Hampshire County Council Buildings, Land and Procurement Panel Item 19 October 2004 Risk Management Strategy for the Built Estate - Annual Review Report by the Director of Property, Business and Regulatory Services

Contact: Paula Crompton Ext: 5454 email [email protected]

How the conclusion in this report fits with the Corporate Strategy This scheme will impact on the delivery of the following Corporate Aims Aim 4 - Building strong and safe communities - by working with others to build strong, safe and sustainable communities Aim 5 - Improving services - by improving our performance to deliver services and manage resources

1		Summary
1.1		This report: · highlights changes from the previous year's risk register; · confirms the current strategic threats; · summarises the actions and additional resources required to improve performance; · highlights the progress made against the highest risks to the built estate; · identifies the outcomes achieved following the earlier allocation of additional funding of £2.8m; and · updates on the Health and Safety review programme in schools.
1.2		The report also seeks approval to use a Design Model for the installation of sprinklers in the Nursing Care and Older Persons' Residential Homes.
2		Summary of Resources
2.1		The risk profile informs the allocation of resources from the landlord's repairs and maintenance budgets and New Deal for School (NDS) Condition funding, which are reported elsewhere on the agenda. In April 2003 Members agreed to allocate additional funding of £2.8m to address issues relating principally to fire, structural collapse, electrical safety and asbestos. Expenditure was profiled over an 18 month period and the allocations were fully committed by the end of August. The use of this additional funding is shown below.
		A contingency to meet the highest risks was agreed by the Executive Member for Policy and Resources on 8 April 2004 and the proposed distribution of this is also indicated below:
			Risk Heading Additional Resources previously approved 2003/4 New resources proposed in this report for 2004/5 £000 £000 Fire including arson 1,530 2,165 Failure to manage contractors 0 60 Condition of building fabric 60 0 Asbestos disturbance 400 550 Electrical services failure 210 450 Detection of Legionella 0 540 Structural collapse and temporary buildings 600 0 Total 2,800 *3,765
			* £2,165 is funded from the NDS allocation
	2.2		Due in the main to the NDS allocations, it has been possible to allocate additional one-off resources to the highest risks. With uncertainty over the long-term future of NDS funding and other budget pressures which were detailed in the earlier budget report, the department is at the limits of what can be achieved to manage and minimise landlord risks within its existing resources.
	3		Risk Management Strategy 2003/4 to 2004/5
	3.1		The strategic risk assessment and performance framework for the Built Estate for 2003/04 is attached at Appendix 1. Following the annual review this summer, the register has been revised for 2004/05 and is attached at Appendix 2.
	3.2		Of the top 20 strategic risks on the risk register for 2003/04, one risk, `Business Threat to future service delivery' has been deleted, leaving 19 strategic risks on the Property Services Risk Register for 2004/05.

3.3	Of the 19 strategic risks, one (`Failure to manage contractors and supply chains') has been reclassified from high to medium and two risks reclassified from medium to low (`Structural collapse of permanent and temporary buildings' and `Discrimination - failure to provide access to public buildings'). One risk has moved from low to medium following improved understanding of our management arrangements and current performance (mechanical engineering services failure). There is no change in the performance rating for the 19 remaining risks, with 10 amber and 9 green performance ratings.
3.4 3.5	A commentary on each risk category is given in appendix 3 to demonstrate progress, the use of additional resources detailed in the table in 2.1 and the impact on performance. Key performance targets met in 2003/4 were:
	· installation of fire detection to 13 secondary schools · fire surveys completed in all residential buildings (excluding older persons' homes) · asbestos reinspection programme launched, lead manager appointed and team formed · procedures produced and launched to staff for Construction (Design and Management) Regulations (CDM) and non-CDM projects · consultants appointed for Planning Supervisor role on high-risk projects · Head of Procurement appointed · new term contract established to complete electrical test and inspection programme · 50% reduction in positive legionella test results · updated and fully operational database available to provide inventory of mechanical plant · consultants' insurance arrangements - reviewed and approved by Risk Management Board.
3.6	Key actions for 2004/5 include: · installation of 18 new fire alarms with automatic smoke detection at Secondary Schools · commence the implementation of agreed programme of structural fire precaution work to residential older persons' homes · revise and reissue Fire Safety Manual to local managers · implement asbestos reinspection programme · improve quality of asbestos survey information · appoint Construction H&S Manager · establish term contract for minor works
	· establish test and inspection programme with increased frequencies for community buildings, swimming pools and floodlighting · eliminate repeated legionella detections in Older Persons' Homes · replace all wet cooling towers by 2005.

