Strategic thinking

Why has the Cabinet Office published a strategy for its dealings with the construction sector before responding to the IGT report on low carbon construction?

Paul Morrell’s report offered a pretty thorough analysis of the industry’s problems and a set of practical recommendations. The Government is due to publish its response this month and it might have been better to await this before announcing the strategy.

The strategy sets out some important objectives but is less clear on how these will be achieved. On the positive side it acknowledges what report after report has identified as an endemic problem, the fragmentation of the industry and calls for integration. It also aims to bring clarity and a measure of certainty to public procurement of construction.

Unfortunately there is not enough emphasis on the long-term performance of buildings and carbon reduction appears to have been downgraded as cost reduction comes to the fore.

Facilities management is at least acknowledged in the section on operation and asset management and there is little to argue with in the statement that: “Integration of the design and construction of an asset with the operation phase should lead to improved asset performance.” However, the reference to “subsequent arrangements for facilities management” suggests that early consideration of FM is not being seen as necessary to inform design and construction.

By the way, do these reports ever go through a Plain English filter? What on earth does, “the capability required to improve the effectiveness of central challenge functions” mean?

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Last month I promised to offer some insights into the future of schools capital investment; apologies for the delay.

Mike Coleman from Partnerships for Schools (the body charged with delivering the abandoned Building Schools for the Future programme and now to be wound up by next spring) gave a presentation to the CIC’s Economic & Policy Forum in May entitled “School building in an age of austerity”.

It’s no longer about achieving educational transformation through “landmark” school buildings, said Coleman. Fitness for purpose will be the guiding principle. The existing pipeline has been addressed with around 50 local authorities asked to deliver savings (over £350m identified so far) on existing BSF schemes and site assessments underway for 75 “old style” academies but with significantly less new build.

The new approach to capital investment in schools has not been fully defined (we’ll have to await the outcome of the James’ review for that) but the focus will be on the condition of buildings and capacity. A new model will be developed for assessing the condition of school buildings and capital will be allocated accordingly.

Last year’s Comprehensive Spending Review reduced the capital available for school building and maintenance by 60% over the four years until 2014-15.

The focus on condition should also mean a renewed emphasis on maintenance. As Coleman said, it hasn’t always been clear who should be fixing what. Clarifying who is responsible will be vital. A comprehensive condition survey should reveal whether there is a significant maintenance backlog arising from decisions to defer all but essential work in anticipation of new facilities through the BSF programme

Localism notwithstanding, a “central body” is likely to put in place a small number of national procurement contracts and the Department for Education will let national contracts for maintenance and small projects.

All this presents a major opportunity to professionalise schools FM.

Working together

The Construction Industry Council convened an important event last Thursday. Titled ‘Rethinking Professional Services for the Low Carbon Future’, the one-day conference brought together representatives from most of the built environment professions, government and industry to address possibly the most important issue facing us all.

There was a palpable sense of frustration in the room at Store Street but also determination. Frustration that pilot projects aren’t followed up, Government initiatives abandoned or downgraded, documented good practice ignored. Determination that things can be different.

Paul Morrell, chief construction advisor to the Government, pointed out that virtually everything in theUK’s Low Carbon Transition Plan* involves construction but the industry “does not have a plan for its own future.”

Morrell took over the work of the Innovation and Growth Team (IGT), commissioned by the last government to consider how theUKconstruction industry can rise to the challenge of the low carbon agenda. The team’s interim report was published in March and the new government has endorsed the initiative. A final report should be published at the end of this year.

The interim report calls for a “quantum change” in the industry’s response to the challenge if the commitments of the Climate Change Act are to be met. It identifies barriers to progress including: the structure of the industry; the need for “up-skilling” across the supply chain; the gap between the design criteria of buildings and their performance; and a continuing preoccupation with initial capital spend, rather than whole life basis cost.

In addition to its emerging findings, the report has just one key recommendation to Government: to commission a suitably qualified “programme manager” to prepare a detailed execution plan for the physical work assumed in the UK Low Carbon Transition Plan.

This recommendation is supported by 18 propositions and Morrell highlighted one of these – the need to include auditing of a building’s performance in a project’s costing. “Carbon is as important as money,” he said, “we must develop whole life carbon accounting.”

Morrell didn’t pull any punches when it came to vested interests which, he said, could slow progress. He was quite critical of the built environment professions which he said could be protectionist and competitive.

This point was picked up later, although more mildly, by Bill Bordass who called for more “learned societies” to develop and publish knowledge.

The internet has transformed our ability to disseminate information rapidly but is the Facebook approach right? No self-respecting project is now without a website, associated discussion forum and a presence on social networks.

This is fine if you’re living and breathing the subject but if you actually want to find out something it can lead to a frustrating virtual treasure hunt, following snippets of someone else’s conversation and picking up clues which often lead to another dead end.

