States’ building repair “backlog” could incur £20m bill

Tuesday 05 February 2019

Government officials have admitted failing to review the condition of the 500-plus properties in their portfolio for nearly a decade, pushing the estimated bill for dealing with the maintenance “backlog” to over £20million.

The finding came in a new report on Jersey Property Holdings (JPH) prepared by the Public Accounts Committee (PAC) – a panel of politicians responsible for reviewing how effectively public money is spent and looked after.

Its publication marked the second time the body responsible for looking after the States’ £1bn property portfolio had been slammed for mismanagement of public assets.

Pictured: The Comptroller and Auditor General (C&AG), Karen McConnell, previously criticised JPH.

PAC found that JPH acknowledged “up-to-date information” was required on the state of the properties it holds on behalf of the public, but admitted that it hadn’t carried out any kind of review since 2011.

Director General Ray Foster, who has since left his post, told the panel that one was supposed to be conducted last year, but that this was pushed back.

The news means that many buildings have not received ongoing maintenance, leaving some to become increasingly dilapidated. The report referred to “decades of structural investment” and concluded that “significant” sums of money would be needed to “bring them into a condition that is ‘fit for purpose’”.

Pictured: Cyril le Marquand house is one of the States' main properties.

The annual maintenance budget for JPH is almost £12 million, but the Committee noted that the backlog of maintenance work to be carried out, both within the general work programme and as a result of new accessibility legislation, could bring the real cost to around £20 million.

PAC added that there didn't appear to be any “reassuring evidence that there was a serious attempt to plan for closing this backlog, with realistic timescales and acknowledgement of the impact it will have on spending."

They added that estimating an exact cost was especially difficult because JPH had no long or medium-term plan for dictating how the buildings would be used or sold off in future.

JPH staff were said to have had a lack of regard for the “financial consequences of the lack of direction, strategy and organisation" - something the panel said majorly concerned them.

Pictured: The PAC said that JPH wasted money by "not planning ahead".

“The Committee is dismayed that JPH has incurred costs by not planning ahead, for example proper costings of future-proofing buildings, making current stock compliant with expected legislation, and maintaining building stock to appropriate levels of repair," the report read.

John Rogers, the Director General of Growth, Housing and Environment, told the Committee that Mr Foster’s departure would be "a real challenge" for how and when his department could plan, adding that it would be between six months and a year before a strategy for managing the properties was in place. 

This, according to the PAC, was "unacceptable." “The lack of succession planning only adds to the lack of management and overall inefficiencies,” they added. “Property is investment and management of this valuable portfolio has been haphazard.”

The Public Accounts Committee review comes following a report from the Comptroller and Auditor General (C&AG), Karen McConnell, who criticised the “silo mentality” of Jersey Property Holdings and their lack of strategy.

Pictured: Senator Sarah Ferguson, Chairman of the Public Accounts Committee.

In her foreword to the PAC’s report, Chair of the panel Senator Sarah Ferguson, said it was “disappointing to learn that it will take at least six months before an up-to-date plan is in place and that there was no timescale in place for implementing the C&AG’s recommendations."

“There is pressure on the public purse and more attention should be given to releasing some of the unnecessary property assets that the States holds, but this is not easy to work out in the absence of a comprehensive strategy plan for all States property,” she added.

Senator Ferguson warned that without a written and States-wide strategy in place, and without clear direction for the Director General, “it will be hard to foresee which buildings need to be disposed of, maintained, demolished or utilised as part of a clear and cohesive management plan,” which will create “substantial costs to the taxpayer.”

“It is difficult to see matters improving in the near future,” she added.