4	Health and Safety Review Programme in Schools
4.1	A health and safety review programme for secondary schools was launched in February 2002 by in-house health and safety advisers following a successful pilot scheme. A primary schools review programme, run in partnership with Education Personnel Services, was launched in May 2003 following the completion of the programme in the secondary sector. Health and safety property issues were the primary focus for the secondary school reviews, whilst the content was extended for the primary sector to cover for example child protection and physical intervention procedures.
4.2	The review programme, now fully completed in the secondary phase and 50% completed for the primary phase, has been well-received by head teachers. A recent customer satisfaction survey completed by Miller Associates, an independent consultant, identified the service as a valuable and professional service, even where performance is found to be poor.
4.3	A common area for improvement is the availability of written risk assessments, currently a legal requirement. Schools have carried out risk assessments and implemented controls to minimise risk to pupils, staff and visitors, but have overlooked formal recording. Education Personnel Services have provided schools with model risks assessments to assist them with the process and when completed, will provide a straightforward means of formalising and recording risk assessment to improve health and safety performance and statutory compliance.

5	Design Model of Sprinkler Systems in Nursing Care and Residential Older Persons' Homes
5.1	The installation of sprinklers into County Council buildings is based on a risk assessed process. Once it has been determined that sprinklers are required, they are installed to British Standard 5306 Part 2. However it is felt inappropriate to install sprinklers in the Nursing Care and Residential Older Persons Homes to this standard but develop a Design Model. The main reasons for this are: · the residential nature of the buildings and the need to avoid an `industrial' appearance; · the need to provide fire safety precautions in addition to those set down in the Building Regulations and NCIS Standards, which would protect the quality of life for the residents should a fire occur; · the perception of a conventional sprinkler system and the impact its presence may have on residents.
5.2	The County Council commissioned a specialist fire consultant, GEM Consulting to develop a Design Model to act as a guideline document for the design and installation of the sprinkler systems in the Nursing Care and Residential Care Homes in Hampshire.
5.3	GEM Consulting drafted the Model Document, basing the engineering solutions on the British Standard and DD 251 documents. The coverage of the sprinkler system within the buildings, the hazard classification and the fire risks are based on a Risk Assessment undertaken by Property, Business and Regulatory and the Hampshire Fire and Rescue Services (HRFS).
5.4	The engineering division of the Building Research Establishment (BRE) has validated the engineering solutions and applications set down in the model document, and given third party accreditation to the Model. HFRS has also been closely involved with the development of the Model Document which they have endorsed.
5.5	While at this stage it is only intended to use the Design Model in the Nursing Care and Older Persons Residential homes, it is intended to develop it to meet the requirements of all properties in the built estate where sprinkler provision has been agreed.
6	Conclusions
6.1	Good progress has been made by PB&R in implementing a risk management strategy for the County Council against the highest risks through focused management action, supported by additional funding to ensure continuous improvement in departmental performance. This report provides an evidential base for planned improvements and actual achievements against the highest risk to the built estate. Significant resources have been redeployed against the highest risks across the built estate. At this level of expenditure the department is at the limits of achievement in a 12 month period within existing staff capacity. Limited improvement can be made by focused management action and in many instances only the provision of additional resources can reduce risk to the lowest level.
6.2	For many of the highest risks, including fire, condition of buildings and asbestos disturbance, significant capital investment is required over the next five years if downward pressure on these risks is to be achieved. It is not possible to take resources from areas where the risk is low and current performance meets with best practice, since maintenance and repairs programmes are essential for keeping risks as low as reasonably practicable.

Recommendation(s):
That the Buildings, Land and Procurement Panel advises the Executive Member for Policy and Resources that: 1 the revised Property Services Strategy Risk Register for 2004/5 at Appendix 2 be approved; 2 approval be given to the allocation of £1.08m as detailed in paragraph 2.1 and Appendix 3; 3 the Design Model is adopted as the technical solution for the installation of sprinkler systems in the Nursing Care and Residential Homes and developed in the future to address all properties in the built estate where sprinkler provision has been agreed.

