1. As part of the rolling programme of reviews of the Divisions of the Unified Administrative Service, the Council, at its meeting on 24 January 2005, established a Committee to undertake a review of the Estate Management and Building Service (EMBS).
The Committee was given the following terms of reference:
| (i) | Future plans, staffing levels, and budgets. |
| (ii) | The administrative performance of the Service, including effectiveness in use of resource, planning, staff development, and quality assurance. |
| (iii) | The views of internal and external users of the Service. |
| (iv) | How the Service's performance compares with best practice in other leading UK universities. |
| (v) | Value for money. |
In carrying out the Review, as well as looking at the overall performance of the Service, the Committee was asked to consider and report separately on the operational effectiveness of the major sections of the Service. The Council asked the Committee to report, in the first instance, on the Maintenance and Minor Works Section.
2. Members of the Review Committee:
3. The Committee used the following methods of investigation:
| (i) | Written documentation on the national and University context, service delivery, organization and management systems, and external scrutiny, such as
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| (ii) | interviews with
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A list of people who provided written and/or oral evidence is attached in Appendix A.
4. EMBS serves the University in maintaining its existing stock of buildings, managing the construction of new buildings, and giving professional expert advice in the area of estate planning. The Division has offices in 74 Trumpington Street and a maintenance depot at Laundry Farm off the Barton Road. There are currently over 200 staff working with an annual budget approaching £100 million.
5. Although its budget of approximately £30 million is a small proportion of the overall expenditure of EMBS, the section has a disproportionately great impact on the rest of the University and, as a result, the quality of the service provided attracted a large number of comments, both positive and negative. Based on the evidence presented, the Review Committee concludes that the Maintenance and Minor Works Section of EMBS is relatively well managed, but in a complex environment. The key issues raised concern communication and a number of recommendations are made.
6. The great expansion of the estate over recent years, with many construction projects undertaken at Addenbrooke's, West Cambridge and in the centre of town, has in general been successfully managed by EMBS. New forms of contract were introduced and changes were made to the appointments process of professional external consultants, which has generally led to an improvement in punctuality and cost-control of major projects. There have been and continue to be problems, but this is to be expected in a capital programme of this size. EMBS has, with some significant exceptions, been able to restrict the financial risk to the University and is determined to continue to keep costs under control.
The Review Committee considered the concerns expressed over the relatively high construction cost of buildings, particularly compared to commercial buildings, but - on balance - feels that the University is getting reasonable value for money, when whole-life costs are taken into account. The Review Committee considered the guidelines for the different key people involved in major projects in some detail.
7. This is a relatively small, but increasingly important, section. The Committee is satisfied with the quality of the strategic and planning work done by the section, but recommends that, for organizational reasons, consideration should be given to the possibility of moving the purely operational aspects of the portfolio.
8. Internal management includes the activities of the Accounts and Office Management Sections. The Review Committee recommends the introduction of more realistic internal costings in order to make the monitoring of value for money easier.
9. Given the significant developments on the Addenbrooke's, West Cambridge and North West Cambridge sites, EMBS will have to continue to monitor its resources carefully to ensure that the University gets a high-quality service, particularly in the areas of project management and maintenance. The Committee notes that the performance of the Division might well be enhanced if more appropriate accommodation could be found in the medium to long term.
Recommendation 1: The structure of the Maintenance and Minor Works Section should remain broadly unchanged under its current Head.
Recommendation 2: The committee structure should be revised so that the financial boundaries for minor works become clearer.
Recommendation 3: The documentation relating to minor works projects should be sufficiently detailed to enable the Minor Works Review Group and/or the Buildings Committee to reach an informed judgement on value for money.
Recommendation 4: The Minor Works Review Group should inform the Buildings Committee of all decisions taken.
Recommendation 5: There should be effective forward planning before the current Head of the Maintenance and Minor Works Section is due to retire. If at all possible, a proleptic appointment should be considered to ensure a smooth handover.
Recommendation 6: There should be a more transparent mechanism for assessing whether the maintenance budget in Head 8 accurately reflects the needs of the University.
Recommendation 7: Value for money must be the principal guide in the budget setting process and the methodology used must be transparent.
Recommendation 8: The budget setting process should start earlier, be more realistic, and cover a longer period. Maintenance expenditure covered by budgets outside Head 8 should be taken into account as far as possible.
Recommendation 9: Consideration should be given to extending the charging mechanism for utilities and energy to provide further effective incentives for making savings at institutional level. Any proposals for changes should take value for money into consideration.
Recommendation 10: Consideration should be given to identifying members of EMBS staff to act as contact points for particular Schools, sites or similar groups of institutions to improve communication between institutions and EMBS (see also Paragraphs 60-62, Recommendations 14-15).
Recommendation 11: The Service Level Agreement should be strengthened in consultation with Departments, Faculties and other institutions, and performance against the SLAs should be regularly reported to the Buildings Committee.
Recommendation 12: EMBS should firm up the lines of responsibility and accountability between themselves and the contractors doing the actual work to ensure better control and supervision of staff hired through external contractors.
Recommendation 13: The Direct Labour Force should introduce a better control mechanism to ensure that non-urgent tasks are carried out within the agreed time frame and that communication is improved in cases of delay.
Recommendation 14: EMBS should review communication links with institutions and ask Departments and Faculties to nominate an appropriate contact for all EMBS-related work.
Recommendation 15: Consideration should be given, in some cases, to installing appropriately skilled staff to undertake maintenance work in Departments, Faculties and institutions.
Recommendation 16: Consideration should be given to improving the follow-up procedure for maintenance and minor works projects.
Recommendation 17: EMBS should inform institutions of their application procedures for regular maintenance needs and of the rolling five-year condition survey and prioritized maintenance programme.
Recommendation 18: EMBS should publish the timetable for the rolling maintenance programme.
Recommendation 19: EMBS should be encouraged to review their internal costing, particularly in the area of Minor Works projects, and compare the value for money of in-house versus contract work.
Recommendation 20: The structure of the Major Projects Section should be reviewed to keep pace with the major new developments in West and North West Cambridge.
Recommendation 21: All senior officers, project managers, contract administrators and the Representative User should follow the guidelines for their own roles and be aware of those of the other participants. Senior officers should ensure that these guidelines are consistently followed.
Recommendation 22: Each interviewing panel should, in consultation with the Director of EMBS, agree the relative weightings of the different criteria before the selection process begins.
Recommendation 23: Guidelines should be reviewed and followed which ensure that individuals are part of detailed and clear reporting chains so that alert signals are issued at key points in the process in respect of time, cost and quality of the project; this should include signals indicating that all is going to plan.
Recommendation 24: If Heads of Institution are not taking on the role themselves they must sign a formal document delegating the authority to the appointed Representative User.
Recommendation 25: Where problems are perceived with the performance or service of staff within EMBS, these issues should be raised within the line management system of the Division and, where necessary, the University.
Recommendation 26: In cases where the Representative User poses a risk to the project by non-compliance with the guidelines, the Director of EMBS should alert the relevant Head of Institution or Chair of the School.
Recommendation 27: EMBS should undertake assessments of the appropriate life expectancy of individual new buildings and compare the overall costs and provision of the mechanical and electrical services with that provided in the equivalent private sector buildings.
Recommendation 28: EMBS should continuously review the appropriate level of specification to challenge the 'Cambridge factor'.
Recommendation 29: EMBS should improve the validity of initial estimates.
Recommendation 30: Consideration should be given to moving the responsibilities for operational aspects out of the Planning and Property Section.
Recommendation 31: Space management activity should be kept at least at the same level, as the University should be able to profit from space management in terms of value for money.
Recommendation 32: Internal controls should be improved so that a realistic assessment of the cost of particular services, such as the messenger service, can be made.
Recommendation 33: Improved accommodation for EMBS must be included in the long-term plans for the Unified Administrative Service (UAS).
10. The Estate Management and Building Service (EMBS) is responsible to the University for the management and development of the University's Estate in the widest sense, including maintenance and refurbishment of existing accommodation, construction of new buildings, advice to the University on planning issues. EMBS is also responsible for the Fire Office, the Environmental Office, and utilities management in the University. More detailed information on the various responsibilities of EMBS can be found in the Division's self-assessment which is attached to this report.
11. The origins of EMBS can be traced back to 1923 when the Estate Management Branch of the School of Agriculture was set up, combining the teaching of estate management with the practical management of University and College estates. In 1961, it was agreed that there should be a complete separation of the professional and building function from teaching and research: the Estate and Management Advisory Service (EMAS) was established under the control of the Financial Board, and the Department of Land Economy was set up to teach the new Tripos. EMAS changed its name to EMBS in 1973 and became one of the Divisions of the Unified Administrative Service (UAS) in 2001. The last review was undertaken in 1997.
12. EMBS has just over 200 members of staff and is responsible for a budget of approximately £95M of annual capital and recurrent expenditure. The funding of this budget comes from various sources (see Paragraphs 27-9, for Maintenance and Minor Works). The Estate currently comprises roughly 660,000m2; it has grown by 25% since the last review and the capital development programme has quadrupled.
13. EMBS is one of the eight Divisions of the UAS, of which the Registrary is the Head. The Division itself is divided into six sections (see organizational chart in Table 1, p. 952). The Pro-Vice-Chancellor (Planning and Resources) advises the Vice-Chancellor on planning and building issues, many of which are part of the direct responsibilities of the Director of EMBS.
14. The bulk of the work done by EMBS is overseen by the Buildings Committee, currently chaired by an external member. The Committee oversees major capital projects over £1M, maintenance, utility provision and environmental issues. It receives detailed reports from the initial stages of building projects through to post-completion reports. It has been a full committee since January 2005, directly under the Council, but it sends reports to the Planning and Resources Committee (PRC). The Chairman of the Buildings Committee is a member of the PRC and the Director of EMBS attends.
15. The Minor Works Review Group is responsible for projects up to £1M and reports to the Resource Management Committee (RMC). Other committees and working groups currently include the Space Management Advisory Group, the Land Use Working Group, the Committee for Environmental Management, the West Cambridge Development Group, the Old Press/Mill Lane Sites Working Group, and the Property Investments Sub-Committee. Reference to specific committees will be made throughout the report, as appropriate. Table 2 gives a layout of the committee structure relating to EMBS activities.
16. Individual sections of EMBS have strong links with other parts of the University, for example: the Environmental Office and the Fire Office work closely with the Health and Safety Division; and the Minor Works Section, the Planning and Property Section, and the Major Projects Sections liaise with the Planning and Resource Allocation Office of the Academic Division. EMBS, on behalf of the University, is engaged in continuous intensive liaison with external agencies, for example, with the local planning authorities.
