Agenda item

The Scrutiny & Overview Committee is presented with the Annual Asset Disposal Plan 2023/24 report due to be considered by the Mayor at the Cabinet meeting on 24 May 2023.

The Committee is asked to: -

1.     Review the information provided in the attached report, and

2.     Consider whether there are any recommendations to bring to the attention of the Mayor.

The Committee considered a report that provided the Annual Asset Disposal Plan 2023/24 report due to be considered by the Mayor at the Cabinet meeting on 24 May 2023. This report was included on the agenda as it was identified by the Committee as an item for pre-decision scrutiny.

The Cabinet Member for Finance, Councillor Jason Cummings, and members of the Corporate Management Team were in attendance at the meeting for this item.

The Chair asked what the rationale was for the £50 million figure, and asked why these assets had been selected for disposal. The Cabinet Member for Finance explained that this figure had been chosen as a target for the first year as it was thought to be achievable, but it was highlighted that this was the minimum that should be achieved. The list was considered to be assets that were ‘excess to requirements’ and that the Council was in a position to dispose of. The Corporate Director of Resources & Section 151 Officer explained that there had been over £50 million of Capital Receipts achieved in 2022/23, and that this was the second tranche of £50 million; it was expected that at least £50 million of Capital Receipts would be achieved in 2024/25 and 2025/26 respectively.

The Deputy-Chair asked what percentage of the Council’s total asset base were included in the report. The Cabinet Member for Finance explained that the total useable asset base was valued at around £300 million; currently all properties thought to be excess to requirements were on the asset disposal list, and this would be kept under review to ensure assets were added when appropriate. The Deputy-Chair asked how £50 million of Capital Receipts could also be generated in 2024/25 and it was explained that some assets needed more work, or were currently being used to deliver services, and so could not be added to the asset disposal list at this time but would be added in the future once these issues were resolved. The Chair queried the definition of ‘excess to requirements’ and heard that this was any asset the Council could sell while continuing to deliver its statutory responsibilities. The Interim Director of Commercial Investment & Capital explained that there was a rolling list of assets that could be defined as surplus, but that each asset required forensic analysis through the lens of service need. As a result of this, deciding if an asset was surplus needed to be carried out through the Transformation Programme to look at service need and demand and the locality of service need. Members heard that heat maps of assets were used to bring forward comprehensive plans that embraced supporting the Voluntary and Community Sector in developing Family and Community Hubs to deliver services in localities. The Interim Director of Commercial Investment & Capital stated that additional resources were being used, alongside operational leads of the Council, to augment the process of producing heat maps that would accelerate the process of identifying surplus properties to repurpose or dispose of. It was expected that an updated asset disposal list would be submitted to Cabinet in November 2023.

Members asked if there was a forward plan for the redesign of services whose delivery would be affected by asset disposals. The Interim Director of Commercial Investment & Capital explained that a Disposals and Transformation Property Board would be set up to coordinate service reviews, and to engage with the voluntary sector where appropriate. This would assist the Council in identifying which assets should be retained or repurposed and which could be classified as surplus as part of an integrated approach through the Transformation Programme. Members asked for reassurance that statutory services would not be affected, and heard that this was the case. The Cabinet Member for Finance stated that the Council would always meet its statutory responsibilities, and should it find itself in a position where it could not, then this would be escalated to national Government. The Committee heard that where asset disposals were linked to the cessation of a service, this could be brought forward relatively quickly; assets that were likely to be added to the list at a later date would be those that would require the relocation or redesign of services.

In response to Member questions about who would be on the Disposals and Transformation Property Board, the Interim Director of Commercial Investment & Capital explained that this was an officer board that they would chair, but that it would consult external organisations where appropriate. Members requested that they be kept up to date with the establishment and work of the Disposals and Transformation Property Board, and the Interim Director of Commercial Investment & Capital agreed that they would do so. The Deputy-Chair asked for reassurance that the team working on asset disposals was adequately resourced to ensure the best for value money could be achieved for each asset. The Interim Director of Commercial Investment & Capital explained that each building category would be approached differently, with a disposal category for each that varied in its approach to the market and methodology of disposal, in collaboration with external expertise and advice. The Chair asked if the Town Hall was included in the Asset Disposal Plan, and the Cabinet Member for Finance stated that this was not the case at this moment in time.