Section 100 D - Local Government Act 1972 - background papers

The following documents disclose facts or matters on which this report, or an important part of it, is based and has been relied upon to a material extent in the preparation of this report.

NB the list excludes:

1 Published works

2 Documents which disclose exempt or confidential information as defined in the Act

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BLPP1004C

Appendix 1

Property Services Strategic Risk Register 2003/4

Summary of ten highest risks WITH controls in priority order also illustrating current performance

Level of risk	Area of risk	Risk Owner	Position	Traffic light to illustrate performance
High	Fire including arson	S Clow	1	Amber
High	Failure to manage contractors & supply chain	J Duggan	2	Green
Medium	Condition of building fabric	M Fitch	3	Amber
Medium	Asbestos disturbance	M Fitch	4	Green
Medium	Electrical services failure	K Woodward	5	Green
Medium	Detection of Legionella	K Woodward	6	Green
Medium	Structural collapse and temporary buildings	K Woodward	7	Green
Medium	Discrimination - access to public buildings	P Crompton	8	Green
Medium	Swimming pool plant failure	K Woodward	9	Amber
Low	Access for maintenance to plant or buildings	M Fitch	10	Amber

Summary of performance criteria:

Red - reactive performance. Resources (people time or money) required to significantly improve risk management controls. Urgent action required.

Amber - proactive and reactive performance. Progress is being made but specific improvement required.

Green - Meeting best practice. Issues require little managerial attention until next review

Appendix 2

Property Services Strategic Risk Register 2004/5

Summary of ten highest risks WITH controls in priority order also illustrating current performance

Level of risk	Area of risk	Risk Owner	Position	Traffic light to illustrate performance
High	Fire including arson	M Kent	1	Amber
Medium	Asbestos disturbance	P Crompton	2	Green
Medium	Condition of building fabric	M Fitch	3	Amber
Medium	Failure to manage contractors & supply chain	J Duggan	4	Green
Medium	Swimming pool plant failure	K Woodward	=5	Amber
Medium	Electrical services failure	K Woodward	=5	Green
Medium	Detection of Legionella	K Woodward	=7	Green
Medium	Glazing and window safety	M Fitch	=7	Amber
Medium	Mechanical Services failure	K Woodward	9	Amber
Low	Professional Quality Assurance	S Clow	10	Amber

Summary of performance criteria:

Red - reactive performance. Resources (people time or money) required to significantly improve risk management controls. Urgent action required.

Amber - proactive and reactive performance. Progress is being made but specific improvement required.

Green - Meeting best practice. Issues require little managerial attention until next review.

Appendix 3

Corporate Risk Assessment for the Built Estate

Commentary on top eleven risks · Fire including arson · Asbestos disturbance · Condition of building fabric · Contractor and supply chain · Swimming pool plant failure · Electrical services failure · Detection of Legionella · Glazing and window safety · Mechanical services failure · Professional Quality Assurance · Structural collapse and temporary buildings

