Alan LoganAlan Logan

Head of FinanceHead of Finance

West Lothian CouncilWest Lothian Council

Asset ManagementAsset ManagementCIPFA Students Society – April 2009CIPFA Students Society – April 2009

Asset Management – Scope of Presentation

Asset Management: key influences, building blocks and benefits

Corporate Approach

Data Gathering and Interpretation

Developing a decision making process

Integrating asset management, capital planning and service plans

Audit Scotland

Asset Management: Key influences, building blocks and benefits

Building Blocks

•Corporate View essential – driven from Corporate Plan or corporate objectives

•Assets provide service delivery for now and in the future

•All assets must be considered

Benefits

•Provides understanding of condition, performance and cost of all assets

•Allows better informed decision making

•Potential to deliver substantial cost savings and efficiency gains

•Allows organisations to demonstrate good stewardship of assets

Influences

•Prudential Code

•Best Value

•Moves toward medium to long term planning

•Best Practice in School Estate

Corporate Approach

Corporate Plan

Corporate Asset Management Plan

Roads,Structures,Lighting,

WaterInfrastructure

Open SpaceProperty Housing Fleet ICT

Condition

SufficiencySuitability

Value

Accessibility

RevenueCosts

Condition: Physical

Sufficiency:Demand

Suitability:Purpose

Data Gathering and Interpretation - Key Drivers of Asset Management

Developing a decision making framework – Identifying Investment Needs

Statutory

(e.g. DDA)

Backlog / Lifecycle

(to bring all assets up to an appropriate condition)

Project / Additional Provision

(all other investment opportunities)

Strategic Outline Business Case (SOBC)

Brief Description & Rationale for Investment Type of Asset / Service supported Statement of need How investment was identified Research Base Lead officer and project sponsor

Suitability

Link to Corporate Plan’s aim and objectives Consultation with Community Partners Key objectives of the investment

Financial Information High level indicative capital cost and revenue implications High level indicative resources and potential funding gaps Profiling of costs over the capital strategy period (typically 10 years)

Supporting Information Impact on Service delivery Reasoned supporting argument for proposed course of action Consequences of project not proceeding Key risks and uncertainties Key milestones for the project (financial and non financial)

CONTENT• Strategic context• Capital and Revenue information• Impact on asset/service delivery• Impact on outcome agreement targets

FINAL STAGE10 Year Capital

InvestmentProgramme

Integrating Asset Management, Capital Planning and Service Planning

PRIORITISATION OFINVESTMENT1. Core statutory investment2. Core backlog/lifecycle

investment3. Prioritise remaining

investment (including new projects).

STAGE 1Key Asset Management

Data(establishes investment

requirements)

STAGE 2SOBC for each

Investment Area

After a robustcorporate

prioritisationprocess

Filteredthrough each ofthe individual

AMPS and linkedto Serviceplanning

Audit Scotland study – Provisional findings

25% of property in bad condition

Maintenance backlog increasing in two-thirds of local

authorities

50% of Councils have no Asset Management Strategy

50% of Councils give no Asset Management information

to Members

Slow progress on work with Community Planning

partners

Audit Scotland study – Key Recommendations

Create Asset Management Plans for all assets

Hold current asset information

Formulate a long-term capital strategy

Take account of whole life costs

Ensure Elected Members are able to scrutinise asset

usage and costs

Conclusion Asset Management is a crucial and ongoing aspect of the management of

resources and effective service delivery.

Comprehensive asset management plans will ensure the following:

Better utilisation of assets

Condition, Capacity and Suitability of Assets is determined

Priority investment is determined

Surplus assets are identified

Integrating asset management plans with service and financial plans should

is essential to provide a clear route to optimising the use of assets and

enabling organisations to direct expenditure where it is most required