Guidance

Property spend control pipeline guidance v1.2

Updated 18 July 2023

Approved for internal government trial (1 April 2021)

Developing Property Event Pipelines

Government organisations should use this guidance to develop their property event pipeline for leaseholds, property acquisitions and disposals.

1. 1. Introduction

The Government Functional Standard GovS 004: Property requires each government organisation with property assets to develop and maintain its own property strategy and supporting delivery plans. A government organisation is defined as government departments, Arm’s Length Bodies or any other entity identified as being within the scope of a functional standard, by policy decision, agreement or contract, such as government-sponsored organisations. For brevity these organisations will be referred to here as ‘government property organisations’ or ‘GPO’.

A Property Event Pipeline is a forward look of property event activity through which these plans will be delivered. By developing and maintaining a Property Event Pipeline, GPOs will gain greater and earlier insights on the challenges and requirements of its planned activities. The ability for a GPO to manage its property demand across its ALB stakeholders will also allow the GPO to plan how it resources the various property events for the greatest possible success.

To assist in planning for the government office and logistics / storage portfolios, pipelines that include these asset types shall be shared with GPA.

2. 2. Definition of a Property Event Pipeline

A Property Event Pipeline is a forward look of property event activity for a GPO. It is a live tool, updated periodically, providing a list of future property event activities planned by the GPO over a defined period and over a designated transactional spend level.

This definition of a Pipeline is taken from the Cabinet Office (CO) Controls Framework [Pipeline - a forward look of spending proposals for categories of spend, sufficient to triage proposals and support proportionate and targeted assurance]

The Pipeline will include the following property event activity:

2.1 Leasehold

• Acquisitions (i.e. grant of new lease/licences, assignments and subleases)
• Lease renewals and extensions
• Renegotiation of lease break options (incl non exercise of lease break options)
• Pre-leasing (new build)
• Sale and leaseback

2.2 Property Acquisition

• Freehold acquisition (existing building)
• Ground leases (secured by way of premium payment or ground rent (or combination))
• New builds (freehold turnkey arrangement)

2.3 Disposals

• Freehold
• Leasehold

3. 3. Purpose of a Property Event Pipeline

A Property Event Pipeline should support the GPO’s property strategy and delivery plans and will enable a GPO to plan and map out clearly the expected future property event activity that it is likely to require. A Pipeline will assist departments to make the strategic case for the demand or need (test) for property. Pipelines increase upstream visibility of property event activity, this will support the GPO’s strategic management of property activity, as well as enabling increased strategic oversight of HMG property activity.

By mapping out this management information and keeping this regularly refreshed, GPOs can:

• See a strategic view of future property spend activity
• Plan resources and capability requirements
• Improve spend planning and transparency
• Focus expertise on spend activities that require more oversight
• Promote assurance activity that is sensible and proportionate

4. 4. Requirements for a Property Event Pipeline

Pipelines are mandatory for all organisations subject to the CO Controls regime. However it is important to understand that a Pipeline is not a substitute for the operation of a real time spend control at the time of financial commitment as set out in the Spend Control Guidance.

All GPOs that are subject to CO Controls are required to build and then maintain a Property Event Pipeline. This will need to be maintained on an ongoing basis and jointly reviewed with the CO Office of Government Property Team to comply with the spend controls. GPOs office pipeline must be shared with GPA, whether or not they are onboarded.

Pipelines will be developed on a pragmatic and risk aware basis. To adhere to good practice in creating and maintaining a Pipeline, it should include:

4.1 1: Property events within the pipeline should align and reflect the information in parts 1 and 2 of the Property Control Approval Request form (PCAR)

This is the minimum information a potential property event activity must identify, document and maintain. The PCAR provides a framework to assist organisations to build their Pipeline to a good standard and then be used to submit approval requests.

4.2 2: The Pipeline should set out all future leasehold, acquisition and disposal activity covering a 5 year period

• The lease activity Pipeline will be developed using lease event information drawn from the InSite database and/or GPOs own databases. This will be as agreed between OGP and the GPO. Lease activity included in the Pipeline will take a rolling 5 year forward look
• For disposals and acquisition activity a template approach will be adopted. Template examples are included at section 6; Guidance and Templates.

5. 3: The Pipeline should be a live tool

Pipelines will require review and update as necessary throughout the year. The frequency of Pipeline updates will depend on the volume and scale of Pipeline activity alongside Pipeline risk and complexity. Frequency of updating will be agreed with the OGP Property Team

It is envisaged that the frequency adopted will reflect business need but could be:

• Lease Events: Quarterly or Biannual
• Property Acquisitions: Annually (Where the DG Government Property requires an organisation to develop a Strategic Asset Management Plan (SAMP) this will be used to fulfil the requirement)
• Disposals: Annually or biannually, depending on requirements from Disposal team (Included as part of SAMP, where the GPO is required to develop one)

The above does not prevent information on the Pipeline being updated with greater frequency to reflect the status of individual transactions or any changes in approach to portfolio strategy.

It is the responsibility of GPOs to manage the Pipeline. You must record planned spend activities on your Pipelines, ensuring all activity that is within scope of the NPC is included, unless otherwise directed by the DG Government Property. New freehold or leasehold acquisition spend or disposal activity should be added to your Pipelines at intervals to be agreed with the DG Government Property.

6. 5. Assurance

Once initial Pipelines are in place they will require periodic, proportionate, joint review by the GPO and the DG Government Property. The frequency of Pipeline reviews will depend on the volume and scale of pipeline activity assessed alongside pipeline risk and complexity. The approach to review will be agreed with each GPO, taking into account value thresholds, aggregated proposals/programmes, delivery risks, high value activity or novel or contentious proposals.

7. 6. Guidance and Templates

7.1 6.1 - Templates

i). Pipeline template example. Organisations can use their own template in agreement with NPC but should contain similar inputs.

ii). Property event information within the Pipeline should align and reflect the information in parts 1 and 2 of the Property Control Approval Request Form