PROPERTY CONDITION SURVEYS – REVISED ARRANGEMENTS

EXECUTIVE MEMBER FOR RESOURCES

DIRECTOR OF RESOURCES

8th February, 2005

Purpose of report

  1. To:
  2. set out changes to the Property SLA for property condition surveys which have been agreed with HBS. These changes have been necessary to meet DfES property inspection and information requirements and to enhance the programme of corporate property inspections to a standard that meets central government expectations.
  3. seek approval for a change to the Service Middlesbrough contract price in order to resource these changes and enhancements.

Background and external consultation

2.The current Service Middlesbrough property SLA includes provision for condition surveys of both council buildings and schools. Although this sets out clearly what is expected there have been three issues that have generated problems:

  • The resources available to fulfil the requirements (para 2.1 from the extract below indicates that funding for schools work is to be resolved)
  • Changes to DfES requirements for survey work and property information.
  • Increasing central government expectations about the approach taken by local government in managing corporate property.

3.The resourcing of this work has been in dispute for some time and in 2002/3 resulted in the Council having to employ outside consultants at short notice in order to ensure that DfES condition survey reporting could be delivered to the prescribed standard and timescales. The disagreement with HBS has centred on the failure to resolve the scale of additional resources required to properly deliver the service and the significant changes to the DfES’s requirements for condition surveys for schools.

4.The current SLA includes the following provisions:

Part A

2.1 The service shall provide an effective monitoring and assessment service of the condition of the Council’s portfolio including the maintenance of comprehensive building survey and property information of Council premises including schools. (funding issue to be resolved)

2.2 The service shall ensure the Council meets the ongoing and future requirements of the Council’s property initiatives and DETR/DfEE performance targets and statutory requirements including the maintenance and development of computerised asset management recording systems.

2.3 The service shall provide technical advice on maintenance issues for Council premises including an annual review that shall ensure the establishment of maintenance priorities and a programme of repairs for approval.

Part B

1.9 Provide condition-based information in agreed format relating to all school property in accordance with the Council’s School Asset Management Plan. Including the provision of an annual overview condition survey of all schools and a full condition survey of schools on a five-year programme which identify a schedule of priorities (including Mechanical & Electrical information) in accordance with DfEE requirements and standards.

5.The current set of KPRs do not include any that soley measure this element of the service. It is partly covered through one KPR however this covers a range of areas of which condition surveys are only one element.

6.Discussions have taken place with HBS to agree a solution to the issues identified at paragraph 2 and the following paragraphs set out the proposed way forward.

7.Revised sections of the SLA are attached as Appendix A and revisions to KPRs, which also form part of the SLA, are attached as Appendix B. These attempt to specify more clearly the scope of condition surveys and the outputs required. There is potentially some limited duplication in the KPR measurement because the existing KPR picks up elements of this work. It is proposed that this is picked up as part of the contract review to ensure that there is no duplication from April 2005 onwards. HBS have agreed to the specification revisions and the additional KPRs.

8.The outstanding resource issue has also been discussed with HBS. It is clear that to properly support this function that additional staff would be required. The table below sets out the proposed staffing requirements to fulfil the condition survey requirements and the proposed split in costs to provide additional resources. These costs are for a full year and it is proposed that they should be in place for the remainder of the contract.

Total

Cost

£`000s / Cost to
HBS
£`000s / Cost to
MBC
£`000s
Building Surveyor
M&E Surveyor
CAD operator
Data Base administrator
Building surveyor / 38.4
33.6
26.4
21.6
38.0 / 19.2
0.0
26.4
21.6
19.0 / 19.2
33.6
0.0
0.0
19.0
158.0 / 86.2 / 71.8

9.The resources to fund the council contribution to this can be found from the Strategic Resources Asset Management budget and Education resources. This would be split on a 50:50 basis.

10.During 2004 HBS began putting these resources in place. As a result there will be a pro-rata payment due to HBS for the employee costs incurred to-date. This is anticipated to be around £50,000 and can be funded from the budgets identified in paragraph 9.

