FACILITIES MANAGER'S DESK REFERENCE [3 ed.] 9781119633600, 1119633605

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FACILITIES MANAGER’S DESK REFERENCE

FACILITIES MANAGER’S DESK REFERENCE Third Edition JANE M. WIGGINS FM Tutor & Associates Ltd

This edition first published 2021 © 2021 John Wiley & Sons Ltd. All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted, in any form or by any means, electronic, mechanical, photocopying, recording or otherwise, except as permitted by law. Advice on how to obtain permission to reuse material from this title is available at http://www.wiley.com/go/ permissions. The right of Jane M. Wiggins to be identified as the author of this work has been asserted in accordance with law. Registered Offices John Wiley & Sons, Inc., 111 River Street, Hoboken, NJ 07030, USA John Wiley & Sons Ltd, The Atrium, Southern Gate, Chichester, West Sussex, PO19 8SQ, UK Editorial Office 9600 Garsington Road, Oxford, OX4 2DQ, UK For details of our global editorial offices, customer services, and more information about Wiley products visit us at www.wiley.com. Wiley also publishes its books in a variety of electronic formats and by print-on-demand. Some content that appears in standard print versions of this book may not be available in other formats. Limit of Liability/Disclaimer of Warranty In view of ongoing research, equipment modifications, changes in governmental regulations, and the constant flow of information relating to the use of experimental reagents, equipment, and devices, the reader is urged to review and evaluate the information provided in the package insert or instructions for each chemical, piece of equipment, reagent, or device for, among other things, any changes in the instructions or indication of usage and for added warnings and precautions. While the publisher and author have used their best efforts in preparing this work, they make no representations or warranties with respect to the accuracy or completeness of the contents of this work and specifically disclaim all warranties, including without limitation any implied warranties of merchantability or fitness for a particular purpose. No warranty may be created or extended by sales representatives, written sales materials or promotional statements for this work. The fact that an organisation, website, or product is referred to in this work as a citation and/or potential source of further information does not mean that the publisher and author endorse the information or services the organisation, website, or product may provide or recommendations it may make. This work is sold with the understanding that the publisher is not engaged in rendering professional services. The advice and strategies contained herein may not be suitable for your situation. You should consult with a specialist where appropriate. Further, readers should be aware that websites listed in this work may have changed or disappeared between when this work was written and when it is read. Neither the publisher nor author shall be liable for any loss of profit or any other commercial damages, including but not limited to special, incidental, consequential, or other damages. Library of Congress Cataloging-in-Publication Data Names: Wiggins, Jane M., author. Title: Facilities manager’s desk reference / Jane M. Wiggins, owner, FM Tutor & Associates Ltd. Description: Third edition. | Hoboken, NJ : Wiley-Blackwell, 2021. | Includes bibliographical references and index. Identifiers: LCCN 2020038232 (print) | LCCN 2020038233 (ebook) | ISBN 9781119633594 (paperback) | ISBN 9781119633600 (adobe pdf) | ISBN 9781119633617 (epub) Subjects: LCSH: Facility management--Handbooks, manuals, etc. Classification: LCC TS155 .W536 2020 (print) | LCC TS155 (ebook) | DDC 658.2--dc23 LC record available at https://lccn.loc.gov/2020038232 LC ebook record available at https://lccn.loc.gov/2020038233 Cover Design: Wiley Cover Image: © Howard Kingsnorth/Getty Images Set in 10/11.5pt MinionPro by SPi Global, Chennai, India

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Contents

List of Abbreviations

xxv

Introductionxxxiii 1  History of Facilities Management 1.1   Origins of facilities management 1.2   A brief history of FM 1.3   Growth of the FM profession 1.4  Defining FM 1.5   Development of FM 1.6  Trends 2  Key Drivers of Facilities Management 2.1   The business organisation 2.2  Demand and supply 2.3   Roles of FM 2.4   Drivers of FM 2.5  Champion of end-users 2.6   Flexibility in office space 2.7   A recruitment differentiator 2.8  Scope of services 2.9   Impact of working environment on productivity 2.10  The virtual office 2.11  Technology–systems integration 2.12  Building designs 2.13  Financial performance 2.14  Ownership of the property 2.15  Value added 2.16  Service profit chain 2.17  FM’s contribution 2.18  Performance measurement 2.19  Performance indicators 2.20 Benchmarking 2.21  Future trends 3  Activities in Facilities Management 3.1  Introduction 3.2   Facilitation of services and information 3.3  Management functions 3.4   Premises and building management 3.5   Business support services

1 1 1 3 5 8 10 11 11 11 12 13 13 14 14 15 15 15 16 16 16 17 17 17 19 19 20 20 21 23 23 23 23 24 26 v

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3.6   Scope and extent of FM activities and services 3.7   FM and the property management function

27 28

4  Delivering Facilities Management – Strategy

29

4.1  Introduction 4.2  Business strategy 4.3  Identifying needs 4.4   Benefits of a strategic approach 4.5  Strategic analysis 4.6  Determining factors 4.7  Premises policy 4.8  Facilities audit 4.9  Audit process 4.10 Awareness 4.11  Space audit 4.12  Audit stage 1 – fact finding 4.13  Audit stage 2 – further investigation 4.14  Audit benefits 4.15  Developing solutions 4.16  Strategy implementation 4.17  FM strategy models

29 29 29 33 33 33 34 35 35 36 36 36 36 37 37 38 38

5  Outsourcing43 5.1  Introduction 5.2  Multi-service contracts 5.3  Best Value 5.4  Longer contracts 5.5   Integrated FM solutions 5.6  Benefit analysis 5.7  Intelligent client 5.8   FM outsourcing models 5.9  Vested sourcing 5.10  Selection process 6  Financial Management 6.1  Introduction 6.2   Financial systems and process 6.3   The finance department 6.4  Financial controls 6.5  Financial statements 6.6   Finance and the FM 6.7  Sources of funding 6.8  Use of funding 6.9  Fixed assets 6.10  Working capital 6.11 Investments 6.12  The balance sheet 6.13  The profit and loss account

43 43 44 44 44 44 45 45 46 46 48 48 48 52 52 53 53 54 54 54 55 55 55 55

Contents  vii

6.14  Cash flow statement 6.15  Performance measurement 6.16 Profitability 6.17 Liquidity 6.18  Other liquidity issues 6.19  Annual reports of accounts 6.20  Financial accounting standards 6.21 Budgets 6.22  Roles of budgets 6.23  Budget design 6.24  Capital or revenue 6.25  Property costs 6.26  Budget variances 6.27  Cost data 6.28  Cost accounting 6.29  Cost centres 6.30  Cash flow 6.31 Leases 6.32 Tax 6.33 Depreciation 6.34  Financial business cases 6.35  Investment appraisal methods 6.36  Preparing a financial proposal 6.37  Building life-cycle costs 6.38  Life-cycle costing methodology 6.39  Evaluating life-cycle costs 6.40  The impact of inflation 7  Property and Estates Management 7.1  Introduction 7.2  Property industry 7.3  Market influences 7.4   The cyclical nature of the market 7.5  Property portfolios 7.6   The investment market 7.7  Property investors 7.8  Property management 7.9   Property professionals and specialists 7.10  Developing a property strategy 7.11  Property and asset registers 7.12 Dilapidations 7.13  Vacant property 7.14  Property guardians 8  Property Legislation and Leases 8.1  Ownership and tenure 8.2   The Estate Agents Act 1979 8.3   Consumer protection regulations

56 56 57 57 58 59 59 60 61 62 62 62 63 64 65 66 67 69 69 76 76 77 80 80 81 81 82 84 84 84 85 85 85 85 87 88 88 91 92 94 97 98 99 99 102 103

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8.4   Defective Premises Act 1972 103 8.5   Occupiers’ Liability Acts 1957 and 1984 104 8.6  Energy Performance of Buildings (Certificates and Inspections) Regulations104 8.7   Health and Safety Legislation 104 8.8   Boundaries and Party Walls 105 8.9   The contents and terms of a commercial lease 105 8.10  Tenant’s covenants 107 8.11  Landlord’s covenants 110 8.12 Schedules 110 8.13  Trigger notices 112 8.14  Time limits 112 8.15 User 113 8.16  Alienation or assignment 113 8.17 Arbitration 113 8.18  Additional covenants 114 8.19  Lease renewals 114 8.20  Security of tenure 114 8.21  The machinery for termination – Sections 24–28 115 8.22  Landlord’s basis for opposing a new tenancy – Section 30 115 8.23  The new tenancy 116 8.24  Section 32 Rule 116 8.25  Market forces and lease renewal 117 8.26 Repairs 117 8.27 Wayleaves 118 8.28 Easement 118 9  Developing New Buildings 9.1   The development process 9.2  Planning legislation 9.3   The Town and Country Planning Act 1990 9.4  Planning permission 9.5   The Town and Country Planning (Use Classes) Order 2005 9.6   Planning policy guidance notes 9.7  Development plans 9.8  Planning agreements 9.9   Breach of planning control 9.10  Uses pre-1964 9.11  Listed buildings 9.12  Conservation areas 9.13  Building design 9.14  Building types and uses 9.15  Drivers of building design 9.16  Sustainable construction 9.17 Passivhaus 9.18  Intelligent buildings 9.19  Building information modelling (BIM) 9.20  Structure and its effect on building use

119 119 122 123 124 126 127 127 127 128 129 129 129 130 130 131 131 133 133 134 135

Contents  ix

9.21  Planning grids and the use of space 9.22  Developers’ fit-out 9.23  Measuring building efficiency 9.24  Building efficiency 9.25  Layout impact 9.26  Building performance 9.27  Design Quality Indicator 9.28  Commercial building materials 9.29  Building Regulations 9.30  Approved Documents 10    Project Management 10.1  Introduction 10.2   Project management process 10.3   Fundamentals of project management 10.4   Project manager role 10.5  Responsibilities 10.6  Project briefs 10.7   Terms of reference (TOR) 10.8  Project programmes 10.9  Project timescales 10.10  Quality plan 10.11  FADE project methodology 10.12 PRINCE 10.13  Project planning 10.14  Planning techniques 10.15  Gantt charts 10.16  Critical path analysis 10.17  Project control 10.18  Risk management 10.19  Project budget 10.20  Project teams 10.21  Project support 10.22  Project handover 11    Space Management 11.1  Introduction 11.2   Data and information gathering 11.3  Importance of space 11.4   Space management policy 11.5  Space guidelines 11.6   Effective use of space 11.7   The FM cost driver 11.8  Business performance 11.9  Space planning 11.10  Impact of building structures on space use 11.11  Impact of building services on space use 11.12  Space allocation

135 136 137 138 138 139 143 144 144 145 147 147 147 147 148 148 149 150 150 151 151 151 152 153 154 154 155 155 156 156 157 157 158 160 160 160 161 161 162 163 164 165 166 170 170 175

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11.13  Space utilisation 11.14  Space audits 11.15  Building efficiency 11.16  Building operating costs 11.17  Measuring terminology 11.18  New developments in space use 11.19  Legislation and compliance 12    Workplace and Accommodation Management 12.1   Workplace and accommodation changes 12.2  Move requests 12.3  Churn 12.4  Swing space 12.5  Planning a move 12.6  Implementation 12.7  Post-move

176 178 179 181 183 185 190 192 192 192 193 194 194 196 197

13    Procurement198 13.1  Introduction 13.2  Purchase criteria 13.3  Procurement policy 13.4  Service contracts 13.5  Procurement strategy 13.6  Procurement stages 13.7  Strategic sourcing 13.8  Spend analysis 13.9  Identifying the need 13.10  Demand management 13.11  Supplier selection 13.12 Specifications 13.13  Tendering process 13.14  The tender document 13.15  Invitation to tender process 13.16  Cost models 13.17  Whole-life costing 13.18  Value engineering 13.19 E-purchasing 13.20 Legislation 13.21  European procurement legislation 13.22  Bribery Act 2010 14    Contracts and Contract Management 14.1  Introduction 14.2  Consideration 14.3   Communication of offer and acceptance 14.4  Acceptance 14.5  Withdrawal 14.6   Contracts by deed

198 198 198 199 199 201 201 201 202 202 203 203 204 205 205 206 206 207 209 209 211 212 214 214 215 215 215 215 215

Contents  xi

14.7   Contracts which are not binding 14.8  Contract types 14.9  Contract methods 14.10  Contents of a contract 14.11  Lump-sum contract 14.12  Measured-term contract 14.13  Term contract 14.14  Fixed-price contract 14.15  Reimbursable contract 14.16  Schedule of rates 14.17  Reimbursable and fixed-fee contract 14.18  Contract relationships 14.19 Partnership 14.20  Contract extensions 14.21  Service level agreements (SLAs) 14.22  Standard contract forms 14.23  CIOB Facilities Management Contract 14.24  JCT suite of contracts 14.25  GC/Works/10 Facilities Management Contract (2000) 14.26  NEC framework of contracts 14.27  BSRIA Soft Landings 14.28  Private finance initiatives (PFIs) 14.29  Terms and conditions

216 216 217 219 219 220 220 220 220 221 221 221 221 222 222 222 223 223 224 224 224 225 226

15    Legislation227 15.1  Introduction 15.2   UK legal system 15.3   Impact on FM 15.4  Duties 15.5  Negligence 15.6  Vicarious liability 15.7  Consultation 15.8  Competence 15.9  Operational compliance 15.10 Records 15.11  Strategic impact 15.12  Corporate manslaughter 15.13  Bribery Act 2010 15.14  Modern Slavery Act 2015

227 227 230 232 233 233 233 233 234 234 234 235 235 235

16    Legislation Affecting Facilities Management Activities

237

16.1  Introduction 16.2  Safety policy 16.3  Enforcing authorities 16.4   Management of health and safety regulations 16.5   The HSE five-step approach 16.6   Risk assessment standards 16.7  Hazards

237 237 238 239 239 239 240

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16.8  Risk control 16.9  Risk register 16.10  Definitions of hazard and risk 16.11  Hazard identification 16.12  Work activities 16.13  Risk assessment 16.14  Risk assessment records 16.15 The Workplace (Health, Safety and Welfare) Regulations 1992 (amended 2002) 16.16  Control of Substances Hazardous to Health 2002 16.17  Work at Height Regulations 2005 16.18  Provision and Use of Workplace Equipment Regulations 1998 16.19  Manual Handling Regulations 1992 16.20  Personal Protective Equipment at Work Regulations 1992 16.21  Lifting Operations and Lifting Equipment Regulations 1998 16.22  Control of Noise at Work Regulations 2005 16.23  Confined Spaces Regulations 1997 16.24  Building Regulations 2010 – Part L 16.25  Data Protection Act 2018 16.26  Regulation of Investigatory Powers Act 2000 16.27  Human Rights Act 1998 16.28 Transfer of Undertakings (Protection of Employment) Regulations 2006 16.29  Working Time Regulations 1998 16.30  National Minimum Wage Act 1998 16.31 Greenhouse Gas Emissions (Directors’ Reports) Regulations 2013 16.32 Companies (Directors’ Report) and Limited Liability Partnerships (Energy and Carbon Report) Regulations 2018 17    Fire Safety and Legislation 17.1  Introduction 17.2  Legislation and standards 17.3  Building design 17.4  Building Regulations 17.5  Designing space 17.6  Standards 17.7  Balanced solution 17.8  Fire separation 17.9   Classification of materials, buildings and fixtures 17.10  Building classifications 17.11 Furnishings 17.12  Means of escape 17.13  Fire signage 17.14  Fire detection and fire alarms 17.15  Fire detection system categories 17.16  Control panels 17.17 Zoning

240 241 241 241 242 242 243 244 245 246 246 247 247 248 248 249 249 250 251 251 251 252 252 253 253 254 254 255 255 258 258 259 259 259 260 261 262 262 264 264 265 265 266

Contents  xiii

17.18  Fire, smoke and heat detectors 17.19 Sounders 17.20  Call points 17.21 Cabling 17.22  Suppression systems 17.23  Fire extinguishers 17.24  Hose reels 17.25  Fire blankets 17.26 Sprinklers 17.27  Fire hydrants 17.28  Dry and wet risers 17.29  Regulatory Reform (Fire Safety) Order 2005 17.30  Risk assessment 17.31  Assessment methods 17.32  Training records 17.33  Fire-trained staff 17.34  The fire drill 17.35 Refuges 18    Electrical Supplies and Electrical Safety 18.1  Introduction 18.2  Single-phase supply 18.3   Three-phase low-voltage supply 18.4   High-voltage three-phase supply 18.5  Wiring 18.6  Inspection and testing 18.7  Standards – 18th Edition 18.8   Portable electrical equipment 18.9  Safety 18.10  Electric shock 18.11 Earthing 18.12 Bonding 18.13  Circuit protection 18.14  Cable management 18.15  Power quality 18.16  Voltage optimisers 18.17  Power failures 18.18  Assessing the need 18.19  Uninterruptable power supplies 18.20 Generators 19    Accessibility and Inclusive Built Environments 19.1  Introduction 19.2  Inclusive FM 19.3   Disability discrimination legislation 19.4   Special Educational Needs and Disability Act 2001 19.5   Disability Discrimination Act 2005 19.6   Equality Act 2010

266 266 267 267 268 268 269 269 269 270 270 270 272 272 273 274 274 276 277 277 278 278 278 278 279 279 280 281 281 282 282 282 282 283 283 283 284 284 285 287 287 287 288 290 290 291

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19.7   Planning and Compulsory Purchase Act 2004 19.8  Disability awareness 19.9  Front-of-house services 19.10  Personal emergency evacuation plans (PEEPs) 19.11 Communication 19.12  Physical adjustments 19.13 Claims 20    First Aid at Work 20.1  Introduction 20.2   Definition of first aid 20.3   Health and Safety (First-Aid) Regulations 1981 20.4   Assessment of first-aid needs 20.5  Suitable person 20.6  First-aid equipment 20.7   Automated external defibrillators 20.8   Travelling first-aid kits 20.9  First-aid rooms 20.10  Inspection and communication 20.11 Reporting of Injuries, Diseases and Dangerous Occurrences Regulations 2013 20.12  Fit note

292 292 292 293 294 294 295 296 296 296 296 297 298 299 300 300 300 301 302 303

21    Asbestos304 21.1  Introduction 21.2  Regulations 21.3   Asbestos management plan 21.4  Management options 21.5   Asbestos survey types 21.6   Asbestos material assessment algorithm 21.7   Asbestos priority assessment 21.8   Asbestos management strategies 21.9   Managing an asbestos incident 21.10  Summary checklist 22    Water Supplies and Water Safety 22.1  Introduction 22.2  Water systems 22.3  Water consumption 22.4   Benefits of water conservation 22.5  Water industry 22.6  Compliance 22.7  Water pollution 22.8  Drinking water 22.9  Washing and cleaning 22.10  Food preparation 22.11  Water pressure 22.12 Drainage

304 305 306 307 307 309 309 310 311 312 313 313 314 314 314 315 315 316 316 318 318 318 318

Contents  xv

22.13  Sustainable Urban Drainage System (SuDS) 22.14  Specialist maintenance 22.15  Water design capacity 22.16  Supply continuity 22.17  Management review 22.18  Water management policy 22.19  Water-saving technology 22.20  Water recycling systems 22.21  Urinal controls 22.22  Water-saving tips 22.23  Leak detection 22.24  Water safety 22.25  Approved Code of Practice L8 22.26  Legionella Control Association Code of Conduct 22.27  Risk assessment 22.28  Legionnaires’ disease 22.29 The maintenance implications of Legionnaires’ disease 22.30  Maintenance routines and operating procedures 22.31  Coliform bacteria 22.32  Pseudomonas aeruginosa 22.33  Water quality legislation 22.34  Water quality testing 22.35  Swimming pool management

319 319 319 319 320 320 321 321 323 323 324 325 325 327 327 328

23    Construction (Design and Management) Regulations

334

23.1  Introduction 23.2  Notifiable works 23.3   Impact of the Regulations on FM 23.4   Principal designer duties 23.5  Designer duties 23.6   Principal contractor duties 23.7  Competence 23.8  Assessing competence 23.9  Demolition 23.10 Documents 24    Business Continuity 24.1  Introduction 24.2  Basic principles 24.3  Legislation 24.4  Standards 24.5  Impact on business 24.6  Policy 24.7  Planning 24.8   Business impact analysis 24.9  Corporate strategy 24.10  Critical assets

329 330 331 331 332 332 333 334 335 336 337 337 337 338 339 340 340 344 344 345 345 345 346 346 347 347 348 348

