URL: https://www.southampton.gov.uk/modernGov/ieDecisionDetails.aspx?ID=3500

Decision Maker: Cabinet

Outcome:

Is Key Decision?: Yes

Is Callable In?: Yes

Purpose: To consider the report of the Cabinet Member for Economic Development seeking approval for the phase 2 of the Asset Development and Disposal Programme. 

Content: To consider the report of the Cabinet Member for Economic Development seeking approval for the phase 2 of the Asset Development and Disposal Programme.  (i)  To approve the Phase 2 assets recommended for disposal, development or regeneration within the Asset Development and Disposal Programme as detailed in Appendix 1. (ii)  To delegate authority to the Executive Director Growth and Prosperity, to progress and implement asset disposal, development and regeneration opportunities within the scope of the ADDP Programme (as outlined in Appendix 1). This decision will be taken following the required consultation with the relevant members and statutory officers.  The assets recommended for disposal or development in Phase 2 of ADDP, as outlined in the confidential appendix are being recommended for approval following extensive engagement with relevant services to align with their transformational initiatives, localised service assets review and early market assessments, consultation with officers and relevant members to build on the intelligence gathered within the past 18 months and select the most appropriate set of assets.   The receipts from these disposals are required to help fund the council’s transformation programme and exceptional finance support requirement. The rationalisation of the council’s asset portfolio will also reduce the future repairs and maintenance liabilities reducing the requirement for further capital and revenue funding.   Lastly and perhaps more importantly it also releases assets that can support the city’s regeneration, supported by the work of the Renaissance Board.   The report also seeks approval for delegated powers to officers following consultation with relevant Cabinet Members to progress discrete asset disposals and asset development or regeneration opportunities within the scope of the ADDP. A thorough decision making, and governance process is in place under delegated powers as outlined within the March 2024 Cabinet Report, (recommendation (iv)).  The delegated power process will ensure the council can take advantage of the market offers and ensure a speedy, yet robust and transparent decision-making process. Option 1. Do nothing: The Council maintains a sizeable asset portfolio containing c.330 corporate and operational properties, and further 200 investment and commercial properties. Assets within the General Fund incur substantial maintenance and operational costs, including energy, insurance and business rates. If the council does not act now and aim to reshape or condense its portfolio of assets by either disposing of inefficient or ageing assets or redevelop and regenerate sites across the city, there is a risk that properties may fall into disrepair due to lack of adequate investment. There is also a risk that the council will therefore be unable to meet its future investment requirements to address its ongoing maintenance liabilities for an oversized and ageing portfolio.   Over time these liabilities are likely to compound and would require continued significant financial investment, that would not be sustainable over the long-term. Doing nothing will also fail to meet the council’s capital receipts targets to ensure the financial benefits and fiscal stability of the Council.   Option 2: Gain individual disposal approval of assets from Cabinet/ Council. This approach is not sustainable when considering the volume of assets in scope for disposals or development within a phased programme such as this.   Option 3: Disposal of assets identified in phased approach. In March 2024 Council approved an ADDP including Phase 1 asset list. This programme is now underway with disposal or development proposals being progressed under delegated authority, as stated in that report. Phase 2 is proposed in this report. Undertaking the disposals in this phased manner allows for a planned and manageable approach in undertaking a wholescale review of the council’s assets.   Option 4: To propose an alternative list of assets All assets are being reviewed in a phased manner. The phase outlined in this report is  the next tranche of assets to be assessed. Savills have now been engaged and a marketing programme is in place offering market assessments for each disposal and exploring the right marketing strategy, through to completion of sale or proposing assets suitable for development schemes as appropriate.  To amend the list at this stage would cause delays in securing the capital receipts.   Therefore, the recommended course of action is to proceed with Option 3.

Date of Decision: December 17, 2024