RICS Public Sector Asset Management Guidelines - …

1 RICS Public Sector Asset Management Guidelines A guide to best practice Supported by RICS Public Sector Asset Management Guidelines A guide to best practice Edited by Keith jones and Alan D. White Acknowledgements The authors and publishers wish to thank the following for permission to reproduce copyright material: BRE. COPROP. DETR. HM Treasury IPD Global DCLG. OGC. University of Leeds Every effort has been made to trace copyright owners. Anyone claiming copyright should contact RICS at the address below. Published by the Royal Institution of Chartered Surveyors Surveyor Court Westwood Business Park Coventry CV4 8JE. UK. No responsibility for loss or damage caused to any person acting or refraining from action as a result of the material included in this publication can be accepted by the author or RICS. ISBN 978-1-84219-370-9. Royal Institution of Chartered Surveyors (RICS) January 2008. Copyright in all or part of this publication rests with RICS, and save by prior consent of RICS, no part or parts shall be reproduced by any means electronic, mechanical, photocopying or otherwise, now known or to be devised.

2 Typeset and printed in Great Britain by Page Bros Printed on Greencoat Silk 115gsm Contents Preface v Foreword vii Acknowledgements and Contributors viii Glossary ix Introduction 1. 1 WHAT IS Public Sector Asset Management ? Description of Asset Management 5. Concept diagram and arrangement of the Guidelines 7. 2 STRATEGY AND VISION DEVELOPMENT. The purpose and role of Asset strategies 9. The coverage of the Asset Management plan (including the Asset strategy) 10. Key elements of preparing Asset strategies 11. The pivotal role of the Asset strategy and the Asset Management plan 15. 3 Asset PROGRAMMES. The stages in the preparing of Asset programmes 17. Review of the Asset base 17. Project evaluation (business cases) 19. Asset programme development and evaluation 21. Financial planning for assets 22. 4 DELIVERY. Introduction 25. Overview of delivery 25. Direction 26. Resources and capabilities 26. Means of delivery 26. Project structure and governance 28.

3 Project planning 29. Communications 29. Monitoring, incentives and benefits realisation 30. Risks 30. Conclusion 31. 5 REVIEW AND PERFORMANCE Management . Performance Management 33. Reviewing the Asset Management system 33. Developing performance Management for the Asset base 35. Conclusion 39. 6 CHANGE Management . Coverage of this chapter 41. Understanding the nature of change in Asset Management 41. Attributes of good change managers in Asset Management 44. iii RICS Public Sector Asset Management Guidelines 7 LEADERSHIP AND CUSTOMERS. Leadership skills 47. Engaging stakeholders 49. 8 ORGANISATION. Key steps 51. Organisational culture 51. Process 51. Roles and responsibilities 53. Structure 54. 9 RESOURCES AND CAPACITY. The role of resources and capacity in Asset Management 55. Defining resources and capacity for Asset Management 56. What needs to be done? 57. 10 SUSTAINABILITY. The context 59. Definitions 59. Building impacts 60.

4 A sustainability criteria approach for Asset Management 62. Summary of sustainability principles for Asset managers 63. 11 DATA AND INFORMATION Management . Introduction 65. Specifying requirements 65. Options for systems 67. Business case 67. Implementing the systems 68. Managing and maintaining the data 68. 12 Asset Management AN INTERNATIONAL DISCIPLINE. Overview 71. Asset Management in Australia 71. Asset Management in New Zealand 76. Asset Management in the USA 76. Summary 78. Appendices 78. Bibliography What's Been Published Already 83. Index 87. iv Preface In 2006, we were approached by RICS to produce So, we embarked on what has proved to be a longer Public Sector Guidelines on property Asset manage- journey than we all expected! We have had great sup- ment. It had identified a need for the Guidelines for the port from RICS officers, who had the foresight to take following reasons: the initiative in the first place, and we have been very G The subject has been at the forefront of Public fortunate to have a good team of authors, and a good Sector property thinking for some time and whilst publishing team, to work with.

5 Many representative its application was previously primarily in local bodies have also been keen to support us. We thank all government, interest and expectations were spread- these people and organisations sincerely for their time ing to many other parts of the Public Sector . and effort in assisting with the preparation of this G The subject is a challenging area for chartered publication. surveyors and other property practitioners, as it We took the decision to ask a number of specialists requires skill sets that are as much to do with to write some of the individual chapters and so we Management and business processes as they are to became editors rather than authors of the whole pub- do with mainstream property expertise. lication. The text was actually written quite quickly. G It was felt important to set out the key features of The time has really been consumed by logistics . good property Asset Management practice for identifying the right authors (and then getting them to members and other property practitioners.)

