Hampshire County Council

Buildings, Land and Procurement Panel Item 10

13 October 2005

Strategy for the Built Estate

Report by the Director of Property, Business and Regulatory Services

How the conclusion in this report fits with the Corporate Strategy

This scheme will impact on the delivery of the following Corporate Aims:

Aim 1 - Maximising life opportunities - by providing a good-quality and well-maintained built estate for the community to enjoy

Aim 2 - Stewardship of the environment - by ensuring the built estate is well-maintained and provides an environment in which people want to live

Aim 5 - Improving services - by providing good-quality buildings that enable improved service delivery

1

Summary

1.1

The strategy and key objectives for the current year relating to the built estate were confirmed by the Panel at its meeting in April and approved by the Executive Member for Policy and Resources on 14 April 2005. The purpose of this report is to review progress against the strategy and provide an overview of the issues that are emerging and discussed in more detail in the reports that follow. The objectives of the strategy, identified in Appendix 1, provide the framework against which the revenue, capital and NDS funds are determined. Significant progress has been made against all the objectives in the strategy.

2

Strategy and planning

2.1

Over the course of the financial year the Panel will continue to receive reports around the landlord's key activities and programmes of work, which taken together over many years, will ensure that the key objectives relating to the built estate are achieved. The Panel has the challenging task of balancing the distribution of its resources across an increasing number of workstreams including:

· priorities emerging from the corporate risk assessment

· contributions to major capital programmes and projects

· meeting sustainability objectives, particularly those relating to reducing energy consumption

· the need to address outstanding maintenance liabilities in both the education and non-education estate at a time of declining budgets

· development of services to schools to maintain the current 100% buy-back.

2.2

The approach to maximising progress in each of the above areas is summarised below and considered in more detail in the reports later on the agenda. One trend that is emerging and causes some concern is that tender price inflation over the last four to five years continues to devalue our spending power which is having a notable impact on non-education buildings in particular.

3

Programme management

3.1

The detailed budget distribution for 2005/06 was approved by the Executive Member on 14 April 2005. The report later on the agenda dealing with budget issues identifies the financial pressures on the budgets and the emergence of pressures in the non-education estate. This year's allocation, together with indicative allocations to 2007/08, are given in the table below:

2005/06 2006/07 2007/08

Capital Repairs 5,618 5,618 5,518

Major Repairs 8,310 8,310 8,310

Revenue Maintenance ¹ 12,565 12,565 12,565

NDS Condition ² 11,341 12,601 12,000

Devolved Capital ³ 14,321 15,000 15,000

Schools 52,155 54,094 53,493

¹ At current rates and does note include passporting or inflation uplift

² The DfES has not confirmed allocations beyond 2006/07

³ These sums are delegated directly to schools although the majority of the funding is used to undertake building work. It has been assumed that the current level of devolved capital will continue in 2006/07 and 2007/08.

3.2

Revenue expenditure

The bulk of the budget, over 60%, is committed to planned engineering servicing and maintenance and forms the most significant part of the Service Level Agreement with schools. Each year as part of the engineering term contracts, around 4,000 items of mechanical and electrical equipment, including gas safety checks, fire alarm installations, catering equipment, intruder alarms and ventilation systems are serviced. In addition, more than 17,000 breakdowns, system failures and call-outs are attended to in an average year. Only 27% is spent on reactive maintenance such as roof leaks and vandalism. The continuation of major capital programmes such as the SCOLA recladding is having the impact of reducing maintenance liabilities, specifically external redecoration and repairs and significantly improving the quality of the built environment.

3.3

NDS funding (including the 2004/05 allocation and fees) has been allocated towards the following types of work:

*NDS Investment

Priority Area £'000 Number of Schools

SCOLA recladding 14,750 58

Flat roofing/window replacement 13,125 149

Boilers mechanical system replacements 8,850 157

Fire precautions/electrical safety 8,300 161

External works and drainage 1,290 54

External redecoration 7,810 207

General building, engineering and

structural repairs 3,660 21

Other work including temporary classroom

replacement and contingencies 69,000 807

* excludes fee provision

3.4

As demonstrated in the above table, the impact of NDS funding is significant by dealing directly with many of the most significant liabilities along with wide coverage across school sites. However, as already noted, with resources for schools likely to reduce it will remain important to plan programmes over longer timescales and continue to work with schools on the integration of their priorities and devolved funding.