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24.11  Hazards, consequences and impacts 24.12  Benefits of a business impact analysis 24.13  Unavailability impact table 24.14  Risk assessment 24.15 Documents 24.16  Standby site 24.17 Implementation 24.18  Two-team approach 24.19  Crisis management team 24.20 Logistics 24.21  Telephony and data communications 24.22  Testing the plan 24.23  Upkeep of records 24.24 Audit

349 350 350 350 350 353 353 353 353 355 355 355 356 356

25    Maintenance – Definitions and Strategies

357

25.1  Introduction 25.2  Maintenance priorities 25.3  Maintenance classifications 25.4  Maintenance policy 25.5   Computerised maintenance management systems 25.6  Asset registers 25.7  Maintenance programmes 25.8  Maintenance activities 25.9  Maintenance schedules 25.10  Controlling maintenance work 25.11  Building records 25.12  Annual inspections 25.13  Condition surveys 25.14  Planning the survey 25.15  Component life cycles 25.16  Bathtub curve 25.17  Element and component life expectancies

357 358 358 360 361 361 361 363 363 364 365 366 367 367 368 369 369

26    Mechanical and Electrical Systems and Their Maintenance

371

26.1  Introduction 26.2   Heating, ventilation and air conditioning 26.3  Heating systems 26.4   Direct heating systems 26.5   Indirect heating systems 26.6  Ventilation 26.7  Relative humidity 26.8  Natural ventilation 26.9  Mechanical ventilation 26.10  Air conditioning 26.11  Comfort control 26.12  Selection of an appropriate system 26.13  Air-conditioning systems

371 372 372 373 373 374 375 376 377 377 377 378 379

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26.14  Local exhaust ventilation systems 26.15 Dampers 26.16 Fans 26.17 Filters 26.18  Displacement ventilation systems 26.19  Fan coil units 26.20  Chilled beam 26.21 Diffusers 26.22  Heat pumps 26.23  Packaged air-conditioning units 26.24 Refrigeration 26.25 Humidification 26.26  Cooling systems 26.27  Fire safety 26.28 Standards 26.29 Lifts 26.30 Lighting 26.31  Lighting requirements 26.32  Light fittings 26.33  Lighting efficiency 26.34  Lighting controls 26.35  Building management systems 26.36  Intelligent buildings 27    Information and Communications Technology 27.1  Introduction 27.2  Ownership options 27.3  Telephone systems 27.4  Telephony services 27.5  Communication wiring 27.6  Fibre optics 27.7  Cable distribution 27.8   Structured cabling systems 27.9   Data rooms and centres 27.10  Wireless networks 27.11  Cellular networks 27.12  Personal area networks 27.13  Virtual private networks 27.14 Firewalls 27.15  Smartphones and tablets 27.16  Cloud computing 27.17 Tele-presence 27.18  Video conferencing 27.19  Voice over Internet Protocol 27.20 Applications 27.21  QR codes 27.22 Drones 27.23  The Internet of Things

380 381 381 381 381 382 382 382 382 382 383 383 383 384 384 385 386 388 389 389 389 390 390 392 392 392 393 394 395 396 397 398 400 402 404 405 406 406 406 406 407 407 407 407 409 409 410

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27.24  Artificial intelligence 27.25  Voice-activated services 28    Grounds and External Areas 28.1  External areas 28.2   In-house or contracted-out landscaping maintenance 28.3  Landscaping standards 28.4  Landscape architects 28.5  Decay of trees 28.6  Damage to trees 28.7   Removal of trees and tree stumps 28.8  Ownership of trees 28.9   Spreading of roots and branches 28.10  Dangerous trees 28.11  Licence to plant 28.12  Tree preservation orders 28.13  Conservation areas 28.14  Internal planting 28.15  Artificial plants 28.16  Maintenance of hardstandings and external areas 28.17  Vegetation and planted areas 28.18  Boundary fencing 28.19  Brickwork walls 28.20  Grounds maintenance contracts 28.21  Site footpaths and roads 28.22  Workplace parking 28.23  Parking policy 28.24  Car park categories 28.25  Car park design 28.26  Bicycle parking 28.27  Motorcycle parking 28.28  Car parking standards 28.29  Travel planning 28.30  Car sharing 28.31  Bike share 29    Fabric Maintenance 29.1  Introduction 29.2   Maintenance implications of building structures 29.3   Fabric maintenance programmes 29.4   Internal and external finishes 29.5   External walls and building envelope 29.6   Guttering and rain downpipes 29.7  Lightning conductors 30    Energy Management 30.1  Introduction 30.2  Energy consumption

411 411 412 412 412 413 413 415 415 415 416 416 417 418 418 418 418 419 420 421 422 422 422 423 424 424 425 426 430 432 433 434 435 436 437 437 437 437 438 441 442 443 444 444 444

Contents  xix

30.3   Energy-efficient building designs 30.4   Energy management good practice 30.5  Carbon footprint 30.6  Choice of fuel 30.7  Electricity 30.8   Combined heat and power systems 30.9   Renewable energy sources 30.10 Gas 30.11  Energy monitoring 30.12 Metering 30.13 Investment 30.14  Energy policy 30.15  CRC Energy Efficiency Scheme 30.16 Companies (Directors’ Report) and Limited Liability Partnerships (Energy and Carbon Report) Regulations 2018 30.17 Greenhouse Gas Emissions (Directors’ Reports) Regulations 2013 30.18  Carbon Trust Standard 30.19  ISO 50001 – Energy Management 30.20  BS EN 16247 – Energy Audits 30.21  PAS 2060 – Carbon Neutrality 30.22  PAS 2080 – Carbon Management in Infrastructure 30.23 Legislation 30.24  Building Regulations 30.25  Energy Performance of Buildings Directive 30.26  Energy Performance Certificates 30.27  Display Energy Certificates 30.28  Feed-in Tariff 30.29  Renewable Heat Incentive 30.30  Energy Savings Opportunity Scheme 30.31  Minimum Energy Efficiency Standard 30.32  Smart Export Guarantee Scheme 31    Front of House 31.1  Reception services 31.2   The first impression 31.3   The welcome process 31.4  Welcome formalities 31.5   Managing visitor expectations 31.6  Best practice 31.7  Customer service 31.8   Customer and visitor satisfaction 31.9  Visiting groups 31.10  Meet and greet service 31.11  Styles of welcome and reception service 31.12  Welcome boards 31.13  Remote entry points 31.14  The goodbye

445 446 447 448 449 450 451 453 455 455 457 457 458 458 460 460 460 461 461 461 462 463 463 464 464 465 465 466 467 467 468 468 468 469 469 470 470 471 471 472 472 473 473 473 474

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31.15  Reception service standards 31.16  Corporate duty of care 31.17  Recording visitor information 31.18  Display of company signage 31.19  Visitor risk assessments 31.20  Fire precautions in the reception area 31.21  CCTV surveillance 31.22  Trespassing and theft 31.23  Switchboard services 31.24  Room booking services 31.25  Virtual reception 32    Housekeeping and Cleaning Services 32.1  Cleaning services 32.2  Cleaning methods 32.3  Cleaning standards 32.4  Cleaning specifications 32.5  Cleaning costs 32.6   Advantages and disadvantages of contract cleaning 32.7  Staff 32.8  Daytime cleaning 32.9  Equipment 32.10  Microfibre materials 32.11  Ionators and active water 32.12  Cleaning chemicals 32.13 Detergents 32.14 Sealants 32.15 Solvents 32.16  Example contract cleaning specification 32.17 Checklist 32.18  COVID-19 Cleaning guidance 33    Security Management 33.1  Introduction 33.2  Security strategy 33.3   Contract security services 33.4   Licensed security roles 33.5  Increased importance 33.6  Contractor selection 33.7  Service standards 33.8   Site survey and analysis 33.9  Assignment instructions 33.10  Access control 33.11  Door security 33.12  Door furniture 33.13 Windows 33.14  Electronic access control systems 33.15  Components in electronic systems

474 474 476 477 478 479 479 480 480 481 483 484 484 486 486 487 489 489 491 492 492 493 494 494 495 498 500 501 504 505 506 506 506 507 508 508 508 509 510 511 511 515 516 518 519 520

Contents  xxi

33.16  Advantages and disadvantages of electronic systems 33.17 Training 33.18  Special considerations 33.19  Disability discrimination 34    Customer and Stakeholder Relations 34.1   The importance of good service delivery 34.2  Customer care 34.3  Stakeholder analysis 34.4  Customer service 34.5  Communication 34.6   Service delivery requirements 34.7  Analysis tools 34.8  Questionnaires 34.9   User and focus groups 34.10  Mystery shopping 34.11  Critical service features 34.12  Gap analysis 34.13  Service quality (SERVQUAL) 34.14  Internal customer service 34.15  FM helpdesk 34.16  Service level agreements 34.17  Customer service standards 34.18  Customer journey mapping 34.19  Customer Effort Score (CES) 34.20  Net Promoter Score (NPS) 35    Waste Management 35.1  Introduction 35.2   Waste management policy 35.3   Waste management structure 35.4   Waste management procedures 35.5  Duty of care 35.6  Waste minimisation 35.7  Building design 35.8  Operational buildings 35.9   Business activities and business processes 35.10  Product labelling 35.11 Recycling 35.12  Plastic waste 35.13  Anaerobic digestion 35.14  Waste to energy 35.15  Waste product database 35.16  Waste classification 35.17  Waste management audits 35.18 Targets 35.19 Landfill 35.20 Legislation

522 523 523 523 524 524 524 525 526 527 527 528 528 528 529 529 529 530 531 532 534 535 536 536 536 538 538 540 540 540 540 541 542 542 543 543 544 544 546 546 547 547 551 551 552 553

xxii Contents

36    Catering and Hospitality Services 36.1  Introduction 36.2  Catering trends 36.3  Catering strategy 36.4  Catering objectives 36.5   In-house catering operation 36.6   Contracted-out catering services 36.7  Contract types 36.8  Catering specification 36.9  Catering costs 36.10  Catering services review 36.11  Food hygiene and safety 36.12  Hazard Analysis of Critical Control Points 36.13 Allergens 36.14 Legislation 36.15 Well-being 36.16  Standards and accreditations 37    Quality Management 37.1  Origins 37.2  Quality 37.3  Quality management 37.4  Continuous improvement 37.5  Lean 37.6   Quality systems and procedures 37.7   Total quality management 37.8  Business Excellence Model – European Foundation of Quality Management 37.9  Six Sigma 37.10  Quality standards and accreditation schemes 37.11 Standards 37.12  ISO 9000 37.13  ISO 41001 37.14  ISO 14001 37.15  Investors in People 37.16 Benchmarking 37.17  FM benchmarking 37.18  Key performance indicators 38    Document Management Services 38.1  Corporate information 38.2  Document management 38.3  Mail 38.4  Reprographics 38.5  Photocopiers 38.6  Printers 38.7  Multi-function devices

556 556 556 557 558 558 559 560 563 565 567 570 571 571 572 573 573 575 575 575 575 576 577 577 577 579 580 580 581 581 584 585 585 586 588 590 592 592 592 593 597 598 601 602

Contents  xxiii

38.8   Facsimile (fax) machines 38.9   Electronic document management system 38.10  Audiovisual equipment 38.11 Archives 39    Sustainability and Environmental Issues 39.1  Introduction 39.2  Historical overview 39.3  Definitions 39.4  Earth’s resources 39.5  Ecological footprint 39.6   The One Planet Living principles 39.7  FM’s role 39.8  Environmental impacts 39.9   History of CSR 39.10  CSR responsibilities 39.11  CSR standards 39.12  Measuring CSR 39.13  Benchmarking CSR 39.14  Sustainability Index in FM 39.15  CSR and Environmental Policy 40    Management of the Facilities Management Function 40.1   The facilities management team 40.2  Setting up the department 40.3  Workload planning and allocation 40.4  Delegation 40.5  Recruitment 40.6  FM competencies 40.7  Training and development 40.8  Career planning 40.9  Motivation 40.10  Culture and values 40.11  Team building 40.12  Multi-team (cross-functional) working 40.13  Discipline, grievances and staff exit 40.14 Management 40.15 Leadership 40.16  Raising the profile of workplace and FM professionals Index

603 603 604 605 606 606 606 609 609 611 612 612 613 620 621 626 627 630 630 631 632 632 632 633 635 636 637 640 641 642 645 645 647 648 649 649 651 653

List of Abbreviations

AC ACAS ACM ACoP ACPO AD ADR AE AED AFDD AFM AGA AHU AI AIB AMR AP ASHRAE BALI BAR BAS BCIS BCM BCO BCP BE BEIS BEMS BESA BIA BICSc BIFM BIM BITC BMS BOO BOT BRE BREEAM BRICS BS

air conditioning Advisory, Conciliation and Arbitration Service asbestos-containing material Approved Code of Practice Association of Chief Police Officers anaerobic digestion alternative dispute resolution annual equivalent automated external defibrillator arc fault detection devices Association of Facilities Managers Authorised Guarantee Agreement air handling unit assignment instruction asbestos insulating board automatic meter reader appointed person American Society of Heating, Refrigerating and Air-Conditioning Engineers British Association of Landscape Industries British Association of Removers building automation system Building Cost Information Service business continuity management British Council for Offices business continuity planning/plan built environment Business, Energy and Industrial Strategy building energy management systems Building Engineering Services Association business impact analysis British Institute of Cleaning Science British Institute of Facilities Management building information modelling Business in the Community building management system Build, Own, Operate Build, Operate, Transfer Building Research Establishment Building Research Establishment Environmental Assessment Method Brazil, Russia, India, China and South Africa British Standard xxv

xxvi  List of Abbreviations

BSI BSIA BSRIA BT BTEC BV BVPP CAD CAFM CAWR CBA CBM CCP CCTV CDM CEA CEEQUAL CES CFM CHAS CHP CIBSE CIOB CIPS CIS CITB CITES CLP CMG CMMS COSHH CPA CPI CPSS CPU CRC CRM CSF CSR CV DAERA DAS DBFO DCF DCMF DDA DEC DEFRA

British Standards Institution British Security Industry Association Building Services Research and Information Association British Telecom Business and Technology Education Council best value Best Value Performance Plan computer-aided design computer-aided facilities management Control of Asbestos at Work Regulations cost–benefit analysis condition-based maintenance critical control point closed circuit television Construction Design and Management Regulations cost-effectiveness analysis Civil Engineering Environmental Quality Assessment and Award Scheme Customer Effort Score Centre for Facilities Management or Certified Facility Manager Contractors Health and Safety Assessment Scheme combined heat and power Chartered Institution of Building Services Engineers Chartered Institute of Building Chartered Institute of Procurement and Supply Construction Industry Scheme Construction Industry Training Board Convention on International Trade in Endangered Species of Wild Fauna and Flora Classification, Labelling and Packaging Regulation Commercial Moving Group computerised maintenance management system Control of Substances Hazardous to Health Regulations critical path analysis critical performance indicators Cleaning Professionals Skills Suite central processing unit Carbon Reduction Commitment customer relationship management critical success factors corporate social responsibility constant volume Department of Agriculture, Environment and Rural Affairs Design and Access Statement Design, Build, Finance, Operate discounted cash flow Design, Construct, Manage, Finance Disability Discrimination Act Display Energy Certificate Department for Environment, Food and Rural Affairs

List of Abbreviations  xxvii

DNO DPC DPIA DPO DQI DREAM DSE EA ECA EDMS EDS EFAW EFQM EfW EHO EIA EIA/TIA EMAS EMEA EMI EMS EPBD EPC ERP ESOS ESTA ETO EU EWC EWS FAQ FAW FELV FF&E FFI FIT FM FMA FMI FMP FRS FSC FTE FTSE GCW GDO GDP GDPR GEA

distribution network operator damp proof course data protection impact assessment data protection officer Design Quality Indicator Defence Related Environmental Assessment Method Health and Safety (Display Screen Equipment) Regulations Environment Agency enhanced capital allowance electronic document management system Electronic Data Systems emergency first aid at work European Foundation of Quality Management energy-from-waste Environmental Health Officer environmental impact assessment Electronic Industry Association and the Telecommunications Industry Association Eco-Management and Audit Scheme Europe, the Middle East and Africa electromagnetic interference electromagnetic screen Energy Performance of Buildings Directive Energy Performance Certificate enterprise resource planning Energy Savings Opportunity Scheme Energy Services and Technology Association economic, technical or organisational reason European Union European Waste Catalogue enterprise-wide system frequently asked questions first aid at work functional extra-low voltage fixtures, fittings and equipment fee for intervention Feed-in Tariff facilities management or facilities manager Facilities Management Association Facility Management Institute Facility Management Professional financial reporting standards Forest Stewardship Council full-time equivalents Financial Times Stock Exchange General Contract Works general development order gross domestic product General Data Protection Regulation gross external area

xxviii  List of Abbreviations

GEEP GHG GIA GPI GPRS GPS GRI GSM GWP HACCP HCFC HDPE HFC HIV HMRC HR HRRB HSE HTHW HV HVAC IAM IAQ ICF ICT IEE IEEE IET IFM IFMA IFRS IiP IOSH IoT IP IPC IPCC IPD IPMS IPS IPSA IRR ISA ISO/IEC IT IWBI IWFM JCA

generic emergency plan greenhouse gas gross internal area general performance indicators General Packet Radio Service Global Positioning System Global Reporting Initiative Global System for Mobile Communications global warming potential Hazard Analysis of Critical Control Points hydrochlorofluorocarbon high-density polyethylene hydrofluorocarbon human immunodeficiency virus Her Majesty’s Revenue and Customs human resources high-risk, high-rise buildings Health and Safety Executive high temperature system high voltage heating, ventilation and air conditioning Institute of Administrative Management indoor air quality intelligent client function information and communications technology Institution of Electrical Engineers Institute of Electrical and Electronics Engineers Institution of Engineering and Technology Institute of Facilities Management International Facility Management Association International Financial Reporting Standards Investors in People Institution of Occupational Safety and Health Internet of Things Internet Protocol integrated pollution control Intergovernmental Panel on Climate Change Investment Property Databank International Property Management Standards inline power supply International Professional Security Association internal rate of return individual savings accounts International Organization for Standardization and the International Electrotechnical Commission information technology International WELL Building Institute Institute of Workplace and Facilities Management Joint Competent Authority

List of Abbreviations  xxix

JCT KPI LA LAN LCC LCR LED LEED LEV LLP LNG LNR LOLER LoW LPA LTHW LTM LV M&E MDHS MEES MEL MEP MERS MFD MICC MIS ML MMS MTHW NEAT NEBOSH NEC NFMA NHSS NIA NNR NPS NPV NSI NUA O&M ODG ODP OECD OES OJEU PACE PAN

Joint Contracts Tribunal key performance indicator local authority local area network life-cycle costing least-cost routing light-emitting diode Leadership in Energy and Environmental Design local exhaust ventilation limited liability partnerships liquefied natural gas Local Nature Reserves Lift Operations and Lifting Equipment Regulations List of Waste local planning authority low temperature system long-term maintenance low voltage mechanical and electric Methods for the Determination of Hazardous Substances Minimum Energy Efficiency Standard maximum exposure limits mechanical, electrical and plumbing most economical route selection multi-function device mineral insulated copper cable management information system machine learning multimedia services medium temperature system NHS Environmental Assessment Method National Examination Board in Occupational Safety and Health New Engineering Contract National Facility Management Association National Highways Sector Scheme net internal area National Nature Reserves Net Promoter Score net present value National Security Inspectorate net usable area operating and maintenance Office Design Group ozone depletion potential Organisation for Economic Co-operation and Development occupational exposure limits Official Journal of the European Union Property Advisers to the Civil Estate personal area network

xxx  List of Abbreviations

PAT PC PD PDCA PEEP PERT PEST PESTLE PF2 PFC PFI PIA PIN PIR PLC PM POE PPE PPM PPP PQQ PRINCE PUE PUWER PV PVC PZB QAC QM QMS QR RAM RCD REACH REIT REP RFI RFID RH RHI RIBA RICS RIDDOR RLV RO ROCE ROLO

portable appliance test principal contractor or personal computer principal designer Plan, Do, Check, Action Personal Emergency Evacuation Plan Program Evaluation and Review Technique political, economic, social and technological analysis political, economic, social, technological, legislative and environmental analysis revised format of PFI perfluorocarbon private finance initiative Post Implementation Analysis personal identification number passive infrared public limited company project manager Post Occupation Evaluation personal protective equipment planned preventative maintenance public–private partnership pre-qualification questionnaire Projects In Controlled Environments power usage effectiveness Provision and Use of Work Equipment Regulations photovoltaic polyvinyl chloride Parasuraman, Zeithaml and Berry quaternary ammonium compounds quality management quality management system quick response random-access memory residual current device Registration, Evaluation, Authorisation and Restriction of Chemicals real estate investment trust real estate partnership request for information radio frequency identification relative humidity Renewable Heat Incentive Royal Institute of British Architects Royal Institution of Chartered Surveyors Reporting of Injuries, Diseases and Dangerous Occurrences Regulations reduced low voltage Renewables Obligation return on capital employed Registration of Land-Based Operatives