17. The Maintenance and Minor Works Section (M&MW) is headed by one manager and is the largest section of the Division in terms of staff numbers. It comprises the following sections:
18. The estate is varied, with ageing, listed buildings at one end of the spectrum and modern, state-of-the-art buildings at the other end. Old buildings can pose particular challenges in the area of disability access, trip hazards and fire prevention, while new buildings are normally technically sophisticated and can have complex maintenance requirements. There are over 300 buildings within the care of EMBS.
19. Although the minor works section deals with projects costing less than £3M, the following committees are specifically concerned with Maintenance and Minor Works: projects under £1M fall under the remit of the Minor Works Review Group, those over £1M under the Buildings Committee. Projects over £2M undergo further scrutiny through the Capital Projects Process (CPP). The maintenance budget is considered by the Buildings Committee, but this does not include maintenance expenditure outside Head 8; this is an issue which needs further consideration (see also Paragraphs 29, 46 and Recommendation 8). The demarcation of responsibilities between committees and working groups dealing with minor works and major projects is the source of some confusion and there is a need to clarify the boundaries (see also Paragraph 32 and Recommendation 2).
20. The Fire Safety Office is a specialized unit which is part of EMBS. The Fire Safety Manager is responsible for fire safety throughout the University and reports directly to the Head of the Maintenance and Minor Works Section. The unit undertakes fire risk assessments for all premises, and the Fire Safety Manager has to ensure that all Heads of Departments, Faculties and other institutions are made aware of their responsibilities in the area of fire safety regulations and that project managers for all building projects are informed of fire safety regulations. Reports from the Fire Safety Office are considered by the Health and Safety Executive Committee; the responsible enforcement agency is the Fire Rescue Service.
21. Another important unit in the section is responsible for Energy and Utilities management; the remit includes formulating and implementing the University's Energy Policy, purchase of utilities, monitoring and targeting utility consumption and costs and identifying opportunities to increase energy efficiency. Day-to-day management is delegated to the Energy Manager, who reports to the Head of the Maintenance and Minor Works Section.
22. Work on maintenance and minor works projects in the University is carried out by staff falling into one of the following categories: staff employed by EMBS, staff employed by other institutions in the University, and staff in firms contracted by EMBS for certain projects. The bulk of planned maintenance and minor works is undertaken by external contractors; EMBS in-house staff deal with unforeseen and emergency tasks.
23. The Head of Section, who reports to the Director of EMBS, is responsible for nearly 150 members of staff, including five Senior Advisory Officers in charge of a team of Maintenance Surveyors (19 staff), the Fire Safety Office (8 staff), the Minor Works Team (21 staff), the Maintenance Unit (86 staff, including the direct labour force of engineers, building craftsmen and gardeners) and Energy Management (4 staff). Table 3 shows the structure of the section.
24. Some Faculties, Departments and other institutions employ a number of professional, specialized maintenance and building staff who undertake work for their own institutions. These members of staff are primarily employed to serve the needs of the research programmes within the Departments concerned, but they clearly have the expertise to undertake general maintenance tasks.
25. A substantial amount of work, particularly in the Minor Works area, is outsourced and undertaken by firms contracted by EMBS to undertake certain projects: according to EMBS, this includes all construction work and 75 to 80% of design work (by value).
26. The section is mainly located on two sites, with the Minor Works, Building Surveying and Fire Safety teams in 74 Trumpington Street and the Maintenance (Direct Labour Force) and Energy and Utilities management units, including the maintenance help desk, at Laundry Farm off the Barton Road. There are also small Maintenance and Minor Works teams in the Downing Site and the New Museums Site.
27. Approximately £14M of the expenditure incurred by EMBS on maintenance is recurrently funded from the Chest (Head 8, 'Maintenance of buildings and sites'). Additional funding comes through HEFCE projects and through donations by charitable trusts and other sponsors. Minor Works projects are normally paid from HEFCE funds (SRIF or Project Capital schemes), funds held by the relevant institutions, or from a centrally administered Chest account. There is considerable overlap between maintenance and minor works funding, since refurbishment projects often include a significant amount of maintenance work (see also Paragraphs 43-49).
28. The Fire Safety Office and the Energy and Utilities Unit have their separate budgets under Head 8, £900,000 and £7M, respectively, mainly for fire-related building alterations and for energy and water consumption, respectively.
29. Faculties, Departments and other institutions in the University have their own maintenance budgets. In the case of some big Departments in the Schools of Physical Sciences and Technology, particularly Physics, Chemistry and Engineering, substantial sums of money are involved: the total expenditure for maintenance by Departments amounts to approximately £3M according to financial management information available from the Finance Division. The Committee is aware that EMBS has submitted documents on this issue to the Buildings Sub-Committee and the Buildings Committee and that opinions differ on the total amount spent by Schools and Departments.
30. The section is a large and complex organization, and the size and range of responsibilities placed on the Head is considerable. This is an aspect that has to be taken into account when, in due course, succession arrangements have to be considered. In the meantime, however, the section is relatively well managed, and firmly led and controlled. The Committee deliberated whether a restructuring resulting in different organizational arrangements would make the section easier to manage and produce better value for money overall. An option might be separating the constituent parts, 'maintenance', 'minor works', 'fire safety' and 'energy and utilities', or just separating 'maintenance' and 'minor works'. On balance, it was felt, however, that the need for close co-operation between the different parts of the section and the way the activities and budgets were interconnected outweighed the possible disadvantages of the big size of the section.
31. The Fire Safety Office is part of the section and this appears to be a satisfactory organizational and structural arrangement, as long as there are effective communication links with cognate areas in the University.
Recommendation 1: The structure of the Maintenance and Minor Works Section should remain broadly unchanged under its current Head.
32. The Review Committee notes that the committee structure overseeing the activities of the section is unclear. There appears, in particular, to be some confusion over where the borderlines for committee responsibility for minor works lie: this should be cleared up as soon as possible (Paragraph 19).
Recommendation 2: The committee structure should be revised so that the financial boundaries for minor works become clearer.
33. The Review Committee is concerned that there is, in general, insufficient independent scrutiny for minor works, even though all projects above £50,000 are considered by the Minor Works Review Group and those above £1M by the Buildings Committee.
Recommendation 3: The documentation relating to minor works projects should be sufficiently detailed to enable the Minor Works Review Group and/or the Buildings Committee to reach an informed judgement on value for money.
34. Having considered the suggestion that the Minor Works Review Group should report to the Buildings Committee to streamline the committee structure, the Review Committee feels that there would be an advantage if the Buildings Committee was regularly informed of all business dealt with by the Minor Works Review Group. There would then be one committee in the University with oversight of all building projects.
Recommendation 4: The Minor Works Review Group should inform the Buildings Committee of all decisions taken.
35. The Review Committee obtained comparisons of the costs and numbers of the estate personnel in other Russell Group Universities. When these were adjusted to allow for the size of the estate, it emerged that EMBS numbers were close to the mean for this group and the Review Committee draws the conclusion that there is little scope for reducing EMBS staff.
36. The section faces significant recruitment difficulties, particularly for skilled technical staff, for example, plumbers, electricians, and building tradesmen, as well as professionally qualified staff. Other institutions in the University share the difficulties in recruiting such staff; indeed, it is a regional, if not a national, problem. Recruitment of top-level senior project managers also causes concerns. The level of wages and salaries in the University, combined with the high cost of living in Cambridge, clearly exacerbates the problems.
37. One solution to the problem is to change the salary structure to match market conditions. Another solution is for the section to take on more junior staff and train them to a higher level of skills and expertise, but there will always be the risk of training staff and then losing them to organizations offering higher salaries (see Paragraph 39). The market weighting element of the current pay and grading exercise may help resolve this issue.
38. Another way to alleviate the problem is to outsource more work which cannot be undertaken because no in-house staff is available; a significant amount of work is undertaken by contractors in any case (see also Paragraphs 25, 57, 67).
39. Staff retention currently does not give rise to particular concern, though staff occasionally move on to better paid jobs after having undergone training while employed by EMBS (see Paragraph 37).
40. Because of the specific range of responsibilities and the complexity of the job described in Paragraph 30 (see also Paragraph 23), the successor to the current incumbent will, above all, need excellent organizational and management skills, as well as detailed knowledge of all aspects of the Estate: it will be a challenging task to find a suitably qualified candidate. It is likely that, with the increase in size of the Estate, the scale and workload of the post will grow as well, and the detailed management structure should be re-examined at that stage.
Recommendation 5: There should be effective forward planning before the current Head of the Maintenance and Minor Works Section is due to retire. If at all possible, a proleptic appointment should be considered to ensure a smooth handover.
41. The location of the buildings in Trumpington Street, in the centre of town, outweighs the disadvantages of the complicated layout of the offices and the rather cramped working conditions. The problem appears not to be so urgent that immediate action should be taken; the Committee is, however, reassured to know that EMBS is included in the medium- to long-term accommodation plan for the UAS.
42. The premises at Laundry Farm, principally occupied by the Direct Labour Force of the Maintenance Section, are a long way from the centre of town and this can be a disadvantage. Too much time may be spent travelling to and from Laundry Farm and this may lead to poor response times. To maintain detailed knowledge of individual buildings it might be helpful to have maintenance teams dedicated to groups of buildings on various sites, such as is already the case in the New Museums and Downing Sites. This improves liaison and speed of response as well as local knowledge. The Committee recommends that further devolution for small-scale maintenance tasks to individual sites is given serious consideration (see also Paragraphs 62 and 67, and Recommendation 15). Laundry Farm is, however, useful as a general depot.
43. It is essential that, at the appropriate level, the University has a clear and comprehensive view of the complete funding arrangements outlined in Paragraphs 27-29. The Review Committee recognizes that the process of preparation, consideration, and approval of the annual maintenance budget is complex. It is therefore important that there is full confidence and trust in the budget setting process. This should be achieved by ensuring that the initial application is more realistic without an increase in additional paperwork. The Review Committee notes that the application for 2005-06 has been an improvement on previous years' applications in this respect.
44. Minor Works projects are currently normally funded through SRIF or from departmental budgets. A larger proportion of SRIF funding than has previously been the case can now be allocated to refurbishment. With the ever-increasing need for refurbishment with substantive maintenance elements, this has been an important new source of money for the University.
45. When fEC (full economic costing) takes over from, and possibly replaces, SRIF, close and effective co-operation between the Departments and Faculties, the Planning and Resource Allocations Office in the Academic Division, the Research Services Division and EMBS will be ever more important to ensure sufficient funding for refurbishment schemes which are connected with new research projects. It will be essential for the full costs of building maintenance, refurbishment, and cost of utilities to be identified and included in submissions for research projects (see Recommendation 8).