Fire including arson
In recognition of changing legislation and the increasing cost of arson in daytime premises, fire safety, including arson, has been ranked the top risk to the built estate over the past three years . Improving fire safety is inextricably linked to the local management of fire and use of the buildings, which is the responsibility of the service department and manager in control of the building. Current performance for the landlord is assessed as amber.
	Agreed actions 2003/4 Outcomes 2003/4 Implementation of NDS programme Installation of fire detection to 13 Secondary schools and other minor improvements Fire survey to residential buildings (excluding older persons homes) Fire surveys completed Implement agreed fire precautions programme in older person homes Programme has not started - subject of report to members at this meeting. Implement County Council sprinkler policy Practice note and risk based approach implemented and revised following change to Council policy in February 2004. Despite significant progress in the last 12 months, a green performance assessment is not anticipated until 2006, subject to the current level of resources being made available. The proposed actions for 2004/5 are listed below:
	Agreed actions 2004/5 Provision of resources 2004/5 £000 Implement agreed programme of structural fire precaution work to residential older persons homes following structural fire precaution surveys Within existing resources Implement agreed NDS programme £2,165,000 NDS Revise and reissue Fire Safety manual for local managers Within existing resources Appoint full time departmental lead manager for fire and revise line management arrangements and set up operational team Within existing resources Response HFRS enforcement notices Within existing resources
	In addition to the above the usual budget allocation from the major repairs budget has been supplemented this year by resources carried forward from 2003/04 giving £970,000 available to respond to HFRS enforcement actions and actioning the outputs from the structural fire precautions surveys of residential homes. The NDS programme relates in the main to the installation of 18 new fire alarms with automatic smoke detection at secondary schools.
	Asbestos disturbance
	Ranked in second place ( 4th in 2003/04) as a medium risk with a green performance rating. Despite having a detailed improvement plan, specific problems were encountered that caused slippage in the achievement of the improvement agenda, including retention of technical staff to complete asbestos surveys, appointment of subcontractors with adequate insurance to satisfy the Council policy and availability of scale plans for certain operational buildings. Therefore the table below shows certain actions that are not complete and will be carried over to the next 12 months. Agreed actions 2003/4 Outcomes 2003/4 Complete asbestos surveys and publish registers for all operational buildings 99% of sites have an asbestos register. (Twenty buildings do not have a register.) Develop re-inspection programme to review condition of asbestos Re-inspection programme launched June 2004. Appoint full time senior manager to lead operational team for asbestos Lead manager appointed in April 2004 Revise guidance for local managers about asbestos Revised guidance published and currently being distributed Implement repairs to asbestos in poor condition Prioritised repairs programme implemented To ensure adequate progress during the next 12 months and to meet new legislative requirements, a senior manager has been appointed to lead an integrated team of staff from Regulatory and Property Services to deliver an ambitious asbestos management strategy: Agreed actions 2004/5 Provision of resources 2004/5 Implement coordinated re-inspection programme across the estate £300,000 additional resource requested Improve quality of survey information (commence year 1 of 5 year programme in April 2005) £250,000 additional resource requested Provide information to building users and occupiers to ensure that all buildings, in which the County Council has an interest, complies with the law Within existing resources Publish asbestos register in 100% of buildings Within existing resources The new arrangements represent a significant step forward and an opportunity to provide a seamless and integrated range of services for the future.

Condition of building fabric
	Ranked in third place as a medium risk for the past two years, with an amber performance rating, this risk covers many issues relating to the maintenance and improvement to both internal and external parts of buildings. Where a separate heading features, for example electrical services, these risks are excluded from the assessment. Agreed actions 2003/4 Outcomes 2003/4 Implement agreed capital and NDS programmes Programmes implemented Maintain quinquennial AMP survey information for schools Survey completed to time and high priority repairs implemented Establish quinquennial AMP survey programme for Community buildings Consultants appointed to commence survey for 20% of estate. Implement new vandalism strategy and term security contract. Term security contract agreed & vandalism strategy published. Investment programmes for SCOLA recladding, external redecorations, reroofing etc all serve to reduce liabilities associated with condition of buildings. Condition of buildings (5,000 buildings across 1,000 sites) is an area of risk that requires significant capital investment if downward pressure on this risk is to be maintained. Significant progress has been possible in controlling this area of risk as a result of the NDS Condition funding received from the DfES over the last three years. Agreed actions 2004/5 Provision of resources 2004/5 Implement agreed NDS programmes NDS funding Implement agreed capital programmes in community buildings 2004/05 capital repairs Appoint consultant to survey further 20% of non-education estate. Within existing resources Despite considerable investment in building condition, a green performance assessment is not anticipated until 2008, subject to the current level of resources being made available annually.