3.5

While there has been significant additional funding for schools over recent years, investment in the rest of the estate, some 300 establishments covering 250,000 m² of floor space, has remained static. At the same time the creation of Discovery Centres and Nursing Care units for example has increased the floor area. While these facilities will not require major planned investment in the immediate future, routine maintenance, regular servicing of plant and the usual inspections relating to safe occupation are bringing about pressures against the revenue budget.

3.6

Recent planned capital investment has been targeted to support major capital developments such as Discovery Centres and has involved only a relatively small number of buildings. There is growing evidence, including feedback from service departments, that wider-scale investment in the full range of Recreation and Heritage facilities, together with the need to develop strategies to tackle liabilities at some social care residential establishments and community centres in particular, will be required over the medium-term.

3.7

The impact of addressing repairs in a reactive way, as opposed to planned, is to increase costs substantially over time. Service managers will also become increasingly concerned about the impact that deteriorating buildings have on the service delivery and the users' perspective of the quality and services being provided.

3.8

It is proposed to bring forward a detailed report to a future meeting of the Panel on the condition of the non-education estate, together with proposals for tackling outstanding maintenance liabilities in the medium-term.

4

Sustainability initiatives

4.1

A report was presented to Members on 5 April 2005 outlining key sustainability projects and initiatives relating to the following:

· new building management system for Headquarters buildings

· reducing energy and water consumption and increasing `green' electricity

· pilot studies of buildings with low environmental credentials and managing construction waste

· initiatives relating to water conservation

· BREEAM - a new environmental assessment method for designing and managing sustainable new school buildings

· contractors in the community scheme.

4.2

There has been significant progress in most areas. The Building Management System (BMS) has been installed and is already having a positive impact in reducing gas consumption and CO₂ emissions. Three secondary schools with poor environmental credentials have agreed to take part in a pilot and data gathering has commenced. The Smart Waste programme is also being piloted with three construction sites now segregating and monitoring on-site waste and BREEAM is being piloted at two new primary school projects.

4.3

A contractor in the community scheme, involving 35 local contractors who have made voluntary financial contributions, has been launched. To date these contributions have been used to support older people in their own homes through the provision of small jobs, including security.

4.4

Members of the Panel will be aware of the 2.5% target reductions in the consumption of energy, CO₂ emissions and water that were established by the Cabinet earlier in the year. Progress towards these targets will be monitored by the Corporate Sustainable Development Group and reported to the Panel in due course.

4.5

A new European Union (EU) Directive on the energy performance of buildings, which is part of the EU's initiatives on climate change, comes into force on 4 January 2006 and over time will have an extensive impact on the County Council's Built Estate. The impact and implementation of the Directive will be reported to a future meeting of the Panel.

5

Developing services to schools

5.1

Members will know that all community schools access landlord's services through a comprehensive Service Level Agreement which runs until 31 March 2007. The report later on the agenda reviews the progress being made in implementing improvement plans for primary and secondary schools. The improvement plans have been developed following external research with schools and progress has already been made in delivering an improved service.

5.2

While there is overwhelming support from schools for the services provided by the landlord, it is clear from the research that further support relating to health and safety and access would be valued additions to the current portfolio of services. These new reviews will be piloted in the coming months, together with the establishment of enhanced engineering term contracts.

6

Value for money efficiency savings

6.1

Value for money in our building operations has long been a part of the Panel's activities. Given the difference between our budgetary provision for inflation (3%) and actual tender price inflation (of 6 to 7%) it is unlikely that cashable savings will emerge. However, the review of services to schools, the renewal of the term maintenance engineering contract and the wider efficiency agenda, suggest that it would be appropriate to review our current operations against best practice and what opportunities might exist in relation to procurement.

6.2

It is proposed to bring to the next meeting a report on existing arrangements and to establish a regular review of operations to secure best value for money.

Recommendation

That the Buildings, Land and Procurement Panel advise the Executive Member for Policy and Resources that approval be given to:

1

The progress made against the Strategy for the Built Estate and that further reports be presented to the Panel on managing outstanding maintenance liabilities in the non-education estate in the medium-term.