This Memorandum outlines a number of measures that continue the Government's reforms in asset management, particularly in relation to office accommodation and property. It also reiterates aspects of Premier's Memorandum 97-2, Government Office Accommodation and Property Disposal (copy attached), dated 12 February 1997, which have not been complied with by all agencies.

Cabinet has approved the adoption of the strategies outlined in the attached document, Government Office Accommodation Reform Program [html version] , which provide for the rational planning of accommodation resources in NSW and aim to reduce the Government's exposure to rising costs. The strategies emphasise the need for a whole-of-government approach not only from the point of view of more consistent planning and decision making across agencies but also to utilise the Government's position in the marketplace. The strategies are consistent with and support the Government's Corporate Services Reform Program by providing the means to achieve significant medium to long term savings.

A Government Asset Management Committee (GAMC) has been established to ensure implementation of the Reform Program. The Committee will establish performance benchmarks for asset management and report agencies' performance to the Budget Committee of Cabinet. The Committee's membership and terms of reference are outlined in the document attached.

The Department of Public Works and Services (DPWS) is responsible for the centralised coordination and management of leasing office accommodation and property disposal. In this role it will oversee the implementation of the strategies from a whole-of-government perspective while agencies are individually expected to adopt them. It is expected that agencies will address the implementation of these strategies in the preparation of their annual Strategic Office Accommodation Management Plans and DPWS will report on these issues to the GAMC. The strategies are to be adopted by all agencies.

Premier's Memorandum 97-2 (PM 97-2) continues to apply and the following requirements are reiterated to remind agencies of their responsibilities in this regard:

• Apart from the guidelines for the Disposal of Surplus Property (Attachment 3 of PM 97-2), PM 97-2 does not apply to operational accommodation such as schools, courthouses, hospitals, etc. Procedures for that type of accommodation are contained in the Total Asset Management guidelines.
• Agencies are to reduce their average utlisation of office space to the current Government target of 18m2 per employee. In recognition of the fact that this will not be achievable in all instances, it was recently agreed with the public sector unioins that new accommodation should be designed at 15m2 per employee provided and agency's functional requirements are not compromised.
• A Strategic Office Accommodation Management Plan is to be prepared annually and submitted to Treasury and DPWS as part of an agency's Total Asset Strategy which also includes plans for Capital Investment, Asset Maintenance and Asset Disposal (see Attachment 4 of PM 97-2). The Total Asset Strategy should be submitted by the end of June each year (this supersedes the April date established in PM 97-2).
• Agencies should determine their leasehold needs at least 12 months prior to lease expiry. No agency is to enter into a new or renewed lease for office space without reference to DPWS in accordance with Attachment 1 of PM 97-2. Similarly agencies must not make approaches to private sector property owners or agents until they have advised DPWS of their intentions.
• Where a new or renewed lease exceeds 500m2 a facility plan must be completed in accordance with Attachment 2 of PM 97-2 and submitted to DPWS.
• All surplus properties with a highest and best value in excess of $3M must be referred to DPWS by all agencies for management of their disposal in accordance with Attachment 3 of PM 97-2.
• DPWS is also to be advised of all proposed property disposals with a highest and best value of between $1M and $3M to assess their potential strategic value.
• DPWS is to be consulted at the earliest opportunity where:
  • any accommodation (leased or owned) becomes vacant and available for disposal
  • surplus property is capable of consolidation with other government owned property
  • land exchanges, development agreements or provision of facilities is proposed.

Ministers should ensure that all agencies under their administration are familiar with the strategies of the Government Office Accommodation Reform Program and they are reminded of the requirements of PM 97-2, particularly those reiterated in this Memorandum. Ministers should also ensure that Public Trading Enterprises under their administration consider and adopt the strategies of the Reform Program.

Bob Carr
Premier