Contractor and supply chain
Failure of contractors and supply chains represent a high risk and is ranked fourth (2nd in 2003/04) on the risk register for 2004/05. The construction industry encompasses a wide range of activities, hazards, materials, techniques, employment patterns and contractual arrangements. Nationally, far too many people are injured on construction sites or have their health damaged by construction work. Despite robust checks on the competence and resource of all approved contractors, the understanding of health and safety by construction workers is limited, coupled with poor planning and communications with occupiers and sub-contractors, provides a potential liability for the County Council as client.
	Agreed actions 2003/4 Outcomes 2003/4 Implement procedures for CDM and non-CDM projects Procedures launched to staff through in-house seminars during October 2003 Review arrangements for health and safety files Scoping exercise completed and revised arrangements drafted Review arrangements for Planning Supervisor role Consultants appointed as planning supervisor for higher risk projects. Provide training of minor works contractors on health and safety Training held during autumn 2003 Head of Procurement appointed Appointed in December 2003 Key actions for the coming 6 months include a review of the site safety check procedure and use of new project procedures, implementation of a revised strategy for outstanding project H & S files and to consider the practicability of term contract arrangements for certain small works. The following actions are proposed to maintain our best practice status: Agreed actions 2004/5 Provision of resources 2004/5 Establish multi-disciplinary forum for feedback on H&S procedures and processes including staff, contractors and consultants. In-house resources Appointment of a Construction Health and Safety Manager £60,000 additional resources proposed in Appendix 5 Establishing term contract for minor works Within existing resources Complete health and safety files at end of project to time and to acceptable standard Within existing resources Implement health and safety training in line with industry standards eg National card certification. Within existing resources Significant improvements have been made over the past two years and emphasis is now being placed on consolidating arrangements to maintain current performance, and the identification of minor improvements.

Swimming Pool Plant Failure
	Limited resources allocated to repair and maintenance of swimming pools historically has seen an overall deterioration in condition illustrated by increased risk rating and amber performance assessment (moved from 9th position in 2003/04 to =5th position in 2004/05). Funding delegated to schools was part of the Education Committee's revenue budget. A recent review conducted by Education, estimated that minimum capital funding of £1.8m would be required to bring pools up to an adequate standard for health and safety. Further consideration is being given to the funding, safety and asset management to identify a way forward to improve performance. Agreed actions 2003/4 Outcomes 2003/4 Implement capital programme Deferred subject to funding being agreed Implement improved maintenance programme Deferred subject to funding being agreed Key actions to improve performance are listed below: Agreed actions 2004/5 Provision of resources 2004/5 Implement capital programme To be determined Implement improved maintenance programme Partly within existing resources Subject to the review finding and approval of funding (yet to be determined), upgrading pools to an acceptable Hampshire standard will allow risks to pool users to be reduced. Until this time the Council remains vulnerable to accidents and liability from pool users, especially vulnerable people such as those with a disability, babies and young children, and older persons.

Electrical Services Failure

Ranked as fifth risk on the Property Services risk register with a green traffic performance assessment for the past 2 years. The risk describes fixed electrical installations across the estate, where the greatest risk is associated with vandalism or accidental damage to sockets and fittings.

	Agreed actions 2003/4 Outcomes 2003/4 Implement quinquennial test and inspection programme Programme now meets with legal minimum (slippage of 20% has been resolved) Implement new term contract for test and inspection programme Term contract established to provide agreed outcomes at lowest cost by competent contractor. Implement prioritised repairs to fixed installations Repair programme implemented Identify future improvements to performance Gap analysis completed to inform current improvement plan Service improvements to meet with best practice and maintain current green performance assessment are listed below: Agreed actions 2004/5 Provision of resources 2004/5 Establish Test and Inspection programme with increased frequencies for community buildings, swimming pools and floodlighting to meet with best practice £450,000 from contingency Develop inventory of lightning protection systems and programme for test and inspection Within existing resources Implement annual inspection programme for electrical terminations, breakers and switch fuse devices Within existing resources Having made considerable improvement in the past eighteen months it is proposed to maintain current performance at green within existing resources.

Detection of Legionella
	Assessed as a medium risk in seventh position, an improved green performance rating since Autumn 2003 illustrates significant achievement during the past 12 months. Agreed actions 2003/4 Outcomes 2003/4 Reduce number of Legionella detections in older persons homes Approximately 50% reduction in positive test results. Implement minor repairs and improvements to water services installations Minor improvement implemented using in-house resource Publish risk assessment for operational buildings Risk assessment published for 5% of estate. Key actions to improve performance are summarised below: Agreed actions 2004/5 Provision of resources 2004/5 Eliminate repeated Legionella detections in older persons homes Mainly in-house resource with £120,000 from contingency Replace all wet cooling towers by 2005 Additional resource £420,000 from contingency Review all risk assessments on a two yearly cycle Within existing resources Deliver workshops for Social Services managers. Within existing resources Budget and professional resources have been identified and requested to support the replacement of the remaining three cooling towers within the Castle Complex and a building in Southsea. A bid of £420,000 for additional resource has been made against the contingency for 2004/5. The current testing regime and risk management arrangement for cooling towers complies with L8 and there have been no recorded legionella test failures. The capital programme, if approved, will reduce the risk rating from medium.