11.There are a number of comments and conditions associated with this proposal from both the Council and HBS that should be noted. The Council’s position is as follows:

  • the Council continues to support the contractual position set out in a letter from the Director of Strategic Resources sent on 3rd March 2004 (a copy of this letter is attached at Appendix C).
  • the Council has consistently maintained that it has responsibility to fund the full cost of delivering mechanical and electrical surveys – as a result it is expected that this post will work exclusively for Middlesbrough Council
  • CAD operation and database operation are central to the service provided under the existing SLA and should be accommodated through HBS
  • The Council recognises that there are capacity issues within the surveyor aspects of the service and agrees to fund 50 percent of the additional Surveyors required – under the proposals this equates to 1 FTE.
  • the Key Performance Requirements associated with this work do not require the above staffing resources to remain in place rather they set requirements for the service expected. However it is expected that HBS will maintain the above staffing compliment, keep the Council informed of any personnel changes and seek the Council’s approval for any proposals to change this structure. The council will require a letter of intent from HBS confirming this.
  • HBS should note that the schools’ based work has a substantial capital allocation from central government associated with its successful submission. In the event of the submission to DfES not being graded as satisfactory the Council would not only seek to apply KPR penalties but may consider action through Clause 28.3 of the contract to seek redress for the loss of capital grant.

12.HBS have the following comments on the proposal:

  • The conditions from the Council attached to this arrangement are acknowledged; and
  • The Council should note the dependencies attached to the KPRs.

OPTION APPRAISAL / RISK ASSESSMENT

13.As stated above the Council and HBS have been in discussion about this issue for some time. Failure to resolve it would seriously prejudice the Council’s ability to comply with DfES asset management requirements, which attract between £1.5m and £3m of capital funding for schools each year. It would also prejudice the Council’s ability to assess and manage the condition of corporate properties.

14.The proposals set out in this report should minimise these risks. There are two alternative options. The first would be to enter into a formal dispute with HBS, which would be escalated through the process set out in the contract. This could take some time and would be likely to prejudice the delivery of the condition surveys and receipt of the resources associated with their satisfactory submission to DfES. The likely outcome of such an escalation is a compromise on similar terms to those proposed above. A second option would be to engage consultant to undertake this work. This would be a more expensive option, likely to cost at least £160,000 per annum. It would also be a significant blow to partnership relationships. This service is scoped and should be provided by HBS.

FINANCIAL, LEGAL AND WARD IMPLICATIONS

15.The proposal will cost the Council an additional £71.8k per annum for the remaining life of the Partnership. This is 45% of the total additional costs. It is proposed that this is funded from the Strategic Resources Asset Management budget and Education resources – funded on a 50:50 basis.

16.There are no ward or legal implications resulting from this proposal.

RECOMMENDATIONS

17.It is recommended that the Executive Member:

  • Notes the issues that have arisen concerning condition survey work and the proposed revisions to the Property Service Level Agreement and KPRs
  • Approves the proposal for funding condition survey work for the remainder of the life of the Contract.

REASONS

18.The proposal provides a realistic approach to resolving difficulties that have arisen in resourcing property condition survey work.

BACKGROUND PAPERS

19.The following background papers were used in the preparation of this report:

  • DfES Asset Management Plan Guidance

AUTHORS:Martin Shepherd, Corporate Assets Officer (729298)

John Polson, Partnership Manager (729017)

______

Address:

Website:

APPENDIX A – Revised SLA specification

PART A

2.Property Survey & Inspection

2.1The service shall provide an effective monitoring and assessment service of the condition of the Council’s portfolio of property including the maintenance of comprehensive building surveys, CAD layout drawings and property condition information as they relate to identified Council corporate property including schools.

2.2The service shall ensure the Council meets the ongoing and future requirements of the Council’s property initiatives and DETR/DfEE performance targets and statutory requirements including the maintenance and development of computerised asset management recording systems. This will include the development of project plans for inspection programmes for corporate and education buildings.

2.3The service shall provide technical advice on maintenance issues for Council premises including an annual review that shall ensure the establishment of maintenance priorities and a programme of repairs for approval.

PART B

B1Description of service (replacing B1.9)

  • Provide a project plan detailing the full condition survey programme for all corporate properties over the agreed timescale by June 2006 (portfolio of property to be reviewed 3 monthly) and a project plan showing the annual on-going condition survey programme for all education establishments to the Council’s Strategic Officer Group (Property).
  • In accordance with the above plans, provide comprehensive building surveys, CAD layout drawings and property condition information for corporate buildings and education establishments. These will be produced in accordance with DfES Asset Management Plan Guidance (varied for corporate properties in accordance with instructions of the client).
  • Provide a series of Condition Data Quality Assurance Surveys (for both corporate properties and education establishments) on a quarterly basis to an independent third party as follows:
  • 6 corporate and 3 education sample surveys. Samples will be from the breadth of the portfolio wherever possible and agreed with client.

