Written evidence from COPROP, FPS, NaPPMI
and NBVBS
SECTION 1: EXECUTIVE
SUMMARY
1. For local accountability to be effective and
well-informed, local authorities need sound data about the management
and performance of property assets, works and professional services.
2. Decentralised responsibilities for decision-making
should result in local circumstances and priorities being reflected
in the prominence given locally to specific themes and indicators.
However, there is a danger that this could lead to fragmentation
and duplication of effort in designing local performance management
arrangements, which would inevitably be of variable quality. This
could be both costly and ineffectual for individual local authorities.
It would be better to encourage the use of tried and tested relevant
and reliable indicators.
3. Benchmarking of performance is important to
give a context for local discussion about what is being achieved
and what is achievable; and in identifying priorities for improvement.
4. To support these activities, local authorities
need staff with clear responsibilities for recording and reporting
data, and skilled Asset Management/property services practitioners
to interpret and make effective use of the information.
5. Local Authorities should be encouraged to
participate in professional networks to share and develop best
practice on this.
6. A thoroughgoing approach to performance management
would include all the measures identified and discussed in Section
3 below. Local authorities will no doubt wish to concentrate selectively
on those which will inform their work to address local priorities.
It is suggested that a core set of indicators which will be of
value to all authorities should include measures relating to:
(a) (for Asset Management):
(i) Condition/Maintenance expenditure.
(ii) Sufficiency (ie density of occupation and
usage).
(iii) Environmental Performance.
(iv) Property Costs.
(b) (for programmes of work):
(i) Procurement effectiveness (time, cost, sustainability
etc).
(ii) Value for money in investment.
(iii) Whole life cost/value.
(iv) Client/Customer Satisfaction.
(c) (for professional services):
(i) Cost.
(ii) Income.
(iii) Productivity.
(iv) Customer Satisfaction.
SECTION 2: INTRODUCTION
7. This report is submitted as evidence to the
Communities and Local Government Committee's inquiry into future
requirements for:
(a) audit of local authority
expenditure;
(b) oversight and inspection
of local authority performance; and
(c) value for money studies.
8. Our particular area of interest is Local Authority
Asset Management and Property Services. This report has been prepared
and endorsed by/on behalf of:
(a) COPROP (the Association
of Corporate Property Officers).
(b) FPS (the Federation of
Property Societies).
(c) NaPPMI (the National
Property Performance Management Initiative).
(d) NBVBS (the National Best
Value Benchmarking Scheme).
(e) For further information
about these organisations and a full table of acronyms used in
this report, see Appendix 1.
9. This report concentrates primarily on issues
related to performance (as per para 7b, above), but in doing so
also suggests what issues should be considered in audits of expenditure;
and how value for money studies might be informed by reference
to performance indicators.
10. We are grateful to the Committee for giving
us the opportunity for submitting a late return. We would have
responded by the original deadline had we been aware of the call
for evidence at an earlier date.
11. We recognise the current administration's
intentions to decentralise responsibilities for decision-making
and to increase local accountability. Our comments below focus
on:-
a) practical considerations
arising from those intentions, and
b) suggestions as to how
to measure and manage the performance of local authority property
assets and property services to best effect in this context.
| (signed) | Roosje Barr, President, FPS
|
| Tony Gale, Chair, NaPPMI
|
| Andrew Stirling, President, COPROP
|
| Alan Tyler, Company Secretary, NBVBS
|
SECTION 3: LOCAL
AUTHORITY PERFORMANCE
12. To gain a complete picture of the efficiency and effectiveness
of property and asset management in local authorities, the following
aspects should be measured:-
(a) The performance of the property estate (asset management).
(b) The management of programmes of work to acquire, build,
maintain, operate and dispose of property.
(c) The provision of property services.
13. Asset Management
(a) The local authority estate constitutes a substantial tranche
of public sector fixed assets. In 2009, CIPFA estimated the total
value of the estate (England only) at over £220 billion.
(b) Measures of Condition, Suitability, Sufficiency and Spend
have been in widespread use within local government for over a
decade. More recently, measures related to Environmental Performance
and Access have been added to the commonly-used sets.
(c) The National Property Performance Management Initiative
(NaPPMI) was established in the early 2000's (with endorsement
from the Government departments that are now CLG and DfE) to develop
and encourage a common approach to benchmarking and continuous
improvement across local government. NaPPMI performance indicators
are endorsed and supported by a range of local authority property
services networks including ACES, COPROP, Core Cities, CBSS, CLAW,
FPS, Octopus, SCEME and the CIPFA Asset Management Network. Over
100 authorities subscribe to a benchmarking service using the
NaPPMI indicators and provided through NBVBS.
(d) Benchmarking studies from NBVBS show evidence of major
variations in performance between local authorities, including:
(i) levels of investment and condition of property;
(ii) utilisation of property (eg density of occupation in
offices);
(iii) cost of property (running costs per m2);
AND
(iv) environmental performance (energy and water consumption,
CO2 emissions).
(see also Section 4, below).
(e) Such evidence suggests that there are substantial opportunities
for many local authorities to improve the performance of their
assets. In many instances this could create efficiency savings
which could be achieved as a contribution to reducing costs or
as an alternative to cutting frontline services.
