Guidance

Terms of Reference for Thematic VfM Review on the Maintenance of Public Sector Assets

Published 20 January 2026

1. Background

Public sector fixed assets are fundamental to the delivery of public services and for supporting economic growth. However, there is considerable evidence, as examined by the National Audit Office (NAO), of ongoing issues in maintaining these assets, including ageing infrastructure, under-prioritisation of maintenance investment, inconsistent asset management practices, and lack of long-term planning. As of January 2025, the maintenance backlog across the government estate was estimated by the NAO to be at least £49 billion^{[footnote 1]}. Such challenges create risks to service delivery and increase costs over the asset lifecycle.

The 10 Year Infrastructure Strategy, published after Spending Review 2025, and the Balance Sheet Framework, published alongside Autumn Budget 2025, are first steps to addressing this. The latter in particular sets expectations for the evidence that departments and the Treasury should use when making capital allocation decisions on maintenance. This review will work with departments to embed these standards and seek to develop further practical solutions by reforming key frameworks and supporting departments to strengthen asset management.

The review, led by HM Treasury (HMT) with support from the Office of Government Property (OGP) and the National Infrastructure and Service Transformation Authority (NISTA), will bring together current initiatives such as the Social Infrastructure Roadmap (part of the 10 Year Infrastructure Strategy) and OGP programmes to improve asset management planning and the collection and use of data. HMT, OGP, and NISTA will collaborate on gathering evidence and developing new policy following engagement and consultation with departments.

2. Objectives

The review aims to strengthen the evidence base and improve asset maintenance across government, enabling better-informed investment decisions and supporting public service delivery. The findings will be used to develop and agree new policy, with implementation led by the participating departments with support from HMT, OGP, and NISTA. Findings should also inform departmental asset planning and shape future Spending Review bids.

To achieve this, the review will:

• Collect necessary evidence: Gather robust evidence by engaging with departments, reviewing their processes, and examining relevant data collection exercises. This may also include analysing specific datasets held by departments.
• Strengthen evidence and asset planning: Collecting robust asset condition data, modelling of maintenance need and links between asset condition and outcome delivery, and detailed asset management planning are key to effective maintenance. The review will consider how best to support departments to achieve this, building on the standards set out in the Balance Sheet Framework and tools and guidance produced by OGP.  It will also consider how asset management planning reflects long-term service transformation, rather than focusing on short-term fixes.
• Review and strengthen institutional arrangements: Assessing the strengths and weaknesses of current ownership structures, and accountability arrangements and identify opportunities to strengthen institutional structures for asset management, while allowing for varying departmental contexts.
• Examine budgeting and reporting frameworks: Ensuring budgeting and reporting drives trade-offs around costs and benefits of maintenance and incentivises effective asset management is important. The review will examine how current frameworks shape departmental approaches and outcomes and consider potential reforms.
• Assess the trade-offs between maintenance and new builds: The review will analyse how to facilitate effective trade-offs between maintaining existing assets and building new assets, as well as between maintenance and other areas of capital investment.

3. Scope

The review will focus on six key departments – the Department of Health and Social Care (DHSC), Department for Education (DfE), Department for Work and Pensions (DWP), Ministry of Defence (MoD), Ministry of Justice (MoJ), and Department for Transport (DfT). Collectively, these departments are responsible for a substantial proportion of the public sector asset base.

The review will consider the management and funding of all fixed assets owned, leased, managed or used by entities within each departmental group.  For DHSC, DfE and DfT, the scope will also extend to assets they fund which are not directly owned by the department and which may be outside the departmental group or central government boundary, specifically, the NHS estate, local roads, and the schools and colleges estates.

For the purposes of this review, asset maintenance is intended to cover both RDEL ordinary maintenance and repairs and CDEL major renovations and enlargements (including renewals).

Areas excluded from scope include:

• Capital investment decisions on new assets (i.e. construction of new buildings or major infrastructure projects), except where directly relevant to maintenance planning and lifecycle costing.
• Maintenance of IT systems, digital infrastructure, and non-physical assets.
• Initiatives managed exclusively by other departments or agencies outside the six identified.
• Legacy projects and assets decommissioned prior to 2025.

4. Governance

The review will report to the Chief Secretary to the Treasury.

A senior official steering group, with representatives from relevant departments, will oversee policy development and the recommendations to ministers. This study will consist of leads from HM Treasury, OGP, NISTA, supported by a wider virtual team of finance and estates experts from the six departments (DHSC, DfE, DWP, MoD, MoJ, DfT).

The review will be collaborative and based on the shared ownership of conclusions. Cross-departmental workshops will be convened at key milestones to test findings and co-design recommendations. The review team will maintain open lines of communication with departmental finance, estates, and policy teams, as well as relevant ALBs and external experts.

The Steering Group should consider what expertise the review requires and where there are gaps within departments, use external expertise and views, including local delivery partners, to ensure the best knowledge and experience possible.

5. Timetable

The final output will be a set of recommendations to be considered and reported as part of the next Spending Review. Interim reporting and stakeholder engagement will be built into the process to ensure the opportunity for feedback at key stages. Department specific findings will be shared with participating organisations to inform future business cases and departmental submissions at the next spending review.

1. Maintaining public service facilities ↩