46. The maintenance budget in Head 8 of the University's Estimates is initially drawn up by EMBS, supported by various indicators, such as the HEFCE benchmarking figure of expenditure at 1.5-2.5% of the net replacement insurance value of the Estate and the condition survey undertaken by external consultants on a rolling, five-year programme. In order to reassure the University of the validity of the reports, the estimates contained in the regular condition surveys of the Estate should be carefully checked for value for money before they are used as a basis for the maintenance budget. The EMBS maintenance budget does tend to reflect the HEFCE norms, with expenditure at approximately 1.3%, but it excludes additional expenditure on maintenance by Departments. The amount of this additional expenditure gives rise to a difference of opinion: views vary between 0.035% and 0.3%. The reason for this is the difficulty in distinguishing between maintenance and refurbishment expenditure which is connected with specific research projects funded through grants by sponsors and other, routine departmental maintenance and refurbishment.
47. The Review Committee recognizes that the estate statistics collected by the HEFCE can only be used for rough guidance as these take little account of factors peculiar to universities such as Cambridge, which is research intensive, has a high proportion of old and listed buildings and where student accommodation is not part of the functional estate. It is, however, of note that Cambridge's maintenance expenditure per unit floor area is one of the highest in the sector and is significantly higher than that of Oxford, which has a similar estate. This expenditure is reflected in the condition of the Estate which is among the best in the sector and has been improving over the last few years. The Review Committee concludes that current levels of funding are appropriate.
48. The draft budget is first submitted to the Buildings Committee and to the Finance Division; a recommendation is then made by the Buildings Committee to the Planning and Resources Committee. It would aid planning overall if the budget covered more than one year and if departmental expenditure on maintenance expenditure contained in Minor Works projects were taken into account during the budget setting process. If the HEFCE norm of 1.5-2.5% (see Paragraph 46) is to be used as a benchmark, it would be advisable that the full cost of maintenance undertaken throughout the University is taken into account and agreed, including other maintenance-related budgets within EMBS, such as window cleaning.
49. It is assumed that the rolling survey (see Paragraphs 52 and 64) identifies changes in maintenance standards and gives an indication of the adequacy of funding levels. The condition survey should also identify future maintenance needs, together with a cost estimate.
Recommendation 6: There should be a more transparent mechanism for assessing whether the maintenance budget in Head 8 accurately reflects the needs of the University.
Recommendation 7: Value for money must be the principal guide in the budget setting process and the methodology used must be transparent.
Recommendation 8: The budget setting process should start earlier, be more realistic, and cover a longer period. Maintenance expenditure covered by budgets outside Head 8 should be taken into account as far as possible.
50. The Fire Safety Office has a budget of £900,000, which is part of Head 8. This is ring-fenced for fire risk assessments and for fire-related building alterations which have to be undertaken as a result of the assessments, and the budget should be kept under review. The Committee wishes to make no recommendation for change in this arrangement, which appears to work well and ensures that there is sufficiently tight control in the area of fire safety. Fire safety is also an important factor during the planning stage for Maintenance and Minor Works projects. Expenditure is either covered by the Fire Safety budget or, as is often the case with refurbishments, by specific project budgets.
51. Expenditure for utilities and energy forms another part of the maintenance budget. The Committee recognizes that significant savings have been made in this area in recent years. Further savings might be possible if charges reflected the consumption in a more direct way and were passed down to institutions. Currently charges are made through the Resource Allocation Model (RAM) space element and do not reflect energy and utility usage. It is important that there is effective communication with the Colleges' consortium.
Recommendation 9: Consideration should be given to extending the charging mechanism for utilities and energy to provide further effective incentives for making savings at institutional level. Any proposals for changes should take value for money into consideration.
52. Despite the varied and complex nature of the Estate, it is well-maintained and in good condition. This is confirmed by HEFCE statistics and other assessments, such as the rolling maintenance survey (see Paragraph 64). Much of the credit for the good condition of the Estate is, no doubt, due to the good management and hard work evident in many parts of the section. The section, does, however, face particular problems: for many of the older buildings plans are either non-existent or inaccurate, which makes it hard to estimate costs for refurbishment work and can make work itself more difficult and time-consuming than foreseen. The Committee is reassured that, in the case of more recent building works, detailed plans are produced and kept, so that in the future such problems should be avoided.
53. Fire safety is a very compliance-heavy area: the Fire Safety Manager is responsible for keeping up-to-date with legislation and for taking into account possible implications for the University. Close liaison and effective communication with the Health and Safety Division and with all institutions of the University are essential. All Heads of Institutions are obliged to return annual surveys and compliance with this requirement is generally satisfactory, though there is room for improvement; evidence suggests that Departments, Faculties and other institutions are well aware of the Fire Safety Office's activities. The Committee is satisfied with the control mechanisms in place and is not aware of particular problems in this area, although the Fire Safety Manager himself would welcome a higher profile of his unit's activities.
54. The Committee was not made aware of any instances where buildings, health and safety or other regulations had been infringed within the area under the control of the section.
55. There seems to be a significant problem of communication. Judgement on the quality of service delivery is, in the nature of things, to a certain extent subjective and, in the view of the users, very often dependent on personal contacts. The Review Committee notes that users who expressed themselves happy with the service that is provided almost invariably felt that they had a good personal relationship with a member of staff in the section. Conversely, people who were not satisfied did not, on the whole, blame a particular member or members of staff but seemed to lack a key contact and found it difficult to establish an effective communication link (see also Paragraph 60).
Recommendation 10: Consideration should be given to identifying members of EMBS staff to act as contact points for particular Schools, sites or similar groups of institutions to improve communication between institutions and EMBS (see also Paragraphs 60-62, Recommendations 14-15).
56. The Committee notes that Service Level Agreements were rarely mentioned, neither through written evidence nor during interviews. Most Departments are aware of their existence but do not appear to refer to them, as they are not felt to be a valuable tool in the pursuit of quality of service delivery. Some departmental users felt that, even if EMBS were in breach of their side of the agreement, there would be no point in pursuing the question, as no reasonable sanction could be enforced to ensure that better progress was made on a particular project. The Committee questions whether these agreements actually serve any purpose as they are currently used.
Recommendation 11: The Service Level Agreement should be strengthened in consultation with Departments, Faculties and other institutions, and performance against the SLAs should be regularly reported to the Buildings Committee.
57. Considerable and wide-spread concern was expressed over work undertaken by external contractors, and it emerged that work was on occasion sub-contracted by contractors to other contractors, sometimes several levels deep. The quality of work suffered accordingly, schedules were not adhered to and, on occasion, conditions of contract appear not to have been fully observed. It is evident that occasionally, when external contractors are used, the conditions of the contracts are not enforced by EMBS. Supervision of contractors demands additional skills from EMBS staff compared to the management skills needed in the supervision of in-house employees.
Recommendation 12: EMBS should firm up the lines of responsibility and accountability between themselves and the contractors doing the actual work to ensure better control and supervision of staff hired through external contractors.
58. The Review Committee has looked at the operation of the Direct Labour Force (DLF) at Laundry Farm in some detail. It has been found that the response rate is of prime importance for some of the work undertaken by the DLF. Particularly where emergencies are concerned, the service delivered by the DLF is good. Institutions acknowledge that the DLF generally make every effort to give a good service, but some irritation was expressed by institutions who feel that less urgent tasks which are not business-critical seem to be ignored after having been duly logged in the database of the DLF Helpdesk. Institutions should be able to track progress of their requests on-line: there are several programmes available to do this. Such programmes also flag up the need for action if the agreed response times look like being exceeded.
Recommendation 13: The Direct Labour Force should introduce a better control mechanism to ensure that non-urgent tasks are carried out within the agreed time frame and that communication is improved in cases of delay.
59. The Review Committee notes that, in general, the relationship between institutions who have their own in-house technical and maintenance staff and EMBS is significantly better than that between institutions who depend for all their maintenance work on EMBS. Representatives of the institutions with their own skilled technical staff, on the whole, expressed themselves satisfied with the service delivered by the Maintenance and Minor Works Section; it is noteworthy that the service these institutions require is normally additional higher-level professional guidance rather than day-to-day practical work. Staff of the section also feel that they generally have a satisfactory working relationship and a good understanding of where boundaries should lie: there appears to be significant mutual respect of the professional knowledge and expertise on both sides. There is a fairly flexible approach to sharing responsibilities, with legal requirements and value for money the key factors in the consideration of dividing the responsibilities.
60. Good two-way communication between departmental and EMBS staff is critical. It is clear that the reason behind a great number of concerns expressed over service delivery can be traced back to a failure in communication. This problem appears to be particularly acute where outside contractors are involved and can cause serious problems, particularly if the work involves severe disruption of normal teaching or research work. It is not always clear where the fault for the breakdown in communication lies. As with service delivery (Paragraph 55), the problem is generally exacerbated when institutions have no in-house maintenance staff and are thus more dependent on EMBS for day-to-day maintenance: it is these institutions who normally do not have a contact person who is known to EMBS and, moreover, they do not know a member of staff in EMBS well enough to alleviate communication problems of this sort.
61. Staff in EMBS, in turn, also have concerns over communication: they feel that institutions sometimes have unrealistic expectations and appear not to be aware that applications for routine maintenance work should be made well in advance to ensure smooth programming of non-critical but desirable work.
Recommendation 14: EMBS should review communication links with institutions and ask Departments and Faculties to nominate an appropriate contact for all EMBS-related work.
62. In some cases, minor maintenance work could perhaps more effectively be undertaken by appropriately skilled members of staff on site. The site might be a Faculty, Department or institution, or a group of smaller institutions. Such a person could be a current custodian, if necessary with a revised job description, and would report to the Head of institution or a designated deputy on the site for day-to-day matters, while at the same time being part of EMBS and responsible to an officer in EMBS. It is the considered view of the Review Committee that current staff could be redeployed and that there would be no need for additional resources. This pattern would follow that already in place for General Board Officers in Faculties and Finance Managers in Schools. It is not suggested that no central resource would be required if some EMBS maintenance staff were to be outstationed, but the Review Committee feels that efficiency gains could be achieved if some of the maintenance staff were 'on the spot' resulting in a reduction of the central core. Large science Departments with maintenance teams may not wish to alter their current arrangements. The Service Level Agreements would have to be revised, taking account of the new situation. Alternatively, consideration could be given to outsourcing maintenance for a whole site or a group of buildings.
Recommendation 15: Consideration should be given, in some cases, to installing appropriately skilled staff to undertake maintenance work in Departments, Faculties and institutions.
63. Maintenance and minor works projects should be followed up with a proper inspection on completion and, if appropriate, with a report to the Department or Faculty concerned.
Recommendation 16: Consideration should be given to improving the follow-up procedure for maintenance and minor works projects.
