RICS – Olympic performance in the public sector

08 November 2012

The importance of best practice property asset management in the public sector, as showcased through a case study looking at the Government Property Unit’s use of a Croydon ‘hub’ during the London Olympics.

In this age of austerity and budget cuts, the public sector is under constant pressure to cut costs and release capital, whilst all the time maintaining output. To achieve these demands, efficient and effective use of all resources is critical, and the government’s property portfolio is a proven area where some of the most significant savings can be made. Indeed, according to RICS’ Public Sector Asset Management (PSAM) guidelines, best practice management of property assets can deliver cost, productivity and environmental efficiencies of up to 20% across properties and portfolios.

It is essential that a strategic approach is taken to property asset management – one carefully aligned with business aims and objectives. Our updated PSAM guidance note has been specifically developed with this in mind, supporting public sector professionals working to achieve targeted savings of some £83 billion over the next four years across its £700 billion property estate. This note details good practice for property asset managers including devising a management plan, delivery processes and collecting and measuring results.

Planning and processes
Central to effective planning of property asset management is an understanding of the inter-relationship between business and property processes. A property asset plan must be developed at the strategic business level and integrated within the business plan – including being matched to organisation-wise resourcing policies - to be effective. For this reason we have also provided guidance for board level professionals.

Even the most rigid of plans will, however, come up against unexpected developments and challenges when put into practice. Flexibility and creativity is therefore essential. Constant review of the requirements and best use of assets needs to be considered within the overall plan – ensuring property remains relevant to situations and developing business strategy.

At no time has this requirement been more evident in practice than this year, which has seen the arrival of the world’s greatest sporting event in London. Contingency plans were a key business focus in the run up to the Games, but the actual impact that the event would have on resources and services was largely unknown, meaning a level of flexibility was required.

Case study: Croydon, an Olympic hub
With 80,000 civil servants working in Greater London, half of them centrally*, the public sector faced a significant logistics challenge during the Games. Integrated management of the Government’s property estate was essential to enable flexible working during the Games and the Government Property Unit’s (GPU) creative approach offers both an excellent example of good property asset management in the public sector and a lesson for others to potentially follow.

The GPU established ‘hubs’ in existing, under-utilised office space outside of central London to offer 500 alternative work spaces. A particularly successful project was the transformation of an empty disused floor at the Government’s Southern House building in Croydon. The result was a fully-functioning office providing space and services for 150 staff outside of Central London. This effective transformation of an unused part of the Government’s property portfolio was achieved on a budget of under £6,000 – demonstrating the financial benefits of an integrated asset managed plan.

To achieve this shift in location clearly requires collaboration and support across the board in terms of corporate resources. The Croydon Hub achieved efficient use of resources through utilising an existing IT system and recycling furniture from the offices of the recently closed COI.

Sherin Aminossehe, Head of Regional Strategy, Government Property Unit said: “We saw the Games as a unique opportunity to maximise resources and in turn drive working efficiencies that could have a lasting legacy beyond the Games.

“Civil servants received the usual advice offered by organisations and business across the Capital, such as to consider different work and travel patterns. However, no additional leave was offered and many requests for leave were refused. This meant we needed to maximise the property assets we had to support staff and ensure services were delivered.

“The Croydon hub has been made available beyond the Games, providing smarter, more flexible working for the Civil Service. There are also plans to roll out the scheme in other surplus office spaces across the country to establish future ‘hubs’ for longer-term flexible use.

“This development was just one example of our new creative approach to the government’s property estate. This approach has already generated £200m for the public purse by enabling the sale of 40 government buildings in London since May 2010.”

The Croydon hub example highlights the power of a strategic approach to managing a property portfolio, in line with the key principles set out in RICS’ guidance note. Through collaborative working across the structure of an organisation it is possible to utilise space whilst reducing costs and driving efficiency.

Members can view RICS’ ‘Public Sector Property Asset Guidelines at: www.publicsectorassetmanagement.com. A separate document for non-property colleagues entitled ‘Senior Decision Maker’s Guide – an insight into property asset management’ is also available here.

As a means of strengthening the guidance on offer to the FM sector, RICS is currently working to provide new guidance, looking particularly at how asset and facilities managers interact. This relationship is vital in maximising all available assets and resources for the benefit of business performance and delivery of services.

*Based on most recent figures of March 2011.