The independent third party will upon receipt of the above undertake the following:

  • review the sample reports and undertake a desktop check.
  • undertake a site inspection from the desktop sample (spread versus intensity of site inspection will depend on the findings of the desktop analysis).
  • produce a written report of all findings prior to presentation of report to the Strategic Officer Group (Property).
  • Provide an electronic copy or one hard copy output report for both corporate properties and education establishments to the following:
  • Service area manager or occupier of each premises
  • ODPM
  • The Council’s Director of Strategic Resources
  • The DfES as part of an annual Education submission
  • Output reports to be made available for audit purposes
  • Shall include within each property report for Corporate properties the production of a medium-term (5 year) rolling planned maintenance schedule of priorities (to be updated annually). This will include all building services in compliance with DfES Asset Management Plan Guidance and any supplementary guidance on future years requirements.
  • The production of a medium-term (5 year) planned maintenance programme for Education premises will be carried out by MC Education personnel.

B4Dependencies

  • The service is dependent on the Client forwarding up-dates of any changes to the ODPM/DfES condition survey methodology/guidance within 10 working days of the receipt.
  • The service is dependent on receiving any updated CAD information (drawn to an agreed specification) from the council T&D section or service areas relating to any building alterations or extensions carried out between inspections.
  • The service is dependant on receiving appropriate information relating to the extent and number of properties to be included in the portfolio of corporate property.
  • Appropriate access is afforded to council premises to allow for survey work to be undertaken.
  • That the appointed third party acts in a timely manner.

APPENDIX B (i)

Corporate Properties KPR

SERVICE AREA
/

Property

SERVICE GROUP /

Facilities Management

/ SERVICE GROUP WEIGHT / 1
STANDARD RERERENCE NUMBER /

P9

/ PRIORITY / High / MONITORING PERIOD / Quarterly
MINIMUM PERFORMANCE LEVEL (MPL) / 100%
KEY PERFORMANCE REQUIREMENTS
To collect, record and report condition on all of the council’s corporate properties in compliance with DfES Asset Management Plan Guidance and submit to the Council (Strategic Officer Group Property) in accordance with the specified condition survey programme scheduled for completion by June 2006.

ACTIVITY

SLA REFERENCE & NARRATIVE

The service shall provide an effective monitoring and assessment service of the condition of the Council’s portfolio including the maintenance of comprehensive building survey and property information of Council premises including schools.
Provide all necessary premise information for the above to assist in the production of the asset management plans including the survey of all council owned property to meet the requirements of asset management planning and DfES/ODPM requirements.
EVIDENCE
  1. HBS to produce an electronic version of the survey information within the Technology Forge Asset Management system that will be made available to identified council officers in accordance with the specified condition survey programme. In addition, supply one hard copy of the condition survey report to property managers and make available additional copies for audit purposes as and when required. All reports produced will be done so in accordance with DfES Asset Management Plans Document Section 3a: Getting into Condition, Feb 03 and subsequent revisions.
  2. Confirmation of submission of Condition Data Quality Assurance Surveys on a quarterly basis to an independent third party as follows;
  • 6 corporate sample surveys. Samples will form the breadth of the portfolio wherever possible.
  1. Confirmation of a ‘satisfactory’ condition data assessment from an independent third party.
  2. HBS to produce CAD drawings for each property to a specification agreed by the Council.

