Further Action Required: The Committee is concerned that the response does not address the recommendation in full. It considers that requesting and ensuring that asset management plans be developed as per specific guidelines, not just their delivery, needs to be initiated by the Corporate Asset Management Board. The PAC will monitor closely the progress of developing all asset management plans and looks  forward  to  seeing  how  its  recommendation  is  progressed  through  the Government's Recommendations Tracker.

Further Action Required: The Committee considers that the response to the recommendation is appropriate and asks to view the Terms of Reference for CAMB (or its replacement) in advance of their submission to the States Assembly.

Further Action Required: The Committee welcomes the proposal to establish and publish a report as described in the Executive Response. However, given the strategic and financial importance of the Estate, it considers this should be every six

months to identify areas of risk and as such, would provide a timely and accurate appraisal of the State of the Estate.' The PAC considers that any such report should also include the performance of the Corporate Asset Management Board itself, against key performance indicators and PAC/C&AG Recommendations Tracker updates.

Further  Action  Required:  The  PAC  commends  the  response  to  its recommendation; however it seeks clarity and further evidence on how this will be delivered  within  the  stated  timeframe  of  Q1  2022,  and  requests  immediate notification of any delay to the proposed timetable.

The PAC looks forward to seeing evidence that each specific acquisition or disposal of property is in accord with an established delegation of authority' guideline and is documented and reported in detail. This should include the key decision-making criteria, alternatives considered and competing needs assessed. Evidencing such methodology will promote public confidence in those entrusted to manage the States Estate. The PAC also seeks assurance and evidence of a plan for when there are other land or property uses/requirements identified that require more immediate action to meet Island needs.

Further Action Required: The PAC accepts the response to the recommendation, including the appropriateness of the Asset Management Plan timeframe to align with the 4-year Government Plan cycle.

Further Action Required: The PAC is unclear as to why this recommendation has been deemed only partially accepted' when the body of the response sets out agreement and proposed action to fulfil the recommendation. Furthermore, the Committee seeks clarity on why there is a need to review the governance structure when it has already undergone a review. Whilst supporting the proposed plan, the PAC seeks an explanation or rationale for not incorporating its Recommendation 11 into the findings and ultimate proposal to the States.

Further  Action  required:  The  PAC  welcomes  the  acceptance  of  its recommendation; however, it requests the Government to accept recommendations 4, 5, 6, 7, and 8 in full and ensure that the Corporate Asset Management Board commits to overall responsibility for ensuring that asset management plans and specific target completion dates are presented to the States (and shared with PAC). The PAC recognises that such plans can change over time, under the guidance of CAMB,  but  delivering  asset  management  plans  and  delegation  of  authority guidelines regarding States owned properties will demonstrate a commitment to improving the overall management of these assets.

Stakeholder Engagement

Further  Action  Required:  The  Committee  is  concerned  at  this  only  partial acceptance of the recommendation. The recommendation was borne from a need to progress engagement with stakeholders, including a named responsible officer taking ownership of the collation of comprehensive property needs' assessments from all departments. The response states that it is not within the remit of the Director General of Infrastructure Housing and Environment (IHE) to determine the (property) needs of other departments.'

This recommendation to DG of IHE was in his corporate capacity as the Chair of the Corporate Asset Management Board which is supposed to be responsible for the delivery of asset management plans, as clearly set out in the CAMB terms of reference.  The  PAC  is  not  recommending  that  the  DG  IHE  determine, independently, departmental property needs, it is recommending that CAMB be the driver in requesting and collating those needs.

One of the many problems with current Estate Management is that there is no co- ordinated, consistent, or timely approach to establishing competing property needs so  that  prioritisation  of  those needs  could  subsequently  be  assessed.  There  is currently an ad hoc process on first come first served' basis which is supposed to be initiated by the department without prompting by any central body. This process is not understood or followed by all departments as evidenced at length in the PAC's report. The PAC asks if it is not for CAMB (and therefore the Chair of CAMB) to be the driver in instigating the centralised collation and co-ordination of asset management, then who should have that responsibility?