List of Abbreviations  xxxi

RRO SAC SAI SCS SDG SECR SEG SENDA SEPA SERVQUAL SFP SIA SIC SIM SLA SMART SME SMS SOR SPA SPS SPV SSSI STP SuDS SWL SWOT TDS TFM TOR TPO TPS/FPS TQM TSC TUPE UBR UDP UPS UPVC UTP UV VAT VAV VE VFM VIP VOA VOC VoIP

Regulatory Reform (Fire Safety) Order Special Areas of Conservation Social Accountability International structured connectivity solution Sustainable Development Goals Streamlined Energy and Carbon Reporting Smart Export Generator Special Educational Needs and Disability Act Scottish Environment Protection Agency service quality Sustainability Facility Professional Security Industry Authority Standard Industrial Classification of Economic Activities subscriber identity module service level agreement specific, measurable, achievable, realistic and timely small and medium-sized enterprise short messaging service statement of requirements Special Protection Areas Safer Parking Scheme special-purpose vehicle Sites of Special Scientific Interest shielded twisted pair Sustainable Urban Drainage System safe working load strengths, weaknesses, opportunities and threats total dissolvable solid total facilities management terms of reference tree preservation order telephone/fax preference service total quality management Term Service Contract Transfer of Undertakings (Protection of Employment) Regulations uniform business rate unitary development plan uninterruptible power supply unplasticised polyvinyl chloride unshielded twisted pair ultraviolet Value Added Tax variable air volume value engineering value for money very important person Valuation Office Agency volatile organic compound Voice over Internet Protocol

xxxii  List of Abbreviations

VPN VR VRF VUCA WAN WAP WCED WEEE WHSWR WLAN WPA WTE WWF

virtual private network virtual receptionist variable refrigerant flow volatility, uncertainty, complexity and ambiguity wide area network Wireless Application Protocol World Commission on Environment and Development Waste Electrical and Electronic Equipment Directive or Waste Electrical and Electronic Equipment Workplace (Health, Safety and Welfare) Regulations wireless local area network Wi-Fi Protected Access Waste to Energy World Wildlife Fund

Introduction

FM (facilities management, or facilities manager) covers a wide range of disciplines, sometimes being referred to as the ‘jack of all trades’ or the ‘Cinderella function’ in an organisation. Many employees will turn to the workplace manager or FM to sort out their workplace issues and requests, so a competent FM must be able to turn their hand to practically anything. With constant changes to legislation, advances in the use of technology in the workplace, and increasing demands from staff, visitors and customers, many organisations are striving to maintain their competitive advantage. FMs are frequently expected to ensure compliance, provide opportunities for the organisation to adopt new ways of using built environments and identify other creative ways to reduce operational occupancy cost, yet maintain appropriate and productive working environment standards. For FMs, who need to juggle the many demands on their knowledge, experience and time, this reference text will be a useful ‘bible’, helping them to facilitate solutions and adaptations to their clients’ built environments. Facilities Manager’s Desk Reference provides a useful source of information to help in the daily activities of FM, specifically helping any person who is responsible for the management of premises and provision of business support services. Many people undertaking this role may not consider themselves ‘facilities managers’, and may work under a title such as ‘office manager’, ‘practice manager’, ‘school manager’, ‘bursar’, ‘workplace manager’, ‘warehouse manager’, ‘leisure centre manager’, ‘business services manager’ or ‘site manager’. This book will be useful for people working at all levels of FM, but especially those starting their careers in FM, such as a team leader of a group of operatives. Supervisors, FM co-ordinators and assistant FMs will also find this text helpful as they gain more experience across the wide roles and responsibilities of FM. This book is recommended as a course text at several academic organisations. Students will find it useful to support their studies as it covers the fundamentals of various topics in the syllabi of many FM courses and qualifications, and FM modules in property, surveying, estates management and business management courses. This third edition is updated to reflect some of the important changes in the FM industry and discipline. Many of the original chapters have been updated with changes in legislation and operational practice. A new chapter on leadership and management of the FM function has been added to give guidance on raising the profile and respect of FM in the business community.

xxxiii

1

History of Facilities Management

1.1  Origins of facilities management The origins of FM (facilities management, or facilities manager) can be traced to an era of scientific management and the subsequent explosion in office administration in the mid1900s. The main catalyst in the 1960s towards FM was the introduction of computers in the workplace. The energy crisis in the 1970s brought home the importance of cost-in-use and the need to better manage costs associated with premises that support the organisation’s business. As the pace of change is speeding up and as new technologies are being adopted, FM continues to develop and expand to meet the demands of clients, occupants and customers using a variety of built environments for diverse purposes.

1.2  A brief history of FM FM owes its origin to the growth of office administration – bringing together large groups of people into buildings – required to manage increasingly complex work. The introduction of computers into the workplace was a major catalyst for change in its design and management. 1960s era The 1960s was the first period in the history of FM. This was when the term ‘facilities management’ was first coined, by Ross Perot of EDS (Electronic Data Systems) in the USA. At that time, it was associated with the trends affecting the management of IT systems and networks. However, quite soon, the scope of FM had expanded to include system/modular furniture and office design. 1970s era The energy crisis of the 1970s forced organisations to critically analyse their true cost base. During the 1970s, office furniture manufacturers, such as Herman Miller and Steelcase, were developing ever more sophisticated furniture systems. The problem was that the new office furniture was ahead of office design. It was certainly ahead of the thinking of the average office manager, who was typically responsible for procuring new ‘desks and chairs’, rather than ‘systems furniture’.

Facilities Manager’s Desk Reference, Third Edition. Jane M. Wiggins. © 2021 John Wiley & Sons Ltd. Published 2021 by John Wiley & Sons Ltd. 1

2  Facilities Manager’s Desk Reference

Herman Miller, realising that the market was being supply led, concluded that it needed to interact with knowledgeable clients – clients who understood the importance of space planning and value of space, and who could consequently understand the relevance of the permutations which could be contrived from the new furniture systems. Herman Miller brought together a group of would-be knowledgeable property users and various property advisers in 1979. It was only at this point that the importance of FM in the process of strategic organisational planning was recognised, and discussed openly at senior management level. Very quickly this group established itself as the Facility Management Institute (FMI), and it is the FMI that is generally credited with coining the term ‘facilities management’. One member, Dave Armstrong, a leading proponent of the FMI, is recognised by many as the unofficial ‘father’ of FM. The FMI was founded in Ann Arbor, Michigan, in 1979 as an offshoot of parent company Herman Miller Inc. The aim was to establish and advance FM as a new management science and professional activity. The FMI laid the groundwork for organisational recognition of the importance of facilities in corporate strategic planning (although there was much emphasis on utilisation of space). 1980s era In 1980, the US National Facility Management Association (NFMA) came into existence, born of the need to create independence from a furniture/space-planning commercial parent in order to allow FM full potential to develop. The NFMA very quickly evolved into the International Facility Management Association (IFMA). The year 1980 was therefore a key date in the development of FM generally. 1990s era This era was a period of great change, with more organisations outsourcing to specialist providers. Many new laws were introduced in the UK, affecting employees, working practices and contracts. Large-scale infrastructure projects linked with the operational services in ‘private finance initiative’ (PFI) schemes raised the awareness of FM across a wider population of users and customers. 2000s era In this era, the FM profession raised its profile in many organisations. Issues such as business continuity, security threats, risk management, corporate social responsibility and financial instability put increasing pressure on FMs to deliver efficiencies in the workplace. Pan-European and global FM contracts became a reality, supported by an increasing use of technologies in all facets of FM. 2010s era As the FM profession reached a more mature status, career pathways and qualifications for practitioners in the profession developed. FM contractors grew larger, mostly through acquisition of smaller FM providers, and were able to offer more services to their clients. The debate on the benefits of outsourcing continued, as did the drive for more accurate performance metrics and evidence of the impact of FM on productivity from client organisations. Integration of FM with property (real estate), technology, HR and other support service departments was still

History of Facilities Management  3

an aspiration for many. Some FM providers extended their range of services into scientific support in both the healthcare and the pharmaceutical sectors, showing that the potential of FM is limitless. Another example of the broadening of FM was the expansion of FM service providers into the care home sector. 2020s era The next decade will see real impact from automation, robotics and artificial intelligence. It is expected that FMs and their clients will respond to the global climate crisis with a real shift in attitudes to sustainability from aspirational to obligatory. There will be more complexity and more globalisation as the societal value of FM gains recognition. There will be a greater need for higher standards of ethics, credible and qualified FM professionals, and adoption of international FM standards. The focus on well-being, prudent use of natural resources, minimisation of carbon emissions and enabling workplace productivity will ­continue. Clients will also continue to review their FM operations, changing the model of delivery to suit their unique financial and market conditions.

1.3  Growth of the FM profession International Facility Management Association (IFMA) Formed in 1980, the IFMA’s mission is ‘to advance the professional discipline of facility management worldwide’. With 23,000 members in more than 100 countries, the organisation continues to grow. In 2018 and 2019, new chapters were opened in Barbados, China, Croatia, France, India and the UK. IFMA’s World Workplace conferences are held each year in China, Europe, India, the Middle East and the USA. As of June 2018, 12,796 FM professionals held IFMA credentials: Certified Facility Manager (CFM), Facility Management Professional (FMP) and Sustainability Facility Professional (SFP). These credentials are awarded to members who have been tested in their knowledge of FM across 11 competences. FM in the UK In the UK, FM developed in the early 1990s. Initially there were two organisations competing for members and status in the FM market, resulting in many people waiting until the organisations merged before they joined. The original organisations were the Association of Facilities Managers (AFM) and the Institute of Facilities Management (IFM). Association of Facilities Managers (AFM) The AFM was registered in 1985 and launched in 1986 by a group of 10 FMs. It was the first such body in the UK, formed to support the professional practising FM. Institute of Facilities Management (IFM) The IFM was launched in June 1990. It grew out of the Facilities Management Group and Office Design Group (ODG) (of the Institute of Administrative Management, or IAM). The ODG had been active within the IAM for 25 years. This Institute also owned and ran the Office of the Year Awards, the precursor to the former British Institute of Facilities Management (BIFM) Awards for Excellence. The IFM developed qualification examina-

4  Facilities Manager’s Desk Reference

tions with the IAM’s support, and these were later revamped for the BIFM Part 1 and Part 2 examinations. British Institute of Facilities Management (BIFM) The merger of the AFM and the IFM was formalised on 1 September 1993, and in January 1994 this new organisation became the British Institute of Facilities Management. The BIFM developed its own suite of qualifications, from level 2 to level 7, accredited by its Awarding Body in accordance with the regulations laid down by the UK government education watchdog, Ofqual. IFMA UK The UK chapter of the IFMA was certified in 2000 to represent IFMA members from the UK. The driving factor at that time was to represent IFMA members in the UK, many of whom worked for overseas businesses or were employed in international roles. In 2004 the IFMA signed a Partners in Excellence collaboration agreement with the BIFM. In 2005 the UK chapter became the BIFM International Special Interest Group, which was open to members of both organisations. The Partners in Excellence agreement was renewed in 2008 for a 5-year period (although the UK chapter had been disbanded in 2006) and expired in 2013. By 2018 the IFMA had more than 500 members in the UK with no local chapter to represent them. A new UK chapter was certified in April 2018. The chapter’s mission is to enhance, evolve and expand the knowledge of what it calls ‘facility managers’ with a specific focus on IFMA members in the UK, while also providing pathways to career success for professionals within the industry. In addition to providing localised support and activities for its members, the chapter aims to maximise the benefits of collaboration between the IFMA and the Royal Institution of Chartered Surveyors (RICS), providing access to the global resources, standards, networks and credentials of the two organisations. RICS FM Group In 2016, the IFMA and RICS announced a global collaboration agreement to further develop and professionalise the field of facility management. The scope of the collaboration covers FM education, research, conferences and events. RICS professionals who have qualified in FM automatically receive IFMA member benefits. In turn, IFMA members and credential holders are able to attain RICS professional qualifications and benefit from RICS’s international standards and global professional network. This creates a single FM career pathway from new entrant to chartered status and fellowship. Institute of Workplace and Facilities Management (IWFM) In July 2018, the BIFM members supported a rebranding of the 25-year-old organisation, and so the Institute of Workplace and Facilities Management (IWFM) was created in November 2018. There are approximately 15,000 members, distributed via regional and special interest groups. A refresh of the professional standards created new competences embracing a focus on workplace issues (see Chapter 40). Facilities Management Association (FMA) Prior to 2014, the Facilities Management Association (FMA) was the UK’s leading representative trade body for employers engaged in delivering non-core services in the FM sector. The FMA merged with Asset Skills to become the Building Futures Group in 2014. There is no longer a trade body for the FM industry in the UK.

History of Facilities Management  5

Asset Skills Asset Skills was one of many Sector Skills Development Agencies appointed by the UK government. Asset Skills represented the housing, cleaning, property and FM sectors. The aim was to improve productivity, efficiency and effectiveness. Its key purpose was to work with employers to ensure their staff and potential staff had the skills they needed to do their work well. There were three core activities  –  qualifications, employer engagement and labour market information. Asset Skills developed the UK national occupational standards for FM. It also worked with industry market leaders, professional bodies and educational establishments to develop apprenticeships in FM. This group merged with the FMA to become the Building Futures Group, which ceased operations in 2016. EuroFM EuroFM is a network of organisations based in 30 European countries and representing professional (national) associations, education and research institutes, and corporate organisations. The network of professionals, academics and researchers generates a rich mix of activity, supporting the three pillars of EuroFM – practice, education and research. The EuroFM members are involved in open exchange of information and experience through meetings, seminars and workshops; through collaboration in research projects, sometimes funded by the EU; and through the development of joint educational programmes. Proceedings of these activities are disseminated through the network via the EuroFM website, an annual conference, and newsletters, research papers and publications. Global FM Global FM is a worldwide federation of member-centred organisations committed to providing leadership in the FM profession. Global FM is a formal alliance of FM-related associations, an international association of associations. The founding members were the BIFM, the Facility Management Association of Australia and the IFMA. Global FM promotes collaboration in the interests of its nine members and the extension of such benefits to the wider FM community around the world. As a single, united entity promoting FM, Global FM is a conduit for furthering the knowledge and understanding of FM and sharing best practices. The vision of Global FM is to lead the global transformation of FM to create a better world.

1.4  Defining FM Historically it was difficult to establish a standard definition due to lack of commonality between organisations teaching FM, practising FM and representing FM. As a result, there were as many definitions as there are different types of organisation in industry. This confirms the very dynamic nature of FM and its rapid development as a profession. Many definitions are very general, while others are very specific. This restricts their use and gives rise to a limited view of the FM industry and profession. The most widely accepted definitions of FM are as follows.

6  Facilities Manager’s Desk Reference

Definitions of FM International Facility Management Association (IFMA) ‘Facility management is a profession that encompasses multiple disciplines to ensure functionality of the built environment by integrating people, place, process and technology.’ Association of Facilities Managers (AFM) ‘[FM is] the management of premises and buildings together with the facilities, services and people contained therein; this has implications in respect of initial design, maintenance, the day-to-day administration and control of manpower, energy and related resources.’ Strathclyde Centre for Facilities Management (CFM) ‘Facilities Management is a process by which an organisation delivers and sustains agreed support levels within a quality environment to provide full values in use to meet strategic objectives.’ Royal Institution of Chartered Surveyors (RICS) ‘Facilities Management (FM) involves the total management of all services that support the core business of an organisation. It deals with those areas that the managers of the organisation consider to support their fundamental activities. FM focuses on the interaction between the core business, the support functions, and the facilities throughout all sections of industry, commerce, and services.’ British Institute of Facilities Management (BIFM) The former definition used by the BIFM, which represented the FM profession in the UK for 25 years, was: ‘Facilities Management is the integration of multi-disciplinary activities within the built environment and the management of their impact upon people and the workplace.’ EuroFM In 2006, all European countries agreed to use the European Committee for Standardization’s definition, which was part of the BS EN 15221 standard (see Chapter 37): ‘Facilities management is the integration of processes within an organisation to maintain and develop the agreed services which support and improve the effectiveness of its primary activities.’ This was adopted by many organisations, including the BIFM. However, as there was no specific reference to workplace or people, the BIFM provided supplementary explanations

History of Facilities Management  7

Box 1.1  Extract from the former BIFM website FM encompasses multi-disciplinary activities within the built environment and the management of their impact upon people and the workplace. Effective FM, combining resources and activities, is vital to the success of any organisation. At a corporate level, it contributes to the delivery of strategic and operational objectives. On a day-to-day level, effective FM provides a safe and efficient working environment, which is essential to the performance of any business – whatever its size and scope. Within this fast-growing professional discipline, FMs have extensive responsibilities for providing, maintaining and developing myriad services. These range from property strategy, space management and communications infrastructure to building maintenance, administration and contract management.

to help members understand the new European definition of FM. Critically, it referred to a safe and efficient working environment, and gave some examples of likely services provided to support a business (see Box 1.1). International Organization for Standardization (ISO) In April 2017, ISO 41011 was approved and launched, giving a new global definition of FM. This has now been adopted by many associations and organisations, including the IWFM. It states that FM is an: ‘organizational function which integrates people, place and process within the built environment with the purpose of improving the quality of life of people and the productivity of the core business’. Institute of Workplace and Facilities Management (IWFM) In addition to adopting the ISO definition, the IWFM explains that: ‘Workplace and facilities professionals are responsible for services that enable and support business performance.’ It characterises FM as a role that covers: ‘management of a wide range of areas including health and safety, risk, business continuity, procurement, sustainability, space planning, energy, property and asset management. [FMs] typically oversee activities like catering, cleaning, building maintenance, environmental services, security and reception.’ The justification of the new focus of the Institute was explained as outlined in Box 1.2. Box 1.2  Extract from the IWFM website Beyond the built environment, workplace recognises the joint responsibility of facilities management, IT and human resources to achieve optimal performance between people, technology and work space, anywhere that work happens, including hospitals, hotels, tourist attractions and many other types of facilities. Workplaces represent a large proportion of any operation’s costs, so when organisations bring people together in them there must be a value to doing that. There is, and it comes about through making connections and engendering joint purpose and direction. Workplace professionals interconnect between specialisms to optimise business performance; they empower work wherever it takes place and to make workplaces productive. (‘What is workplace and facilities management?’ IWFM, 2020)

8  Facilities Manager’s Desk Reference

Broad scope of FM FM is about taking control, adding value, supporting the business, and ensuring that the space and working environment enhance (not impede) the productivity of the core activity and the staff. Each of the many definitions of FM can be applied in any organisation. An organisation may wish to develop its own definition to ensure that it fully scopes the mission and vision of FM that supports that particular business client. Professional management FM is the professional management of the built environment. FM is the champion of the occupant or end-user, who requires the services and facilities to get their work done. FM is also about getting the maximum efficiency and effectiveness of the space, or working environment, that an organisation owns or leases. A supporting role Every organisation relies on a mix of functions and services to provide the support essential to its core business operations. Ensuring that this support is available in the right form, at the right quality and for the right cost is the task of FM. A proactive approach is required, ensuring that the most appropriate support is provided. FM is the process by which an organisation delivers and sustains agreed levels of support services in a quality environment at appropriate cost to meet the business need. Control of non-core activities FM frees organisations to do what they do best while FMs take care of the rest. Defining the core and non-core activities in some organisations can be difficult. In many cases the productivity of staff and the satisfaction of customers will depend on critical FM services, such as reception or catering. A business enabler FM is a business enabler, and it bridges the gap between the physical environment of the workplace and the occupants. FMs work with suppliers, customers, neighbours, contractors and community members to ensure that the workplace is safe, secure and fit for its purpose.

1.5  Development of FM Essentially there are four types of organisation offering FM services. These groups are based on the original business of the organisation: (i) Construction. (ii) Property development. (iii) Technical and engineering specialists. (iv) Service providers. More recently, consortium and management consultants have entered the FM market.

