Re-Naming and Transfer of Functions - Corporate Services - Research - 4 December 2015

Government of Jersey

Transfer of Property Holdings to Infrastructure

Introductions / overview of review team

• Matthew Symes

• Civil Engineer, career in consultancy advising clients on property management and organisation solutions, plus business transformations
• e.g. Royal Mail organisation, Direct Line Group, Olympics mobilisation, HS2 delivery strategy, Irish Government OPW capability and capacity review

• Ben Burke-Davies

• Senior Government official plus private sector experience
• MoD, then head of Strategy in Government Property Unit involving re- structuring of portfolios and adopting different property / asset management approaches.

Our understanding of the context

Jersey's benefits sought

• Strategic view of the whole asset management solution

• All related resources in one place

• Cost efficiencies / savings from administration of Jersey's property and infrastructure assets

• Release value through office consolidation

• Value creation through development / planning gain (over and above SJDC)

• New workplaces become enablers for change

• breaking down barriers and promoting agility and flexibility
• potentially as part of the public sector reform programme

INTERNATIONAL COMPARISONS

(TRANSLATION – THERE IS NO "RIGHT" ANSWER)

Two broad models evident in governments

The "devolved" model The "centralised" model Benchmarking, standards RLaensodulorrcde /adcciroeucntitvaebirloitlye

Centre

Resource accountability Tenant / occupier role "owner occupiers"

Departments

Reporting lines – again two broad themes

A or B

Ministerial  Treasury Ministerial accountability accountability accountability

Property & Property Infrastructure infrastructure

Status

• No business case for this change(!) not even retro-fitted (!!)

• No consideration of options
• Unusually relaxed governance for such a major change

• A "stealth" transition is already underway

• Not a plan as such

• Low-level / negligible transformation

• Missing a trick in terms of benefits

Potential benefits

Benefits & status

• Synergies, by aligning two project-centric groups

• Pooling scarce "white collars" – more resilient
• Some projects interact – better coordination / comms L
• Good sense in merging maintenance communities

• Whole life asset view / strategic asset management M

• Regeneration / value release potential M

• Catalyst for public sector reform programme H

Potential dis-benefits from the transfer

• Remoteness from Treasury  Impact

• Weaker link between £ and strategic planning L
• Weaker link between £ and business case sponsorship

• Loss of independent stance / position

M

• Custodian of the "people's assets"

Potential dis-benefits from stopping the transfer

Impact

• Demotivating, not to follow-through at this stage H

• Lose the synergies mentioned above M

Observations on transition

• Merging two units in "Business as Usual" mode

• Opportunity to re-structure not being taken

• Missing the opportunity to re-shape particularly JPH role & authority

• More directive, less facilitative / service provider culture
• Role as landlord and reform catalyst
• Stronger remit for value release

Vision & plan Transfer X TransfVeirsion & plan

CONCLUSIONS

Conclusions

• No right answer – different governments have different approaches

• Some have thought about and rejected Jersey's approach
• Others have evolved into different solutions
• Several have an integrated asset management approach

• For Jersey, there are some advantages in the transfer (but the disadvantages need thinking about and managing)

• BUT - not managed as a transformation and the benefits may be missed

• Org structures; Remits / authorities; Transition plan
• 1+1=2 in this case, the way things are going

Recommendations

• Although it's a "done deal", Officials should present a business case for change

• Do nothing option
• Hybrid – e.g. Transfer FM / maintenance to TTS; JPH reports to Treasury
• Full transfer as stated

• Define the new end state

• Organisational model, roles, competencies, responsibilities
• Authorities (e.g. JPH in strong landlord role?)

• Develop a clear, purposeful transition approach

• With momentum
• Driven by benefits, and officials should track and manage benefits realisation

ANNEX

INTERNATIONAL COMPARATORS

Australia

• Constitutional monarchy, with a federal division of powers. There are 18 ministries and 20 ministers in cabinet, headed by the Prime Minister, Tony Abbott.

• Property is currently a mixed model, The Property and Construction Division and sits under the Department of Finance.

