Crown asset transfer and disposal policy

This page provides information on the process for transferring or disposing of Crown title assets (land and buildings) managed by Tertiary Education Institutions (TEIs[1]).

• Crown Asset Policy Guidelines (PDF, 109 Kb)
• Verification of Assets
• Crown Asset Transfer Process
• Crown Asset Disposal Process
• Frequently Asked Questions
• Head leases Over Crown title assets

Overview

On 27 October 2009 Cabinet agreed in principle to a policy to transfer Crown-owned assets (land and buildings) to TEIs that are core to their educational purpose, and to dispose of Crown-owned assets (land and buildings) managed by TEIs that no longer meet their needs. If a TEI deems a Crown asset surplus to its requirements and the asset is sold, then the TEI will, subject to Ministers approving a business case, receive between 80% - 100% of the net proceeds of disposal for reinvestment in capital expenditure projects (and in some cases operational expenditure). The intention of this policy is to provide a clearer framework for ownership and control of Crown title assets and to encourage TEIs to manage assets under their management in an efficient manner.

The two key features of this policy are that:

• The ownership of Crown title assets managed by TEIs can be  transferred to TEIs where there is an ongoing educational need for those assets, and
• TEIs can dispose of Crown title assets where these assets no longer meet their needs, with 80% (potentially more) of the net sale proceeds available for TEIs to reinvest in other assets, subject to Ministers approving a business case.

Background

The TEC had previously considered proposals from TEIs to dispose of Crown title assets on an ad hoc basis. All proposals required full business cases from TEIs and needed to be individually approved by Cabinet. It was unclear whether TEIs would receive the proceeds from any sale, which did not provide good incentives for TEIs to efficiently manage Crown assets under their control. The Government has since agreed to implement a new policy which will allow TEIs to obtain legal ownership of Crown assets, and to dispose of Crown assets surplus to their requirements and for the net proceeds of sale to be available for reinvestment subject to Ministers’ approval of a business case.

Summary of policy and eligibility criteria

The policy sets out a standard process for how transfers and disposals will be assessed and how and when decisions will be made. In summary, the policy is:

• If a TEI can demonstrate a current and ongoing need for a Crown owned asset under its current and historic (pre-1990) management, then the asset will be eligible for transfer to the TEI’s ownership (subject to assessment against a range of criteria, as indicated below and in the Crown Asset Policy Guidelines). A condition of transfer will be that if the TEI sells the asset within five years from the date of transfer, the TEI must pay the Crown 20% of the net sale proceeds.
• If a TEI manages a Crown asset that it no longer needs, the asset can be made available for disposal under the Public Works Act (subject to various clearances as indicated in the Crown Asset Policy Guidelines). When a TEI managed Crown asset is disposed of, the TEI will receive at least 80 percent of net proceeds for reinvestment (subject to the approval of a business case), and (at joint Ministers discretion) possibly more provided there are compelling reasons for additional capital expenditure. If a TEI is unable to spend the proceeds on capital projects, it can in certain situations apply to use the proceeds for operational expenses.
• If there are over-riding reasons to retain the land in Crown title, or where Ministers do not approve the transfer, the Crown and TEI will identify a satisfactory outcome on a case-by-case basis. If the TEI wishes, it will be issued with a long-term registered head lease for the asset at a nominal rental. This will give the TEI similar benefits to ownership. In these situations, the TEC will only present recommendations to joint Ministers that have been seen and approved by TEIs.
• TEIs that want to initiate transfers or disposals of Crown assets must integrate the TEC’s Capital Asset Management (CAM) standard into their strategic and financial planning systems, and the transfer or disposal of Crown assets must align with long term strategic goals of the TEI. The TEC will work with TEIs on a case-by-case basis to achieve this.

The transfer or disposal must also align with TEIs’ investment plans and long-term strategic goals as outlined in the figure below.

Further information

For further information, TEIs should email camenquiries@tec.govt.nz.

• [1]

  Tertiary education institution (TEI) - universities, ITPs and wānanga