(f) Many authorities are still not collecting/reporting this
information. As a result, any attempts they make to identify and
tackle priorities for improving property performance are impeded
by lack of data, with serious implications for the effectiveness
of their decision-making.
(g) We contend that if local authorities are to be held to
account for the proper management of assets, they must be able
to demonstrate how effectively they are managing them, using valid
and relevant quantitative evidence. Effective asset management
depends on:
(i) robust data against appropriate indicators;
(ii) sound benchmarking; AND
(iii) skilled staff with clear responsibilities for collecting,
reporting, interpreting the information and using it to improve
performance.
(h) NaPPMI endeavours to reflect current priorities for local
government and external factors affecting asset management and
performance measurement. This reduces the burden on individual
local authorities who would otherwise each have to consider how
to respond to such issues and develop their own arrangements for
doing so. Examples include:-
(i) Implementing changes resulting from the introduction of
IFRS (new property classifications etc, including Surplus Assets
and Assets Held for Sale).
(ii) A review of the existing indicators to identify a "core
set" of not more than 10 essential indicators, recognising
the pressure on local authorities to reduce resources devoted
to back-office operations and concentrating on the most important
functions eg ensuring quality performance and outcomes. The core
set is likely to include measures relating to:
(1) Condition/Maintenance expenditure.
(2) Sufficiency (ie density of occupation and usage).
(3) Environmental Performance.
(4) Property Costs.
(iii) Developing a "drilldown" reporting suite within
the NBVBS benchmarking service for key property types with unusual
characteristics (eg residential homes, wet leisure) to enable
closer examination of specific performance issues.
(iv) Developing proposals for introducing a TNRP indicator
(return on investment for local authority commercial and industrial
property)—an important element of the local authority estate,
currently under-reported.
(i) COPROP's principal focus is on asset management, with
performance management as an important theme. NBVBS runs a Property
Performance Management module on behalf of COPROP, reporting on
the performance of individual properties (offices and schools),
in contrast to the "whole estate" focus of the NaPPMI
benchmarking. This detailed information is of value to local authority
asset managers in exception reporting and prioritising improvements
to their property estates.
14. Programmes of Work/Investment in Property:
a) "The Estate We're In" (4Ps, 2007) estimated
direct property-related costs of the local government estate as
between £8 billion and £10 billion per annum. CLG figures
(Local Authority Capital Expenditure & Receipts, 2009/10)
show local authority capital expenditure on new construction and
conversion at nearly £15 billion in 2009-10.
b) When examining investment in acquiring, building, maintaining
and operating property, local authorities need to consider:
i) Overall levels of investment (too little? too much? right
focus?).
ii) Investment strategies (eg whether to acquire, build, refurbish
etc).
iii) Alternative strategies (eg PFI, third party provision
of services).
iv) Procurement effectiveness (time, cost, sustainability
etc).
v) Value for money in investment (see below, Section 4).
vi) Whole life considerations (capital costs vs. operating
costs; financial investment vs. functionality and impact on service
outcomes).
vii) Client/Customer Satisfaction with work undertaken.
c) Measures and toolkits to demonstrate performance against
these considerations include:
i) CBSS indicators on maintenance as part of NBVBS suite (currently
being developed with CBSS).
ii) NaPPMI indicators on condition and maintenance spend,
and time and cost predictability for capital projects, reported
in NBVBS benchmarking.
iii) COPROP Whole Life Value model/toolkit (developed as a
regional project in Southwest, in conjunction with SW IEP).
iv) COPROP Cost and Performance Database for Capital Projects
(regional project in Southwest, in conjunction with SW IEP).
v) COPROP Customer Satisfaction benchmarking service—modules
covering works elements of Building Maintenance and Capital Projects.
d) The various elements in 14(b) above have been developed
piecemeal by different organisations in response to specific requirements
and opportunities. The Committee may wish to reflect on whether
a "localism" approach might see more such developments,
and whether it might be more efficient and effective to provide
a common central framework and a more coordinated approach.
15. The provision of professional property services:
(a) The range of professional property services within local
authorities varies, but typically includes:
(i) Architecture.
(ii) Quantity Surveying.
(iii) Mechanical & Electrical Engineering.
(iv) Structural Engineering.
(v) Land Surveying.
(vi) Clerks of Works.
(vii) Project Management.
(viii) Planning Supervisors.
(ix) Building Surveying.
(x) Maintenance Engineering.
(xi) Estate Management.
(xii) Asset Management.
(b) There are several models for the provision of local authority
professional services, including:
(i) In-house professional services.
(ii) In-house professional services "topped up"
by bought-in services:
(1) bought-in services procured through frameworks; AND
(2) ditto through one-off procurements.
iii) Externalised (outsourced, partnered) professional services.
(c) Whatever approach is taken to providing these services,
local authorities should be able to report on the efficiency and
effectiveness of the operation, including measures of:
(i) Cost.
(ii) Income.
(iii) Productivity.
(iv) Customer Satisfaction.