64. The five-year rolling condition survey and maintenance programme is an excellent concept, but institutions would like to be better informed on this programme. They do not appear to know when their buildings, or parts of buildings, are due for decorating or refurbishment, and many appear not even to be aware of the existence of a schedule. This programme is now in its sixth year of operation, which means that all of the Estate should have had at least one assessment.
Recommendation 17: EMBS should inform institutions of their application procedures for regular maintenance needs and of the rolling five-year condition survey and prioritized maintenance programme.
Recommendation 18: EMBS should publish the timetable for the rolling maintenance programme.
65. The question of value for money has been at the forefront of the Review Committee's deliberations at all times. The balance and comparative costs of in-house EMBS staff, departmental maintenance staff, and staff hired from external contractors has been considered in detail. These issues were also discussed with the regional estates adviser from HEFCE and at a meeting with a representative from a specialist maintenance firm (MITIE).
66. Some of the big science Departments, for example Physics, are able to undertake even extensive refurbishment and maintenance work in-house. This is normally connected with specific research projects, where strict deadlines are imposed by the research grant conditions and any delays have serious cost implications. The time constraints and potential effects of delays make the choice of departmental rather than EMBS staff value for money. The Review Committee notes that departmental workshops also do important maintenance and refurbishment work which is not connected to research projects and would normally be part of the regular work programme undertaken by EMBS.
67. Proposals for the introduction of skilled local maintenance staff as outlined in Paragraph 62 and Recommendation 15 should be analysed in the light of value for money considerations. The Review Committee is of the view that such arrangements might well improve service delivery, forge better communication links with EMBS, and ease the workload of the DLF. The total amount of resources spent on Maintenance and Minor Works would not have to be increased, but the individual budgets would have to be rebalanced. The Review Committee is aware that there are organizational, financial and management issues which would have to be carefully considered: detailed proposals should not be formulated before extensive consultation had taken place. Overall Chest expenditure should not be increased and any changes should be introduced gradually if necessary.
68. A substantial amount of minor work is designed in-house. EMBS aims to have sufficient staff to undertake the basic level of design work in-house but to appoint contractors when the work load is heavier than normal. Before a decision on the optimal balance of in-house versus externally employed staff can be reached, there has to be a more realistic estimate of the hourly cost of in-house staff. When hourly rates are agreed, a schedule and targets have to be provided for each project, and this has to be checked against similar projects. Only then can a valid cost comparison be made between outsourcing and using in-house staff. The Review Committee is aware of the extensive benchmarking exercise that is being carried out, but is nevertheless of the view that the comparisons are flawed, as EMBS overheads currently do not include space costs and non-productive time, such as, for example, attendance of Buildings Committee meetings, and allow only 3% for support services, but they do take into account the savings on VAT which is chargeable for most outsourced work. The Review Committee is concerned that hourly rates do not take sufficient account of all expenses involved.
69. Comparisons between direct labour and contract procurement need to be monitored and reported from time to time to the Buildings Committee.
Recommendation 19: EMBS should be encouraged to review their internal costing, particularly in the area of Minor Works projects, and compare the value for money of in-house versus contract work.
70. Financial control of Minor Works and Maintenance is generally well managed, but the Review Committee found a number of minor instances where insufficient attention has been given to the cost of proposals and their implementation. It has not been possible to comment on these matters in detail, but evidence suggested that there is room for improvement in the area of value for money on small jobs.
71. Major Projects I and II were previously called 'Major Projects' and 'Intermediate Projects'. They are responsible for the management of construction projects above £3M. The figure of £3M is, however, not a fixed limit for projects to be allocated to one of the Major Projects Sections. Projects of a lesser value can be undertaken by Major Projects I and II. Major Projects I predominantly deal with the West Cambridge and central city sites, Major Projects II with Addenbrooke's, Sidgwick and the other sites. The sections undertake procurement and are responsible for the commissioning process, including the selection and appointment of architects, quantity surveyors, engineers and contractors.
72. The University experienced an unprecedented growth of annual capital expenditure in the last few years, from £14M in 1998 to £79M in 2004. A total of 67 major projects were completed during this period, amounting to approximately £374M. Funding sources ranged from JIF/SRIF, charities, private benefactions, to funds held by the University. The University has also made representations to the recent South Cambridgeshire District Council Planning Enquiry concerning the area covered by North West Cambridge in the Estate Plan.
73. The extent of increase in construction activity made tighter control of project management and accounting resources essential and, as a result, a more structured decision-making process for capital projects (CPP, Capital Projects Process) was introduced in 2002 and the procurement approach has been developed in line with the agenda set out in the government-sponsored Latham Report, published in 1994.
74. EMBS follows the EU procurement regulations, which includes placing advertisements in the Official Journal of the European Union (OJEU) inviting expressions of interest for all consultant services with fees above £150,000 and for contractor services where construction work is likely to exceed £3.8M. There are special circumstances, where there is dispensation not to follow OJEU procedures.
75. A shortlist is drawn up from all the applicants and after a process of interviews and fee tendering a selection is made. The interviews and assessments are normally undertaken on the basis of marking in accordance with quality and cost. The interviewing panel is generally chaired by a member of the Buildings Committee and includes the EMBS project manager and the Representative User.
76. Procurement methods have changed significantly in the last few years: 'Develop and Construct' is generally the method of appointment of a contractor, using the 'Engineering and Construction Contract' (ECC).
77. EMBS normally uses a two-stage, Develop and Construct, procedure for major projects: this is now a widely used procurement process, having replaced the traditional single-stage tendering. Two-stage tendering introduces the contractor early on into the design process and encourages a teamwork approach to the design and construction of a building.
78. The ECC is considered to be the best form of construction contract for major projects in combination with two-stage tendering. There are two points within the procurement process when EMBS place a contract. The Stage 1 Contract is awarded when the mark-up and fees for overheads, profits, preliminaries and pre-construction services have been agreed with the contractor. The Stage 2 Contract is let when the tender sum has been agreed and EMBS instructs the Contractor to implement the construction work. During the Stage 1 process the responsibility for the design is transferred to the Contractor.
79. There are some cases where the 'Joint Contract Tribunal' form of contract is suitable and is therefore occasionally used.
80. EMBS project managers handling major projects are responsible for the selection of the procurement strategy and method, among other matters: they make the arrangements for the appointment of the project team and produce the design brief.
81. The number of project managers within EMBS, of various levels of seniority and with different professional qualifications, is currently seven, with appropriate support staff. There are occasions when secondment of additional staff from commercial firms is necessary to ensure that there are sufficient resources to cope with the workload, and currently there are two project managers in Major Projects I seconded from commercial firms.
82. Project managers take on the role of 'client' in the project and, as such, are in a position to authorize changes in cost, design or programme. In practice, they undertake risk assessment and risk management, monitor progress against the schedule and budget, and check on quality. They also present reports to the Buildings Committee.
83. EMBS have a comprehensive schedule of duties for both in-house and external project managers, regardless of source.
84. Contract administrators manage the minutiae and detail of the design and construction process, including all day-to-day issues. The role of contract administrator can be undertaken by a member of the existing team, including the architect or EMBS project manager, but it is more likely that an external firm is specifically appointed as contract administrator. Contract administrators are appointed at the start of the design process or of the construction phase and continue until there is agreement of the contractor's final account.
85. The Representative User is the member of the Faculty or Department nominated to be the main point of contact with EMBS. The role is usually taken on by a senior member of staff who should have delegated authority to represent the interests of the future users. The Representative User is required to agree drafts of the designer's brief and to approve design proposals and plans, as well as any subsequent changes.
86. After completion, EMBS provides a so-called 'soft landing' service, whereby users are supported with occupation issues for the first three years after handover. The intention is that representatives of the design and contract teams are available in the building for the first few weeks to be able to help users on an immediate and pro-active basis.
87. The Review Committee interviewed Officers of Major Projects I and II, as well as a number of other Officers and external professionals involved with the planning and construction of major projects. Moreover, the Review Committee carefully considered and took into account the views expressed by users across the University, both in interviews and through written correspondence.
88. The Review Committee recognizes that there are historical reasons for the organization of the section into Major Projects I and II (see Paragraph 71), but feels that, other than distributing the workload between sub-sections, there is no clear logic behind the current organization. Particularly in view of the new developments in North West Cambridge, it is essential that the sections are efficiently organized along clearly defined structures and the structure should therefore be reviewed.
Recommendation 20: The structure of the Major Projects Section should be reviewed to keep pace with the major new developments in West and North West Cambridge.
89. The University must be assured that the current system of project management is producing the most cost-effective buildings for its estate. In the process, the project manager must make sure that the University's needs are properly met, balancing quality, cost and time constraints. Having advised on the most appropriate procurement method for each specific project, the project manager has to monitor the process from the early planning, through design and construction to early occupation. Normally, a contract administrator would be appointed to support the project manager in this task.
90. Concerns have been raised that project managers do not always have the time needed to devote themselves to the effective management of individual projects. As a result, the quality of the service provided to the Representative User, on the one hand, and the contract administrator, on the other hand, can vary. The view has been expressed that the role of project managers is not clearly enough defined and that there is too much flexibility in the interpretation of the role description. It is inevitable that the performance of project managers also depends on individuals' qualifications and experience. The Review Committee recognizes that EMBS have produced useful detailed documentation describing the management of projects step by step, but there is a need for improved monitoring of the procedures outlined in the guides to ensure consistent high-quality performance across all projects.
Recommendation 21: All senior officers, project managers, contract administrators and the Representative User should follow the guidelines for their own roles and be aware of those of the other participants. Senior officers should ensure that these guidelines are consistently followed.
91. In the opinion of the Review Committee, the appointments process of consultants and contractors is working reasonably well. Quality is judged by the application of objective criteria, and decisions are made on the basis of quality, cost and reputation. The Review Committee feels, however, that the criteria should be kept under review and that the weighting used for each appointment should be agreed at the start of the selection process.
Recommendation 22: Each interviewing panel should, in consultation with the Director of EMBS, agree the relative weightings of the different criteria before the selection process begins.
92. The University is aware of potential issues that can arise when donors wish to select the architect and the Review Committee is confident that the necessary level of caution is being exercised.
93. The Review Committee is aware of several major projects which have run into difficulties because of unforeseen additional costs. Particularly problematic cases are under special investigation and the Review Committee can therefore make no specific comment other than advising the University of the importance of constant vigilance on the part of EMBS to ensure that the University is alerted to potential risks at the earliest possible opportunity.
Recommendation 23: Guidelines should be reviewed and followed which ensure that individuals are part of detailed and clear reporting chains so that alert signals are issued at key points in the process in respect of time, cost and quality of the project; this should include signals indicating that all is going to plan.