Glazing and Window Safety
	Ranked in equal seventh position and amber performance rating, this risk describes window failure or damage to glazing which can create injury to building users or contractors. The rank order has increased from thirteenth to seventh position following an improved understanding of the risk and potential liability associated with windows. The following table confirms the key actions and performance during 2003/4: Agreed actions 2003/4 Outcomes 2003/4 Monitor the implementation of glazing risk assessment for community buildings Partially completed using in-house resources Establish annual capital programme of window replacement NDS programme implemented Programme deferred for community buildings subject to funding being made available.

	Key actions to improve performance planned for 2004/5 are listed below: Agreed actions 2004/5 Provision of resources 2004/5 Revise guidance for local managers Within existing resources Implement agreed NDS programme Within existing resources Implement agreed capital programme for community buildings Within existing resources

Mechanical Services Failure
	Ranked in ninth position with an amber performance rating, an internal review of performance identified some improvements and this has created an increased risk rating from sixteenth position in 2003/04 following the annual review. This risk covers mechanical engineering plant which has the potential for fire and explosions associated with failures, and bring about the closure of operational buildings. Agreed actions 2003/4 Outcomes 2003/4 Review database to provide an inventory of all plant Database updated and fully operational Review responsibilities for plant outside of term contract Responsibilities confirmed and agreed Key actions to improve performance planned for 2004/5 are listed below: Agreed actions 2004/5 Provision of resources 2004/5 Revise Corporate Policy and guidance for local managers Within existing resources Develop programme to service and replace safety valves Within existing resources Consideration is being given to the funding, safety and asset management of this risk to improve performance over the next 12 months.

Professional Quality Assurance
	This risk covers human error leading to the potential for third party damages, significant costs and customer dissatisfaction. Embracing in-house arrangement to ensure bet practice and high levels of performance, this risk covers health and safety procedures, quality assurance, financial arrangements and technical controls. Agreed actions 2003/4 Outcomes 2003/4 Review consultants' insurance arrangements Insurance reviewed and arrangements approved by Risk Management Board. Implement office procedures for appointment and management of contractors Procedures implemented in October 2003 using in-house resources. Key actions to improve performance planned for 2004/5 are listed below: Agreed actions 2004/5 Provision of resources 2004/5 Develop the Technical Review programme Within existing resources Establish multidisciplinary forum for feedback on in-house procedures and process including staff, contractors and consultants. Within existing resources Improving technical standards and audit procedures will further reduce risk of claims and liability and ensure achievement of best practice.

Structural collapse and temporary buildings
Previously assessed as a medium risk in seventh position in 2003/04 with a green performance rating, this risk has reduced to thirteenth place reflecting the improvement over the past 2 years. Pro-active risk based surveys of permanent and temporary buildings ensure that all buildings remain safe to occupy, reducing the risk of collapse and injury to building users, while quarterly reports to senior managers provide data on survey findings, identify resources for remedial actions and review departmental performance.
	Agreed actions 2003/4 Outcomes 2003/4 Commence inspection of buildings under 40m2 20% of inspection programme completed Implement prioritised capital repair programme Programme completed Key actions to maintain current performance are summarised below: Agreed actions 2004/5 Provision of resources 2004/5 Continue inspection of buildings under 40m2 Within existing resources Implement prioritised capital repair programme Within existing resources Agree duty holder and strategy for fixed equipment, eg climbing walls, hoists, Within existing resources The use of capital resources to remove poor condition, temporary buildings in the next 4 years will reduce the cost of inspections and eliminate risk in the foreseeable future. Having made considerable improvements in the past eighteen months it is proposed to maintain current performance at green using in-house resources.