History of Facilities Management  9

Market size The FM market ranges in size depending on what is measured by whom. It is a large and increasingly important industry. FM is the second-highest cost for any organisation and can make a considerable contribution to the bottom line on an ongoing basis, clearly demonstrating the importance of managing the operation and maintenance costs of built environments. In the UK, FM accounts for 8% of the UK economy or GDP, with over 3.4 million people employed in FM roles. It is second only to the financial services sector. According to MTW Research, the UK FM market was broadly valued at £100 billion in 2016 and was predicted to increase by 2.8% in 2017. The market research company Frost & Sullivan predicts that by 2025 the global FM market of outsourced services will be worth $1 trillion. Outsourced FM is increasingly used to deliver complex services. Only 60% of FM functions are outsourced in the UK, with just 8% of this as the total integrated FM model. There are over 1,300 FM companies in the UK, with most being small organisations. Just 5% have a turnover greater than £5 million. The UK continues to be recognised as the leading FM marketplace, followed closely by the USA, Europe, Australia and Japan. Other areas where FM is fast emerging include Brazil, Russia, India, China and South Africa (known as the BRICS market), the Middle East, South Africa and Eastern Europe. Many of the top global FM companies operate from Europe. The problem with identifying the size of the market is determining which services and functions to include in any assessment, and indeed in identifying the FM function within different organisations. According to research by Barbour Index in 2000, fewer than 4 in 10 managers fulfilling FM responsibilities actually held the FM job title, with more than 40 different titles being recorded. Research by Asset Skills revealed in excess of 2,000 job titles held by employees carrying out FM roles. Measurement of the FM market The Standard Industrial Classification of Economic Activities (SIC) code for FM, 81.10, was introduced in January 2008 (see Box  1.3). This enables better measurement of the FM market. Market growth While the various functions of FM have always existed within an organisation, prior to the 1980s they were not commonly brought together under one manager, but rather managed separately. There are a range of factors contributing to the growth of FM, including: ❑❑ Global competition forcing companies to retrench to core business areas and seek cost-

driven competitiveness.

❑❑ High cost of space and premises focuses attention on the cost of occupying, servicing

and maintaining space. Premises costs are second only to the payroll on many balance sheets.

Box 1.3  SIC code 81.10: combined facilities support activities This class of activities includes the provision of a combination of support services within a client’s facilities. These services include general interior cleaning, maintenance, trash disposal, guard and security, mail routing, reception, laundry and related services to support operations within facilities. These support activities are performed by operations staff who are not involved with or responsible for the core business or activities of the client.

10  Facilities Manager’s Desk Reference

❑❑ Employees’ rising expectations of work and their local working environments. ❑❑ Cost of mistakes – particularly in areas of health, safety and environment. ❑❑ IT and the growth of technologies used in the operation of buildings. Technologies are

always changing the way we work and how we can control working environments.

❑❑ Public sector policy – competitive tendering, best value, private finance initiatives and

European procurement regulations.

❑❑ The investment focus of the property market, with little concern for the needs of tenant

occupants.

❑❑ Sustainability and the increasing focus on corporate responsibility and the health and

wellness of the occupants and users of workspaces.

1.6 Trends With countries and companies experiencing low and slow growth, there is pressure on FMs and FM companies to show greater value – to do more for less. As FM strategies move from a single contract to bundles to total FM contracts, the marketplace is showing signs of polarisation – lots of smaller niche FM providers with a few large FM organisations. It is hard to grow a business organically, so there is plenty of merger and acquisition activity in the FM market. The need for specialist service providers and innovative solutions will continue to drive the FM marketplace to improve working environments for client organisations. At the same time, there is also a refocus on cost-effective operations, so some larger organisations have brought their FM department back in house and self-perform both management and operational FM tasks, saving huge amounts due to the high margins and overheads of the larger FM contractors. However, for every client organisation that decides one particular FM model is the best for them, another will do the opposite.

2

Key Drivers of Facilities Management

2.1  The business organisation An organisation relies on its primary processes in order to achieve its strategic objectives. Changing market forces and developments coming from areas such as legislation, technology and mergers influence these processes constantly. These changes must be managed and structured at strategic, tactical and operational levels throughout the organisation in order to remain viable and compliant. Support processes, which can be a part of the organisation or be delivered by external service providers, have a direct impact on the efficiency and effectiveness of the primary activities. The distinction between primary activities and support services is decided by each organisation individually; this distinction has to be continuously updated. Some organisations in the UK refer to support services as non-core and primary activities as core. What is considered core in one organisation may be considered non-core in another.

2.2  Demand and supply FM (facilities management, or facilities manager) aims at balancing the demand for supporting services with supply of an optimised mix between needs/service levels and capabilities/ constraints/costs. This is illustrated in Table 2.1. To maximise performance and value, it is crucial to align demand and supply based on economic, organisational and strategic objectives. Figure 2.1 shows the demand–supply model of FM, which is described below. Table 2.1  Demand and supply of FM services Demand The internal need of the primary activities for facility services (space and infrastructure and/ or people and organisation) Driven by the primary activities of the organisation Responsibility of the client (at a corporate level) to clearly define the FM strategy and requirements Generated from client, customer, consumer and end-user Supply

Specified and defined in a service level agreement (SLA) that can change over time Providing a broad scope of services as defined in the FM specification and agreement Managed and delivered by internal and/or external service providers Performance measured via key performance indicators (KPIs)

Facilities Manager’s Desk Reference, Third Edition. Jane M. Wiggins. © 2021 John Wiley & Sons Ltd. Published 2021 by John Wiley & Sons Ltd. 11

12  Facilities Manager’s Desk Reference

Voice of business

Client Customer Consumer

D E M A N D

S P E C I F I C A T I O N

S L As

Strategy Tactics Operations

Voice of customer

Consultants

K P Is

S U P P L Y

D E L I V E R A B L E S

In-house

FM function

Outsource

Specialists

Figure 2.1  Demand–supply model of FM

The organisation can be viewed as being made up of client (corporate level), customer (business unit level) and end-users. It is the task of the client to specify their needs and to procure the required FM services. The business units or departments will request the delivery of these services within the conditions of an FM agreement. Finally, end-users or consumers then receive these support services. These various levels of interaction from clients, consumers and customers in the demand side of FM create many challenges in expectation management and communication. To succeed and deliver required results, the FM should be working in harmony and in close synchronisation with the mission and vision of the organisation and its objectives. The FM must work hard at relationship management with the demand side of the business to be effective.

2.3  Roles of FM The roles of FM can be considered at the three levels of the organisation as shown in Table 2.2. Effective and efficient provision of FM in an organisation will therefore: ❑❑ Enable integration of the different services’ processes across the organisation. ❑❑ Provide the link between the strategic, tactical and operational levels of activity within

the organisation.

❑❑ Ensure consistent communication (bottom up and top down) in the organisation. ❑❑ Develop a partnership relationship between clients/end-users and suppliers/service

providers.

Key Drivers of Facilities Management  13

Table 2.2  FM roles in an organisation 1 Strategic level

Defining the overall FM strategy Policy making, setting guidelines for space, assets, processes and services Active input and response at corporate level Initiating risk analysis and providing the direction to adapt changes in the organisation Initiating and monitoring key performance indicators (KPIs) Managing the impact of facilities on the primary activities, external environment and community Maintaining relations with authorities, landlords and tenants, strategic partners, associations, etc.

2 Tactical level

Implementing and monitoring guidelines to follow strategies Developing budget plans Translating business objectives to operational level Defining and interpreting KPIs (performance, quality, risk and value) Monitoring compliance with laws and regulations Managing projects, processes and agreements Managing the FM team Optimising the use of resources Interpreting, adapting and reporting changes Communicating with internal and external service providers on a tactical level

3 Operational level

Delivering services Monitoring and checking service delivery processes Monitoring service providers Receiving requests for service (e.g. via helpdesk or service centre) Collecting data for performance evaluations, feedback and demands from end-users Reporting to tactical level Communicating with internal or external service providers on an operational level

2.4  Drivers of FM The development of FM has been driven by many internal and external factors. These are summarised in Table 2.3. Each FM should undertake an analysis using a tool such as PESTLE (which examines political, economic, social, technological, legal and environmental factors) or Five Forces to see which issues are affecting their client and function (see also Section 4.3).

2.5  Champion of end-users The role of FM as the champion of the user or occupier of buildings can be traced back to a time when traditionally the landlord and/or the landlord’s agent was focused on rent recovery rather than tenant satisfaction. Property was viewed as a product or investment by a landlord  –  who used it and how did not concern the landlord too much. Agents were appointed for rent reviews, service charge administration and resolution of disputes between the landlord and tenant. The conflict of interest meant that the agents could only really act for the landlord and not the tenant. The role of a customer-focused FM was created to champion the needs of the occupiers. Professional FMs can offer the kind of

14  Facilities Manager’s Desk Reference

Table 2.3  Factors driving the development of FM Global change

Reduction in trade barriers Resultant government policy Compulsory competitive testing Market testing

Global competition

Customer focused Quality/cost/change-oriented

Impact of IT

Connectivity of systems Reporting of information

Private finance initiatives and other service-based property market products

New procurement methods Service availability

Cost implications of physical resources

The search for a competitive edge

More sophisticated user and stakeholder expectations

Workplace quality Accountability Quality control Raised standards

Growing recognition and acceptance of environmental issues

Legislation Regulation Corporate risk Sustainable development Corporate responsibility

i­mpartiality and confidentiality required by tenants and occupiers. This has led to more important strategic planning roles within client/customer organisations and ultimately to a more structured and better-informed occupier-led property market.

2.6  Flexibility in office space The economy requires corporate business plans to change direction quickly, if they are to survive in a highly competitive market. The fixed and highly specialised corporate headquarters building is often a constraint on a business. Buildings and their layout have traditionally been an obstacle in the need to change the working environment; however, with new types of buildings, the space can be more flexible and adaptive to an organisation’s current and future needs. Shorter leases, short-term licence to occupy, co-working centres and more flexible open-plan workspaces now suit many modern businesses. The corporate campus with multiple interconnected buildings is the location of choice for many corporations. Each building can operate independently if required. These building clusters can readily respond to shrinking business plans by allowing the subleasing of a floor or an entire building. Conversely, demands for more space can be met by adding buildings or allowing more intensive occupation.

2.7  A recruitment differentiator Salary is not the only way to attract and retain new employees. The image that an organisation conveys through its working environment is an essential feature in how it attracts and retains staff. The physical environment is one of the first points of contact with prospective

Key Drivers of Facilities Management  15

employees and customers. It is often the first opportunity for a company to make an impression on its potential employees and customers, either good or bad.

2.8  Scope of services Organisations find that the range of supporting services in the workplace has become increasingly important as staff compare employment and career prospects of one organisation against another. Competition for skilled employees will continue to encourage companies to provide an ever-greater array of amenities and services. HR and FM professionals will need to work more closely together. Employees have ever higher expectations of their workplace, especially those who still live at home or in shared rented accommodation. Their workplace becomes more ­important – ­providing them with both a working and a socialising space. The restaurants, canteens, self-serve kitchenettes, cafés and vending spaces offer the socialisation spaces in corporate and multi-tenant buildings – encouraging individuals to meet casually, access the intranet or Internet, exchange ideas, be creative and be productive. The trends on the high street have come into the corporate environment. A full range of support and employee services may continue to be developed to meet the demands and expectations of occupants. These could include child-care centres, fitness centres, retail outlets, car maintenance and valeting workshops, cycle stores, order and delivery points for Internet shopping at the workplace, gaming zones, and IT drop-in centres – all are now common features. FMs with health and safety remits could also find themselves dealing with audits of third spaces – such as co-working hubs or home workplaces.

2.9  Impact of working environment on productivity Workplace quality has become increasingly important to employers: a well-designed and strategically considered office creates a happier, more productive and more empowered workforce. An efficient, pleasant, dynamic workplace improves performance and productivity; it fosters happier staff and, ultimately, better business. As more people are working at home, at client sites or in transit, they will require a new range of support services. These staff will expect to use a range of FM services accessible from various locations and settings. The FM needs to respond to these demands in costeffective ways. Buildings influence the culture of organisations. The quickest way to change people’s behaviour is to change the space they are in. Organisations frequently modify and change workspaces in order to change the behaviour and culture of their employees. Companies articulate and express corporate values and goals in their property, real estate and FM decisions. Companies in many sectors use their work environments as a source of competitive advantage. The workplace is changing, and companies are responding to these changes and the role of ‘place’ in competitive business strategy.

2.10  The virtual office Working virtually – from anywhere connected via the Internet and email systems – will not completely eliminate the need for corporate office space. Working on the move is increasing. The FM and their team currently have to be present to manage the actual building and

16  Facilities Manager’s Desk Reference

services, but, in time, even these roles may become more flexible as technology, robotics and artificial intelligence develop further. Some would argue that office buildings will continue to be required because complex knowledge relies on face-to-face communication, and innovation occurs through spontaneous interaction between people. But as technology improves, this preference for face-to-face interaction and a place for work may change. Pressures to reduce the carbon footprint of an organisation will also favour greater use of alternative working spaces and modes.

2.11  Technology–systems integration Different information and technology systems can be brought together by the integration of building systems with other specialist IT systems (e.g. finance, HR, procurement). Voice, data and electrical distribution systems, together with lighting and temperature controls, are becoming more integrated. Ideally, users need greater individual control of their working environment, via their own computers, smartphones and tablets. This demand, however, conflicts with the need to set one standard for everyone, with better efficiency of building plant and services. Security monitoring can now be introduced across a global organisation via fibre optics, digital cameras and the Internet. This approach can be applied to one-off buildings as well as whole communities. Cities can be reconfigured with Wi-Fi to create new types of connected living and working spaces.

2.12  Building designs Buildings of tomorrow will need to be smarter to ensure that the traditional downtime associated with the process of reconfiguring office space is minimised. Buildings’ mechanical and electrical services will be linked via the Internet and intelligent controls to allow the services to be easily configured and reconfigured. The operation and maintenance of modern, complex buildings requires information about many areas and on several levels. Information comes from many diverse building systems such as fire alarms, access control systems, closed circuit television (CCTV) and security systems, all from different manufacturers and communicating in different languages, as well as from the general management information residing in various IT systems. The integration and merging of the technologies and protocols will support the step change required to raise both the profile and the performance of FM and their teams. The advances of energy efficiency and renewable energy technologies have also made an impact in building design, construction and operations. Greater pressures from environmentalists to address sustainability issues, together with widening legislation to increase the standards of building environmental performance, will also affect the development of FM.

2.13  Financial performance Building design, technology, telecommunications and space utilisation offer the means to gain a competitive advantage. Organisations need to think differently about workplaces and look at how their physical space positively impacts their corporate financial performance. For example: (i) It is evident that the workplace environment can affect employee behaviour.

Key Drivers of Facilities Management  17

(ii) Reductions in facilities and property costs have a direct impact on overheads and the bottom line. (iii) Corporate performance measures will include aspects of building performance, in particular sustainability, energy and community performance.

2.14  Ownership of the property The move away from ownership of corporate real estate to leasing or buy-back deals will continue. Companies are under pressure to release and reuse the capital tied up in real estate, putting this money to better use, often through investment in their core business. Private finance initiative (PFI) deals and sale/leaseback of corporate office space will continue to be attractive options for many organisations. Owner-occupiers of buildings are generally less effective in space utilisation (and associated FM costs) than those who lease their property. The effect of rent and service charges in the balance sheet brings more sharply into focus the relationship between space and its impact on both productivity and overhead costs. The issues of legacy leases on empty premises will require organisations to ensure that their estates are well managed as strategic assets. Changes in taxation and rates will also require closer co-operation between the financial and property teams in organisations.

2.15  Value added The value chain, as originated by Michael Porter in his seminal 1985 text Competitive Strategy, gives rise to the concept of value added. In the value chain, the supporting services of HR, FM, IT and finance are challenged to ascertain whether they add to or detract from the value of the primary or core processes of the business (see Figure 2.2). It is imperative, therefore, that FM continually tests the value contribution of its services to the organisation it serves. One challenge is to continually add value to the business processes by proactively initiating change programmes that have an impact on the margins or profit. FM performance measures need to be directly related to organisational deliverables such as customer retention, service delivery and level of production or market share. Intermediate performance measures such as productivity, adaptability, speed of response and performance resilience will still be recognised but ultimately it is the bottom-line impact of the FM services that will be used to judge whether FM is delivering added value to the business.

2.16  Service profit chain The service profit chain, developed by Heskett and colleagues, shows the links between internal service, external service value and profitability, and it identifies the various drivers of the service concept. It demonstrates that both employee and customer satisfaction are critical to the success of a business. The service profit chain starts with the internal strategy and systems, such as property, information technology and business support services (see Figure 2.2). The more efficient and effective these systems, the higher the satisfaction of employees and in turn their customers. A study by the market researcher company Gallup identified that a 5% improvement in employee engagement will generate a 2% increase in sales. Given the role of FM in ensuring employees’ satisfaction with their working environment, this model shows the

NONCORE SUPPORT FUNCTIONS

ALIGNMENT

C CO O-O LL PE AB R OR AT AT ION IO N

SUPPLY

B RE ENE LA FIC TIO IA NS L HIP

1

HR – JOB DESIGN, RECRUITMENT, TALENT DEVELOPMENT, REWARD

2

FINANCE – PROCUREMENT, ADMIN, CONTRACTS, PAYROLL

3

IT – DATA, COMMUNICATION, CONNECTIVITY, SYSTEMS

4

FM – ESTATES, UTILITIES, HEALTH AND SAFETY, CORPORATE SOCIAL RESPONSIBILITY, ENVIRONMENT, RISK, PROJECTS

VALUE ADD

OPERATIONS

OUTBOUND/OUTPUT PRODUCT OR SERVICE

MARKETING/SALES

AFTER-SALES

1

2

3

4

5

TH

W RO

G

INBOUND/INPUT RESOURCES

CORE PRIMARY ACTIVITIES

INVESTMENT

PROCESS

DEMAND Figure 2.2  Value-added contributions in a collaborative organisation

Job satisfaction Cash flow Knowledge sharing Well-being

MARGIN or PROFIT

Productivity Market share Customer satisfaction Customer loyalty

D N AN TIO R B MO O PR

Key Drivers of Facilities Management  19

core role of FM in providing a delivery system to support the chain of events and relationships in an organisation. The challenge for the FM is to see these links and to educate their team to realise the potential of service value. It is essential to reach alignment with other functions in the business, such as finance and marketing, to create a fit with the client’s activities. FMs need to consider their impact on brand image, enhancing productivity of employees, attracting and retaining talent, saving money and support CSR initiatives – all of which can make a meaningful difference to the client’s business.

2.17  FM’s contribution Senior management are now recognising the contributions that efficiently and effectively run buildings make to a healthy and sustainable business. At last the people who have been managing buildings – with or without the title of FM – are being consulted, and more importantly appreciated. The FM must therefore rise to the challenge and contribute to corporate success at a strategic level. The FM must deploy their managerial skills to step back from day-to-day operational tasks and find time to look longer term, into the future, to ensure that the buildings and FM services will suit the client organisation both today and tomorrow. FMs will need to demonstrate that the buildings and the FM services are contributing to the business objectives on three levels: (i) Efficiency. (ii) Effectiveness. (iii) Economy. Efficiency of service is increasingly seen as an absolute necessity and given in terms of performance. It is something that is expected as the norm by all service providers, whether internal or outsourced. FMs must become professionally recognised experts in the operational management of buildings and services (see Chapter  40). It will become a basic requirement for all FMs to understand both the hard and soft aspects of FM; the real test today is to go beyond the basics to find ways FM can enhance productivity within the client’s core business.

2.18  Performance measurement In both outsourced FM contracts and PFI or public–private partnership (PPP) relationships, there is an ongoing need to measure performance against the contracted service level agreement. Payments to the service provider depend on performance levels. Performance in many of these areas needs to be monitored by an integrated performance measurement system using real-time data. Data can come from individual subsystems (such as access control, CCTV, the building management system and fire alarms) as well as from other IT management systems (such as enterprise resource planning (ERP), management information systems (MIS) packages, or individual accounting or human resources systems). Developing technologies such as radio frequency tagging and sensors are allowing many new areas of performance to be measured objectively in real time with the data made available to other systems.

20  Facilities Manager’s Desk Reference

The potential benefits of real-time data are reduced administration costs and manual input, reduced frequency of disputes on data availability and interpretation, and reduction in failures to meet service levels. With truly integrated performance measurement systems, the various parties involved in service provision will be able to develop more effective management of the contract, continuous improvement and better partnerships.

2.19  Performance indicators There must be performance indicators that measure the efficiency and effectiveness of FM. Measures need to be based on the principles of validity, accountability, transparency and fairness. Examples include: ❑❑ Total property cost per square metre. ❑❑ Total accommodation (square metre) per staff full-time equivalents (FTEs). ❑❑ Total property maintenance backlog as a percentage of average annual maintenance

spend for the past 3 years.

❑❑ User satisfaction survey results. ❑❑ Number of new management initiatives or practices implemented per year. ❑❑ Cost of property and FM department expressed as a percentage of the organisational

running costs and per square metre.

