Shaping FM in the Public SectorMichael Cant BArch MRICS MBA

Larch Consulting

                           

What is being Learnt

• Over 20 years of dramatic public sector change in FM.

• Pace of change in FM has varied, but key threads now emerging across both public and private sectors.

• The next 20 years will be very different.• There is much to be done …

                           

Underpinning Issues

• Local Authority specific:– Gershon/Efficiency savings.– The OGC Better Asset Management

initiative.– Best Value and related initiatives.

• Across the FM sector:– Location independent working.– New technology and its impact on work.– Sustainability (in all its guises).– Bundling/ integration of services.

                           

Progress Made in FM - Philosophy and Principles

• Devolved budgeting is strongly embedded in LA sector.

• Achieves benefits of empowerment, ownership, authority and self-determination.

• Sometimes misses opportunities for aggregation, efficiency and more effective bundling.

• Much achieved - the basis is set for a more balanced approach in the future.

                           

What we have found• Mid-1980’s to 1990’s - change barely on the

radar pre this period! • Public sector as competent as private sector.• Opportunities to improve FM through service

efficiencies (but it often takes a ‘baseline’ approach):– If we continue refine our MIS, and strip out ‘noise’ –

efficiencies available and providing better service to customers.

• Infrastructure services increasingly more effective where fully integrated day-to-day operations from client and provider perspectives: – (this can only be done a through more transparent

approach).

                           

Implications for FM• Cost focus (where FM is seen as a

commodity or non value-added purchase). • Pressure on achieving expenditure

reductions across the whole area (Gershon pushing for actual cost reductions): – In practice this could mean reduced levels of

service to minimum-acceptable standards.– A real challenge emerging in the supply chain

implications.• ‘Making the case for investing more, or

achieving better value and real transparency from the spend’.

                           

What is needed is Clarity

• Clarity in:– The real and future FM expectation.– The current ‘baseline’.– What are the changes going to

achieve.– Is the impact of the transition

sufficiently outweighed by the benefits?

– How it is demonstrated at all stages of the change process?

                           

Analysis Tools

Measure Measure Current Current

OperationOperationOrganogramsOrganograms

RASCIRASCI

Service Service Description Description TemplatesTemplates

Historical Historical Analysis Analysis

Identify Identify Change Change OptionsOptions

SWOTSWOT

External External ComparatorsComparators

Provider Provider CapabilityCapability

Assess Risk Assess Risk of Changeof Change

PESTEPESTE

4R Framework4R Framework

Payback Payback Analysis (NPV or Analysis (NPV or

similar)similar)

SWOTStrengthsWeaknessesOpportunitiesThreats

PESTEPoliticalEconomicSocialTechnologicalEnvironmental

Reframing Restructuring Revitalising Renewal

                           

Analysis Tools - RASCI Profiling

                           

Emulation Modelling

What is an emulation model?

• A clear forecasting tool that minimises risk exposure.

• By simulating the operating environment, managers are able to manipulate site/FM cost variables.

• Feeds into conventional analysis tools such as direct payback, NPV etc.

                           

Modelling Example – Service Focus

                           

Modelling Example – Resource Focus

                           

Modelling – Typical Payback Analysis

                           

Plus or Minus Points?• Coming-together of public sector bodies across

regions:– Achieve more efficiency (for the benefit of a region),– Specifically in increased buying power/efficiency?

• New bodies (including Local Strategic Partnerships and Shared Service Organisations):– To generate increased collaboration and benefits?– Economies of scale?

• Local Strategic Partnerships.• Neighbourhood Renewal Funding:

– Where LSPs work well, they will begin to buy together (this will mean bigger, broader contracts i.e. less tailored and specific to a single client).

                           

Next Few Years – ‘Usership’ not Ownership

• Political shift will alter focus of FM response for Local Authorities as well as PFI/PPP and related endeavours (regardless as who holds office).

• The first waves of cost reduction/ bundling/ outsourcing need real baseline re-evaluated (but will they be allowed to?).

• Infrastructure (including Property and FM) ‘management’ convergence – will it follow the trend elsewhere?

• Facilities Management must lead rather than follow if it is to add significant value to the Local Authority environment.

• Will property ownership and management disappear off the map?

• PFI/PPP and sale/leaseback – the acid test on performance to date.

• Managing different contracts and relationships – can we really get it on track?

                           

Rearguard – The direct labour implication

• Many authorities still have significant blue collar/operative labour teams – alternative methods now emerging that do not require outsourcing.

• TUPE and outsourcing are still to be tackled in many areas – but against a proper assessment process.

• Much of the focus is practical rather than strategic – collaboration is becoming essential.

                           

The FM Future …