The Committee requests the Chief Executive Officer to reiterate the corporate OneGov nature of roles such as Chair of the Corporate Asset Management Board, with the inherently wider perspective than that of a Director General, including the needs of the Island as a whole. Regular CAMB meetings should be minuted with actions  and  timetables  so  that  deadlines  can  be  achieved.  The  PAC  strongly encourages  the  Government  to  accept  the  PAC  recommendations  including establishing  clear  overall  responsibility  for  Government  owned  estates  and properties. Once agreed, CAMB can and should take the initiative to request and ensure completion of acceptable asset management plans including collecting and understanding all property needs (as per size and strategic importance levels defined in the delegation of authority guidelines).

States of Jersey Development Company (SOJDC)

Further Action Required: The PAC seeks clarity on the exact role that the Arms- Length Body Oversight Board has in respect of receiving the forthcoming SOJDC- commissioned report. Furthermore, it notes that the report, which was due to be completed by October 2021, has not been sent to the PAC, despite repeated requests. The Director General, IHE, in response to prompting for an update on the status of the report, advised by email on 13 December 2021, that, "I assume we will received [sic] by end of 2021. Then we need to digest and report to the necessary groups we have,  including  RSG  (Regeneration  Steering  Group)  and  COM  (Council  of Ministers), then release to PAC. So, I would work on a date of end of January/early February (2022)."

The PAC requests the Chief Executive Officer to explain the delay of this report, given that he stated to the Committee in his letter, dated 30th August 2021 that the SOJDC - commissioned review, looking into the relationship between it and Jersey Property Holdings, could potentially shape the future operations of SOJDC').

Further Action Required: The PAC notes that the stated commencement date of Q1 2022 is highly unlikely, given that the SOJDC-commissioned report will not be available  until  January/February  2022  as  advised  by  the  Director  General  of Infrastructure, Housing Environment on 13 December 2021 and recorded under Further Action Required' to R14. However, it welcomes the acceptance of its recommendation  to  undertake  a  review  in  Q1  2022  and  requests  a  specific completion date. It also requests to be formally notified of any slippage in the implementation timetable for this, or any other, recommendation.

States Owned Entities (SOEs)

Further  Action  Required:  The  PAC  is  concerned  by  the  rejection  of  its recommendation and the explanation in the response to it. The Committee seeks to understand who in Government should be taking a role to work effectively with States owned entities on the implementation of the Estates Strategy, if not the Arms- Length Body Oversight Board (or CAMB).

The response seems especially incongruent with the response to Recommendation 14, which states that the ALBOB will provide a level of oversight to ensure that no bias exists in an SOJDC-commissioned report which will set out its relationship to Jersey Property Holdings. Again, the Committee requests the Chief Executive Officer to clarify roles, responsibilities and drivers' to progress the Estates Strategy and take ownership of such progress.

Further Action Required: The PAC is disappointed to note the rejection of its recommendation  and  reiterates  its  comments  on  this  response  as  per Recommendation 16.

Further  Action  Required:  The  PAC  reiterates  its  comments  as  per  previous recommendations and responses. It will monitor progress via the Recommendations Tracker and will seek regular updates from the outgoing interim Chief Executive Officer and the incoming Chief Executive Officer whose tenure is due to commence by the end of Q1 2022.

Target Operating Model

Further Action Required: The PAC seeks assurance that the urgency for clarity of roles  and  responsibilities  within  the  division  of  JPH  is  recognised.  The  PAC considers it should demonstrate delivery of its core objectives before embarking on a transfer of elements of the portfolio currently outside of its remit. The Committee is also mindful that the current Estate Strategy still does not have an implementation plan underpinning it to ensure its successful delivery, more than a year after the Strategy itself was drafted. Furthermore, the PAC is concerned at the timescale given in the response to this recommendation (2023) which appears to indicate a lack of urgency or importance that the Government places on resolving the issues.

The PAC requests the Chief Executive Officer to address its concerns as a matter of urgency as it considers clarification of the roles and responsibilities of Jersey Property Holdings to be central to any delivery of a comprehensive Estate Strategy.