94. One of the main advantages of ECC is that disputes have to be settled during the process of the contract, which means that additional costs generally come to light during the construction period rather than at the end. As a consequence, final accounts are normally settled quite speedily.
95. EMBS have recently produced a substantial guide for Representative Users which includes useful notes prepared by two academics with significant experience as 'project leaders' (Representative Users). The guide is detailed and helpful and the Review Committee commends EMBS on its production.
96. It is important that Representative Users have sufficient authority to command the respect of their constituency and that they can command authority with the project team. Representative Users can delegate responsibility to more junior colleagues who deal, on their behalf, with day-to-day issues.
Recommendation 24: If Heads of Institution are not taking on the role themselves they must sign a formal document delegating the authority to the appointed Representative User.
97. Communication between the Representative User and the contractor should always be through EMBS. The Review Committee notes that, on at least one occasion, a Representative User contacted the contractor directly. Such approaches carry immense risks with them: it is essential that communication lines are absolutely clear and that EMBS is kept informed and involved at all times.
Recommendation 25: Where problems are perceived with the performance or service of staff within EMBS, these issues should be raised within the line management system of the Division and, where necessary, the University.
Recommendation 26: In cases where the Representative User poses a risk to the project by non-compliance with the guidelines, the Director of EMBS should alert the relevant Head of Institution or Chair of the School.
98. The introduction of this initiative is warmly welcomed by the Review Committee. It ensures that designers and contractors are committed to provide a smooth handover, give extensive post-completion service and monitor the achievement of environmental targets. The existence of a building user handbook in addition to the normal 'operation and maintenance manual' and the specifically targeted training of users in the operation of the building are expected to save the University money and time overall.
99. The Review Committee has found that capital costs of buildings recently constructed for the University of Cambridge are generally higher than the HEFCE norm for higher education buildings of a similar size and nature. The following reasons were given: the fact that each building has specific requirements related to the Representative User; the location - East Anglia being an expensive region and construction in the town centre of Cambridge particularly so; the so-called 'Cambridge factor' - the University is perceived to want its buildings to be of a particularly high quality.
100. It has been pointed out that commercial buildings appear to cost significantly less than equivalent University buildings. There may be several reasons for the cost differences. These include expected life-span of the building, the degree of servicing required for specialist research, the need for teaching facilities, and the perceived notion that the University requires a higher than average standard of specification. The Review Committee encourages EMBS to review the situation, if appropriate, by asking independent cost consultants to undertake a study.
Recommendation 27: EMBS should undertake assessments of the appropriate life expectancy of individual new buildings and compare the overall costs and provision of the mechanical and electrical services with that provided in the equivalent private sector buildings.
Recommendation 28: EMBS should continuously review the appropriate level of specification to challenge the 'Cambridge factor'.
101. Whatever the capital cost, cost control is essential. EMBS assured the Review Committee that national benchmarks are used for the production of initial estimates. There is, however, concern that initial estimates are often too high: on a number of occasions, the finally agreed figure turned out to be significantly lower than the original estimate, without the application of value engineering. EMBS should amend the benchmarks they use in the light of experience.
Recommendation 29: EMBS should improve the validity of initial estimates.
102. Increased legislation adds an extra burden to the management and cost of capital projects; while this affects all buildings, the effect is most acutely felt for scientific laboratories, and it is predicted that general costs will increase.
103. The Review Committee appreciates that EMBS is mindful that the initial capital cost is only a part of the overall figure: sustainability and whole-life running costs are essential aspects of the total financial burden to the University. In the first twenty years of the life of a building, the running cost of occupation, including maintenance and day-to-day up-keep, can amount to five times the capital cost. The occupational cost, such as laboratory expenses, staffing and consumables, may be several times that. Even if a Department or Faculty can afford the initial capital costs, it is essential that the long-term financial implications are taken into account and that each building is best suited to its users in all possible respects.
104. The Post-Occupancy Evaluation, which is undertaken a few years after completion of each project, plays an important part in ensuring value for money. The analysis of initial and maintenance costs leads to a more accurate estimate of whole-life costings and assists the Accounts Office in the production of initial estimates and would give much better guidance on the calculations of whole-life costs in the future.
105. It is important that there is effective communication between Major Projects I and II and Maintenance, the Fire Office, with the Health and Safety Division, the Security Office and with the Disability Resource Centre. The Review Committee recognizes that communication channels do exist, but would encourage early input and involvement throughout the development of major projects, as appropriate. Insufficient representation can lead to increased costs at a later stage.
106. Communication with press and media is handled by a designated press officer. Good advantage is usually taken of opportunities for positive publicity at topping-out ceremonies or when new buildings are opened and it is recognized that this is an important aspect of the relationship between 'town and gown'.
107. The Planning and Property Section deals with all aspects of estate planning, from short-term, local plans, including space management issues, property acquisition and disposals, to long-term overall development issues involving the whole University. The Head of the section is supported by eight officers and a number of administrative, clerical, technical and manual staff. The section is responsible for a variety of operational and strategic functions, including town and country planning, space management, environmental issues, management of non-operational properties, car parking on University premises, custodial and technical services on some lecture sites, and hire of premises during vacation.
108. The following committees and working groups, among others, play a role in the activities of the section: Planning and Resources Committee (PRC), Resource Management Committee, Buildings Committee, Land Use Working Group, Investments and Property Investments Sub-Committees, Committee for Environmental Management, West Cambridge Development Group, Space Management Advisory Group, and Old Press/Mill Lane Sites Working Group.
109. As the principal body responsible for estate planning, the section has undertaken major work done in this area, particularly in the last few years. The biennial estate planning process raises general awareness and ensures that the University regularly considers short-, medium- and long-term planning issues. In the recent past, work has been concentrated on the Master Plan for West Cambridge and the development of North West Cambridge, but the section has also developed individual strategies for each site in the University.
110. Effective liaison and co-operation is essential, not only with Faculties, Departments and Schools of the University, but also with local, regional and national planning authorities and with local communities.
111. Space management and space usage are increasingly important aspects of planning. Awareness of these issues has been raised significantly through the production of the estate plan, and there is now a recognition in the University that the prioritization of the capital programme has to be closely connected with realistic and sensible space utilization.
112. The non-operational estate, which includes retail, industrial, office, residential and agricultural assets at a value of approximately £41M, is managed by senior officers of the section reporting to the Finance Committee. The investment property portfolio (approximately £105M) is part of the Amalgamated Fund and currently under the auspices of the Property Investments Sub-Committee of the Investments Sub-Committee with external managers overseen by senior officers of the section. It is expected that this will fall under the new Investments Management Board. Senior officers of the Planning and Property Section deal with acquisition and disposal of non-operational and operational property.
113. For historical reasons, some aspects of facilities management are also handled by the Planning and Property Section, for example, the hiring out of premises during vacations, car parking, custodial and technical services for central sites.
114. The Environment Office advises the University on environmental issues. The Office promotes good practice throughout the University and is directly involved in the following: energy and water management, effluent discharges, carbon dioxide emissions, University Travel Plan.
115. Over the last few years, the most important function of the section has clearly been the planning aspect. The section has been, and is still, playing a leading role in advising the University on the development of West and North West Cambridge, as well as the Master Plans for various sites. In the Review Committee's opinion, the section has done valuable work on the University's behalf: negotiations with local and national planners are not always easy, and EMBS officers need to demonstrate political awareness as well as professional expertise. Despite some disagreements with neighbours over specific local issues, for example, the floodlighting of the Sports Ground in Wilberforce Road, EMBS have, in general, been skilful in looking after the interests of the University, while at the same maintaining good working relationships with the planners.
116. For historic reasons, the section is not only responsible for policy and strategic aspects in EMBS, but is also handling operational duties, for example, car parking and room booking during vacation. It is not obvious to the Review Committee that there is any advantage in this arrangement: the Committee feels that operational and strategic issues should be separated, with operational duties handled by another section of EMBS.
Recommendation 30: Consideration should be given to moving the responsibilities for operational aspects out of the Planning and Property Section.
117. The HEFCE is putting great weight on space management and regularly publishes statistics. The figures are, however, not easy to interpret for Cambridge, mainly because they are based on undergraduate numbers and the University has a particularly great number of post-doctoral research workers who are not part of HEFCE's calculation. Nevertheless, monitoring of and advising on occupation rates and space management are important aspects of the section's work. The University's occupation rates are, generally, less favourable than those of similar institutions in the sector. It is clearly not the 'fault' of EMBS if Faculties and Departments have too much space, and the introduction of the RAM has started to have an impact and influences matters in the right direction. The Review Committee has not considered the appropriateness of the RAM space charges. It is, however, essential that EMBS continue to use their professional expertise and advise the University on space management, at the initial stages of new building projects, including refurbishments.
Recommendation 31: Space management activity should be kept at least at the same level, as the University should be able to profit from space management in terms of value for money.
118. Sensitive issues like plans to release land from the Green Belt, the construction and maintenance of certain types of research facilities, the construction of buildings in various, occasional controversial, architectural styles require a lot of work in both external and internal relations. The University has a press officer whose post is dedicated to Estate matters, including building and planning. Given the potential reputational risks to the University from negative publicity, this is an important post.
119. The Director is assisted by a small number of support staff among them, until March 2006, a senior manager.
120. The Accounts Office is responsible for the accounts in Heads 1(b) and 8 of the University's budget, totalling approximately £100M per annum. The office controls expenditure for capital projects, planning fees, minor works, maintenance, utilities, non-operational property, with related income streams and charges, as well as specific projects and services, for example, the Citi4 bus. In addition, the office plays a part in the preparation of the initial estimates for new buildings and in planning budgets.
121. The Office Management and Facilities team has two distinct areas of responsibility: dealing with matters internal to EMBS and dealing with issues which affect the University as a whole. Internally the section is responsible for a number of office disciplines, but principally deals with personnel matters of support staff and administration and office management services for the whole of the Division, and the premises occupied by the Division. Also, it deals with day-to-day utility matters, fleet management, open days/seminars, Health and Safety, training, advertising, recruitment, purchasing, budget management, a central document management service, reception and customer services, migration of software and hardware, and Representative User matters.
Externally the section is responsible for a number of facility management services covering the operational estate:
122. EMBS use a number of software applications, many of which are incompatible with external bodies. A project aiming to rationalize the software is currently in progress: this will improve communication in general and will assist integration between currently disparate systems.
123. Up to now, most legal support has normally been bought in, particularly in cases of dispute, but it has been decided recently that it would be more economic to have an in-house legal capability to deal with contract casework arising from property transactions and the capital programme.
124. The Accounts Office is regularly audited and monitored through external bodies. The Review Committee has not been alerted to particular problems or concerns and is satisfied with the current performance of the Office.
