To provide committee members with information concerning Herefordshire Council’s Property Services, Asset Management Plan, together with update reports on council acquisitions of College Road Campus and Three Elms Trading Estate.

Further to the ‘Income and Charging’ report considered at the meeting on 7 November 2023 (link to minute 18 of 2023/24), the Chairperson said that it had been expected that more information would have been made available in the published agenda for this meeting.

The Cabinet Member Finance and Corporate Services introduced the report; this had been published in Supplement 2 to the agenda.  The Corporate Director - Economy and Environment tabled the presentation ‘Thrive Transformation’, which included slides on ‘Herefordshire Council’s Thrive Transformation Programme’ and ‘Thrive: Service Cost Recovery Work Package’; the presentation was published following the meeting in Supplement 3.

The principal points of the discussion are summarised below.

1.           It was noted that there was an intention to ‘make much greater use of digital technologies to deliver services and improve the efficiency of the council’ (Supplement 3, page 4).  The Chairperson questioned the risks associated with not being able to realise the benefits and savings of transformational changes.  The Director of Strategy and Performance explained that each business case would consider what was needed in terms of upfront investment, the transformation programme, and the service delivery model to recover the investment.  It was reported that pilots for an automated contact system had received positive feedback.  The committee was advised that clarification could be provided on the budget timescales for wider investment in digital technologies across the organisation.

2.           There was a discussion about the differences between services that had to be delivered as part of the council’s statutory responsibilities and additional services that could be provided.

3.           A committee member commented on the need to explore cost savings fully given the financial pressures on council tax payers and local businesses.

4.           In response to a question about the overall target for the transformation programme, the Corporate Director - Economy and Environment said that a long- list of opportunities was being worked through in order to ascertain reasonable targets in terms of efficiencies and increased charges.  Comments were also made about the need for services to be affordable and about the longer term sustainability of the organisation.

5.           It was noted that budget setting for 2024/25 would include directorate savings, base budget and income plans.

6.           It was reported that the government had recently announced that planning fees would increase from 6 December 2023 on most types of planning applications.

7.           In response to questions about the council’s strategic transformation partner, PricewaterhouseCoopers (PwC), the Cabinet Member Finance and Corporate Services advised that PwC had business and transformational skills that were not available within the council, along with substantial experience of the public sector nationally and internationally.

8.           The Chairperson noted that the council had a commercial property portfolio and the appendices to the report included updates on the College Road Campus acquisition and the Three Elms Trading Estate acquisition.  The Chairperson also welcomed the provision of the Strategic Asset Management Plan (StAMP) and the Property Services New Ways of Working – Informal Brief. 

9.           Further assurance was sought that investments in commercial assets were delivering appropriate returns.  The Cabinet Member Finance and Corporate Services advised that a review of commercial rents had been undertaken during summer 2023.  In response to questions, the Strategic Assets Delivery Director commented on: the standardisation of the approach to lease arrangements and the advice provided to tenants; there had been increases of around 34% to bring rents up to market levels, as part of phases one and two of the review, and phase three had started; whilst some tenants had been lost for various reasons, there was strong demand for units and the need for consistent treatment was emphasised; and the reference to ‘Maintain the Terrier’ (Supplement 2, page 19) related to the management of the record system for each asset.

10.        A committee member considered that the StAMP should make explicit references to environmental sustainability, achieving carbon neutrality, and mitigating the impact of climate change.  The Strategic Assets Delivery Director identified that the Carbon Management Plan was referenced and commented on the development of a procedure by a low carbon working group.

11.        In response to a question about the maintenance of assets, the committee was advised that capital bids were submitted each year for major works, along with allocations for reactive maintenance and emergency works.  It was noted that the costs of materials and labour had increased significantly in recent years.

12.        In view of situations in other authorities, assurance was sought that the commercial property portfolio would not expose the council to high levels of risk in the future.  The Cabinet Member Finance and Corporate Services advised that the 2022/23 External Audit Findings Report had been issued with an unqualified opinion.

13.        In response to a question about the extent to which the StAMP benefitted the whole county, the Cabinet Member Finance and Resources noted the acquisition of commercial properties in Hereford historically and that that viable opportunities elsewhere in the county would be considered going forward.

14.        The Chairperson proposed recommendations that the information provided with the budget papers should include: in relation to the commercial property portfolio, assurance that the council was generating an appropriate return for the investment made; and in relation to income and charging, clarity on where income was being generated, with targets clearly identified.

At the conclusion of the debate, the following resolution was agreed by the committee.

Resolved: 

That the information to be provided with the budget papers should include:

1.           In relation to the commercial property portfolio, assurance that the council was generating an appropriate return for the investment made; and

2.           In relation to income and charging, clarity on where income was being generated, with targets clearly identified.