NOTES / METHODOLOGY

This requirement will be met by the following:
HBS surveyors will visit each of the premises to carry out a full non-intrusive condition survey of all corporate properties (as specified in the condition survey programme), including the mechanical and electrical installations in compliance with DfES Asset Management Plan guidance/any future supplementary guidance by June 2006, and receive confirmation of a ‘satisfactory’ assessment from an independent third party on all sample surveys submitted.
Calculating overall performance will be undertaken as follows:
% No. of Properties Surveyed + % No. of Surveys Achieving ‘Satisfactory’ =
2
e.g.
24 (Properties Surveyed) x 100 = 96% + 6 (Surveys Achieved
‘Satisfactory’) x 100 = 100%
25 (Properties Agreed to be Surveyed) 6 (Surveys Sampled)
96% + 100% = 98%
2
A failure by an independent third party failure will constitute one of the following:
  • Submission of a substandard survey i.e. incorrect/incomplete condition survey sample i.e. missing drawings, summary sheet, schedule of costs etc.
  • Poor quality survey i.e. inaccurate collection/recording of condition survey data resulting in a miss-match between an item in surveyor’s records against evidence on site and also an item on site against the surveyor’s record.
  • Total number of properties agreed to be surveyed not achieved.
DEPENDENCIES
  • The service is dependent on the Client forwarding up-dates of any changes to the ODPM/DfES condition survey methodology/guidance within 10 working days of the receipt.
  • The service is dependant on receiving any updated CAD information (drawn to agreed specification) from the Council T&D section or service areas relating to any building alterations or extensions carried out between inspections.
  • The service is dependent on receiving appropriate information relating to the extent and number of properties to be included in the portfolio of corporate property.
  • Appropriate access is afforded to Council premises to allow survey work to be undertaken.
  • The MC appointed third party acts in a timely manner
Report performance quarterly Apr/July/Oct/Jan
SERVICE MIDDLESBROUGH CONTACT /

SERVICE RECEIVER CONTACT

APPENDIX B (ii)

Education Properties KPR

SERVICE AREA
/

Property

SERVICE GROUP /

Facilities Management

/ SERVICE GROUP WEIGHT / 1
STANDARD RERERENCE NUMBER /

P10

/ PRIORITY / High / MONITORING PERIOD / A
MINIMUM PERFORMANCE LEVEL (MPL) / 100%
KEY PERFORMANCE REQUIREMENTS
To collect, record and submit annual condition data downloads in compliance with DfES Asset Management Plan Guidance and achieve a ‘satisfactory’ status.

ACTIVITY

SLA REFERENCE & NARRATIVE

The service shall provide an effective monitoring and assessment service of the condition of the Council’s portfolio including the maintenance of comprehensive building survey and property information of Council premises including schools.
Provide condition-based information to the agreed format relating to all school property in accordance with the Council’s School Asset Management Plan. Including the provision of annual condition surveys for all schools which identifies a schedule of priorities (including Mechanical and Electrical information) in accordance with DfES requirements and standards.
EVIDENCE
  1. HBS to provide an electronic copy or one hard copy version of the survey information within the Technology Forge Asset Management system for all schools (100%) which will be made available to identified MC Education personnel at agreed access levels. In addition, supply all school headteachers with one hardcopy version of the condition survey report for their use and make available additional copies for audit purposes as and when required. All reports produced will be done so in accordance with DfES Asset Management Plans Document Section 3a: Getting into Condition, Feb 03 and any subsequent revisions.
  2. Confirmation of submission of full data survey programme (data download) to DfES by the specified deadline (as notified by DfES) and in accordance with DfES Asset Management Plans Document Section 3: Condition Assessment\Annex A: Condition Data to be Supplied to the DfES.
  3. Confirmation of a ‘satisfactory’ condition data assessment from DfES.
  4. HBS to provide on request a series of Condition Data Quality Assurance Surveys on a quarterly basis to an independent third party as follows:
  • 3 education sample surveys. Samples will form the breadth of the portfolio wherever possible.

NOTES / METHODOLOGY

This requirement will be met by the following:
In accordance with a survey programme produced by HBS and agreed by MC the HBS surveyors to visit and carry out a full re-survey of all Education School establishments on an annual basis and achieve a ‘satisfactory’ status in compliance with the DfES Asset Management Plan Guidance, and any future supplementary guidance on future years’ requirements.
DEPENDENCIES
  • The service is dependent on the Client forwarding up-dates of any changes to the ODPM/DfES condition survey methodology/guidance within 10 working days of the receipt.
  • The service is dependant on receiving any updated CAD information (drawn to agreed specification) from the Council T&D section or service areas relating to any building alterations or extensions carried out between inspections.
  • The service is dependent on receiving appropriate information relating to the extent and number of properties to be included in the portfolio of corporate property.
  • Appropriate access is afforded to Council premises to allow survey work to be undertaken.
  • The MC appointed third party acts in a timely manner
Report performance annually. The date is reliant on the DfES, which could vary year on year. A requirement would be inform all relevant parties.
SERVICE MIDDLESBROUGH CONTACT /

SERVICE RECEIVER CONTACT

APPENDIX C