6 Agree to do it!), bringing consistency to the text, G An initiative was needed to identify and explain honing the text down to a manageable length, getting the wide range of skill requirements applicable consents and approvals, typesetting and printing and across the whole of Public Sector property Asset so on. Management , which would become the main However, we feel that the effort has been very reference point for Asset managers. If, subsequently, worthwhile. We hope you do too. specific guidance in a particular sub- Sector is needed, then more focus on that area will be able to Keith jones be developed using the overarching framework pro- Alan D White vided by these Guidelines . January 2008. v Foreword Public Sector Asset Management first came into the wide range of Public Sector groups4 have formed strong spotlight in the early 1980s. The Ceri Davies report1 on communities of practice who have captured and the NHS estate, the Cabinet Office report2 on Central shared best practice, providing real evidence of the Government office accommodation and the Audit impact of these ideas.

7 Consequently, there has been a Commission report3 on Local Authority property all considerable increase in knowledge about how Public highlighted issues of under-use and a reactive approach Sector organisations can gain more from their to property Asset Management . These reviews provided property and this has resulted in a more strategic and a platform for a major process of improvement a systematic approach to Asset Management . search for new and better ways to manage the valuable These Guidelines therefore come at an opportune Public Sector resource and Asset base: property. time. They pull together an extensive body of work and At the same time, the last 25 years have seen rapid take a holistic approach to property Asset Management changes in all aspects of working practices and the from strategy development to implementation. By Public Sector has not been immune to these. The drawing together a wide range of guidance, techniques pervasive impact of technology, the rise of the service and practice, it becomes a single authoritative source culture and search for greater efficiency in the use of of much of the best material currently available.

8 All resources have challenged professionals to deliver I commend these Guidelines to all those who have new and more responsive property solutions to meet a real interest in improving the performance and the needs of the occupiers, customers and a wide range contribution of property to the overall goals of their of other stakeholders. organisation. I have no doubt that it will become an Responding to these challenges, academics, con- essential resource for practioners in the Public Sector sultants and advisory bodies have developed tools and and beyond. techniques to help Asset managers proactively deal with their portfolios. New financial Management tools, a Professor Ginny Gibson better understanding of information and performance Land Securities Trillium Fellow monitoring, and new approaches to the use and man- Dept of Real Estate & Planning agement of the workplace are but a few of the areas University of Reading which have seen considerable progress.

9 Additionally, a 1 Underused and Surplus Property in the National Health Service, Department of Health and Social Security, HMSO, London, 1982. (Chaired by Ceri Davies). 2 Office Accommodation: A Review of Government Accommodation Management A Report to the Prime Minister, Cabinet Office, HMSO, London, 1985 (Report prepared by Lord Gowrie). 3 Local Authority Property A Management Overview, Audit Commission, HMSO, London, 1988. 4 ACES (Association of Chief Estates Surveyors), COPROP (Association of Chief Corporate Property Officers in Local Government), AUDE (Association of University Directors of Estates) and OGC (Office of Government Commerce) are a few of the groups. vii Acknowledgements and Contributors EDITORS, DRAFTERS AND REVIEWERS We thank Ginny Gibson, Professor of Corporate Real Estate, University of Reading, for writing the Foreword. We are indebted to the following editors, drafters and reviewers, all of whom contributed enormously to the production of these Guidelines .

10 Consultative group We are also indebted to the Consultative Group for the Editors project, who gave valuable advice on the drafts in preparation. The members of the Group were: Keith jones , Director, Performent Consulting, Chair of the RICS Asset Management Group and member of Bob Baber, Audit Commission the RICS Management Consultancy Faculty Board. Stuart Bates/Rob Shelton, Consortium of Local Alan D White, Director, Lenborough Consultants, Authorities in Wales Chair of RICS Facilities Management Faculty Board Roger Bond, Association of University Directors of and the RICS Business Development Board. Estates Joanne Cavey/Sal Ratnayake, Department for Communities and Local Government Drafters and reviewers Pam Chapman, Department of Health David Bentley, Head of Asset Management , IPF/CIPFA Richard Hanson/Dinesh Kotecha, Association of Frank Bowyer, RICS Oceania and FB Consultants Pty Corporate Property officers in Local Government Ltd, Australia Yvonne Hardy/Bridget Hardy, Office of Government Elisabeth Carter, Elisabeth Carter Consulting Commerce Tony Comer, County Property Officer, Hertfordshire Ian Hay, Association of Chief Estate Surveyors in Local County Council Government John Cornish, Head of Estates Branch, Department for Alan jones , Department of Education and Skills Communities and Local Government Nigel Mason, York Consulting Iain Gillies, Network Property and Facility Manager, Bill Ness, Edinburgh City Council New Zealand Telecom Alan Stokes, Society of Construction and Quantity Ian Jeffries.