‘Cuts’ on the agenda in Sheffield

16 September 2010

With the title of Embracing Change at a time of Uncertainty, the CFMD’s Public Sector Networks Conference in Sheffield last week, the event examined the options facing the FM community in light of the impending the ‘public sector cuts’. Jane Fenwick reports

Sheffield University’s pro-vice Chancellor set the scene by saying “It’s less about doing more with less and more about doing the same with less, ” but for Paul Crilly, Reliance FM’s newly appointed CEO, the new language of austerity should be leading FMs towards what they should be doing anyway as part of their strategic objectives.
He said FMs should challenge the procurement strategy of organisations that clearly did not understand the nature nor potential of these “significant relationships” in facilities management. He explained that the procurement process must have clear objectives, reflect the organisational structure and understand the customer’s needs. He recalled projects where the procurement function was buying on behalf of the FM team without consulting them. He said, “ We have now decided not to engage in any process where we do not get to meet the customer. When we have to achieve 20, 30 and 40 percent reductions, those numbers are easily achievable as long as there is no prescripton put on the organisations delivery methods.”
The regretted the inherent lack of trust in my industry. “We are trying to change that, he said, “If you won’t trust my organisation I won’ t participate in processes that doesn’t allow me to build that trust with you.”
He called for a change in language that should not be adversarial but ‘bind us together’ when things go wrong because that is when the cracks of mistruct will open up. He welcomed the PAS11000 standard in delivering stronger relationships but countered this by recalling how in one of the largest recent public sector contracts the Government lawyers asked that the work ‘partnering’ be removed from the documentation.
He said, “We need to start with the outcome - say savings of 25% - and then we can work out how to get there and what cultural, organisaitonal and ways of working changes are needed to get there. We need to consider the make up of the team – it should not be the source of their salary, but should be the best people for the job.
Efficiencies and productivity gains come from technology efficiencies and using it effectively, he explained. “Systems allow us to do more with less, and then it allows you to consider how to do less.”

The scale of the proposed public sector cuts was seen largely by the conference speakers as a real opportunity to do things differently. The EC Harris team of Bob Claver and Colin Stuart described how their property rationalisation strategy had saved the Department for Education saved the organisation £10m.
On potentially a larger scale the partnership between Kier and Sheffield City Council should have the capability to deliver significant savings and regeneration to the City over the 7 years of the contract. Mark Steed, Operational Director of Kier Asset Partnership Services outlined the £54m contract that aims to rationalise the City’s property estate, improve regeneration using its property, reduce carbon emissions and make the Council more efficient.
Only just over a year into the partnership, Kier and Sheffield City Council has drawn up an Asset Management Plan for the next 10 years, and clarified the governance structure that uderpins decision making. He explained that it was a mutually benificial partnership. As the first big contract for Kier Asset Partnership, Kier wants to see Sheffield as a showcase on which to grow its business, achieve a single digit profit margin (above which profits are shared) and an open and honest partnership. He said, “Partnership should not be confused with week contract management. Rather the partnership is a opportunity to outperform the traditional ways of outsourcing. The strategic partnership will face challenges and work with the client to find solutions.”
To date the partnership has achieved £1m savings, developed its capital asset management plan and office accommodation strategy that could save £20m over the term of the contract.
Director of Property and FM Services at Sheffield City Council, Nalin Seneviratne commented that the City’s property estate including domestic properties was deemed to be worth £2.6bn and comprised 153 schools, 42,000 homes, 79 council properties and halls, as well as acres of countryside outside the city. The City Council already outsources waste management (Veolia), HR and finance (Capita) and property maintenance (Kier Maintenance). He explained that the reasons for entering into the Asset Partnership was because property and FM is not a core business for the Council. It enables it to handle the risk better and draw on the partners better skills and experience.
He admitted that it had taken time for the change to bed down. “This is still going on and there have been ‘ups and downs’. TUPE was not an overnight change for the people involved and in a political environment.. However, the processes are more transparent. There is nowhere to hide and the governance process keeps a constant eye on what is being done.”
He explained that rationalisation of the Council’s accommodation will be put to the Council’s Cabinet and could deliver 30 percent savings on accommodation and £4m a year running costs.
In a debate entitled ‘Half Full-Half Empty: Challenges and perspectives from the public sector’, Haingey Council’s Director of Facilities, Dinesh Kotecha, welcomed the prospect of 25 percent cuts as “an opportunity to do things that have been a problem for some time, and to advance more cross sector working. He saw a future this included sweating assets, community management of some assets and property based regeneration.
In the further education sector, Clive Wilson, Director of Estates and Facilities at the University of Bradford, explained the need to anticipate the needs of students in 10-15 years time in light of technological changes such as cloud computing and funding issues. “It makes us think differently and do things differently,” he said, particularly in the context of north sea gas running out in 15 years and oil production peaking in 2030. “Is the glass half empty or half full,” he asked, “or do we need a new glass?”
Peter Wearmouth, Development Director of Inventures (formerly NHS Estates), explained that the NHS was not protected from the cuts as it was operating now under a static budget. He admitted that when the buget was growing it had not been spent wisely and NHS productivity had not increased. He pointed to “reducing the property portfolio by 20 percent to meet the challenge of flat line budgets”. Other strategies could include more outsourcing of back of house functions, sale and leaseback, disposal of not fit-for-purpose buildings.
In the Q&A sessions issues that arose were the capacity of the FM sector to take the lead and to “speak in the language of business” to be heard. There was a call for reform of TUPE to reduce the burden on suppliers of transferring staff, and for public sector pension reform.
To view the presentations at this conference CLICK HERE