Microsoft Word - PEL_14_04 - Department of Health, Social

Acting Chief Estates Officer
Health Estates Investment Group
Mr Brendan Smyth
For Action or Information as appropriate:
Chief Executives HSC Trusts
Chief Fire Officer Northern Ireland Fire and Rescue Service
Chief Executive HSC Board
Chief Executive HSC Public Health Agency
Chief Executive HSC Patient and Client Council
Chief Executive HSC Business Service Organisation
Chief Executive Regulation and Quality Improvement
Authority
Chief Executive NI Practice and Education Council (NIPEC)
Chief Executive NI Medical and Dental Training Association
Chief Executive Blood Transfusion Agency
Chief Executive Guardian Ad Litem Agency
Chief Executive NI Social Care Council
HEIG Strategic Forum
Regional Estate Management Steering Group
Health Estates Investment Group (HEIG)
Annexe 6/7, Castle Buildings,
Stormont Estate
Belfast
Northern Ireland BT4 3SQ
Tel:
028 9052 3918
Facsimile: 028 9052 8201
Website:
www.dhsspsni.gov.uk
Our Ref:
PEL(14)04
Date:
8 August 2014
Dear Colleagues
REMOVAL OF DELEGATED LIMITS FOR OFFICE ACCOMODATION LEASES
1.
Please find attached minute from Mike Brennan, Budget Director,
Department of Finance & Personnel, regarding the removal of delegated
limits for office accommodation leases from Department’s and their
associated ALB’s.
Background
2.
You have been advised at scheduled asset management meetings that the
Executive’s Asset Management Strategy proposed a range of Property
Controls that would deliver efficiencies in the provision of office
accommodation across the public sector. A key aspect of the property
controls contained within the Asset Management Strategy is that:‘All lease expires in respect of administrative office accommodation will be
exited and all lease breaks will be exercised subject to a thorough value for
money test considering all other accommodation options available within
the Government estate – Exceptions to be approved by DFP’
3.
Please note that DFP has included supporting storage or warehousing
within the definition of office accommodation as stipulated in the delegation
below.
Required Action
4.
To address this issue, DFP are with immediate effect withdrawing
delegated limits relating specifically to the extension of existing lease
agreements, which includes upcoming break options, and the take up of
new lease agreements for office and supporting accommodation. In these
cases, Departments should submit all ALBs proposals accompanied by a
proportionate business cases to their Supply Officer for approval. As a
consequence, Departments will be required to remove delegations to ALBs
(excluding North/South Bodies) for office accommodation and storage
leases.
5.
This is a substantive change to DAO (DFP) 06/12 and introduces an
additional area requiring DFP approval. It will be numbered 68 in the
general delegations section of DAO (DFP) 06/12 with the revised text
stating:
68
6.
All leases for Office Accommodation (including
supporting storage or warehousing) – both new and
existing extension or renewal beyond break points.
The source DAO (DFP) 06/12 has also been updated on the AFMD website
(http://www.dfpni.gov.uk/afmd). This change should be brought to the
attention of all ALB’s business areas. It is advisable that all ALB’s should
make themselves aware of the new changes.
Advice and Guidance from Assets & Estate Management Branch
7.
Apart from the attached minute, DFP has not included any guidance on
timescales or what they require to be included in the proportionate business
case. However, as you are aware the Department has an existing process
in place which PEL(11) 01 refers to, which requires all ALB’s to submit a
Strategic Outline Case (SOC) to Assets & Estate Management Branch
6 months prior to the renewal of a lease or entering into a new lease.
8.
It is advised that current Departmental Business Case Guidance should be
used in conjunction with PEL(11) 01 as a guide for completing the
proportionate business case for new leases, renewal of leases and now for
all upcoming break options in leases.
Existing SOCs for Leases
9.
Please note that SOCs which have already been submitted to the Assets &
Estate Management Branch for lease renewals or new leases may need to
be adapted to comply with the new requirements detailed above.
10.
Further advice and clarification will be sought from DFP and will we advise
you as soon as further information is available.
Enquires
11.
Should you have any enquiries in connection with this PEL, please contact
Paula Jones or Marna Bell at:
Asset & Estate Management Branch
Health Estates Investment Group
DHSSPSNI
Room 12
Annexe 7, Castle Buildings
Belfast, BT4 3SQ
Tel:
028 9052 3809
E-mail: [email protected]
Tel:
028 9052 3723
E-mail: [email protected]
Yours faithfully
Brendan Smyth
Acting Chief Estates Officer
Mike Brennan
Budget Director
Public Spending Directorate
Room P6
Rathgael House
Balloo Road
BANGOR BT19 7NA
Tel No: 028 91858151 (x 68151)
email: [email protected]
and
[email protected]
28 July 2014
To: Accounting Officer
REMOVAL OF DELEGATED LIMITS FOR OFFICE ACCOMODATION LEASES
Purpose
1.
To advise on the introduction of a new general delegation for all
departments, business areas, agencies and arm’s length bodies.
Background
2.
3.
The Executive’s Asset Management Strategy proposes a range of Property
Controls that will deliver efficiencies in the provision of office
accommodation across the public sector. A key aspect of the property
controls contained within the Asset Management Strategy is that:‘All lease expires in respect of administrative office accommodation will be
exited and all lease breaks will be exercised subject to a thorough value for
money test considering all other accommodation options available within
the Government estate – Exceptions to be approved by DFP’
Supporting storage or warehousing is included within the definition of office
accommodation as stipulated in the delegation below.
