Advisor: Gerry Grimstone Gerry is Chairman of Standard Life plc, having been a Standard Life director since July 2003. Prior to this Gerry Grimstone held senior positions with the Department of Health and Social Security and HM Treasury until 1986. He then spent 13 years with Schroders in London, Hong Kong and New York prior to becoming Vice Chairman of Schroders' worldwide investment banking activities. Since then, he has held a number of senior appointments in the private and public sectors. Summary recommendations: 1 there should be an ongoing six-monthly review exercise, carried out across government, to identify new assets to be examined by the Shareholder Executive, together with relevant departmental and organisational stakeholders. These reviews would be tied in to the Pre-Budget Report and Budget announcements every year, together with an update on progress made on the existing portfolio of assets; and 2 assets being examined should be reviewed by individual project teams coordinated by the Shareholder Executive with the full support of HM Treasury, the responsible department or public sector entity, and relevant management. These teams should: • consider whether the most efficient use is being made of the assets from the point of view of business model, organisational and customer requirements, capital structure, including whether the current position within the public sector is appropriate; • bring forward for decision-making the findings of these studies; • once decisions are made, oversee the implementation stage to ensure that plans are properly converted to appropriate action; • where and when appropriate, lead disposal and/or partial disposal activity with departments; and • report progress publicly, to be tied in to the Pre-Budget and Budget processes. |
3.1 The asset management and sales strand of the Operational Efficiency Programme aims to ensure more efficient and commercial operation of assets held by the public sector. In the current economic climate, it is particularly important for Government to demonstrate to the taxpayer that it is creating maximum value from the assets it owns, whether through driving efficiency in the public sector or by transferring in whole or in part to the private sector. But this is not a programme for which the sole objective is the disposal of Government assets - rather this work has been designed to challenge departments on the efficient management of the assets they hold, and to help free up resources for important frontline service delivery. In some cases this may lead to a disposal being the appropriate course of action, but only once the full array of possible options has been properly considered. Other courses of action may be more suitable.
3.2 Where disposals are being considered, assessments on a case-by-case basis should be made regarding the availability of suitable financing as well as the appropriate timing for any disposals to ensure that value for money is achieved. Because of present market conditions, financial proceeds arising from this workstrand will be of medium-term benefit.
3.3 The key focus of this workstrand has been that where assets held by Government are carrying out activities that are predominantly commercial in nature, there is a need to demonstrate that their commercial potential is being fully considered and harnessed. The benefits of doing so will be demonstrated through improved delivery as the assets are used more efficiently in the public sector, or, if appropriate, through the realisation of receipts from full or partial disposal. This will allow reinvestments to be made in the public sector to improve essential public services.