• It sets guidance for all government buildings and manages its own estate and within a property policy framework.

• Employs 140 staff, 30% of which are professionally qualified.

• Property portfolio of 2.9 million m2, 526 buildings.

Bermuda

• British Overseas Territory, with a 10-strong cabinet, overseen by the premier, Michael Dunkley.

• The Property function, Department of Public Lands and Building is centralised, and sits under the Ministry of Public Works.

• Services include the management of property, commercial and residential leases, and managing maintenance and repair

• Responsible for 1,500 acres of land, including several hundred buildings with an asset value of £1.5bn.

• Department includes Architects, Surveyors and FM professionals.

Cayman Islands

• British Overseas Territory with an 8-strong cabinet headed by the premier, Alden McLaughlin.

• The property function, the Department of Public Works, is centralised and sits under the Ministry of Planning and Infrastructure.

• Services include project management, construction, architecture, surveying, repair and maintenance

• Department is split into four: Finance & Admin, Operations & Works, Development & Planning and HR.

• Services are provided mainly in-house using professional staff on the basis that PW will be reimbursed as aggregated on time and project costing systems.

Guernsey

• Possession of the British Crown, with 10 Government Departments, headed by the Chief Minister, Jonathan Le Tocq.

• Property sits under the Treasury, as the States Property Services.

• Services include property and construction advice, promote good practice, property management and best practice.

• Recently criticised for combining services into one centralised building and selling off others to raise £18m.

Ireland

• Integrated property function (Office of Public Works, OPW) has its own Minister, reporting to Treasury function (called DPER)

• OPW has strong landlord role for most government-owned assets, taking a directive stance about occupancy

• OPW is "one stop shop" for asset management planning, setting standards and policies, for project management and maintenance.

• Scope includes direct responsibility for offices, blue light stations, flood defences and heritage assets and design / PM support on demand for operational assets such as schools, hospitals etc.

• Scope also includes benchmarking of central and local gov assets

• 1.4 million m2 of assets, managed by 480 professional staff

Isle of Man

• Self-governing British Crown Dependency with an 8-strong executive government - the Council of Ministers, led by Chief Minister, Alan Bell.

• The Property function, Estates Shared Services, sits under the Department of Infrastructure.

• NB – Treasury retains direct management of Strategic Asset Planning

• Responsible for managing over £1bn worth of assets.

• Main purpose is to manage, maintain and develop all government property.

• Currently undertaking a cost saving programme by reducing buildings, aim for £3.9m savings in 15-16.

Monaco

• Second smallest country in the world, sovereign city state headed up by the monarchy, Prince Albert II and his minister of State, Michel Roger who preside over a five member Council of Government.

• Property is centralised and comes under the Ministry of Environment, Urbanism and Infrastructure.

• The planning and delivery functions are split into two – Service des Travaux Publics and Service de Maintenance des Batiments Publics.

• Planning is in control of 90% of the infrastructure budget and is the main contact point for all architects and engineers

• Delivery is in charge of the day to day running of the estate, which is about 960,000 m2 of space.

Netherlands

• Parliamentary democracy, with the monarchy as head of state. Executive power lies with the Council of Ministers, 13-16 man strong, headed by the Prime Minister Mark Rutte.

• The property function, the Central Government Real Estate Agency, sits under the Ministry of the Interior. Recently formed body in 2014 out of a merger of four property agencies.

• Its role includes managing and maintaining the portfolio, strategy and policy, construction, development and remodelling.

• 1,760 staff, 80% professionally qualified, 13.3 million sq./m.

New Zealand

• Parliamentary democracy, with a 20-strong cabinet headed by the prime minister, John Key.

• Property sits under the Ministry for Social Development, and is devolved – Property Management Centre of Expertise.

• It's main role is to lead and assist agencies in the effective management of the estate and is split into three functions: Projects, Strategy and Research, Operations.

• Government has been recently mandated to go from 20.5 sq./m per person to 12-16 sq./m.

• The estate occupies 1.66 million sq./m of office space for 62 government agencies, providing space for 62,000 FTE.