4.
In implementing the Asset Management Strategy and ensuring the optimal
use of office accommodation across government, it is important that DFP
Supply, supported by the Asset Management Unit within SIB approve all
expenditure associated with lease extensions and take up of new leases
(supported by appropriate businesses cases), including those relating to
Arms Length Bodies (ALBs).
5.
At present, expenditure associated with the extension of existing lease
agreements or the take up of new leases for the provision of office
accommodation will fall within departmental delegated limits, restricting the
scope for centralised management of the Government estate required to
deliver efficiencies.
Required Action
6.
To address this issue, DFP are with immediate effect withdrawing
delegated limits relating specifically to the extension of existing lease
agreements or the take up of new lease agreements for office and
supporting accommodation. In these cases, departments should submit all
proposals accompanied by proportionate business cases to their Supply
Officer for approval. As a consequence, departments will be required to
remove delegations to ALBs (excluding North/South Bodies) for office
accommodation and storage leases.
7.
This is a substantive change to DAO (DFP) 06/12 and introduces an
additional area requiring DFP approval. It will be numbered 68 in the
general delegations section of DAO (DFP) 06/12 with the revised text
stating:
68
All leases for Office Accommodation (including supporting
storage or warehousing) – both new and existing
extension or renewal beyond break points.
8.
The source DAO (DFP) 06/12 has also been updated on the AFMD website
(http://www.dfpni.gov.uk/afmd). This change should be brought to the
attention of all departmental business areas, agencies and arm’s length
bodies.
9.
In assessing proposals, DFP Supply will seek advice from DFP’s Reform of
Property Management Project Team to ensure that the business case
considers all relevant options and is consistent with the objectives of the
Asset Management Strategy. Departments are encouraged to seek advice
from the Asset Management Unit in preparation of business case’s for the
lease of office accommodation before it is submitted to DFP for approval.
10.
Details of the property controls set out in the Executive’s Asset
Management Strategy are contained at Appendix 1. Further advice on the
application of property controls can be obtained from Brian Henning,
Project Director of the Reform of Property Management Project
([email protected]).
11.
Any other queries should be directed to your Supply Officer.
Yours sincerely
MIKE BRENNAN
cc:
Finance Directors
Supply Officers
John McKibbin
Joanne McBurney
Jack Layberry
Peter Jakobsen
Scott Wilson
Brian Henning
Stephen Barrett
Jeff McGuinness
Paddy Hoey
Appendix 1
Proposed Property Controls
Property Controls were introduced in The Government Property Unit’s (GPU) 2010
State of the Estate Report as a means to generate financial and occupational
efficiencies from the Government estate in England.
The controls focus on exercising more influence over the taking and exiting of
leases and mandate space standards for occupation in new and refurbished
buildings. In the first year of implementation GPU achieved a saving of £48m as a
result of a lease moratorium.
This paper sets out, for discussion, principles and suggested property controls for
application in Northern Ireland.
Principles
1.
Value for Money of leaseholds to be tested thoroughly at lease events such as
breaks, expiries or business cases for new takes.
2.
Asset Management Plans to become an integral part of the overall estate
management process and inform the centralised estate management unit
annually of occupier’s accommodation needs and plans in a timely manner
over a rolling 5 year period.
3.
Focus on improved use of owned / freehold buildings.
4.
Space utilisation to be improved to facilitate relocations from lease expiries.
5.
Effective identification and disposal of surplus assets through rigorous
utilisation testing.
6.
Improved recording of detailed asset information through the use of ePIMS
(Electronic Property Information Mapping System). This will also support the
production of an annual State of the Estate Report (SofTE).
7.
Continuous improvement in the operating cost base of Government’s assets
through effective procurement and monitoring of cost inputs through
benchmarking.
Controls
1.
Space utilisation target of 9-11 m2 per workstation for all administrative
buildings, owned and leased, and 7-9 m2 per workstation in contact centres.
2.
The costs of dilapidations, alterations and refurbishments required to achieve
the utilisation targets will be required to meet the DFP’s ‘Invest to Save’
criteria.
3.
Presumption that all lease expiries in respect of administrative office
accommodation will be exited and all lease breaks will be exercised subject to
a thorough value for money test considering all other accommodation options
available within the Government estate – Exceptions to be approved by DFP.
4.
Departments to produce a commensurate business case in advance of lease
end or lease break containing appraisal of options for relocation within the
freehold estate or renewal or re-gearing of existing leases. This business case
is to include an explicit consideration of agile working in the preferred option.
5.
Centralised estate management unit to approve all relocation and lease
renewal business cases.
6.
Property occupation costs to be reported upon annually to determine the most
and least efficient assets within Central Government. Below Average
performing assets are to be targeted for a time bound action within the
appropriate department’s Asset Management Plan to improve the
performance of the asset. It is recognised that items of one-off expenditure
have the potential to skew this annual review. To address this, any items of
non-recurrent expenditure will be highlighted and assessed separately.
Resource Implications
Departments will be required to provide appropriately skilled resources to:
1.
Prepare their annual asset management plans.
2.
Work with the central unit to implement and monitor the property controls
within the Department’s asset management plan and ensure efficient decision
making on strategic asset management.
3.
Prepare business cases for relocation in advance of lease ends and lease
breaks.
4.
Populate and verify ePIMS data on an annual basis.
5.
Support the production of the annual SofTE report.

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