We need to connect the knowledge locked-up in projects, research reports, and online document libraries across professional bodies, consultancies and many other organisations. This will require consistent tagging and a really good search engine plus unprecedented openness.

As someone said last week, knowledge transfer is a contact sport.

* http://centralcontent.fco.gov.uk/central-content/campaigns/act-on-copenhagen/resources/en/pdf/DECC-Low-Carbon-Transition-Plan

 

Public sector property Pt 2

As delegates attended this years’ Government Property conference at the QEII Centre yesterday, acrossParliament Squareteachers were lobbying MPs over cuts to the Building Schools for the Future programme.

Inside the conference centre tensions were just as apparent. Cuts versus investment, speed versus thoroughness, frontline versus back office, central control versus localism.

Andrew Smith, chief executive of Hampshire County Council, suggested we might be witnessing a “perfect storm” as national fiscal priorities combine with local pressures on facilities and services. The book value of local government property is £128bn. Hampshire occupies property equivalent to twice the national sales area of M&S. Smith asked the not entirely rhetorically question: “Do we really need that much space?”

But will this perfect storm drive collaboration and green initiatives or lead to retrenchment and across-the-board percentage cuts? As more than one speaker said, collaboration between local government and with other public agencies is very difficult to crack.

In the big scheme of things it may all be “public money” but who pays the cost and who makes the savings are not entirely academic questions.

The shape of the coalition’s plans for central Government property are becoming a little clearer, as it targets £5bn running cost savings and £20bn in cash receipts from disposals, both by 2020. The relocation of OGC to the Efficiency & Reform Group within the Cabinet Office signals intentions pretty clearly.

The new Government Property Unit, created from OGC’s property team and John McCready’s team in the Shareholder Executive, is finding its feet and planning to harness private sector knowhow, whilst ensuring public sector negotiators remain commercially astute.

Speaking at the conference, McCready said the Government had introduced a moratorium on lease extensions and would extend “national property controls” by the end of this financial year.

In London, Government will rationalise its presence in the five central postcodes aroundWhitehall, maximise freehold and exit leasehold property. McCready also reasserted his view that “ownership of property must be clearly distinguished from use of property.”

“Property vehicles” appear to be the chosen model for achieving this separation and later in the day KPMG helpfully offered a view of what a Government Asset Management Company or GAMCo might look like.

KPMG aren’t predicting widespread sale and leaseback deals or property outsourcing. They see it more in terms of reducing fragmentation of ownership, bringing in skills and making revenue savings.

One thing’s for sure, the Government won’t be lacking in advice on how it can make savings.

Building schools

The decision by the coalition government to halt the Building Schools for the Future programme has catapulted investment in infrastructure into the headlines. The impact on education but also the consequences for the construction industry – and by extension large parts of the FM sector – have been front page news.

The focus has naturally been on the 730-plus projects stopped and the slice of the £55bn cost of the 20-year BSF programme this will save the public purse. There were clearly problems with the programme, an NAO report last year found cost overruns and major delays.

However, it will be education authorities, school governors, headteachers and yes facilities managers, that will have to deal with the consequences of stopping development plans in their tracks.

It is almost certain that, where a major refurbishment or new build was planned, spending on all but essential maintenance will have been scaled back. There is likely to be a substantial backlog of maintenance, repairs and upgrades to schools across the country. A chunk of the savings will have to find its way back into prolonging the life of these buildings for a few more years.

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Do better school buildings produce better students? The question of causal links between facilities and performance is no easier to answer in education than in any other sectors.

But (credit to the Guardian here) there is some research to guide us. A report from KPMG last year found that the rate of improvement in student attainment was 44% higher in PFI schools than conventional ones. Cause and effect?

From 2002 comes a study entitled “Do school facilities affect academic outcomes?” by the wonderfully named National Clearinghouse for Educational Facilities, in theUS. Not surprisingly, this concluded that spatial configurations, noise, heat, cold, light and air quality obviously bear on students’ and teachers’ ability to perform.

The dean of faculty at the UK’s Institute of Education is circumspect: “We do know that bad school buildings impact negatively on learning: what we don’t know is just how much good buildings improve the quality of learning.”

So, it’s probably three quarters commonsense to one quarter empirical research that bringing the education estate up to standard over time will improve theUK’s performance.

A session at the BIFM’s recent Members’ Day offered an insight into how this might be achieved. BIFM Award winners Kajima Community, part of the $15bn Kajima construction conglomerate, explained how they worked with teaching staff to expand the community use of schools.

Perhaps the way to get the most out of scarce resources is not to build schools but general purpose facilities which can meet a number of needs – social, health, leisure and education.

It would require different funding models and a less compartmentalised approach. It would also be a great opportunity for active FM.