125. Whatever changes are envisaged to the financial arrangements within the UAS, the Review Committee recommends that the EMBS Accounts Office should continue to deal with all accounts relating to projects.
126. A number of roles undertaken by the Office Management team are well done. On the personnel management side, there is a valuable comprehensive divisional staff training and development strategy which is based on the appraisal system. The Division has a good record on health and safety and, through a Sports and Social Club and various other activities, enhances working relations between staff in different sections and with staff in other parts of the University.
127. On the evidence available, both the Accounts and the Office Management teams are reasonably well resourced. Crises have occasionally occurred when unplanned sickness absences coincided with retirements and holidays among staff in the University Messenger Service, but in general there appears to be no need for additional staff.
128. The Review Committee would have welcomed more evidence that overall costs of internal management are being closely monitored and realistically assessed; overhead costs appear to be underestimated and comparisons with external firms may therefore be misleading.
129. The Review Committee saw no evidence of an objective method of productivity assessment of the University Messenger Service and concern was expressed that no fully comprehensive, realistic costing of the UMS had been undertaken in recent years; charges to the Colleges, for example, appear to have remained unchanged for a very long time. It is therefore not possible to judge value for money in relation to this service.
Recommendation 32: Internal controls should be improved so that a realistic assessment of the cost of particular services, such as the messenger service, can be made.
130. Most of the accommodation in which the Division is housed is old and of poor quality, particularly at Kenmare House. Service delivery would no doubt be improved if the Division had better accommodation. The Review Committee recognizes that, in the current financial conditions, such provision must be a long-term aim.
Recommendation 33: Improved accommodation for EMBS must be included in the long-term plans for the Unified Administrative Service (UAS).
131. The Division is generally set up in a satisfactory way, although minor adjustments are recommended. EMBS will need to address the question of the organization needed to deal with the work connected with planning and building projects outlined in Paragraph 88 above.
132. The continued development of West Cambridge will require the continuation of the existing level of resources from EMBS. The Addenbrooke's site is expected to expand very significantly and this is likely to involve EMBS to a greater extent than at present; North West Cambridge, which is currently in the early planning stage, will demand as great a commitment of resources from EMBS as West Cambridge.
133. In the medium to long term, the balance between construction of new buildings and maintenance of existing buildings will change without doubt and the University will have to ensure that there are sufficient resources available for the maintenance of the whole, expanding estate.
GORDON HANNAH
Chairman of the Review Committee
26 June 2006
The following have kindly provided evidence for the review in writing or through interviews with members of the Review Committee; the list excludes members of EMBS staff:
These tables are available to download as PDF files:
1. The Estate Management and Building Service (EMBS) is responsible for the management and development of the University's Estate and has been in existence under various titles since 1962, taking on its current structure in 1998 following the present Director's appointment. The last review of EMBS was in 1997.
2. EMBS has a staff of 2241 managing some £95M of annual capital and recurrent expenditure. Over 90% of this expenditure is delivered through outside contractors, consultants and suppliers working in the maintenance and construction industries, sectors which have historically been fragmented with low-skilled workforces.
3. The Estate comprises some 660,000m2 of gross built space (323 buildings) with a current replacement value of £1.4bn. Buildings range from those which are historically important (52 Listed) to the latest biomedical research facilities. Operations range from the day-to-day facility management and maintenance functions, through planned maintenance/refurbishment programmes, construction of new buildings, to all aspects of estate planning from the short-term to securing the University's long-term development needs.
4. Since the last review of EMBS, the Estate has increased in size by some 25% following the unprecedented capital funding from Government, benefactors, medical charities and other sources. Over the same period the capital development programme has quadrupled and currently stands at some £600M. This large investment is a sign of a vigorous and forward-looking University and there are many examples of how that has supported significant changes in teaching and research activity. However, within its finite resources, the University has to make difficult choices between investment in buildings, staff and equipment, and EMBS has an important role in making sure that infrastructural issues are appropriately safeguarded in the University's medium and long term decision-making.
5. Having decided the level of capital investment, the University needs confidence that EMBS will control its money effectively, that the inevitable risks will be well managed, and that the Estate will be developed and maintained in a safe and effective condition to meet the needs of current and future users. This involves the Division having a close and direct understanding of departmental requirements and managing professionally the complex interfaces with the University's outside suppliers and contractors. The aspiration is for this service to be effective and transparent but largely invisible, so as to allow building users to focus on their core activities. The extent to which this is achieved is a yardstick for this self-assessment.
6. Within EMBS the Annual Operational Plan provides the main internal tool for alignment and prioritization of the Division's activities, for identification of work programmes, and for setting individuals' objectives. Targets and performance are decided and annually assessed and reviewed by the Division's Senior Management Team. A Service Level Agreement which was first introduced in 2000 sets out the services and the standard of performance that the Division aims to achieve in its numerous working relationships with Departments and other institutions. The Agreement is updated every two years.2
7. EMBS seeks to be outward-looking, keeping in touch with best practice and participating in bilateral exchanges with peer universities in the UK and US. The Estate Management Statistics (EMS), published annually by the UK Higher Education Funding Councils, although not perfect, allow the University to compare performance with the 163 UK Higher Education Institutions and in particular with the Russell Group. Trends need to be viewed over a number of years, in particular due to the lumpiness in maintenance and capital investment.
8. The table below gives EMS headline indicators for 2001 to 2004. These show that on average, total property costs have been lower than the median for the Russell Group and the estate management overhead is 60% of the median (3rd lowest in the sector). Capital expenditure, maintenance investment and building condition are higher/better than average. The high maintenance costs for 2003-04 reflect a deferral of expenditure from 2002-03 (see para. 21), maintenance costs in the current year 2004-05 are 15% lower in real terms, closer to the median for the Russell Group. On the less positive side, space utilization is poor; an issue that has been flagged in successive Estate Plans and is now being positively addressed.
| Key ratio | 2001-02 | 2002-03 | 2003-04 | |||
| Cambridge | Russell Gp. | Cambridge | Russell Gp. | Cambridge | Russell Gp. | |
| Cost control | ||||||
| Total property costs/m² (NIA) | £91 | £91 | £77* | £91 | £99* | £100 |
| Ratio of total property costs to income | 9% | 9% | 8% | 8% | 7% | 9% |
| Estate management overhead costs/m² (NIA) | £1.45 | £2.46 | £1.77 | £2.52 | £1.62 | £2.77 |
| Investment | ||||||
| Maintenance costs/m² (GIA) | £32 | £22 | £23* | £22 | £32* | £22 |
| Ratio of maintenance costs + capital costs to IRV | 8% | 6% | 10% | 7% | 8% | 6% |
| Building condition % GIA A or B** | 85% | 65% | 80% | 72% | 81% | 74% |
| Space | ||||||
| Space m² (NIA) per student FTE | 24 | 13 | 26 | 11 | 25 | 12 |
* The figures for property costs and maintenance are distorted by the deferral of maintenance expenditure from 2002-03 to 2003-04.
** Building condition figures have been restated to the current EMS definition of the proportion of gross space either 'New condition' or 'Sound, operationally safe and exhibiting only minor deterioration' NIA = Net Internal Area, GIA = Gross Internal Area. IRV = Insurance Replacement Value.
9. EMBS proposed and, after due approvals, implemented a biennial Estate Planning process to allow the University to focus on short-, medium- and long-term Estate issues and to set policy and priorities accordingly. The Estate Plan has raised awareness and enabled pro-active management of space usage (in part through the setting up of the Space Management Advisory Group), and has co-ordinated prioritization of the capital programme with the aim of achieving a sound and sustainable Estate.
10. A strategy is developed for each University site. Medium-term projects are driven from matching School's priorities, space rationalization based on projected student/staff numbers and funding viability with the need to maintain building condition and functionality. Better awareness of space utilization and its impact on capital and running costs has also led to more realistic sizing of new buildings.
11. Like many of its international competitors, the University has outgrown its central core and is seeking to develop other sites to meet its needs for the next 25 years and beyond. This is a high priority for senior Divisional staff, and requires close working with planning authorities, local communities and other key local and national stakeholders. This focus has resulted in the recent granting of outline planning permission for an updated West Cambridge Master Plan and a favourable context for development of North West Cambridge to meet the University's long-term requirements, including much-needed affordable housing for University staff. Work over six years will culminate in a Public Inquiry (PI) for the Cambridge Local Plan starting in September 2005, followed in 2006 by a PI for the South Cambridgeshire Local Development Framework. Agreement has been reached on most but not yet all of the major issues for the first PI and good progress is being made for the second.
12. Environmental considerations, for example the Government's ambitious targets for cutting CO2 emissions, are having a major impact on EMBS's work. The Division, through its Environmental Office, promotes sound practices throughout the University and is directly involved in managing effluent discharges, minimizing adverse environmental impact of capital projects, and in formulation of the University Travel Plan.
13. All significant new building development is now designed from the outset to achieve the highest sustainability standards where this is practicable; project approval requires a 25-year costing. Emphasis is given to energy and water management to achieve optimal environmental impact and to reduce running costs. A number of new buildings have received national sustainability awards. In addition, the University Travel Plan promotes environmentally friendly forms of transport and includes park and cycle facilities and the new University bus service. Currently only 27% of University staff drive to work alone, compared with 54% for other local organizations.
14. EMBS project management resource, vital for successful client-led project leadership, was strengthened to cope with the major increase in the capital programme over the last seven years. At the same time, EMBS has developed its procurement approach in line with the reform agenda set out in the 1994 Government review of the construction industry (Latham Report), so as to ensure that capital is spent effectively, that risks are well managed, and planned benefits of investment are fully delivered. This includes:
15. As a result of these better procurement practices, 92% of projects completed in the last five reported years were on or below budget with an aggregate underspend of over 2%. This compares with the figure for all UK construction projects of 49% over the same period, and is an improvement of some 5% in financial out-turn compared to the previous four years. Most projects are handed over before absolute deadlines although often there is pressure on the later stages of projects with some quality issues having to be finalized after occupation. This is compounded by the squeezing of programmes due to protracted approval processes for Government-funded schemes (which also results in significant inflationary pressure). Over the last five years, an average of 25,000m2 of new built space has been delivered per year, and 16,000m2 refurbished.
16. All projects are subject to post-completion and post-occupancy reviews (respectively, about six months and two to three years after practical completion and draft final accounts). These reviews include input from users and key project stakeholders and go to Buildings Committee with comment on both quality and process issues, with recommendations for future projects. As an example, the 'Soft Landings' protocol, which seeks to maintain contractor and designer involvement during the critical early years of a new building's operation, was a response to hand-over issues identified in a 1999-2000 project review.
