ASSET MANAGEMENT FRAMEWORK 2023 - 2033
57 in 2016 largely as a result of reducing the number of small underused neighbourhood offices. The ability of our partners to use TVP buildings is constrained by security requirements, but does occur at a specific operational team level.
3.2 OUR FUNDING
3.2.1 Financial context
The 2023/24 budget is prepared against a background of unprecedented inflationary increases, a tight recruitment market, supply chain shortages and market volatility, along with uncertainty about future government spending. At the same time the Police service, both nationally and locally, is adjusting to the changing nature and complexity of crime, by investing in recruiting, training and developing officers, and adopting new technologies. To balance these financial pressures with the base cost of ongoing operations, the MTFP includes challenging productivity savings targets. All new business bids are prioritised as part of the annual planning process against the same matrix, taking account of benefits and cost, with the highest priority projects progressed for funding consideration. Inflation has had a disproportionate impact on the construction industry, adding to the existing pressures of maintaining an aging estate. Over the MTCP (including 22/23) it is anticipated that revenue spend will increase from 3.5% of net force revenue spend, to over 4%. For the same period, total Capex spend will be approximately £191.7m, of which property expenditure will be £89.9m, and these figures are at risk of further inflation and slippage due to the above market pressures. The majority of new projects currently have only provisional approval for planning purposes, and to reflect the potential financial impact on force budgets. After full utilisation of estates reserves and reinvestment of asset sales proceeds, the majority of this is still likely to be funded from borrowing.
3.2.2 Cost in Use
The estate represents one of the most significant component revenue costs after staff cost. In 2022/23 the total revenue property budget, excluding reserve funded schemes but allowing for productivity savings, was £17.8m, which represents 3.53% of the force net revenue spend. While estate rationalisation and reductions in estate operating budgets had reduced the cost of the estate steadily since 2012/13, when it was £25.4m, the current inflationary pressures require an increase in the projected budget for the next 4 years to £23.3m (4.02% of force net revenue spend).
3.2.3 Future Maintenance Requirements
The operational portfolio is estimated, as at March 2023, to have approximately £75m of identified maintenance requirements to 2033, based on a combination of condition survey information, ongoing annual servicing costs, and reactive/day-to-day repairs. This information is subject to continuous review so that estimate is likely to evolve. While the overall condition of the estate is currently reasonable, with the unavoidable consequence that reduced maintenance budgets will be insufficient to address long-term maintenance requirements, there is a need to closely monitor portfolio condition, maintenance expenditure (in particular for reactive works) and site specific building infrastructure performance. This is a national issue across the public estate and is reflected in the Force’s 10 year Strategic Estat e Requirements Plan, and it is also highlighted as an estate risk in the Property Services Department’s Risk Register.
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