Property controls: guidance for public bodies

2. What are Property Controls?

Property Controls are in place to safeguard public funding and ensure value for money to the public purse relative to property transactions. Any acquisition or investment in administrative property is in scope of these controls.

Where a public body covered by the Scottish Public Finance Manual (SPFM) wishes to acquire property by purchase or by lease, renew an existing lease, remain in situ post lease break-option or relocate to ‘on estate’ administrative accommodation they must first produce a detailed business case (for more information on business cases please click the following link - Business case - Service Manual) for review and seek endorsement by the Property Controls team. Operational property falls out with the scope of Property Controls as per the table within Section 3 of this guidance. Property and Construction Division (PCD) can provide further clarification and support on the policy if there are any doubts. This process must be followed prior to applying for Ministerial approval to acquire or retain estate as per the SPFM.

The Property Controls team will provide advice and guidance for any property matter, whether supporting the development of a proposal or scrutinising it to provide advice to Ministers. Public bodies or sponsor teams should contact the Property Controls team early as possible when considering a property matter, whether it falls within the scope of Property Controls or not.

Through the Property Controls process, the team will review the business case for the transaction to ensure that public funding is being safeguarded and that value for money is being achieved. It should be noted that approval under Property Controls does not grant budgetary authority nor does it guarantee Ministerial approval will be forthcoming. The public body must ensure that the finance business partner / sponsor team have confirmed that the budget is available for the transaction and all associated costs / professional fees.

The Property Controls process will result in the property proposal either being endorsed (potentially with conditions) or not. Overall approval in deciding whether or not the proposal can proceed will require to be considered by Ministers. In considering the property proposal (please see the diagram below and Section 6 for further information) PCD can provide pre-submission guidance to the submitting public body to ensure their case is robust. Property Controls will also be responsible for providing the relevant Ministers with a final assurance assessment of the business case, confirming its’ compliance with relevant government policies via a narrative statement for submissions requesting approval. A Ministerial submission requesting approval to proceed with the property transaction must then be prepared by the public body / sponsor team. The submission must include the Property Controls assessment outcome and any more detailed narrative from PCD.

Estimated Timescales

Public bodies should ensure that they engage with their Scottish Government (SG) sponsoring team (where applicable) and PCD as early as possible, ideally a minimum of 2 years ahead of the expected transaction. However, in cases where major refurbishment works are proposed then earlier engagement with PCD is required.

For leased properties, 2+ years from the termination or break is the optimum time to engage with PCD for the consideration of the options and the strategy for a lease event. Understandably, this will not always be feasible in shorter duration agreements or for reactive change to business needs. However, whatever the duration of a lease, it is crucial to the best use of public funds that submissions for property transactions are sent to Ministers in sufficient time for an alternative course of action to be practically implemented, e.g. to relocate to available ‘on estate’ options or close a building rather than remain in situ. Accordingly, agreeing the strategy in advance may allow a submission for approval in principle to be obtained permitting a programme timeline to be agreed.

PCD must be engaged by the public body / sponsor team at the earliest possible opportunity and consulted throughout the process. Submitting business cases for endorsement at an advanced stage with no prior consultation fails to demonstrate good stewardship of public funds and the direction Ministers have given for public bodies to work within SSE principles wherever possible - Single Scottish Estate - Public sector procurement.

Late engagement limits opportunities for Scottish Ministers to consider the property need in the wider context of the estate and optimise costs and opportunities under Public Service Reform and the Verity House Agreement.

Property Controls commentary and regular Ministerial updates highlight to Ministers where early engagement and consultation has provided the opportunity to deliver best value to the public purse as a whole and to learn lessons from where opportunities have been missed. Help with planning for lease expiry and break dates can be sought from PCD at any time.

The timeline below shows approximate timings for engagement / actions prior to the lease event. Please refer to Section 6 for more detailed information.

Pre Submission process flow

Pre Submission Process Flow Diagram Text Version

• 24 Months: Begin engagement with SG Sponsor Team and PCT  
• 18-24 months Assess operational requirements, and discuss approach 
• 12-24 months Check estate options and agree which are to be tested in the BC 
• 6 months Submit Draft Business Case 
• 0 months Event requiring property controls 

Note: The timeline to be agreed at 24 months in advance in case the BC needs to be approved in principle to allow significant fitting-out works at 9-12 months before the lease event.