Further Action Required: The Committee considers that the level of vacancies (over a quarter of its workforce for IHE and a third for JPH) puts at risk the delivery of  the  Estate  Strategy.  Therefore  the  level  of  resources  being  directed  to

implementing it must require review. The Committee is pleased to note that the assessment  of  the  human  and  financial  resources  needed  to  deliver  the implementation of the Estate Strategy has been completed and requests to view the implementation plan along with the identified staffing needs (both in place and additionally required) and associated financial resources.

Further  Action  Required:  The  PAC  is  pleased  to  note  the  response  to  its recommendation and suggests that the indices not included in the 2022 report be noted in the report with clarification that they will be added in 2023. This will provide a more complete picture of how performance will be tracked in the future.

Further  Action  Required:  The  PAC  welcomes  the  response  to  this recommendation and is pleased to note that initiatives are being taken to fill vacancies in IHE/JPH. The Committee requests an update by Q2 2022 to satisfy itself of the effectiveness of the proposed initiatives.

Property Maintenance

Further Action Required: The PAC requests to view a list of all States owned properties that will have maintenance managed centrally and those which will still remain outside central control by year-end 2022. It also seeks details of the plans to capture  any  maintenance  efficiencies  for  remaining  properties  outside  central control by end of 2022 and/or plans to incorporate them after 2022.

Concerto

Further Action Required: The PAC is greatly concerned at the rejection of this recommendation as it appears to demonstrate that the IHE department is not willing to undertake  an important lessons-learned' exercise. It is not clear how the assertion that Concerto had been implemented successfully can be made in the absence of a post implementation review. The Committee received some evidence that the implementation had not been entirely successful, demonstrated by, amongst other things, the inability to access basic management information on the state of the Estate and properties within it.

The Committee considers that to embark on a costly IT project without learning lessons from the previous project, is short-sighted and not in keeping with providing best value for taxpayers' money. Given the expenditure and work done to date, the PAC requests the Chief Executive to undertake at least a high-level assessment of key learnings so that the findings can be used to improve the new system.

The PAC also requests full disclosure on the cost of Concerto system, the cost of the new system, and the cost to move the data over to the new system.

Further Action Required: The PAC is supportive of the plans outlined in the response to this recommendation. It requests that specific performance measures be established and tracked to ensure objectives are being met. Given the importance of this initiative, these performance measures and tracking of performance should be included in relevant Government reports, including Annual Reports.

Disability Legislation

Further  Action  Required:  The  PAC  acknowledges  progress  in  this  area  but requests a specific date when appropriate compliance of all States-owned facilities will be in place and a mechanism established to ensure these properties remain in compliance. Even though the response indicates the recommendation is complete and ongoing', the PAC expects to see it added to the Recommendations Tracker so that progress can be monitored closely.

Further Action Required: The PAC welcomes acceptance of the recommendation. It requests a specific date when appropriate compliance of all States owned facilities will be in place and a mechanism established to ensure these properties attain and remain in compliance. Even though the response indicates the recommendation is complete and ongoing', the PAC expects to see it added to the Recommendations Tracker so that progress can be monitored closely.

General  

Further Action Required: The PAC welcomes acceptance of this recommendation and would like to view further details of the Government's reconciliation of available resources against the demands of the Estate' including specific details of standardised industry recognised tools and processes, effective economy of scale, and close communications with service users' to better understand progress. Even though the response indicates the recommendation is complete and ongoing', the PAC expects to see it added to the Recommendations Tracker so that progress can be monitored closely.

Conclusion

5. In summary, the PAC will seek further evidence to ensure that the accepted recommendations are implemented and that improved practices are embedded. It also expects to see evidence that all of its (accepted, partly or partially,

accepted) recommendations have been added to the Recommendations Tracker so that their progress towards implementation can be tracked closely. It requests immediate notification of any delay to the Government's proposed timetables and deadlines, including explanations of the factors causing the delay. To this end, it has written a letter raising all the points above requesting further clarification and/or evidence by 14 January 2022, unless otherwise indicated in the comments above.  

6. Given that this is the current PAC's last few months in operation before new members are appointed after the election, it will include a detailed roadmap' in its Legacy Report, to ensure that this essential work of Infrastructure, Housing and Environment and Jersey Property Holdings is scrutinised rigorously.