17. Recent research by CABE4 has identified how well-designed university buildings are perceived to be a significant factor in the recruitment of staff and students. At Cambridge, it is clear that new facilities have supported increased and improved research activity, but could this have been achieved acceptably with lower-cost buildings? Would a higher-cost building have been better? These are difficult questions to answer, despite extensive benchmarking, as each building is unique. At the simplest level, unit costs of recent University buildings are lower than average when compared with those of similar function in the UK and US, and there has been a general downward trend in unit costs5 of new non-laboratory buildings in the University in the last 10 years: unit costs of laboratory buildings have been held level despite very significant increases in servicing and regulatory requirements.
18. The Division's procurement processes were recently reviewed and then promoted as examples of best practice by the National Audit Office (NAO), and many projects have received awards by national peer groups and professional institutions for quality, sustainability and procurement management.
19. The substantial growth in the Estate and the need to upgrade infrastructure and facilities to meet modern research requirements has put pressure on maintenance and minor works budgets. These total £27M in 2004/05, over 85% of which work is contracted out to outside suppliers and contractors. Many of these have small and low-skilled workforces, necessitating significant hands-on management by EMBS to deliver timely service of the right quality. Most complaints relate to work by external contractors, reflecting general standards in the maintenance industry. Staff levels to maintain the expanding Estate, and the optimal in-house/contracted-out balance are kept under review.
20. The Maintenance and Minor Works Section with an in-house staff of 131 provides day-to-day reactive maintenance, implements planned maintenance programmes, project manages minor works up to about £3M, provides fire safety support and training, and manages energy and utilities provision. Working arrangements and performance standards for these activities are detailed in EMBS's Service Level Agreement (see para. 6).
21. Annual maintenance budgets are decided by the PRC following consideration of available funding, Estate condition and the Long Term Maintenance Plan. This Plan sets out both day-to-day and larger-scale planned maintenance activities over a five-year period to maintain the condition and functionality of the Estate and to meet legislative requirements. The table below shows that maintenance expenditure need, as identified in successive Plans, has risen substantially faster than general national inflation due to the net growth of the Estate, new legislative requirements, and maintenance/construction inflation of 2-3 times RPI.
| Maintenance | 2001/02 | 2002/03 | 2003/04 | 2004/05 | 2005/06 |
| Long Term Maintenance Plan £M | 14.1 | 15.9 | 18.8 | 20.3 | 19.8 |
| Budget £M*** | 12.6 | 12.2 | 15.0 | 13.6 | 15.3 |
| (% of IRC*) | (1.4%) | (1.3%) | (1.2%) | (1.0%) | (1.0%) |
| Actual expenditure £M | 12.2 | 10.6 | **16.6 |
* IRC = Insurance Replacement Value
** 2003/04 actual includes £1.6M deferred from 2002/03
*** Generally excluding externally funded refurbishment projects. A small amount of maintenance work is also directly carried out by Departments mainly in Physics, Chemistry and Engineering.
22. Financial restraints have meant that PRC has felt unable to recommend budgets in line with the Long Term Maintenance Plan. Budgets have been lower than the HEFCE/RICS recommendation (and University objective)6 that routine, steady state maintenance expenditure should be 1.5% to 2.25% of the insured building replacement cost. Less critical but eventually essential work, including disabled access provision, has been deferred, or, where practicable, included as part of Government-funded projects. However, the general condition of the Estate is sound and functional by Higher Education standards.
23. The lack of a confirmed medium-term funding framework for maintenance, with budgets being set annually only weeks before the start of the new financial year, makes the planned implementation of the programme and staff organization difficult, especially for summer vacation contracts. Where extra staff are required, the lengthy release procedures mean that it has been several months into the year before posts are filled, even though formal authorization is achieved in good time following bids made the year before.
24. EMBS annually reports to Buildings Committee on the work carried out and the condition of the Estate including updated performance comparisons with the 'Russell Group' based on the Funding Councils' Estate Management Statistics (EMS).
25. The immediate impact of the deferral of maintenance in any one year is small; however over a period of years the increasing level of backlog will require increased resources at a time when funds will need to be found to meet new regulatory requirements. Some £15M of backlog maintenance work needed in the short/medium term (3/5 years) has been identified from the surveys so far carried out. Although this is small in relation to the size of the Estate and some other universities, it is higher than the previous figure of £10M-£12M.
26. All complaints are followed up with the appropriate internal staff and/or more commonly, external contractors. Complaints have reduced and commendations have increased. A notification service was introduced early in 2005 for reactive maintenance requests, initiated through the helpdesk. Requesters are informed by e-mail of the job number, time of request and who will be dealing with it. An e-mail is sent when the job has been completed with the opportunity to register a complaint if the work is not satisfactory. For a proportion of jobs, the requester is also asked to complete an e-mail or telephone customer satisfaction survey. Feedback from this process increasingly is being used to improve service, and monitor standards and response times against the Service Level Agreement.
27. EMBS is also responsible for the purchase and efficient use of utilities (£8M in 2004/05) including formulation and implementation of the University's energy policy in line with best practice. This includes energy and water efficiency improvements to reduce costs and CO2 emissions; these are instigated on the basis of a four-year payback period, or as part of refurbishment work. As the comparisons below show, there has been a 60% cut in water consumption over the last 15 years through waste and leakage control programmes. Over the same period energy consumption has increased, driven by the growth of the Estate, particularly the highly serviced laboratory space, increases in electrical research equipment and greater user demand for cooling. The University has the lowest unit water and 2nd lowest energy unit consumption for any Russell Group university.
| Cambridge University NIA = Net Internal Area | Russell Group Median | ||||||||
| Measure | Unit | 1989/90 | 1999/00 | 2003/04 | 2003/04 | ||||
| Total units | Units/m² (NIA) | Total units | Units/m² (NIA) | Total units | Units/m² (NIA) | Units/m² (NIA) | Rank | ||
| Water | m³ (000s) | 591 | 1.5 | 268 | 0.6 | 302 | 0.6 | 1.4 | 1 of 18 |
| Energy | kWh (000s) | 83,700 | 208 | 128,100 | 311 | 169,300 | 364 | 530 | 2 of 18 |
28. EMBS Facilities Management Services include custodial, contract cleaning and technical services for central sites, central delivery depot (Old Addenbrooke's), waste collection, window cleaning, University Messenger Service, car parking management and vacation letting of University premises (which produces an income of around £100k).
29. EMBS is also responsible for the management (but not residential lettings) of the Cambridge non-operational Estate (valued at £41M), and has responsibility via committee for the investment property portfolio (valued at £105M) within the Amalgamated Fund. Both these portfolios have achieved or exceeded their objectives of high utilization and total financial returns (for the latest reported year the total returns on the two portfolios were 9.5% and 12.1% respectively).
30. Potentially sensitive issues like plans to release 140ha of land from the Green Belt, certain types of research facilities and major construction programme (with much-discussed architecture styles), require a lot of work in both external and internal relations by a dedicated press and public relations officer employed by the Press and Publications Office, funded by and working in EMBS.
31. EMBS offers limited support to Colleges on specialist property and planning issues, capital procurement and maintenance. Apart from agricultural portfolio management (and related development and planning work) for two Colleges, charges are rarely made. A more extensive service, as provided at Oxford, has been considered.
32. In 1998/9 EMBS was reorganized to provide a more effective service through a flatter senior management structure. With only minor changes, the structure has proved robust despite very large increases in workload. There are six sections, four delivering a University-wide service (Planning and Property, Maintenance and Minor Works, and two Major Projects sections) and two providing support (Accounts and Office Management and Facilities). EMBS now operates from two main locations (previously four) - Trumpington Street and the Maintenance Unit at Laundry Farm.
33. EMBS's activities primarily come under the remit of the Buildings Committee which since January 2005, following the recommendations of Professor Shattock7 in 2001, is a full Committee reporting to the PRC (previously it had reported to the Finance Committee). The Committee is currently chaired by a lay member and includes Acting Treasurer, Chair of Council of each School and a Professor of Architecture. Four other lay members provide a vital external perspective, both in and out of the Committee, based on their extensive professional experience and knowledge of the construction sector. The Director of Estate Management is the Executive Officer of the Committee.
34. Although the primary reporting line is through the Buildings Committee, many other diverse and sometimes duplicate reporting lines exist to other University Committees making co-ordination of the various aspects of Estate Management much less straightforward. A more consolidated structure proposed in 2004 has not been implemented.
35. Staff numbers have risen from 150 in 1998 to 224 today, mostly from transfers of functions to EMBS, and to a lesser extent from the University's recognition that the Estate is a core resource that needs fully accountable management. There is a wide range of personnel including maintenance staff, gardeners, architects, engineers, surveyors, project managers, property, environmental and planning specialists, accountants and administrative staff.
36. As well as its own staff, and unlike other divisions in the University, EMBS employs a much larger number (800 rising at peak times to over 1,200) of external consultants, contractors and sub-contractors in the delivery of its services. These personnel require a different type of management, especially in the current overheating of the industry; for example, it is hard to get reliable external trade contractors such as plumbers and it is a constant challenge to get them to fully comply with University and departmental arrangements.
37. The balance between in-house and external resources is periodically reviewed. For instance, in recent years additional expertise has been brought in-house to deal with the property and Town and Country Planning workload, thereby considerably reducing cost. Currently consideration is being given to whether it would be more economic to have an in-house legal capability to deal with the very significant contract casework arising from property transactions and the capital programme.
38. Turnover (9%) and sickness levels (2.2%) are low at half the national average. Currently 8% of posts are unfilled. Despite the attractive University benefits such as a reliable final salary pension scheme and often better job security than in industry, relatively low pay and the strong local and construction sector economies have led to difficulties in recruitment of administrative and certain professional staff. Very few staff are able to have a College connection.
39. EMBS operates a comprehensive and structured training and staff development strategy for all staff linked to the relevant job role and professional development requirements and identified through the annual staff appraisal system, in which everyone participates.
40. Staff health and safety are high priorities given the nature of EMBS activities, with comprehensive procedures in place led by experienced and qualified staff. EMBS recently received a very favourable audit report from the Health and Safety Division.
41. An active Sports and Social Club enhances working relations within and between sections, with other local organizations and companies, and more recently (through sport and lunchtime quizzes) with other UAS Divisions. Significant sums are raised for charities.
42. The poor quality of accommodation, particularly at Kenmare House, is a significant constraint.
43. EMBS follows 'quality-management' principles whilst seeking to avoid the cost and bureaucracy of some of the more complex, formal approaches. As well as the Service Level Agreement and Operational Plan, the Division has a comprehensive set of policies, technical policy instructions and guides relating to its services and construction activities, training, health and safety and internal service provision.