❑❑ Total building operation revenue costs per square metre. ❑❑ Percentage of property-related capital projects in the past 3 years that are within budget,

within timetable or both.

❑❑ Space use efficiency measures of workstations per FTE and area (square metre) per

workstation.

❑❑ Average annual property capital spend over past 5 years per square metre (linked to

gross internal area, or GIA; see Chapter 11).

❑❑ Total energy consumption (kW/h) per square metre. ❑❑ Total annual water consumption (cubic metre) per square metre. ❑❑ Total net internal area (NIA) accommodation (square metre) over total GIA accom-

modation (square metre).

❑❑ Percentage of waste to landfill of total volume of waste collected. ❑❑ Percentage of waste recycled of total volume of waste collected. ❑❑ Percentage of building(s) used by others (e.g. community or public).

2.20 Benchmarking As FMs raise their value and contribution in organisations, they will need to use building performance information as a powerful resource. As with all data, care needs to be exercised in data interpretation. The key categories of information for comparison are: ❑❑ Property costs – Rent, rates and service charges are usually one of the highest costs. ❑❑ Maintenance costs – This is a major area of building expenditure that should be pro-

actively managed. A planned preventative maintenance (PPM) programme ensures balance is achieved between cost and building performance. ❑❑ Cleaning – This can be a high cost in many buildings, especially if the design is such that the decorative finishes and internal surfaces require a lot of attention. For example,

Key Drivers of Facilities Management  21

glass atria, vast common areas and wooden floors require specialist equipment and trained staff. ❑❑ Utilities – An energy audit and active energy management policies should ensure that costs are as efficient as building operation will allow. ❑❑ User productivity – an audit of how well office environments support employees in their work is required. Workplace satisfaction surveys can be used to measure and benchmark the performance of physical working environments. The Leesman Index is an example of a tool that can be used. Aspects that can be measured include mobility, wellness, pride, collaboration and information management.

2.21  Future trends Predictions for the future of FM include: ❑❑ More global outsourcing of business support services to countries such as India and

other developing countries.

❑❑ Less property and real estate needed for a shrinking workforce, or one that works in a

different way, such as co-working or home working.

❑❑ Facilities with more enticing amenities to attract the best class of employees and ensure

their productivity is enhanced by supportive services.

❑❑ More integrated and varied workspaces to foster creativity and innovation. ❑❑ Infrastructure to support working on the move as businesses react more quickly to

market changes and customer demands.

❑❑ More use of video applications, such as Google Team, Microsoft Teams and Zoom, to

enable effective meetings for both FM and client organisation work activities.

❑❑ Multiple work locations for employees to increase the flexibility of the workforce. ❑❑ Closer integration with other business support services, such as HR and IT. ❑❑ Increased focus on well-being, healthy working spaces and occupational health ser-

vices to deal with work-related stress.

❑❑ Larger integrated FM contracts as more client organisations are operating across inter-

national boundaries.

❑❑ Longer contracts, with reward linked to performance. ❑❑ Alliances and mergers of FM contractors to form larger organisations that can offer

more services to clients.

❑❑ Urban FM solutions, taking FM into community and residential settings. ❑❑ Establishment of new niche FM providers suited to smaller client businesses and those

in the not-for-profit economy.

The external influences bringing about these future developments are: ❑❑ Labour skills and availability of suitable entrants to FM, including competition from

other professions.

❑❑ Changing demographics, with ageing Western populations and migration across

borders.

❑❑ Corporate cultures and governance influencing the structure of business. ❑❑ Political impact of business across national boundaries and the future composition of

the EU.

❑❑ Global competition, including the rise of China, India and other countries as major

players in the industrialised economy.

22  Facilities Manager’s Desk Reference

❑❑ Maturity and potential demise of the PFI/PPP market. ❑❑ Converging technologies (video, voice, data, satellite, Internet Protocol (IP), radio). ❑❑ Legislation to protect the environment and people, plants, animals, waterways, oceans

and marine life. Global terrorism and fundamentalism. A maturing FM industry and increasing competition to win business. Global financial situation – cost of money, availability of credit and worldwide debt. World power  –  a shift of power from older Western economies to new emerging economies. ❑❑ Climate crisis – negative impact of unpredictable extreme weather events, natural disasters, food production issues, use of natural resources, carbon emissions, rising sea levels and loss of species. ❑❑ Corporate (social) responsibility – the response of organisations to sustainability principles, considering the local and global impact of their activities on humanity and society. ❑❑ Epidemics and pandemics caused by virulent new viruses and bacteria – resulting in changing approaches to workplace behaviour and hygiene services to ensure workplace safety, and travel restrictions to reduce the spread of contaminants. ❑❑ ❑❑ ❑❑ ❑❑

3

Activities in Facilities Management

3.1 Introduction FMs (facilities managers, or facilities management) are responsible for many diverse services and activities. FM involves the development, co-ordination and management of non-core, support services in a client organisation, together with the buildings, including their systems, plant, IT equipment, fittings and furniture, in such a way as to positively assist a client organisation in achieving its strategic objectives. The range of non-core services will depend on the client organisation – its size, location, structure, culture, and economic and market sector.

3.2  Facilitation of services and information Often the senior management of the client organisation does not understand the full scope and range of these responsibilities. FMs need to promote the concept that their role is not just a provider of services but also a strategic planner and provider of information to facilitate the efficient utilisation of resources in the running of a business. Although frequently labelled as non-core, FM in reality is a critical service to a business, featuring in most organisations’ business continuity plan. The development of the services to support an organisation may involve setting up contracts, identifying potential improvements, delivering services, and managing change, key relationships and possible closure of services. These are shown in Figure 3.1.

3.3  Management functions FM is a management function concerning three interrelated elements of business and its working environment: ❑❑ Premises – often also known as ‘hard FM’ or ‘building services’. ❑❑ Support services – often also known as ‘soft FM’. ❑❑ Information and communication technology.

For each of these three categories there are two aspects: ❑❑ Management – strategy or ‘the thinkers’. ❑❑ Operation – implementation or ‘the doers’.

FM covers an extremely wide range of activities that are dependent on the type of client business, the market sector and the client organisation’s structure. Facilities Manager’s Desk Reference, Third Edition. Jane M. Wiggins. © 2021 John Wiley & Sons Ltd. Published 2021 by John Wiley & Sons Ltd. 23

24  Facilities Manager’s Desk Reference

Integrity

Risk Range of services Quality Service level standards agreements Business continuity

Trust Approach

RELATIONSHIPS Value for money

DELIVERY

Culture

Issues

Legislation Payment Ownership Management Structure

Communication

CONTRACTS

Benchmarking

Control Assets

Planned Hand over

Unplanned FM SERVICES

CLOSURE

People Knowledge Documents Intellectual property Client Customer

End-user

Incentives

IMPROVEMENTS Control

Consequences Buy-in

CHANGE

Supplier Provider

Continuous

Incremental

Contractor

ROLES

Consumer

Reports

Drivers

Time

Best practice

Benefits Added value

Preparation

Types

Figure 3.1  Factors involved in the provision of FM services

3.4  Premises and building management Often referred to as ‘hard FM’ or ‘building services’, this involves the mechanical, electrical and fabric element of buildings. Similarly to the concept of hardware or hard data, hard FM focuses on the physical aspects of the building. A typical analogy is to pretend you have a building in your hand: shake it up, tip it upside down and you have the hard FM elements left in your hand (the soft FM elements have fallen out!). Hard FM may also include the IT and other technologies used in the whole organisation – or, at the very least, the technologies used in the FM department. The range of services covers: ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑

Mechanical systems and services. Electrical systems and services. Heating and cooling. Public health services (water and sanitation). Control systems. Utility services. Property management. Fabric maintenance. External areas, grounds and landscaping.

Generally, hard FM services may include: ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑

HVAC (heating, ventilation and air conditioning). Lifts (passengers, goods). Cranes, hoists and cradle systems. Escalators and travellators. Lighting and emergency lighting. Plumbing and sanitary services.

Activities in Facilities Management  25

❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑

Kitchen extraction systems. Security systems – CCTV and control systems. Acoustics. Television, radio and satellite services. Data (coaxial and fibre optics). Fire protection. Building management system. IT structured cabling. Public address systems. Power supplies (electricity, gas, oil, wind, solar, solid fuel, combined heat and power (CHP), biomass and other renewables). Small power (LV) distribution systems. Standby power supplies (generator or uninterruptable power supply). Waste compactors. Conveyors and mechanical handling systems. Gases (laboratory, medical and tools). Catering equipment

Electrical systems may include: ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑

Mains distribution system (HV and/or LV). Power supply services. Lighting systems. Emergency and critical systems. Heating and cooking systems. IT networks/server rooms and computer suites. Standby power systems and supplies.

Mechanical systems may include: ❑❑ ❑❑ ❑❑ ❑❑

Hot water systems and boilers. Cold water services. Drainage. HVAC: ○○ ○○ ○○ ○○

natural ventilation; mechanical ventilation; comfort cooling; air conditioning.

Public health services may include: ❑❑ ❑❑ ❑❑ ❑❑

Plumbing. Drainage. Sanitation and sewerage. Drinking water supplies.

Control systems may include: ❑❑ Comfort control – thermostats. ❑❑ Alarm and fire monitoring. ❑❑ Security – access and egress.

26  Facilities Manager’s Desk Reference

❑❑ ❑❑ ❑❑ ❑❑

Lone-working controls. Maintenance systems. Energy monitoring – meters. Presence detection – sensors

Utilities may include: ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑

Electricity. Renewable fuel supplies such as solar, wind, ground, hydro and biomass. Traditional fossil fuel supplies such as coal-fired, nuclear, oil and gas. CHP systems. Oil. Gas. Water. Air. Vacuum. Waste and sewerage.

3.5  Business support services FMs also provide and manage a full range of support services, which are usually referred to as soft FM activities. Similarly to the software or soft data concept, these services are soft due to their impact on people – their feelings, comfort and productivity. These services are not for the building but for the occupants. Occupants’ needs change frequently, so FM support services are varied to suit end-users’ requirements. The range may include: ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑

Meeting and room bookings. Exhibition space and conference facilities. Video and teleconferencing. Audiovisual equipment services. Mail, post and courier services. General office equipment, such as printers, shredders and copiers. Computing equipment and data services. Reprographics and printing services. Stationery and consumables purchasing. Newspapers and publications services. Wireless, fixed, and mobile telephony and broadband services. Central switchboard services. Pagers and short-wave radios, including licences. Information centres and common-area notice boards. Signage and legal notices. Helpdesk services. First-aid services. Occupational health services. Cleaning and housekeeping services. Vending of personal hygiene consumables. Catering and food and drink vending services. Security and business continuity services. Car parking, car valeting and car-servicing schemes. Green travel plan services (e.g. shuttle buses, bicycle share schemes and car-sharing services). Company vehicles and car fleet management.

Activities in Facilities Management  27

❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑

Hair and beauty services. Sports, fitness and leisure facilities. Merchandising, retail and Internet shopping services. Personal purchases (energy, stationery and cars). Business travel services. Residential accommodation services. Small-scale landscaping and grounds maintenance. Internal planting. Floral arrangements (including florists) for staff purchases. Office furniture and equipment. Secretarial services. Library services.

3.6  Scope and extent of FM activities and services As an alternative way of understanding the scope and extent of FM, the services provided and managed by the FM can also be clustered into three main groups as listed in Table 3.1: (i) Support services. (ii) Information and technology services. (iii) Premises services. Table 3.1  Potential FM services Support (also known as ‘soft’) services Mail services Vehicle fleet Catering Reception Housekeeping Office administration Furniture Occupational health Event management Internal planting

Artwork Meeting room management Waste management Reprographics Security Stationery and office supplies Travel Vending Document management

Information technology services Data network Systems integration Voice and data network Network management Video conference systems Audiovisual systems

Wiring installation Software development Computer-aided facilities management (CAFM) Computer-based maintenance management system (CMMS)

Building (also known as ‘hard’) services Property asset management Site selection Acquisitions and disposals Energy management Security infrastructure Space management Project management

Lease management Relocation Structure and fabric maintenance Infrastructure Mechanical and electric (M&E) services maintenance Capital works Property development

28  Facilities Manager’s Desk Reference

Increasing technical and operational knowledge and experience

Increasing general management, financial and strategic ability

Property estates management Business continuity planning Corporate social responsibility Space management Projects

Hard FM Technical services

Soft FM Support services

Figure 3.2  The FM pyramid

3.7  FM and the property management function Another way to consider the range of FM services and activities is shown in Figure 3.2. The two base areas of FM are the soft and hard ranges of services and activities, supporting the overarching estates or property management function. All activities in FM require general financial, people, customer and project management skills to make the FM function work effectively and efficiently. General skills needed to manage and lead the team are explained in Chapter 40.

4

Delivering Facilities Management – Strategy

4.1 Introduction In determining how to deliver FM (facilities management, or facilities manager) services in an organisation, it is useful to have an understanding of general business strategy and management concepts. The starting point for establishing an FM strategy is to understand the organisation’s business plan, defined strategy and high-level goals. Figure 4.1 provides an overview. No function or department in an organisation works in isolation – in real terms, they all exist to fulfil the organisation’s overall mission and goals and should work together to deliver the strategic direction set at senior management level. The strategic apex in Figure 4.2 shows how the three levels of FM strategy relate end-users, occupiers or consumers to the client organisation.

4.2  Business strategy A defined strategy is necessary for every organisation that wishes to achieve its goals or successfully complete a specific project. The strategy defines the long-term lines of action that an organisation will take to achieve its goals. It is based on two elements: (i) Vision – The desired future of the organisation, taking into account the needs of both staff and users. (ii) Mission – Justifies the existence of the organisation in the eyes of its users. The mission explains the scope and goals of the organisation’s services to its users.

4.3  Identifying needs When developing a strategic plan, an FM must first identify the needs and the demand levels for services, and then determine how to meet them: ❑❑ Define the vision and the mission of the organisation according to its stakeholders,

both internal and external.

❑❑ Identify and analyse the strengths and weaknesses of the organisation as well as the

external opportunities and threats. This can be done using the force-field technique or a SWOT (strengths, weaknesses, opportunities and threats) analysis.

Facilities Manager’s Desk Reference, Third Edition. Jane M. Wiggins. © 2021 John Wiley & Sons Ltd. Published 2021 by John Wiley & Sons Ltd. 29

Suppliers

Review corporate business strategy Mission Objectives

Vision

Organisation Primary (core)

Services Organisation People References Specification

Secondary (non-core)

FM strategy Resource audit Analysis

Tender process Selection criteria

Award contracts

SLAs KPIs Organisation

Assets

Communicate

Customer Workforce

MOBILISE

Contractors

Implement

TUPE Premises People Services Costs

Risk assessment and analysis

Customers

Organisation

In-house management

KPIs

Contract management

Evaluate performance

SLAs

Assets

Benchmarking

Feedback

Industry best practice OPTIONS

IN-HOUSE (MIXTURE) OUTSOURCE

FM FUNCTION

Figure 4.1  Developing FM strategies (KPIs: key performance indicators; SLAs: service level agreements; TUPE: Transfer of Undertakings [Protection of Employment] Regulations 2006)

Delivering Facilities Management – Strategy  31

The FM industry

The client organisation Intention Leadership policies Performance and capacity management service level agreements (SLAs) and key performance indicators (KPIs) Demand production

Strategic Direction

The Building

Property/estate management companies, agents, consultants

Control

Tactical

Resource management

Need

Operational

Service delivery

End-users occupants/consumers

FM contractors, consultants Specialist FM single service contractors

FM activities

Figure 4.2  Alignment of strategic purposes of FM

❑❑ Identify the external and internal drivers affecting the organisation and FM depart-

ment. This can be done using a PEST analysis. This is a simple tool that can be used to identify political, economic, social and technological factors. Legislative and environmental factors extend this tool to PESTLE. (Table 4.1 shows an example outcome of a PESTLE analysis.) ❑❑ A strategic plan must be designed that systematises the various steps required to achieve the mission and reach the vision, taking into account the forces that promote and impede reaching the goal. Brainstorming will help to generate four or five lines of action. These strategies should be fine-tuned by analysing their technical, economic and political viability. Table 4.1  Example outcome of a PESTLE analysis Political

Nature of governments. Impact of Brexit. G7. Wars/civil unrest (Middle East, Korea, Pakistan, India). Corruption (Venezuela, Zimbabwe, Russia). Political espionage (Salisbury poisonings). Tensions between nations (e.g. China/Russia and UK). Local politics. Decentralisation and devolvement of power to local communities/nations in UK.

Economic

Globalisation, off-shoring and outsourcing outside the UK. Value of currencies. Taxation regimes. Trade across borders, tariffs, World Trade Organization, United Nations, BRICS (Brazil, Russia, India, China and South Africa), VUCA (volatility, uncertainty, complexity and ambiguity). Bribery and fraud. Workforce availability, location, skills, age and gender. Ageing populations, immigration, emigration. Western countries’ demographic age profiles (more old than young), birth rates. Apprenticeships. Deferred retirement ages and longer life expectancy. Recession, global reactions in stock markets to issues such as pandemics. Tax changes – VAT, stamp duty, corporation, personal. Corporate financial reporting. (Continued)

32  Facilities Manager’s Desk Reference

Table 4.1(Continued) Social

Employee and consumer behaviour. Lifestyle issues – leisure, convenience foods, healthy eating, work hours, work–life balance, continuing adult education. Crime trends and statistics. Tastes and fashion preferences. Single-person households. Loneliness. Celebrity status. Health issues, fitness, local employment. Pandemics and disease – sepsis, diabetes, cancer, COVID, etc. Antibiotic resistance. Life expectancy. Extended family units. Social care for ageing dependant populations.

Technological

Internet, e-commerce, smartphones, apps, tablets, 4G to 6G. CCTV surveillance, digital TV and radio, handheld devices, QR codes, and video, data and voice convergence. Bioscience, genetically modified crops, cloning, stem tissue research, organ regeneration, cancer treatments, nanotechnology. Space exploration. Digital sensors, artificial intelligence (AI) and robotics. Real-time data, increased use of dashboards and plasma screens, data analytics. Video conferencing. Online portals.

Legislative

Updates to 300 to 400 laws affecting FM, regulations, Approved Codes of Practice (ACoPs) and guidance notes. Litigation culture – claims on ‘no win, no pay’ basis. Employment legislation – parental leave, part-time and casual workers, race, age, sexual orientation, gender, religious beliefs and disability discrimination, modern slavery. Workplace and safety legislation – working at height, manual handling, personal protective equipment (PPE), workplace regulations, management regulations, fire regulations, waste electrical and electronic equipment (WEEE), Building Regulations Part L, Asbestos Regulations, Control of Substances Hazardous to Health Regulations (COSHH), L8 ACoP, corporate manslaughter. Planning legislation. Procurement and contract legislation. Data protection legislation. Post-Brexit laws.

Environmental

Corporate social responsibility, environment and green issues. Pollution, congestion, waste management, climate change, resource depletion, biodiversity, species protection, carbon footprints, urban population densities, transport, water sources, marine and ocean damage, carbon dioxide emissions. Fuel alternatives – wind, biomass, solar, ground pumps. Rise of eco protestors, the Extinction Rebellion movement, Greta Thunberg and young activists. Upcycling waste and recycling. Container- and package-free shopping. Alternative transport – car sharing, electric cars, scooters, bikes, hire-ondemand transport (bikes/cars).

Delivering Facilities Management – Strategy  33

4.4  Benefits of a strategic approach A key skill of a good FM is the ability to anticipate and plan for the future. The benefits of a strategic approach to FM are considerable: ❑❑ ❑❑ ❑❑ ❑❑ ❑❑

The premises will support people and their tasks more efficiently. The organisation will be better placed to react favourably to change. Future requirements can be planned and anticipated before a need arises. It will be easier to both plan investment and monitor expenditure. It will enable the organisation to build as much flexibility as possible into premises, which by their nature are fixed and difficult to adapt.

In reality, the FM will have to manage in a permanent state of change. To cope with challenges both now and in the future, the FM has to work within an agreed strategic framework. An FM function should be organised as if it were a business operating within a business – it requires a mission statement and objectives to provide a framework for decision making and operational planning, and internally published services that explain what can be expected of the FM team. As more and more large organisations look at ways of allocating costs to the various parts of the organisation that incur them, the FM team will be under increasing pressure to be accountable to its customers and deliver measurable services.

4.5  Strategic analysis A strategic analysis is required to establish a thorough understanding of the organisation’s current property portfolio, its real estate strategy and the services currently under management. Table 4.2 shows the steps involved. This will require assembling facts on such diverse aspects such as: ❑❑ Goals, objectives, needs and policies (from the organisation’s strategic plan requirements). ❑❑ Physical assets and space utilisation currently achieved (from the property or real estate

strategy).