(d) NBVBS has for several years offered benchmarking services
covering all these elements as they relate to Construction and
Maintenance Services and to multi-disciplinary Property Departments,
including:
(i) Cost—including analyses of employee costs, support
costs and overheads.
(ii) Income—including percentage fees, hourly rates,
time-based charges etc.
(iii) Productivity—including staffing structures, chargeable
hours etc.
(iv) Effectiveness—including:
(1) Time and Cost predictability on capital projects, and
(2) Customer Satisfaction—summary results of satisfaction
with "service" and "product".
(e) ACES (the Association of Chief Estates Surveyors and Property
Managers) offer a similar module through NBVBS concentrating on
Estate Management services.
(f) COPROP offers detailed Customer Satisfaction benchmarking
services covering professional services in Building Maintenance,
Capital Works (Post-Project Reviews), Estate Management and Corporate
& Strategic Asset Management.
(g) It is noted that whilst a number of authorities make good
use of the services offered by NBVBS, others do not or cannot
report information of this type. We consider that information
along the lines set out in paragraph 15 (d, e and f) above is
essential for demonstrating efficiency and effectiveness as part
of local accountability.
16) Our conclusion is that if local authorities are to be
held to account for the management of their property assets, programmes
of work and professional services; to show how efficient they
can be; and to demonstrate that they are not spending wastefully:
(i) they need to collect and report robust and appropriate
data to demonstrate performance, and to inform their plans for
improving this; and
(ii) reports should be based on a core set of key indicators
which can be benchmarked against national comparators; and a broader
range of indicators which can be utilised as and when appropriate
in addressing specific priorities. All such indicators should
be tried and tested for validity and reliability. Any which are
used in benchmarking with other bodies (a vital part of demonstrating
what is achievable) must be based on consistent definitions and
used in the context of a standardised process eg through the NBVBS
and COPROP benchmarking modules.
SECTION 4: VALUE
FOR MONEY
STUDIES
17) We recognise the limitations of headline reporting from
compiled statistics, but we suggest that this can be useful in
highlighting topics for further investigation.
18) The items below are based on extracts from NaPPMI returns
submitted through the NBVBS benchmarking service for the year
2008-09, and give an indication of performance against some of
the core indicators for asset management covered in para 7, above.
CONDITION: MAINTENANCE SPEND PER ANNUM AS A PERCENTAGE
OF REQUIRED MAINTENANCE
Less than 20% of these authorities report spending more than £1
for every £4 of required maintenance. Over one-third of these
authorities report spending less than £0.50 for every £5
of required maintenance.
OCCUPATION DENSITY: OFFICE SPACE (SQUARE METRES OF NET
INTERNAL AREA) PER EMPLOYEE (FULLTIME EQUIVALENT)
This chart includes authorities with a occupation density ranging
from under 7m2 to nearly 20m2 per employee,
with a median of about 11m2. Please note also that
many authorities do not submit data for this item.
ENVIRONMENTAL PERFORMANCE: ENERGY CONSUMPTION PER SQUARE
METRE
This chart shows energy used in running the property estate. Each
bar represents the number of authorities within each band. 16
authorities report consuming between 200 and 250 kWh per m2,
whereas three report consuming less than 100 kWh per m2.PROPERTY COSTS: OFFICES
This graph shows the range of property running costs for offices
(costs per workstation per annum) reported by a range of authorities.
We are currently reviewing this indicator to improve comparability
between freehold and leasehold property.
APPENDIX 1
ACRONYMS USED IN THIS REPORT
| ACES | Association of Chief Estates Surveyors and Property Managers
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| CBSS | Chief Building Surveyors Society
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| CIPFA | Chartered Institute of Public Finance and Accountancy
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| CLAW | Consortium of Local Authorities in Wales
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| COPROP | Association of Corporate Property Officers
| A local authority networking group specialising in asset management, with an emphasis on strategic and corporate issues www.coprop.org.uk
|
| FPS | Federation of Property Societies
| An umbrella group of various local authority professional bodies including ACES, CBSS, CLAW, COPROP, SCALA, SCQS and SCEME http://www.fedps.org.uk/
|
| IFRS | International Financial Reporting Standards
| |
| NaPPMI | National Property Performance Management Initiative
| A forum for developing and promoting good practice in local authority asset management benchmarking. Publishes and maintains a set of performance indicators which are endorsed by COPROP, ACES, CBSS, CLAW and SCEME plus Core Cities, Octopus and the CIPFA Asset Management Network. http://www.nbvbs.co.uk/
|
| NBVBS | The National Best Value Benchmarking Scheme Ltd.
| A limited company providing benchmarking services on behalf of FPS and its constituent organisations http://www.nbvbs.co.uk/
|
| PFI | Private Finance Initiative
| |
| SCALA | Society of Chief Architects in Local Authorities
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| SCQS | Society of Construction and Quantity Surveyors in the Public Sector
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| SCEME | Society of Chief Electrical and Mechanical Engineers
| |
| SW IEP | Southwest Improvement & Efficiency Partnership
| Regional Improvement and Efficiency Partnership. Now part of Southwest Councils.
|
| TNRP | Tenanted Non-Residential Property
| |
January 2011
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