44. EMBS uses a variety of specialist but disparate software applications (8 different major systems) which have been developed over the last decade to cover the wide range of technical activities undertaken by the Division. Many of these activities interface with external companies whose IT is generally more up-to-date, and the incompatibility between systems can be a barrier to efficient communication. The fragmented nature of these packages restrains the quality of management information and impacts on the efficiency of service delivery. Budget restraints have adversely affected review and upgrading of systems, but a software rationalization project is now well under way and it is planned that by mid-2006, subject to the necessary funding, EMBS will have more integrated systems.
45. In addition to a process review carried out as part of the software rationalization project and joint working with other universities (see para. 7), EMBS held a two-day QA workshop in September 2004 involving a representative cross-section of the Division's staff. The workshop was externally facilitated and was structured around the EFQM Excellence Model.8 From this review, five cross-functional groups have been working to recommend and implement improvements in customer feedback, performance measurement, purchasing, staff appraisal and internal communication.
46. EMBS is constantly seeking to improve its services and relationships in response to the ongoing structural changes at the University. Several areas/issues are currently being actively considered:
EMBS SMT/FSW
24 June 2005
I attach comments from the Division. I have no further comments except to express my gratitude to the Review Group and in particular its chair, Mr Gordon Hannah, and to confirm that the Director and I accept the recommendations and will proceed with an implementation plan.
T. J. MEAD
13 July 2006
1. We recognize the care and attention which the Review Committee have given to their task, and are gratified by the positive outcome of the review.
2. The report makes 33 specific recommendations covering a range of issues from the context within which EMBS operates to its internal organization and operating procedures. We recognize that the recommendations identify certain aspects of EMBS's service delivery where improvement is possible, and we will address these actively in the coming months.
3. The report coincides with the appointment of a new Director of Estate Management, and the announcement by the Registrary of a significant reorganization of the Unified Administrative Service and associated staff and student services. This presents a rare opportunity to make changes to the structure of EMBS and to its systems and procedures, in order to address those areas where the Review Committee have identified scope for improvements.
4. In making our comments we have followed the format of the report and comment on: Maintenance and Minor Works; Major Projects; Planning and Property; Internal Management; and the future.
5. We welcome the conclusion that the Maintenance and Minor Works section is 'relatively well managed but in a complex environment'. Our detailed comments were submitted in response to the Review Committee's first report and were considered by the Council in January 2005. Those comments addressed all but four of the Review Committee's first 19 recommendations. We do not repeat the earlier comments in this response, but propose some additional actions in the section below on Internal Management.
6. Of the recommendations we have not commented on previously, Recommendations 1 and 5 refer to the structure of the Maintenance and Minor Works Section and the succession arrangements for when the present Head of Section retires. We agree that these are important issues, and we will take account of the recommendations in bringing forward plans for restructuring EMBS in the context of the Registrary's wider proposals for the UAS.
7. We note the recommendations on the clarification of the Committee structure (Recommendation 2) and the reporting of Minor Works Review Group business to the Buildings Committee (Recommendation 4). Implementation is possible but EMBS is not responsible for the structure of Committees. The views of the Academic Secretary as Chair of Minor Works Review Group would be valuable and should be fully considered in this regard.
8. We agree with Recommendation 20 on the structure of the Major Projects Section. We are currently reviewing the structure of both the Major Projects Sections, and will take cognisance, in any re-organization, of the likely staffing requirements arising from expected further developments at West Cambridge and the future new development at North West Cambridge.
9. We agree with Recommendation 21. The duties are already documented as described below. As noted in paragraph 83, EMBS Project Managers have a detailed schedule of duties. The Project Managers draft the schedule of duties that the Contract Administrator is expected to undertake, and hence will be very familiar with its content. There is also a comprehensive guide produced by EMBS for Representative Users, of which Project Managers are well aware. EMBS hold regular project and section meetings and Project Managers frequently report to senior management on the activities which they undertake on projects. We will however ensure that the guidelines are followed in all cases.
10. We note Recommendation 22 on the weighting of selection criteria. However, it is considered that the Project Manager, in conjunction with the Representative User, is the person best placed to decide upon the appropriate weighting on detailed criteria to be used on any particular project, because of their intimate knowledge of the project. Consistency of weightings across projects is provided by the involvement of the Section Heads in all projects. The Director of EMBS should monitor and review the overall criteria related to Quality and Price from time to time in accordance with the requirements of a project type.
11. We note Recommendation 23 on reporting chains in relation to progress on time, cost and quality. The procedures that currently operate include regular reports from Project Managers to Section Heads, monthly reviews of all projects with the Director of EMBS (at SMT meetings), regular site visits by senior staff, and officers' reports on current projects to the Buildings Committee and to the Lynxvale Board. This process is intended to be totally transparent on the status of projects, be it positive or negative. We will review these arrangements in the light of recent experience.
12. We support Recommendation 24 on the formal appointment of the Representative User. The system currently in operation whereby the Head of the Institution nominates a Representative User is working well from EMBS's point of view. Indeed, the Head of the Institution is probably, for reasons of work load and availability, not best placed to act as Representative User. A formal act of delegation would ensure clarity within the department.
13. We agree with Recommendation 25. Section Heads and the Director of EMBS always welcome constructive criticism and Project Managers would always wish to know if there is a perception that their performance could be improved. The emphasis on line management reporting of performance issues is noted and will be reinforced.
14. We agreed with Recommendation 26 but would suggest this could also be undertaken by Section Heads acting on behalf of the Director of EMBS.
15. We accept Recommendation 27 on the life expectancy of new buildings. The procedures currently being operated to achieve this requirement are as follows.
| (i) | Life expectancy for a new building is agreed by the Project Team, in conjunction with the Representative User, taking into account any requirements of the funding body and the type of research to be undertaken in the facility. |
| (ii) | Part of the duties of the Quantity Surveyor is to benchmark against national and regional trends across all development sectors. |
| (iii) | Whole life cost analysis is usually undertaken for projects in conjunction with the Representative User and Project Team, which is used to optimize the relationship between capital cost and future maintenance and ensure that the appropriate quality of building is specified. A significant proportion of the projects undertaken for the University is highly serviced by comparison with commercial buildings, which inevitably results in a higher capital cost. |
We will review these arrangements and the ways in which this analysis informs the detailed specification and design of each new building.
16. We recognize the importance of challenging the 'Cambridge Factor' (Recommendation 28). Costs in Cambridge are affected by the ripple effect from construction works within the M25 and along the M11 Corridor. A buoyant construction programme in London will force up labour and materials costs in Cambridge due to demand over supply. Specifically within Cambridge a significant amount of building work is being undertaken on the Science parks and for Colleges and other commercial developments (e.g. the Grand Arcade) which inevitably has an impact on the construction market in which the University operates. To counteract this, projects routinely go through value management and value engineering exercises to ensure best value is achieved within the available budget. We believe that this does drive down costs, as historical data on projects indicates that University buildings are no more expensive on a like for like basis than similar developments, elsewhere.
17. We will however continue to seek better ways to ensure that new buildings are correctly sized and that the required functionality is obtained for the optimum whole-life cost.
18. On Recommendation 29 the point being made by the Review Panel is well understood, and we constantly strive to improve the accuracy of initial estimates. However there are difficulties as budgets are usually set before design development progresses to any level of detail. We do commission the services of the foremost construction cost managers with experience of all types of buildings in all sectors, in order to obtain accurate estimates, commensurate with the quality of information available. Statistics of out-turn costs of EMBS projects indicate that, across the board, there is only a very minor variation between forecast and actual costs. We will continue to seek further improvements to the accuracy of initial estimates.
19. We welcome the recognition of the importance of the Planning and Property section and the quality of the work.
20. We concur with the Review Committee's recommendation (Recommendation 30) that consideration should be given to moving the responsibilities for operational aspects out of the Planning and Property section. We are developing plans for a reorganization covering the facilities management, personnel and environmental activities of the section in the context of a wider restructuring of those activities in the UAS. The new arrangements will be designed to improve service delivery while ensuring that operational activities retain effective links with policy development.
21. We welcome the recognition of the importance of space management (Recommendation 31) and are putting into place arrangements to extend the current level of activity, for example to give emphasis to assessing the optimum size of new capital building projects. This will also assist in addressing the 'Cambridge factor' issues (Recommendation 28).
22. We welcome the Review Committee's comments on the performance of the Accounts Section and Office Management and Facilities Section.
23. We accept Recommendation 32, that internal controls should be improved so that a realistic assessment of the cost of particular services, such as the Messenger Service, can be made. Progress is being made on attributing costs to individual services, for example through the use of timesheets for some professional staff. This is already providing some useful data, but it is acknowledged that there is scope for improvement.
24. In relation to the Messenger Service we are conducting a review to assess costs and service quality, including the feasibility of setting up an outstation at Greenwich House to serve West and North West Cambridge. Charges to the Colleges were increased from 8.5p to 9p for 2005/06 and will increase again in 2006/07 to 10p.
25. The Accounts Section will continue to work with Maintenance and Minor Works to progress other recommendations of the Review Committee. In relation to Recommendations 6 and 8, we will endeavour to work with the Officers of the Finance Division to ensure that budgets outside of Head 8 are taken into account as far as possible. This should make the budget-setting process more transparent. In relation to charging for utilities (Recommendation 9), a pilot study was carried out from 1998 to 2002 involving The Old Schools and three academic Departments. Overall it was concluded that any savings identified were too small to justify the manpower required to extend the scheme. We will revisit this to see if it can be done in a more cost-effective manner. Recommendation 13 seeks a better control mechanism for the Direct Labour Force. The specification of proposed new software includes provision for enhanced management information and will facilitate control of jobs and communicating any delays to building occupiers.
26. We look forward to the provision of improved accommodation (Recommendation 33), and can confirm that the needs of EMBS have been included in the long-term plans for the UAS, which are being progressed through the Old Press/Mill Lane Working Group. This Group made a report to the Planning and Resources Committee in May 2006.
M. R. BIENIAS
26 June 2006
1 Staff in post at January 2005 including consultants and trainees.
2 Latest revision of Service Level Agreement was issued in May 2004.
3 The Capital Project Process (CPP) was introduced in 2002.
4 The Commission for Architecture and the Built Environment.
5 After adjustment for national tender price inflation.
6 See minutes of Planning and Resources Committee (PRC), 27 March 2000. Additional requirements for estates with listed and/or heavily serviced scientific buildings such as Cambridge are recommended.
7 Report to Council in October 2001 on University governance arrangements following problems of implementation of the CAPSA project.
8 The EFQM Excellence Model: Higher Education Version was developed by Sheffield Hallam University and is endorsed both by the European Foundation for Quality Management and the HEFCE Leadership Foundation.