❑❑ Human resources (permanent, temporary, interim, agencies and contractors from a ❑❑ ❑❑ ❑❑ ❑❑

full resource review). Current processes and systems (from current services and facilities). Budget forecasts (from a full cost analysis). Assessment of user and client expectations. FM market audit.

4.6  Determining factors An FM strategy gives direction to the management of the working environment. It depends on a number of factors, including the internal environment, the external environment, the marketplace, the economy, legislation, organisational strategies, organisational objectives, human resources availability and unemployment levels. Table 4.3 gives examples of such factors and conditions. An FM strategy is influenced by: ❑❑ External and internal conditions. ❑❑ Success of the current FM strategy.

34  Facilities Manager’s Desk Reference

Table 4.2  Steps in a strategic analysis 1 Idea generation

Brainstorming, PEST, SWOT, ‘what if’ scenarios

2 Portfolio audit

Spaces analysis Estates register Maintenance plans Maintenance audit Risk audit

3 Services review/audit

Current service level agreements and performance analysis Benchmarking Customer satisfaction levels

4 Resource audit

People training/skills audit Existing internal service provision audit Business process mapping or analysis Zero-based analysis

5 Market audit

External service providers intelligence review Suppliers’ competences Suppliers’ management analysis, e.g. Investors in People, ISO 9000, ISO 14000 Availability of premises Market trends

6 Organisational fit

Current management functions and expertise Stakeholders’ demands and requirements

7 Regulatory and statutory compliance

Accidents statistics and environmental violations analysis Claims history

Table 4.3  Conditions affecting an FM strategy Internal conditions

External conditions

The buildings themselves – types and uses Condition and location of the buildings and estate Client services requirements Political conditions (the status of FM in the hierarchy of the organisation) Client relationships Culture of the organisation Finances – amount of money available Attitude of the organisation to improving or maintaining the standard of the working environment Value Added Tax (VAT) status

Economic environment Interest rates – the cost of money Unemployment rates – affecting availability of labour Political environment – taxes, legislation, tariffs and trade conditions Political stability Market conditions Needs, desires and aspirations of customers Compulsory competitive market testing and procurement rules in the public sector

❑❑ Direction of the core business. ❑❑ Development of property and premises policy.

4.7  Premises policy The starting point for the FM strategy is the premises policy, also known as an estates masterplan. This in turn will be aligned with the corporate business plan. It should be a written document that articulates all the factors relating to the buildings that the organisation occupies and owns. It should also be forward-looking and identify future requirements, particularly in relationship to

Delivering Facilities Management – Strategy  35

people, location and information technology. The policy may include standards of accommodation, charging methods, references to other company policies and targets for improvement. A premises policy document should be approved and supported by the senior management. It will be a document unique to each organisation. The premises policy should establish the current situation, with future projections for 5 and 10 years. Table 4.4 lists some of the considerations involved in the determination of a premises policy.

4.8  Facilities audit The next stage in creating an FM strategy is an audit of the current situation. The audit will examine information about the organisation: ❑❑ Policy requirements in terms of standards, guidelines, working procedures perfor-

mance standards, quality standards, health and safety, staffing levels, and financial and other approvals. ❑❑ Processes and procedures will enable a full understanding of how these business areas work today, including in the areas of budgets, procurement, purchasing approvals and payments. ❑❑ Service delivery audits of the existing property portfolio and range of FM services will tease out relationships with customers.

4.9  Audit process The audit is a two-stage process intended to fully understand the organisation and its current facilities operation. Understanding the cost of facilities is the fundamental requirement of an audit. The audit will seek to find out the following: Table 4.4  Premises policy contents 1 Location preferences

Property or land choices. Accessible to appropriate skilled employees and customers/clients.

City centre, business park, rural, transport links

2 Property

Financing implications of any acquisition/disposal, whether property is leased or owned, valuation of property, impact on profit/loss and balance sheet.

Types of premises, uses, sizes, features, legal obligations and constraints

3 Space

Workplace space standards to ensure that space use can be maximised, that employees are provided with appropriate workspaces, and that expansion or contraction can be managed.

Space standards, allocation policy, furniture system, range of space uses, costs of space

4 Quality

Agreed quality standards to ensure that the premises and general business and support services meet the appropriate quality levels, and that planned maintenance will be of the required quality.

BS or ISO standards, quality management standards, benchmarks and best-practice models

5 Image

Premises reflect a corporate identity. Outward tangible Reputation, risk profile appearances communicate much about a company and its culture.

6 IT

IT can enhance or hinder the effective performance of an organisation. IT plays an important role in FM: to provide management information, to monitor building efficiency and to increase facilities’ efficiency.

System integration, protection, security, confidentiality, resilience

36  Facilities Manager’s Desk Reference

❑❑ ❑❑ ❑❑ ❑❑

Exactly what facilities exist? What facilities services are offered? How effective and efficient are the management systems employed by the FM team? What is the current mode of service delivery?

4.10 Awareness It is common for the senior management team of an organisation not to know how much space the organisation occupies. When businesses change ownership, merge or demerge, the property assets associated with such deals tend to be overlooked. In some cases, organisations do not even know how many buildings they occupy. Examples to illustrate this are: ❑❑ Organisations approaching agents to acquire property they do not need. ❑❑ Subsidiary firms or business divisions looking for new space on the open market while

similar space is vacated by another part of the company.

❑❑ Tenders for services specifying buildings that are no longer occupied or omitting build-

ings that are now used.

4.11  Space audit A space audit – part of a full facilities audit – is often required to determine the true use and ownership of space. Very often, spare space only becomes identifiable when an ‘internal charge’ for occupied space is levied. When space is ‘free’, occupiers (e.g. individual departments) often spread out, build empires and defend their boundaries. When a charge per square metre is imposed, the ‘shrink’ in the space required can be dramatic. The FM needs to prepare an outline plan of how the audit will be carried out. A space audit is very time consuming and may involve others (internal and external). The plan needs to show: ❑❑ Likely extent of the investigation. ❑❑ Probable resources required.

4.12  Audit stage 1 – fact finding Table 4.5 outlines the first stage of the audit.

4.13  Audit stage 2 – further investigation Having carried out the first stage of data gathering and initial analysis, the FM should be able to identify the areas of concern which need further investigation and analysis. It is likely that the next stage will include: ❑❑ A detailed space-planning audit. ❑❑ A detailed energy audit. ❑❑ Input from other experts and specialists, such as surveyors, to obtain a full condition

survey of the estate.

❑❑ Analysis of planned preventative maintenance (PPM) schedules, helpdesk reports and

the life-cycle project plan.

Delivering Facilities Management – Strategy  37

Table 4.5  Audit stage 1 – fact finding 1E  stablish the extent (boundaries/parameters)

Number and size of buildings Use of buildings (and subcategories of use) The facilities support services provided The role of facilities in providing IT and information services to the organisation Does a facilities policy exist?

2C  ollect the organisation’s existing cost data

Rent, rates, energy, FM service costs (e.g. cleaning, security, maintenance, landscaping)

3R  eallocate this cost data under meaningful facilities cost centres

These cost centres must relate directly to services for comparison purposes: could be the client’s departments or cost codes

4 Analyse each cost per unit

Could be per unit of floor area or per capita or another appropriate parameter

5C  heck actual performance against service level agreements (SLAs)

Obtain KPI scores against each SLA

6 Review the results of any user satisfaction surveys

Check validity of questions

7 Identify whether the costs are above or below average

External benchmark costs or comparison across the estate may be needed

8 Check whether performance matches the specification

Could be higher or lower than specified

9C  heck that specifications (service levels) are Could be higher or lower than needed appropriate for obtaining the desired performance level 10 Identify the cost centres or services which warrant more detailed examination

Especially overtime and consumables

4.14  Audit benefits The results of the audit have to be looked at holistically – not just cost, but also efficiency and effectiveness. Savings may well come from identifying, and acting upon, the audit findings, such as: ❑❑ Poorly written specifications. ❑❑ Inappropriately drafted service level agreements. ❑❑ Inefficient management systems.

The audit gives the FM a baseline from which to build future FM strategies.

4.15  Developing solutions The organisation will need to develop a range of solutions. Ideally there will be more than one option  –  the minimum would be either ‘stay the same’ or a new FM strategy. Each option must be evaluated or compared in detail to ascertain its merits and disadvantages. Evaluation may include application of analytical tools such as a risk analysis, a stakeholder analysis, a cost–benefit analysis, a life-cycle cost appraisal and a feasibility analysis. The outcome will be the selection of the most appropriate strategy.

38  Facilities Manager’s Desk Reference

4.16  Strategy implementation Once the strategy option has been selected, the organisation must then implement or mobilise the new FM delivery model. The steps to undertake will include procurement, resource planning, identifying people and system requirements, and communication with all stakeholders. A range of initiatives may be required to support the implementation of the new FM strategy. These may include a change management programme, market testing and selection processes, a training and development plan, workshops and seminars, establishment of a performance measurement and benchmarking system, and an overall project plan.

4.17  FM strategy models There are two principal ways that an organisation can arrange its FM services. These are: (i) In-house or self-perform. (ii) Outsource to specialist. These are described in more detail below. In-house or self-perform The structure of the in-house team will depend on the services that are offered, the number of sites and their locations. The team may need to be structured to match the organisation, with a representative to liaise with key departmental representatives on all aspects of FM. Alternatively, the team may be structured functionally, giving each member a specialist area, such as ‘soft’ services or ‘hard’ services. Each of these in turn will have functional areas such as cleaning, security, projects and so on. Figure 4.3 shows a typical structure of an inhouse FM department.

Senior management

HR

Other business functions and departments

FM function

IT

Admin support Customer service

Helpdesk Front of house Reprographics

Figure 4.3  In-house FM model

Support service operations

Building operations

Cleaning Catering Mail Security Space planning

Electrical services HVAC Fabric Grounds Estates

Delivering Facilities Management – Strategy  39

This option can often be overlooked, as the focus of both general managers and current FM practitioners is to look externally for solutions and services. The cost of the in-house option of using directly employed staff across all service provision needs to be compared with the costs of other FM strategy models. In some organisations, it may be more appropriate to keep the FM team in-house due to security, commercial or pastoral reasons. Another aspect to consider is the VAT status of an organisation. If the organisation is exempt, then the VAT charged on services will increase the real cost of FM quite significantly. Advantages Total control over the work and close alignment with the core business. Disadvantages The in-house team: ❑❑ ❑❑ ❑❑ ❑❑

Requires a remuneration package in line with the core staff package. Requires management effort to be diverted from core activities. Can be inflexible, slow and difficult to change. Can be costly to keep trained and competent to carry out specialist roles.

Implication Cost and staffing savings are unlikely to be achievable. FM is most closely aligned with the core client business, with greater loyalty and understanding of priorities. Single or packaged services This is a term used to describe the use of separate contracts for each service line, i.e. one contractor for catering, another contractor for cleaning and so on. Advantages The advantages of this type of FM strategy are that FM can get easier access to specialists in specific contract services, the direct control of the relationship and the reduced risk if there is a need to change a particular service. The phasing of contract durations and start/end dates can be easier. Cancelling individual contracts is also easier. This strategy is particularly beneficial when commissioning a new building, when there is a need to get all the services operating efficiently and effectively. There are many contractors and suppliers to choose from, enabling the client organisation to select the best or most appropriate to their need. Disadvantages Disadvantages arise due to the lack of staff development in small contracts, and the potential loss of good staff to other sites run by the contractor. This option requires more inhouse management and support to monitor, manage and administer the range of single contracts. There is limited scope for economies of scale. Implication There are likely to be opportunities for staffing and cost reductions from the temptation to merge contracts together. This is often a short-term strategy. ‘Bundled’ services Bundled services are where service lines are grouped together into larger groups. For example, one contractor might supply cleaning, catering and security as one contract; another

40  Facilities Manager’s Desk Reference

bundle might group together the mechanical and electric (M&E), building fabric and grounds maintenance; and another bundle might contain administrative and compliance services. Services can be bundled into hard and soft FM clusters depending on what services are required and what is suitable for the organisation. There will be at least two bundles if this model of FM is chosen. Bundles can also be created around geographical areas. Advantages The advantage of bundling comes from economies of scale, reduced administration of contracts and invoices, reduction in the time required to manage the many services and a more consistent approach to a range of services from one contractor. Staff may be able to move within the bundle of contracts, which can be good for career development for the individual. Disadvantages A disadvantage arises if one service line in the bundle is weak or needs to be changed, which may create difficulties in other services in that bundle that are working effectively. It is difficult to find a contractor that can offer excellence in a wide range of services, so careful selection of the most appropriate contractor is critical. Implication A bundled approach is a mid-term solution that offers economies of scale and uniformity of services. It may lead to the next stage of one all-encompassing FM contract. Many clients and organisations prefer this model as it reduces the failure risk of placing all services with one provider. Total or integrated FM Total facilities management (TFM) or integrated facilities management (IFM) describes the total outsourcing of all facilities services to one provider. The client has just one relationship with this provider, typically an account manager or director, and receives one invoice to cover all services. There are relatively few organisations that can provide or self-deliver all FM services. Many FM contractors will actually need to have subcontractors in place to provide the full range of services. Advantages The contract is more easily managed by the client organisation. In theory, there should be economies of scale which should lead to cost savings. It is up to the supplier to ensure roles and jobs are always staffed. There will be fewer bills to process and fewer HR issues to resolve. The client gains access to higher levels of expertise from the FM contractor, who is expected to innovate and be creative in raising FM service standards and finding cost reductions. The outsourced staff get better access to training and development via their employer, with increased career opportunities. Disadvantages There is only one contract and the client is totally reliant on one supplier. It might be difficult to change the arrangement if delivery of part of the contract is unsatisfactory, particularly if all services are contracted to be delivered for the same period from the same date. The client can lose control of their FM and lose valuable knowledge about their estate, the FM services and their employees’ requirements. There is a limited choice of organisations that are capable of TFM or IFM. These organisations are very large, and likely to be operating across EMEA (Europe, the Middle East and Africa) or the global marketplace.

Delivering Facilities Management – Strategy  41

Implication The internal FM or intelligent client function (ICF) (see Chapter 5) ceases to manage the people doing the job and is not responsible for the way the job is done. It manages the performance of the contract rather than the service delivery. This model of FM is more attractive to larger organisations with extensive property portfolios in many locations. Managing agent or contractor A managing agent or contractor solution for FM services is potentially the most expensive option. It is typically provided by property management and FM management companies, who have management skills, as opposed to operational service providers. In this model, the managing entity does not self-perform any services – it simply provides monitoring and management services, acting as a go-between link between the client and the service contractor. The organisation buys in others to oversee the services delivered by others, and this is where the extra cost lies. The fee paid to the managing entity can be linked to its performance monitoring and relationship management of the service providers. This model can be used in start-ups of new buildings, or when an organisation has no internal FM expert or ICF, or when relationships need a neutral broker. There are two versions of this FM model – either managing agent or managing contractor. This gives flexibility as to whether the client wishes to have a direct contractual and financial relationship with the FM contractor or an indirect relationship via a third party. Advantages This model offers professional management of services and clear separation of the operational and strategic aspects of FM. Disadvantages The relationship is managed via a third party, so there is an extra layer of management and costs, and there may be time delays and misinterpretation of requirements and issues. Implication This is a short-term strategy that is very useful when establishing FM for the first time, and it tends not to be a long-term solution or strategy due to its high cost. Private finance initiative This model of FM was developed in the 1990s in the UK as a result of the government agenda to find new sources of finance and expertise in building and managing its estate. Private finance initiatives (PFIs) are also found in other countries, such as Australia, Denmark, Holland, Singapore and South Africa. There are more details on this type of contract in Chapter 14. Modern PFIs are a form of public–private partnership (PPP). The UK government has since revised its contract forms and processes. A new standard (PF2) was developed to ease the burden of administration, speed up the procurement process and offer greater value for money. Soft FM services were excluded in the overall contract, wider sources of finance were encouraged, and transparency and openbook accounting were required. Despite these changes to the standard form of contract and allocation of risk, this model of FM has not been used for several years, and it is no longer available for new public sector FM operations. However, as these contracts can last a very long time, an overview of this model is still essential for FMs and industry suppliers.

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Advantages There is one point of contact for the organisation for the full service operation, including the construction phase. Payments are linked to availability of services. Disadvantages PFIs tend to be very long-term contracts, which may cost more than other modes of FM over time. Few organisations operate in this market, so there is restricted choice for the client organisation. Implications The organisation needs to be clear about its immediate and longer-term requirements in the early stages. A rigorous change process, and many other processes, must be clearly agreed at the start of the contract. The costs of change and cancellation are very high. Corporate private finance initiative This model of FM is based on the public sector PFI concept. Where extensive property portfolios are involved, finance directors and chief executives can choose to raise large sums of money for core business investment through what are effectively sale and leaseback or ‘property outsourcing schemes’, while simultaneously reducing their exposure to the risks of ownership of property. Abbey Bank (now part of Santander), Norwich Union (now trading as Aviva) and British Telecom are examples of large organisations that adopted this strategy in the past. Such schemes became known as corporate PFIs or real estate partnerships (REPs). Special-purpose vehicle The large number of public and private sector PFI schemes has also created new types of TFM contractor and consortia working partnerships. The latter are often established in response to PFI customer requirements and specifications needed for large ‘build and operate’ projects to draw on different strengths from the various parties. These consortia are generally referred to as special-purpose vehicles (SPVs). Some of these contractors and SPVs offer a wide and comprehensive range of sophisticated services from FM consultancy through to more traditional ‘hands-on’ service delivery, as well as construction and project management capabilities.

5

Outsourcing

5.1 Introduction Historically, the desire to reduce operating costs has been the primary reason for outsourcing. Cost efficiencies have been the driving force behind FM (facilities management, or facilities manager) outsourcing. By outsourcing, companies can take non-core activities off the balance sheet and concentrate on their core business. Companies recognise that outsourcing offers powerful forces for change through the innovations that outside specialists can bring. The typical FM services that have been outsourced to specialist contractors for many years are catering, cleaning and security, as well as specialist maintenance services such as lifts, water treatment and fire protection. Companies can pick and choose from a sophisticated marketplace of suppliers for a diverse range of services from property management, space management and communications infrastructure to building maintenance, administration and contract management. Cost efficiencies are still critical in outsourcing services to others; however, there is an increasing need for the outsourced contractor to innovate and add value to their service delivery. Clients are demanding more for less. FM services are not the only areas where organisations outsource. Other functions could be customer call centres, car fleet management, information management, HR (personnel) management, financial management, training, payroll administration and production. Where it suits a company to outsource, FM services can be arranged in any number of permutations. Some companies will manage as many as 50 or 60 outsourced service lines; others will bundle a group of services into two or three contracts. By consolidating the number of contracts, an organisation can expect real cost benefits, a more streamlined administration and a greater degree of flexibility. Integrated FM – where a provider takes on the entire outsourcing operation – takes this consolidation one stage further.

5.2  Multi-service contracts Multi-service or bundled contracts dominate the FM market over single-service contracts for several reasons. Significant cost savings can be made through improved economies of scale, and a single point of contact for a group of similar services gives a higher degree of accountability for the delivery of services. Reducing the number of suppliers reduces the administrative burden of procurement and contract administration for the organisation. It is common to bundle soft FM services into one group and hard FM services into another.

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5.3  Best Value Best value was a concept defined by the UK government as a duty to deliver services to clear standards – covering both cost and quality – by the most economic, efficient and effective means available. Local authorities were required to conduct a best value review of their activities and services using the 4 Cs approach: ❑❑ ❑❑ ❑❑ ❑❑

Challenge – determine why/how the services are provided. Compare – consider how other sectors and organisations deliver and perform. Consult – check the views of local taxpayers and service users and set new targets. Compete – secure efficient and effective services via competitive tendering.

Local authorities produced an annual report (known as the BV Performance Plan, or BVPP) on their best value initiatives, demonstrating their accountability to the public. The Audit Commission audited the BVPPs for compliance and continuous improvement. Scotland continues to test the best value of its public services. The UK public sector has outsourced many services and FM operations to private companies, benefitting from private sector efficiency, competition and innovation. The continued drive for public sector cost savings is supported by a new Shared Services strategy and the One Public Estate programme.

5.4  Longer contracts The UK’s FM contracts have an average duration of 4 years. The move for longer contracts was driven by the development of the private finance initiative (PFI) market, where the levels of commitment and capital are greater. Longer contracts allow more time for innovation to show benefits and reap the rewards and returns on the larger investments by the contractor(s). However, flexibility for the client is reduced and the cost of change is increased as the contract length increases. One significant factor to support longer contracts is the cost of tendering, selection and reappointment of contractors.

