Report of the Deputy Chief Executive and City Treasurer and the Strategic Director (Growth and Development).

This report provides an update on property activity since the last Annual Property Report to Resources and Governance Scrutiny Committee in September 2022.

The committee considered a report of the Deputy Chief Executive and City Treasurer and the Strategic Director (Growth and Development) which provided an update on property activity since the previous update to the committee in September 2022.

Key points and themes within the report included:

• Progress made and initial activity of the Strategic Asset Management Plan (SAMP) including the Asset Review and governance;
• The work of the Council’s Development Team and Investment Estate in delivering against the Council’s objectives for residential and employment growth;
• A decision not to retender the contract for property management of the Council’s investment estate to Jacobs UK Ltd.;
• Significant developments across the city;
• An update on the Council’s operational estate, comprised of approximately 350 assets used by the Council to deliver services;
• The work of the Facilities Management service;
• The Zero Carbon Estates Programme;
• The Council’s Property Asset Database (CPAD);
• An update on the Our Town Hall project; and
• The use of agency staff.

Some of the key points and queries that arose from the committee’s discussions included:

• Welcoming the redevelopment of the Church Street car park, and querying whether the disposal of this meant that the Council would no longer have ownership for this land;
• Highlighting the need for member involvement in the redevelopment of Church Street car park and the importance of retaining the war memorial there;
• If there would be enough car parking in the city centre if the Church Street car park was redeveloped;
• Requesting further information on the Parks Buildings Strategic Group and potential opportunities for buildings in parks;
• The need to understand the implications on the Council’s financial position of the return in investment from Manchester Airport;
• Welcoming changing places in parks and the social value work across the property service;
• How much priority was given to maintaining council-owned land;
• What was meant by ‘surplus assets’;
• How members were involved in the use and purchase of Council-owned land in their wards;
• If the SAMP Board members had the right skills and knowledge in estates management to ensure a maximum return on investments;
• Recognising the Council was awarded Levelling Up funding for Wythenshawe and commending those involved in this;
• Requesting more information on the1,800 peppercorn leases in the Council’s investment portfolio and how these could be viewed on CPAD;
• The vacancy rate amongst council-owned land and properties;
• Whether banks could use surplus space in local libraries across the city;
• Noting that several projects started when interest rates were low, and how viable these schemes were now given the increase in interest rates;
• The quality of early years buildings;
• Whether the Council’s website should be amended to reflect that the Town Hall would not reopen in 2024; and
• Why officers were confident in their ability to reduce the requirement for agency staff and to recruit full-time staff.

The Statutory Deputy Leader introduced the report and emphasised the establishment of the SAMP Board, which provided a cohesive and coordinated approach to the Council’s estates and developments. He stated that the Council was trying to address issues around climate change and reducing carbon emissions within the corporate estate.

The Executive Member for Housing and Development stated that the report highlighted the extent of development in the city, with particular reference to affordable housing, district centre investment and other regeneration schemes.

In response to queries regarding Church Street car park, the Assistant Director of Development and Investment Estate explained that a decision on the redevelopment of this site had not yet been made and was subject to an assessment by the SAMP Board but that it was likely to cease being a car park. He explained that a planning brief was being created in consultation with planning officers and noted that heritage was an important assessment factor and that consultation with local members would be undertaken. It was also stated that car parking capacity fell under the remit of the Parking Strategy, which was currently in development and would include a mapping exercise of car parks to understand capacity and utilisation of spaces and to model the impact of redeveloping Church Street car park, which would help to inform the SAMP Board’s decision.

The Head of Corporate Estate and Facilities explained that the Parks Buildings Strategic Group was established by the Parks service to ensure that the Council’s property function could support the delivery of the Parks Strategy.  The estates service provided support in the form of investments, carbon works and occupation agreements, for example.

The Deputy Chief Executive and City Treasurer committed to providing a report on the Council’s investment in Manchester Airport under a Part B session and stated that she could not speculate on future dividend income or distributable returns.

The committee was advised that a thorough, long-term piece of work was underway to identify the current conditions of all Council-owned land. Work was also underway with colleagues in Neighbourhoods where a different approach to clearing land was needed and it was anticipated that new arrangements would be in place at the committee’s next annual update. The Statutory Deputy Leader stated that the SAMP Board allowed for a more cohesive approach to centralise work with one point of contact responsible for maintaining pieces of land. Members were also informed that the 2024/25 budget proposals included a small amount of investment for reactive works such as addressing flytipping and clearing land to tackle barriers to completing work where land was owned by an organisation other than the Council.

It was clarified that the term ‘surplus’ was meant in regard to operational requirements and sites which could be reviewed for alternative use.

The Assistant Director of Development and Investment Estate explained that the Estates service had recently been successful in employing staff with new skillsets and a commercial focus in the last 12 months to recognise the wider remit of the service. Specific expertise would be commissioned externally where required but the Assistant Director of Development and Investment Estate remained confident in the skillset and commercial awareness within the service.

In response to a query regarding member involvement in the use and purchase of Council-owned land in their wards, it was explained that there was a two-stage process which involved surveyors identifying assets in consultation with colleagues in Growth and Development to determine an appropriate set of future options for a site, such as redevelopment, reinvestment, or refurbishment.  These options were then considered by the SAMP Board to provide more detail and a financial appraisal at which point members would be formally engaged with. The Statutory Deputy Leader also confirmed that three Executive Members were appointed to the SAMP Board and reiterated a commitment to ensuring meaningful and timely consultation with members.

The Statutory Deputy Leader offered to provide a report on peppercorn leases and the Head of Corporate Estate and Facilities endeavoured to write to Councillor Andrews with further information on training and how to access CPAD.

The committee was informed that the vacancy rate of the Council’s estate and properties was not reported by square meterage or percentage, although it was acknowledged as being possible. The Head of Corporate Estate and Facilities noted that the SAMP Board was being used to review the vacant property list and to ensure that those assets were being considered for use. Use of space in libraries or community centres was actively encouraged and there was an example of a bank delivering services from a local library in Longsight.

The Head of Corporate Estate and Facilities stated that the Council had recently committed capital funding investment into the early years estate and that the market had changed significantly since 2010 when it had been hoped that the assets would generate a sufficient profit to reinvest in the buildings. He stated that one tranche of capital activity had been delivered this year with significant improvements made and a second phase would take place in 2024.

In response to a question regarding interest rates, the Director of Development explained that the property estate was a long-term portfolio which enabled strategic mapping and weathering of economic cycles. He stated that the Council had been able to bolster the viability and deliverability of some of the schemes listed in the report by leveraging them as investable propositions and by leveraging GAP funding. He explained that many projects were in receipt of Levelling Up funding and were joint schemes with central government agencies such as Homes England. The Devolution Brownfield Housing Grant was also being used in residential developments.

It was also acknowledged that the error on the Council’s website with regards to the Town Hall reopening date had been flagged and that this would be amended.

The Head of Corporate Estate and Facilities stated that there had been a recent recruitment drive, noting the success of the Growth and Development team in attracting surveyors, and that further recruitment for surveyors would take place in the New Year. 

Decision:

That the report be noted.