The Chair asked for clarification on what delegated powers were being sought for the Corporate Director of Resources & Section 151 Officer. The Corporate Director of Resources & Section 151 Officer explained that it had been found that that Council had not been as quick as it could have been in commercial negotiations, and it was felt that this delegation would assist in concluding these at a greater pace. It was clarified that the delegation only applied to assets on the Asset Disposal Plan that had been approved at Cabinet. In response to questions about recommendation 2.3, it was clarified that ‘in consultation with’ could be taken to mean ‘in agreement with’.

Members asked if Equality Impact Assessment (EqIA) reports were being produced for the individual assets for disposal. The Interim Director of Commercial Investment & Capital stated that an EqIA had been produced for the report and was available in the agenda pack. The Corporate Director of Resources & Section 151 Officer explained that all the properties on the current list were vacant, and so disposal would have a limited impact, as reflected in the Cabinet Report; any asset disposals that required service redesign would be subject to an EqIA as a part of this process.

The Deputy-Chair thanked the Head of Estates, Asset Management & Facilities for their informal engagement and asked about consultation with Ward Councillors in relation to asset disposals. The Corporate Director of Resources & Section 151 Officer explained that this could be difficult due to the pace of disposals, but that Ward Councillors would be notified of property disposals but were unlikely to be consulted as part of the decision-making process. The Deputy-Chair highlighted the strong local knowledge of Ward Councillors and advised that they should be utilised as a valuable resource to help manage potential local concern about a property disposal.

The Chair asked about the role of the Improvement and Assurance Panel in development of the Asset Disposal Plan. The Cabinet Member for Finance explained that the Panel had taken interest in the disposal programme, and had oversight of the paper as they did with all Cabinet reports; the Panel were not involved in choosing assets for disposal. The Cabinet Member for Finance commented on the need for Croydon to do as much as it could to fix its own problems, especially when it was asking for government intervention.

The Deputy-Chair explained that previous a Scrutiny & Overview Committee had recommended that each asset disposal have its own business case and consultation process, if it affected a particular community, and asked if this approach had been implemented for this report. The Cabinet Member for Finance explained that at the point an asset was added to the disposal plan and was considered ‘excess to requirements’ it was not considered that a consultation was necessary as there would be no service impact. Members heard that any consultation would take place as a part of a service change or redesign; however, a business case would be developed for any asset that had an associated income stream that looked at the offset between any potential ongoing income and future capital investment needed for maintenance against the impact of reduced borrowing. The Chair requested that rental streams be provided so that they could be compared with asset sale values, and the Cabinet Member for Finance stated that this could be provided, upon request, for any assets on the disposal list with current rental income.

The Chair asked about public and tenant consultation, and highlighted the example of ‘Snuggles Pre-school’ who were due to have the freehold sold on their premises, and had only been informed in the previous week. The Interim Director of Commercial Investment & Capital explained that their lease would protect this business as the terms and conditions would transfer to any new freeholder. The Corporate Director of Resources & Section 151 Officer stated that the Council did sometimes sell asset freeholds that had a current leaseholder, but that the lease would remain in place and the leaseholder would not be unduly affected. The Chair asked if it would be possible to give leaseholders longer notice should they be affected by disposals, and the Interim Director of Commercial Investment & Capital explained that, as Cabinet had not yet approved the report, it would not yet be appropriate to contact leaseholders. Members heard that once the paper was approved, tenants would be contacted to explain the decision and any possible impacts it may have on them.

The Chair confirmed that there would be an Equalities Impact Assessment (EqIA) for any asset disposals that resulted in changes to service delivery. The Chair asked which asset disposals were likely to be the most controversial and the Corporate Director of Resources & Section 151 Officer explained that significant efforts had been made to ensure the assets in the report were not controversial. The Cabinet Member for Finance explained that any assets being added to the disposal plan that currently delivered services would have already gone through the process of service redesign to ensure they were surplus to requirements, in order to minimise the impact of disposal.

The Chair asked if there was the opportunity for community groups to make compelling offers for any assets on the disposal plan that could generate enough income to warrant their retention. The Cabinet Member for Finance stated that this would be possible, but that these discussions would need to happen at pace given the Council’s financial position.

This item and the meeting concluded prematurely at 7.45 pm due to the evacuation of the Town Hall.