5.5  Integrated FM solutions The UK market has seen more ‘single-solution’ FM companies targeting the strategic FM functions, such as property strategy, in a bid to win more contracts. The relationships between parties have become based on risk–reward sharing rather than traditional feebased contracts. Advances in IT, such as blockchain, allow payments to be tuned more finely to performance measurements. In addition, performance-based contracts are becoming more common. In these contracts, there is no service fee but performance is guaranteed and the savings are shared between provider and client.

5.6  Benefit analysis There are advantages and disadvantages in all models of FM – contracting, outsourcing and using directly employed labour. The choice will depend on the location, the types of buildings, the type and volume of work, and the current workforce. Appropriate arrangements for ­emergency and out-of-hours call-outs need to be put in place. Service level agreements, key performance indicators and other methods of performance management may be introduced

Outsourcing  45

In-house

Outsourced

Outsourced

In-house

Figure 5.1  Relationship between in-house and outsourced operations

to effectively deliver the required level of service by the staff and contractors. Figure 5.1 shows that there will always be a minimum in-house team retained for control and direction of outsourced organisations. This team is referred to as the intelligent client function.

5.7  Intelligent client When outsourcing FM operations to others, the client organisation must consider who will manage the contractor and represent the client. This unit may comprise one or more people, and is commonly referred to as the informed client or intelligent client function (ICF). The role of the ICF is to ensure that the client continues to receive value for money, that the service provider meets the service levels agreed and that the end-users are satisfied. The ICF needs to allow sufficient freedom to the outsourced FM contractor to perform while at the same time ensuring that both current and future needs of the client are met. The ICF may be positioned in the property, finance, procurement, HR or IT departments of the client organisation. Occasionally the function may be found in operations – it depends on the sector and type of organisation. An effective ICF will know the core business extremely well, have a strategic focus, have excellent procurement and contract management skills, and obviously know the FM industry.

5.8  FM outsourcing models There are several stages or models that can be developed, as described in Chapter  4. Figure  5.2 shows the stages, from the in-house management of single-service contracts through to the use of a management agent. The figure shows how the relative size of the in-house FM function changes in shape and size according to the model and the shift of management effort towards the outsourced provider. Some organisations may move progressively through the various models, whereas others will go directly from in-house management to the PFI or the total or integrated FM model. The debate as to whether there are savings to be gained from a total facilities management (TFM) model when compared to the other outsourcing models continues. The need to have sufficient management resources in the TFM provider will increase the overall costs of FM, as their overhead and mark-up will be included in the fees. TFM is not an ideal option for medium-sized organisations, with single premises or small property portfolios. TFM only really offers economies of scale for larger organisations with substantial premises

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Legend In-house management

In-house management

Intelligent client function

Contract manager

Singleservice contracts

Bundled contracts

Total facilities management

Managing agent bundles or single packages

Client team Outsourced team(s)

Figure 5.2  Outsourcing FM models

across significant geographical areas, and additionally this must be countered against the risk of placing all services with one supplier. For clients wishing to get tighter control of their FM operations, the in-house model will continue to be an option. The client needs to review their FM strategy to determine the most appropriate model, which will change over time.

5.9  Vested sourcing Some FM providers suggest that the hybrid approach of vested sourcing is a better solution, as both parties focus on shared goals and aims for mutual benefit. This approach requires agreed desired outcomes, trust, integrity, collaboration, flexibility and transparency. Both parties in the organisations respect each other’s need for success. It is suggested that such relationships will be more of a true partnership, last longer and drive innovation to ensure success.

5.10  Selection process A number of procurement questions need to be answered when considering the outsourcing of FM and the selection of the appropriate outsourcing model. What are the corporate objectives? They might be cost cutting, reduced head count, improved service, rationalisation or something else. It is important to be sure about the benefits of outsourcing. What are the implications? These might include: ❑❑ Redundancy, restructuring or retraining of redeployed staff. ❑❑ New or different monitoring and control systems. ❑❑ The need to be clear about the level of service required. An outsourced service might

be quite different from that presently provided.

❑❑ An assessment of whether the costs incurred in tendering would be better spent on

achieving improvements in a different way using the existing in-house team.

❑❑ Treatment of VAT.

Outsourcing  47

What are the risks? These include: ❑❑ ❑❑ ❑❑ ❑❑

Security. Confidentiality. Loss of direct control of labour. Implications if a contractor fails to deliver.

The service specification Getting the specification right is critical. The specification could be based on input, output, outcome or a hybrid (see Table 13.2). The specification should emphasise the results required, not the methods the contractor should use to achieve them. The specification should incorporate a management structure and chain of command with the client organisation. Appropriate quality monitoring, performance measurement and review procedures should be included. Where possible, payment should be linked to performance improvement over time. The theme of partnership should be developed with a view to a long-term, mutually beneficial relationship. What are the contractual issues? The ability to terminate for non-performance must be built into an outsourcing contract. The advantages and disadvantages of long-term contracts should be borne in mind. Longerterm contracts should generate a better relationship but might lead to complacency, unless quality and performance are strictly monitored. Flexibility is important – not just in terms of break clauses but also in terms of delivery location and numbers of occupants served. What are the considerations concerning potential suppliers? As a part of the pre-tender process, a ‘long’ list of suppliers should be assessed as to their suitability for inclusion on a ‘short’ list to be invited to tender. The track record of any potential supplier should be examined. References should be taken both from customers and from suppliers. Business ethics, corporate social responsibility policy, health and safety history, reputation and performance are all areas to be considered. Quality assurance BS 5750 or ISO 9000 registration provides evidence that the contractor’s quality management system has been assessed as being effective and that it has a responsible attitude to quality. It does not, however, provide evidence of a permanent quality culture. For larger organisations, a supplier with a geographical spread similar to the client’s own spread may have economic and service capability to meet the client organisation’s requirements. However, organisations should not compromise their quality standards simply to ensure they have one supplier for their whole geographical area. Are there any particular tendering considerations? Factors to consider include: ❑❑ A simple system should be developed for objectively scoring tender submissions. ❑❑ Contract cost elements should be easily identifiable. ❑❑ There should be transparency and fairness in the method of assessment.

6

Financial Management

6.1 Introduction FMs (facilities managers, or facilities management) are usually responsible for budgets representing a significant percentage of an organisation’s total expenditure. Information on finance and performance is required by FMs in order to: ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑

Trend and benchmark information. Inform decisions. Prepare future budgets and requests for investment via business cases. Allocate funding to give appropriate services. Make allowances for the depreciation of assets. Repair or renew decision points.

The typical financial challenges faced by FMs include: ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑

Reducing overhead costs. Improving services with the same or less funds. Negotiating discounts from suppliers. Negotiating contracts for services with contractors and consultants. Value-for-money analysis. Business case preparation. Project budget management. Ensuring accurate charges for services on account (such as utilities, service fees and rates).

6.2  Financial systems and process All managers should have a thorough understanding of the financial systems and processes used in their organisation. Table 6.1 shows a glossary of financial terms that are frequently used. An organisation’s finance department will deal with the forecasting and managing of cash flow, keep track of income and expenditure, organise long-term funding for new assets, record financial information, and provide monthly and annual financial statements. The main financial statements in business are the profit and loss account, the balance sheet and the cash flow statement. Managers should be aware of how the funds for their business are obtained, and how these are then used in that business.

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Financial Management  49

The first aim of any business is to cover the cost of its operation, make a profit and increase the wealth of its owners. To do this, its income must be enough to cover all its daily costs and tax bills. In addition, it should have surplus income to spend on investment projects in future years. These could be the purchase of new equipment, new campaigns, or modifications to the premises to ensure productive and safe working environments are provided. The generation of surplus income will enable the organisation to grow and improve its market position or provide more services to the community in the case of a public sector organisation or a charity enterprise. All organisations should also want to please their customers and reward their employees to ensure the loyalty of both. Table 6.1  Glossary of financial terms Accruals

Estimates made of costs incurred but not yet invoiced. They are charged to the Profit and Loss Account and also appear as liabilities in the Balance Sheet.

Allocated Cost

Indirect cost which is shared out over products or departments using some basis of allocation (e.g. hours worked, headcount or square footage).

Assets

The value of items owned by the business which are shown on the Balance Sheet.

Auditors

There are external and internal auditors. External auditors are external accountants who report on the ‘truth and fairness’ of the published financial statements. Internal auditors co-operate with the external auditors but also review operational aspects of the business.

Balance Sheet

A financial statement which records assets, liabilities and shareholders’ investment in the business at a point in time, normally the end of an accounting period.

Book Value

The value at which assets are stated in the Balance Sheet, i.e. cost less any depreciation (also called net book value).

Borrowings

Total amounts owing to those who have lent money to the company. This is often split in the Balance Sheet into short term (i.e. due within 1 year) and long term (i.e. due in more than 1 year).

Break-Even Point

Level or volume of sales at which sales and the sum of variable and fixed costs are exactly even, i.e. profit is zero.

Budget

General term for a short-term (normally 1 year) financial plan.

Capital Employed

The amount of finance (share capital or loan capital) put into a company, on which the management must make a return.

Capital Expenditure

Amounts spent on items of a long-term nature, i.e. which will be used in the business for more than 1 year and which are classed as fixed assets in the Balance Sheet. Also called capital investment.

Cash Flow

The change in the cash position of a business during an accounting period or as a result of a particular event.

Costs

Charges incurred, whether spent or accrued, by a company which are charged to the Profit and Loss Account because they refer to the current year’s operations.

Creditors

Amounts owing to suppliers for bills unpaid at a point in time, e.g. at the end of a financial period. (See also Payables.)

Current Assets

Those assets which are constantly moving around in the business and are therefore relatively easy to turn into cash or realise, i.e. stocks, debts and cash.

Current Liabilities

Amounts owing at the period end which will or could be required to be paid within 12 months. (Continued)

50  Facilities Manager’s Desk Reference

Table 6.1(Continued) Debtors

An asset in the Balance Sheet which represents amounts owing by customers. (See also Receivables.)

Depreciation

A book entry spreading capital expenditure over the estimated life of an asset by means of a charge which reduces profits in the Profit and Loss Account and the value of assets in the Balance Sheet.

Direct Costs

Those costs which can be directly identified with a brand, business unit, department or other part of the business.

Discounted Cash

A method of evaluating projects by flow (DCF) by discounting their projected future cash flows to their present values.

Dividend

Amounts of cash paid or payable to shareholders as a distribution of profits.

EBIT

Earnings before interest and taxes.

EBITDA

Earnings before interest, taxes, depreciation and amortisation.

Equity

The investment in the business by shareholders.

Expenses

Another term for costs, more usually applied to those below the gross profit level.

Financial Accounts The accounts prepared for inclusion in the annual report. Fixed Assets

Assets which are retained for long-term use in the business.

Fixed Costs

Costs where the total amount spent does not vary directly with volume in the short term.

Gearing

An organisation’s financial leverage and risk level. It compares the amount of borrowings (debt) with the capital (equity), showing how much debt the organisation uses in relation to its own funds for its operational activities.

Historical Cost

The original cost of an asset.

Incremental Cost

Another term for Marginal Cost.

Indirect Costs

Costs which cannot be classified as directly attributable to a product, process or department.

Interest Payable

Interest paid on borrowings.

Interest Receivable Interest received from investment of surplus funds. Internal Rate of Return

The Internal Rate of Return (IRR), expressed as a percentage, is the (IRR) discount rate (see Discounted Cash) which would cause a project to have a zero Net Present Value (NPV). A project with an IRR lower than the cost of capital should not be accepted on financial grounds. Often used as an alternative to the NPV.

Inventories

The US term for stock.

Liabilities

Amounts owed by the business.

Loan Capital

Long-term capital put into the business by lenders rather than shareholders.

Management Financial Information

Information produced for the accounting purpose of management decision making and control, rather than for reporting to shareholders.

Margin of Safety

The amount by which sales can fall before profit equals zero, i.e. the break-even point.

Marginal Cost

The increase in total cost as a result of a particular event or decision.

Net Assets

Total assets in the Balance Sheet less liabilities. Sometimes applied to total assets less Current Liabilities; also applied to total assets less current and long-term liabilities, in which case it can be described as net worth.

Net Current Assets Current Assets less Current Liabilities (see Working Capital). (Continued)

Financial Management  51

Table 6.1 (Continued) Net Present Value

The net amount of a project’s cash flow, after discounting at the appropriate cost of capital, i.e. after allowing for the time value of money.

Opportunity Cost

The amount foregone by utilising a resource, i.e. its cost plus any profit it might otherwise have generated.

Overdraft

A facility for short-term borrowing available from bankers.

Payables

The US term for Creditors.

Payback

The number of years it will take to recover an initial amount invested.

Profit and Loss Account

A financial statement which records the sales, costs and therefore profit for a stated accounting period.

Profit Margin

Profit as a percentage of sales.

Provision

Estimate of expenditure which is not yet fully ascertainable but which is charged as a cost in the Profit and Loss Account, such as a provision for bad debts.

Receivables

The US term for Debtors.

Reserves

Another phrase for Retained Profits; also used to describe retained profits plus capital reserves.

Retained Profits

All profits made since the company was formed which have not yet been distributed as dividends.

Revenue Expenditure

Another term for Expenses.

ROCE

Return on equity.

Sensitivity Analysis

A calculation of the impact on profit of changing assumptions.

Share Capital

Money put into the business by shareholders by means of direct investment.

Shareholders’ Capital

Another term for Shareholders’ Equity.

Shareholders’ Equity

Share Capital plus Retained Profits and other Reserves.

Shareholders’ Funds

Another term for Shareholders’ Equity.

Short-Term Borrowing

Borrowing which will or could need to be repaid within 12 months.

Stock

The amount of money tied up in raw materials, work in progress and finished goods.

Sunk Cost

A cost which has already been paid and which therefore should be ignored when considering future actions.

Trade Creditors

Amounts owing to suppliers in the normal course of trading.

Trade Debtors

Amounts owing by customers in the normal course of trading.

Trading Profit

Sales less all normal costs of running the business.

Variable Costs

Costs where the total amount spent varies directly with volume in the short term.

Working Capital (operating definition)

Stocks plus Debtors less Creditors. It does not include cash.

Working Capital (bankers’ definition)

Current Assets less Current Liabilities, i.e. another term for Net Current Assets.

Written Down Value The book value of fixed assets at historical cost less depreciation.

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6.3  The finance department The organisational structure of the finance department and the department’s interface with support and operational business departments will affect how the relationship is managed and nurtured. In some FM departments, there is sufficient volume of business to justify a dedicated member of staff to deal with financial matters. In either case, it is important there is an understanding of FM issues by the finance staff, and equally an appreciation of financial matters by the FM. The job of the finance department is to manage the organisation’s money and to ensure good governance and accountability relating to financial transactions. The department’s principal activities are: ❑❑ Forecasting how profits or surplus are going to be made. ❑❑ Credit control and debt collection to keep track of income to ensure profits are made,

or reserves are created in a not-for-profit organisation.

❑❑ Cash flow management to make sure that the organisation has sufficient cash to pay its

❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑

bills (salaries, utilities, contract fees, supplier invoices, tax demands, expenses, rent and rates). Organising longer-term funding for new assets. Financial control by recording financial information (payments made and requests for payment). Producing monthly and annual financial statements. Producing management accounts. Monitoring variance against budget predictions. Giving assistance with the preparation of business cases. Reviewing business cases. Investigating suppliers’ financial stability. Tax records and returns. Maintaining the asset inventory.

6.4  Financial controls Control systems will increase the probability of an organisation achieving its objectives and encountering no unpleasant surprises. Without financial management controls, organisations may experience impairment of assets, deficient revenues, excessive costs, inaccurate records and reports, legal sanctions and business interruption. Controls can affect the inputs and outputs of business operations as well as the behaviour of employees. As an intrinsic part of an organisation, managers are both part of the problem and the solution (i.e. management control). There are many alternatives for achieving good financial management control in organisations. Their selection is based on feasibility, degree of control needed, costs and management style. For controls to work, staff need to know what actions or results are expected of them, and they need to be able to influence the outcome. Good control is said to exist when failure is possible, but detected in a timely and unbiased way to ensure corrective action can be taken. Controls should therefore be future oriented and objective driven. Clearly, it is therefore important for the competent FM to develop a good working relationship with the finance department, to understand the control measures that are in place to ensure that the right infrastructure services are delivered at the right time, place and price.

Financial Management  53

6.5  Financial statements Financial statements are produced by organisations to show shareholders, owners and investors the financial status of the business. Not-for-profit organisations also use these standard methods to record their financial status: ❑❑ The profit and loss account. ❑❑ The balance sheet. ❑❑ The cash flow statement.

6.6  Finance and the FM The FM needs to understand the three above-listed company financial documents because: ❑❑ The costs of facilities may affect the profitability of the business. In many organisations,

facilities costs represent the second largest cost after the payroll for staff. Much of the facilities costs are considered an overhead, which reduces the margins and scope for profit from the activities of the organisation. ❑❑ The discretionary nature of some facilities services results in frequent requests for reductions in services to generate savings on the budget expenditure. This means FMs have to develop good working relationships with colleagues in their finance departments. Collaboration will be more productive if managers understand what finance does, why certain information is needed and what it is used for. Table 6.2 shows the users and purposes of financial information.

Table 6.2  Users of financial information User

Purpose

Shareholders (owners) of the business

To find out if the business is doing well and whether the directors are doing a good job of running it.

Banks and lenders

To find out whether the business can manage its finances and is profitable. This would be important if the business was asking for a loan.

Creditors (trade suppliers)

To find out if the business pays its bills on time and has good cash flow. This will help creditors to decide whether or not to give credit.

Company management

To control and manage the business.

Analysts and advisers

To assess the business in order to advise potential new shareholders and lenders whether to invest money in the company.

Employees and their representatives

To assess the firm’s potential for continuous and profitable employment.

The government and its representative agencies

Financial statements are a legal obligation and are also the starting point for tax calculations.

Customers and other business contacts

To find out how well the company is performing when trying to decide whether to do business with it.

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6.7  Sources of funding An organisation needs funds, known as capital, to start a business. This is because the business will need to spend money at the outset in order to generate income. Typical start-up costs are the rent of premises, advertising, raw materials and wages. If the person starting the business has enough money, they will probably use some of it. If they don’t have enough, they will probably approach: ❑❑ Other people, who may be invited to become shareholders. They put in capital and ❑❑ ❑❑ ❑❑ ❑❑

receive shares in return. This funding is known as ‘share capital’. Banks or other lenders of funds. Suppliers who can offer credit as a source of funding. Venture capital providers. Government agencies for grants.

Once the business is making profits, it can use these profits to reinvest in the business. This source of funding is known as ‘retained profits’. FMs should be aware of the sources of funding in their employing or client organisation.

6.8  Use of funding Once the business has got funding, it will use it: ❑❑ To purchase fixed assets. These are large items such as equipment and machinery. ❑❑ To stay afloat until customers start paying. This ‘float’ money is known as ‘working

capital’ and will be spent on paying wages, buying stocks, paying for advertising, rent and all the day-to-day costs of running a business.

In the longer term, funding may also be used for investment in other profitable activities. There will always be pressure on the funds, so justification or business cases are required to ensure best use of funds.

6.9  Fixed assets Fixed assets are purchased and owned by the business to generate profits. They are not likely to be sold in the normal course of business, hence the name ‘fixed’. Fixed assets can be either ‘tangible’ or ‘intangible’. FMs need to be aware of the value of the business’ fixed assets to help set maintenance regimes to retain or improve that value. Tangible assets are ones that can be seen and touched, such as land and buildings. Intangible assets cannot be seen or touched. A typical intangible fixed asset is goodwill. This is often bought when purchasing another business, as part of getting the trade and custom that the owner has built up, and a monetary value is often agreed for that goodwill. Patents, trademarks and brand names are other examples of intangible assets.

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6.10  Working capital Working capital is the ‘float’ funding which is used to keep a business going until it generates cash. A certain amount of the organisation’s money will always be tied up in its ‘float’. At any point in time these funds are likely to be invested in: ❑❑ Stocks or inventories of products (manufacturing companies). ❑❑ Customers who owe money, known as ‘trade debtors’. ❑❑ Cash deposits in the bank account.

However, organisations also get short-term credit to help their cash flow and management of their working capital. Sources of this credit are: ❑❑ ❑❑ ❑❑ ❑❑ ❑❑

Banks – an approved overdraft or loan. Creditors – those to whom money is owed. Suppliers – when payment terms are longer than the sales of the goods to customers. Inland Revenue – payment of taxes in arrears. Shareholders who are owed dividends.

