Property controls: guidance for public bodies

6. I have a case requiring a Property Controls assessment, what do I need to do?

The purpose of Property Controls is to ensure that management and use of public property meets SG’s strategic objectives, delivers value for money, and aligns with sustainability goals. On this basis we would encourage all bodies to be familiar with the key objectives of PSR and the SSE when considering their property estate.

With regard to the specific process, while the necessary steps may vary given the individual and unique nature of property related decisions, the following are typical stages involved in the Property Controls process:

1) 24+ months: Begin engagement with Sponsor Team & Property and Construction Division (PCD): For leased properties, at least two years from the termination or break date is the optimum time to engage with your sponsor team and PCD for the consideration of the options and the strategy for the lease event. This may not always be feasible in shorter duration agreements or reactive change to business needs. In any event, allow sufficient time to properly analyse all suitable options and plan the budget and implementation timetable required. At this stage the organisation should have a strategic asset plan in place to consider the particular property need.

2) 18 – 24 months: Assess Operational Requirements: Align property asset management with SG’s strategic objectives, with a particular focus on SSE and PSR. This involves understanding and articulating the needs of a business area, their strategic business planning, workforce and location plans and how property can best support their functions. This can involve discussions with stakeholders regarding their space and location needs and any likely changes in function, business delivery or technology. PCD can provide guidance and advice with respect to evaluating the property asset to determine its suitability for retention, lease, sale, or redevelopment.

3) 18 – 24 months: Discuss Approach: Begin discussions with PCD with regards to the controls process and confirm individual requirements. Ensure ePIMS/InSite data is up to date for the organisation involved.

4) 12 - 24 months: Check Public Estate Options: This stage will require a thorough assessment of existing properties, including usage, condition, costs, and alignment with strategic goals. The time required to undertake this stage can vary materially depending on the asset's complexity and we would therefore recommend early engagement with PCD. The team can also assist in determining the availability of alternative ‘on estate’ or co-located property solutions.

5) 6-12 months: Options Appraisal: At this stage it is necessary to evaluate potential options for acquiring, disposing, or repurposing properties. This includes financial analysis, risk assessment, and consideration of alternative delivery models. PCD are available to provide advice on the best practice when undertaking option appraisals. If a re-location is required, allow sufficient time in the programme for any fit-out.

6) 6 months: Submit Draft Business Case: No later than 6 months prior to the lease event and in some cases earlier, A final version of a “Business Justification Case” or “Full Business Case” must be submitted for review by the sponsor team (if applicable) and Property Controls, together with the relevant strategic asset plan and confirmation of data validation on ePIMS/InSite. This should outline the rationale for the transaction, financial implications, risk assessments, and how it supports strategic objectives. Please note that in the event that major works (i.e. fitting out works) are required a period of 6 months is likely to be insufficient, and a minimum of 12 – 18 months will be required. In all cases we would recommend that early engagement with PCD is essential to establish an appropriate time frame.

Details and further information on the templates available can be found in the “Templates” section below.

7) Approval Process: The body or their sponsor team are to submit the business case to PCD for review. Please be aware that the final review process can take additional time, depending on the governance structure and the required level of approvals and especially if there has been no prior engagement with PCD. Please see Figures 1 & 2 below for more detailed information.

8) Implementation: - Should the property proposal be endorsed by PCD, ensure all other approvals including AO templates and any engagement with portfolio Ministers is completed and proceed to implement the property decision, whether it involves acquisition, refurbishment, maintenance, or disposal. This stage involves coordinating with relevant stakeholders, including contractors and property managers. The team are available to ensure appropriate advice and guidance is provided to assist with this process.

It is essential to ensure that appropriate legal advice is sought, documents of records kept, and salient lease information recorded on e-PIMS/InSITE. If a public body is not experienced in property transactions, then guidance and support must be sought from PCD.

Please note that it is important to consult and follow SG guidelines and policies for precise steps in this process, such as the procurement of goods and services, as these may require time in your project plan and be updated or altered over time to adapt to new strategies or challenges.

Templates

The templates in this Business Case Template document (Section A & Section B) provide an outline structure of the range of information that should be included within a request for Property Controls endorsement. The level of detail required should be proportionate to the value and complexity of the particular proposal. Please note that it is the responsibility of the body proposing a property project to ensure all relevant matters are considered, including whether a property solution is the correct option.

For proposals relating to ‘on estate' moves e.g. a move to the SG Core Estate or an existing public body office already being funded by the Scottish Exchequer, the template at Section A must be used.

For proposals under the value of £2 million Net Present Cost (NPC) that are not ‘on estate’ moves, the Business Justification Case (BJC) template at Section B must be used. Please note that an NPC excel model has been developed to assist in determining the value of the NPC. This model along with further information is available to download from the SSE webpage Single Scottish Estate - Public sector procurement

For higher value cases, above £2 million NPC, a Full Business Case should be submitted. The sponsor team (or PCD where there is not a sponsor team) can provide a template for use in these cases. Further guidance can be found in Treasury's ‘The Green Book (and supplementary guidance.

PCD will decide what is and what is not an ‘on estate’ move where there is any doubt. The overwhelming assumption and Ministerial priorities are that the existing estate already paid for by the public sector and / or Scottish Exchequer will be used first before any commercial property or lease committing to funds leaving Scottish Government can be considered. Barriers of security differences, governance, organisational identity or other matters should be regarded as opportunities for innovation in finding solutions to jointly use existing estate and not as presumptions against co-locations.

• For on Estates Move – use Annex A “On Estate” moves template
• For Off Estate move NPC under £2 million - use Annex B Business Justification Case
• For Off Estate move NPC over £2 million - use Full Business Case

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.

There is guidance on preparing the case for submission available on the SPFM webpages. In particular:

• Guidance on property acquisition
• Guidance on options appraisals

If further support is required during the development of the template or in circumstances where cases are likely to be novel or contentious, the Property Controls team is able to provide further support and guidance.

Once the BJC or FBC has been completed, the sponsor team (where applicable) will submit it to the Property Controls mailbox (Property Controls mailbox) and the review process will begin. In order to plan efficiently for longer-term or larger cases it may be preferable to agree a direction of travel early and seek an approval “in principle” from Ministers subject to later verification of costs. PCD can guide in deciding this.

Where a public body does not have a sponsor team within the SG, they should approach PCD directly and the case for review should be submitted directly to the Property Controls team.

• Body Subject to SPFM should identify the need for Property Control on a transaction and notify the  Sponsor Team. Body prepares templates and submits these to the Sponsor Team who prepares the templates.
• Sponsor Team [where applicable] will support development of template and review the template before submitting to Property Controls Team (PCT) for Property Controls Review. The Sponsor Team will then notify SPD
• Property Construction Division (PCD) will provide support and guidance

As noted within Section 1 - PCD should be contacted at least 2 years before a lease event. This is to ensure that sufficient time is available to properly assess options and deliver the necessary works. However, in more complex cases this time frame may need to be increased so we would recommend that PCD is contacted at the earliest possible opportunity.