These creditors reduce the need for working capital. The precise definition of working capital used by accountants is therefore: Current Assets Current Liabilities

Net Current Assets (Net Worrking Capital)

6.11 Investments Investments are assets which do not relate to the business’ normal activities but still generate income, such as: ❑❑ Shares in other companies. ❑❑ Other companies that have been purchased outright. ❑❑ Loans to others which generate interest charges as an income.

6.12  The balance sheet Funding and assets are put together to make up the balance sheet. The balance sheet shows both where the funds have come from and how they have been used. Funding should equal assets otherwise the balance sheet does not ‘balance’. Investors and lenders use the balance sheet to see how much debt and cash the company has, and to find out whether it is managing its money efficiently.

6.13  The profit and loss account The profit and loss account shows all the income and expenditure for a given period. It shows whether the company has made a profit or loss.

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Start-up organisations often make a loss in the first few years until they become established, but, in the long term, a business must make a surplus or profits. Lenders and investors may not be prepared to continue investing in the organisation without getting a dividend or return on their investment. The profit and loss account shows income and expenditure but does not indicate whether that income has been received or those expenses paid. Thus it does not give an entire picture of a company’s financial health. A company could have a huge overdraft and be unable to pay its employees, due to not having received payment from customers, yet it could still show a profit in theory.

6.14  Cash flow statement The cash flow statement shows how much cash the business has generated in the year and what it has been spent on. The business will generate cash from: ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑

Trading (after paying all trading expenses). Selling fixed assets. New borrowings or taking credit from suppliers. New money invested by shareholders. Receiving interest. Selling part of the business.

Cash is spent on: Fixed assets – purchase and maintenance. Repaying debt and giving loans to customers. Paying dividends. Paying interest. Investments, including smaller ‘opex’ projects (‘operational expenditure’, meaning projects funded using normal revenue rather than the capital budget or ‘capex’). ❑❑ Contracts for outsourced services. ❑❑ Employment of staff. ❑❑ ❑❑ ❑❑ ❑❑ ❑❑

The difference between cash coming in and cash going out is the net increase or decrease in cash for the year. Investors and lenders are very interested to see where their money has gone and the cash flow statement has become very strict in its format to give a complete picture. FMs should be aware of the cash flow implications of their department’s workload – in particular projects and service contracts.

6.15  Performance measurement FMs may need to look at a set of accounts for new suppliers or new contractors to make decisions on current and future relationships with these organisations. It is important to determine how well the business has performed in the past to inform decisions about risks in relationships with suppliers that support the FM function. With recent collapses of large FM contractors in the UK economy, this is now even more important. Two key aspects to look for in any performance analysis or financial comparison are:

Financial Management  57

❑❑ Profitability. ❑❑ Liquidity (how well the business is managing cash).

6.16 Profitability Profits in general should be increasing year on year. However, just looking at the profit figures does not indicate how much money has been invested to generate those profits. There are a number of key profitability ratios used to determine the profitability of an organisation: ❑❑ Return on capital employed. ❑❑ Gross profit margin. ❑❑ Net profit margin.

Return on capital employed ‘Return’ is net profit (before interest and tax). ‘Capital employed’ is the total long-term investment in the company. Return on capital employed (ROCE) is calculated as follows: ROCE

Net profit (before interest andtax) 100 Long -term debt shareholders funds (includes reserves)

Gross profit margin This can be calculated from the profit and loss account. Gross profit margin

Gross profit 100 Sales

Net profit margin This can also be calculated from the profit and loss account as follows: Net profit margin =

Net profit 100 Turnover (sales)

6.17 Liquidity Liquidity ratios are used to indicate how well an organisation is managing its day-to-day cash. A business must have enough money to pay its debts. A common cause of business failure is simply running out of cash and therefore being unable to pay the bills. There are several ratios that indicate the ability of organisations to meet their debts: ❑❑ Current ratio. ❑❑ Quick ratio. ❑❑ Interest cover.

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Current ratio This looks at the assets which an organisation could quickly turn into cash and compares them with the short-term debts to see whether there is enough cash to meet the debts. This can be calculated from the balance sheet as follows: Current ratio

Current assets Current liabilities

Quick ratio This is similar to the current ratio, but it ignores stock as it is argued that this cannot always be turned into cash quickly: Quick ratio

Current assets Stock Current liabilities

A ratio of less than 1 is often seen as being too low, because not enough cash could be raised quickly to pay current liabilities. Despite this, it is not uncommon in certain industries. The main cause of liquidity problems is the inability to manage debtors. By allowing customers too long to pay for the services or goods supplied, the organisation can run out of cash. When investigating the cause of cash flow problems, the accountants can review how long customers are taking to pay and compare this to previous years or to competitors’ figures. A credit control management system is required to follow up late payments and ensure payments are collected on time. A typical measure is the number of debtor days: Debtor days

Debtors 365 Turnover (if all sales are on credit)

6.18  Other liquidity issues Another cause of liquidity problems is when an organisation pays its creditors too quickly, before the due date of payment. Consider this scenario: An FM does a large one-off deal with a stationery supplier, agreeing to receive a 1% discount if payment is made within 7 days. The offer seems too good to refuse and the FM agrees over the phone. This could cause serious cash flow problems if the business normally pays its suppliers on 30-day terms, since the cash may not be available until then. If the large payment has to be brought forward then other more important payments, such as wages, may have to be put back, causing widespread concern among employees. A business will keep track of how long it is taking to pay creditors using creditor days: Creditor days

Creditors 365 Cost of sales

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6.19  Annual reports of accounts It is a legal obligation to keep records of the financial transactions of an organisation. These are known as the accounts. All limited companies must keep accounts and send them to the Registrar at Companies House each year. For most companies, these accounts will include: ❑❑ A balance sheet. ❑❑ A profit and loss account.

And, in addition: ❑❑ An auditors’ report. ❑❑ A directors’ report. ❑❑ Notes to the accounts.

The auditors’ report Most companies have to have their accounts audited by a chartered or certified accountant. The auditors’ report is crucial. If the auditors are satisfied that the accounts give a ‘true and fair’ view of the company’s affairs, then the report will be ‘unqualified’. If they are not satisfied, they may ‘qualify’ the report and state the issues they are concerned about. If the auditors are concerned then this will clearly cause concern among shareholders and lenders. The directors’ report This gives summary information about the company relating to the accounting period. This could include issues such as corporate responsibility, environmental performance, market changes, remuneration of directors, bonus and share save schemes, acquisitions and disposals. Notes to the accounts The notes give more detailed analysis of some figures in the profit and loss account and balance sheet. The notes must also include a description of accounting policies and indicate the general accounting methods and assumptions used in preparing the accounts. Third parties use the notes to see: ❑❑ How much was paid to directors, including pensions, bonus and ex-gratia payments. ❑❑ Any future commitments that have been made by the company that will not show up in

the accounts.

❑❑ Any legal action that is ongoing and may result in financial penalties. ❑❑ Other ‘contingent liabilities’, i.e. sums of money that will be incurred if certain events

happen.

6.20  Financial accounting standards It is now a legal obligation for companies listed on a European stock exchange to prepare their financial statements in line with the new International Financial Reporting Standards

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(IFRS). The financial reporting standards (FRS) 100, 101, 102 and 103 (known as new UK GAAP) are effective from 1 January 2015. These FRS replace existing FRS issued by the Financial Reporting Council for reporting periods starting on or after 1 January 2015. The acronym GAAP stands for ‘Generally Accepted Accounting Practice’ or alternatively ‘Generally Accepted Accounting Principles’ or ‘Generally Accepted Accounting Policies’. GAAP is a term used to describe the rules in accounting practices as laid down by standards or legislation, or upheld by the accounting profession. FM implications International Accounting Standard (IAS) 16 Property, Plant and Equipment outlines the accounting treatment required for most types of property, plant and equipment. Property, plant and equipment is initially measured at its cost, subsequently measured either using a cost or revaluation model, and depreciated so that its depreciable amount is allocated on a systematic basis over its useful life. For FMs, the most significant issue is the treatment of leases in the accounts (see Section 6.31). IAS 17 Leases excludes leases for investment property but covers all other leases. It prescribes the accounting policies and disclosures applicable to leases, both for lessees and lessors. Leases are classified as either finance leases (which transfer substantially all the risks and rewards of ownership, and give rise to asset and liability recognition by the lessee and a receivable by the lessor) or operating leases (which result in expense recognition by the lessee, with the asset remaining recognised by the lessor). IAS 17 was superseded by IFRS 16 Leases on 1 January 2019. Under the IFRS rules, different treatment is required for ‘finance leases’, which are ultimately used to purchase an asset, and ‘operating leases’, where the asset is returned to the leasing company after a certain period of time. Auditors will thus pay particular attention to these leases and how they have been dealt with in the accounts. These rules may be subject to change in the future, so FMs need to keep up to date through regular dialogue with colleagues in the finance department.

6.21 Budgets Management cannot control the future progress of a business without a plan of action and constant efforts to find out whether the plan is being achieved. A budget is a financial plan. Budgetary control is concerned with the fixing of the plan and the use of controlling efforts to achieve it via constant comparisons between actual performance and the budget. For budgetary control to be successful, an organisation needs good communications, appropriate decision making at the right levels and acceptance by the managers concerned of responsibility of the results. An organisation will have a master budget, summarising the overall financial plan. This will be made up of departmental operational (or revenue) budgets and capital budgets. Revenue (operational) expenditure deals with the short-term purchase of goods and services required to keep the business going, and occurs within one financial year. Capital expenditure is associated with fixed assets, which tend to have a value over several years. Both types of cost are managed on a monthly basis to monitor the impact on the organisation’s cash flow and the funding required to service these costs in the form of borrowing or loans. After all the costs have been determined by the organisation, cost apportionment or absorption costing is then applied. Departments are then allocated their operational monthly budget.

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Facilities-related budgets often represent a significant proportion of an organisation’s total expenditure, on average 10–15% of the turnover. In some sectors, such as student accommodation, catering operations and conference management in the university sector, the FM budget also represents a significant income to the organisation.

6.22  Roles of budgets Budgets may have a number of different roles within an organisation. If a budget takes on more than one role in an organisation, then this may lead to conflict. Table 6.3 shows the range of roles. This is particularly relevant if the same budget is used for both performance evaluation and planning. Budgets set for performance will be set at an achievable target, whereas budgets set for motivation will be set at a difficult target. Using such budgets for planning and forecasting will be of little use due to the variances. Budget preparation tends to follow the structure of an organisation, although the amount of consultation and ownership by managers varies both within organisations and from one company to another. Typically, departments or functions within an organisation will be set up as responsibility centres, and these may be cost, profit or investment centres. If set up correctly, then the efficiency and effectiveness of such centres can be measured via the accounting data. Budget setting Research has found that managers tend to set easier rather than more difficult budgets as they see it as being in their own interest to incorporate a bit of slack into their budget estimates. It has also been found that some managers agree budgets that are impossible to achieve just to gain senior management approval. Bias in the budget-setting process may be caused by the type of reward system, past history of budget achievement and the insecurity of managers. Budgetary control Budgetary control determines the financial plan and then monitors it via constant comparisons between actual performance and the expected budget. Budgetary control requires the full range of general management skills, including: ❑❑ ❑❑ ❑❑ ❑❑ ❑❑

Planning. Preparation, administration and co-ordination. Communication. Reporting. Reconciliation and analysis.

Table 6.3  Roles of budgets 1  2  3  4  5  6 

A system of authorisation. A means of forecasting and planning. A channel of communication and co-ordination. A motivational device. A means of performance evaluation and control. A basis for decision making.

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❑❑ Change management. ❑❑ Evaluation and review.

Planning is about forecasting, and gathering information on the services required and their likely costs. Budgeting is an annual process, often starting 6 months prior to the new financial year. In some organisations, budgets are prepared on a rolling basis and so the budgetary planning is a recurring activity at predetermined intervals in the business calendar.

6.23  Budget design The process of budget design will depend on the certainty of objectives in an organisation and the ability to identify results. Costs are required as part of the budget design process and the preparation of the budgets. Budgets can be prepared in two ways. The first way requires a previous budget and involves looking at the previous and current year and then using an agreed index to increase (or decrease) each budget line. An alternative method, referred to as a ‘zero-based budgeting’, is when a budget is built up from nothing or a zero basis. Using the previous year’s budget and an inflationary percentage is not good practice as it can lead to inaccurate forecasts and budgets. The advantage of the zero-based budgeting approach is that it focuses attention on actual need and appropriate costs. It encourages an examination of the reasons why services are provided and the true costs of all services. A zero-based budget is required when starting up a new building or new service.

6.24  Capital or revenue Preparation of budgets involves the use of the appropriate cost centres to record the financial information. There are two main types of expenditure: capital and revenue. Table 6.4 shows the range of costs. Revenue expenditure typically deals with the purchase of goods and services and tends to be in the short term, with the purchase or expense made within a single financial year. Capital expenditure is associated with fixed assets, which tend to have a value over several years, and the spend profile tends to occur over more than one financial year.

6.25  Property costs There are two major elements to property costs – the costs of occupation and the cost of the property itself. Occupation costs will be the primary concern to FMs, and may include Table 6.4  Examples of FM costs Capital costs Plant Equipment Construction projects Vehicles IT equipment

Revenue and/or operational costs Service contract Employees and employment costs Consumable Rent, rates and service charges Travel, depreciation, energy and insurance

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rents, rates, leases, service charges, service contracts and maintenance costs. In most cases, the amount of space determines the occupation costs, so it is important to appreciate the link between space management, the estate role and financial control. Normally the FM budget will have several functional groupings, such as property and premises costs, business support costs and staff support costs. These could be further subdivided as shown in Table 6.5.

6.26  Budget variances Managers use budgets to ensure that their costs do not exceed their income or revenue. The difference between target and actual is called a ‘variance’. If the variance is less than has been budgeted, it is a ‘favourable’ variance. If it is over the budget, it is an ‘adverse’ variance. Adverse variances need drastic action and may be investigated by the finance department. Variation reports are outputs of budgetary control, informing managers of financial performance. Some variations are permanent and others are temporary, but both will require investigation. Budget variances may be caused by: ❑❑ Inefficiency of operation. ❑❑ The original plan being incorrect. Table 6.5  FM cost categories Main category

Service or activity

Property and premises

Rent, rates and insurance

Business support

33.0

Building services

7.0

Fabric maintenance

1.0

Grounds

0.5

Minor works

5.0

Cleaning

8.0

Security

5.0

Utilities

10.0

Archiving

0.5

Reprographics

5.0

Stationery

2.0

Voice services

1.0

Data services

1.0

Post and mailroom

1.0

Transport and fleet

0.5

Porterage

0.5

Business travel

0.5

Furniture

0.5

Office equipment Staff support

Average (%)

0.5

Catering

16.0

Fitness

0.5

Well-being services

0.5

Help desk

0.5

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❑❑ ❑❑ ❑❑ ❑❑

Poor communication of the budgetary goals. Actions of other departments and external forces. Random fluctuations in prices from suppliers. Clerical or typographical errors.

Reconciliation of adverse variations can be achieved via a range of management interventions. These include: ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑

A change of supplier. Reduced standards of service or consumables. Reduced expenses, such as travel, hospitality or overtime. Extended credit from suppliers. Chargeback to end-users for extra services provided. Correction of clerical errors. Phasing of annual fees across the monthly periods. Cessation of non-essential FM services.

6.27  Cost data In the budgetary planning process, obtaining good-quality data and inputs is critical. Sources of data that can help the FM include prices and schedules in contracts, pricing books, staff costs from payroll and contractor budgets. Costs are required in business to make a decision and to provide a means of control. Costs can be described in two ways: ❑❑ Fixed and variable costs. ❑❑ Direct and indirect costs.

Table 6.6 shows examples of fixed and variable costs. Fixed costs Every organisation, and indeed every department, has ‘fixed costs’, which are incurred whether or not its services are used. A good example is the cost of the property that an organisation is renting and paying rates for. The lease is a fixed cost, regardless of whether the premises are actually used or not. These costs are called ‘fixed’ because they do not change with the amount of use. Table 6.6  Examples of fixed and variable costs in the FM budget Fixed costs

Variable costs

Rent Rates Service charges Leases Contracts Tax Insurance Employment costs of staff

Consumables Maintenance Repairs Energy Reprographics Travel and transport Post/couriers IT – telephone, fax, mobiles

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Here are some other examples of ‘fixed costs’: ❑❑ ❑❑ ❑❑ ❑❑

Mortgages. Maintenance service contracts. Employment and salary costs. Hire purchase costs on equipment.

Variable or marginal costs ‘Variable or marginal costs’ are those that increase with usage. In the production department of an organisation, the direct costs are the basic wages and the variable costs are the overtime and bonuses that may be needed to meet particular manufacturing or operation schedules. Ordering materials is another example. Usually the more materials that are purchased in bulk, the better the discount from the supplier. Materials and consumables are therefore considered variable costs as they can be increased or decreased depending on the requirement and usage.

6.28  Cost accounting Cost accounting is required in an organisation to set the prices of services and products and to measure efficiency. Costs are determined by identifying what resources are used to provide the product or service. As explained above, costs are said to be variable or fixed. Variable costs change with volume, whereas fixed costs tend to vary with time. Total cost is the sum of fixed and variable costs. Costs are also classified as direct and indirect. Cost allocation will attribute the direct costs of a function to that function (e.g. salaries of staff solely employed in that function). ‘Cost apportionment’ (explained in further detail in Section 6.29) is required to charge the indirect costs to a function; these are typically overheads. There are two main costing methods: absorption and marginal. Absorption costing The absorption rate that best measures the consumption of overhead resources by the product or service should be chosen. Most commonly, time is used to measure the use of overheads – such as labour hours or machine hours. It is important to use the appropriate constraint that limits the production capacity – i.e. labour or equipment. Absorption costing implies that fixed costs behave in a similar way to variable costs. For example, effluent waste treatment is an overhead created by the manufacturing and production departments. Absorption costing will share out the cost between these departments evenly, depending on the amount of use by each. Marginal costing It is argued by some that because fixed overhead costs are time based and variable costs are volume based, they should be treated differently. In the marginal costing method, the cost of one more unit is its marginal cost; overheads are ignored as the focus is on identifying the incremental costs of producing more goods or more services. Marginal costs are perhaps of most use in management decision making. However, absorption costing is still much used in business as the preferred method because in the long term, all costs are variable.

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Overhead costs If a department or function of an organisation were to be independent then overheads such as the building, equipment and administration would be required. Apportionment of the overhead is an attempt to approximate these costs across the organisation. The charge to occupiers for space utilisation (which includes rent, rates, utilities and service costs) is a typical application of apportionment costing in the FM context. Apportioning costs can be a substitute for market forces. If an external supplier provides services, then the manager is aware of costs and could change supplier if dissatisfied. When these services are provided in-house, they will be cheaper, but there is reduced freedom of choice. By apportioning costs of these services, managers are made aware of the costs, and they can put pressure on the service provider if quality or price deteriorates. This in turn instils a discipline into the service providers that may be less likely if costs are not apportioned in the organisation. Impact of costing methods selected The apportionment of costs is said to simplify complex accounting issues, motivate decision makers and co-ordinate decisions in a decentralised organisation. Such costs serve as a constraint on a manager’s consumption of prerequisites and an approximation of the ‘difficult to observe’ costs. Apportionment costs can be considered as a lump-sum tax to reduce the profitability or increase the costs of a unit. They act as a restraint on discretionary expenditure. There are, however, negative aspects of absorption and apportionment costing methods. Managers are judged on costs that they have little or no control over. Managers may waste time and effort trying to control the uncontrollable. Some managers may ignore all costs on the basis that they have no control over them. In some cases, this can lead to increased production and higher volumes irrespective of the consequences of other departments. It is important to maintain sight of the cause–effect relationship between overheads and a product or service.

6.29  Cost centres A service department is a department that makes no profit but provides a service to the whole organisation. Examples include payroll, personnel, facilities, IT and finance departments. They are costs that the company incurs in order to provide services that are both internal and external to the organisation. Departments that are directly involved in the primary activities of an organisation are known as profit centres. Examples include manufacturing, production departments, sales and marketing departments. However, these departments need the service departments in order to operate. Indirect costs/overheads As every department uses service departments, most organisations charge the running costs of service departments to profitable departments or profit centres. These are ‘indirect costs’ that profitable departments incur, sometimes referred to as ‘overheads’. This is called ‘cost apportionment’. Cost apportionment can be based on a number of factors: ❑❑ Usage of service, based on preceding year. ❑❑ Number of employees.

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❑❑ Floor space occupied.

Using floor space, indirect costs for cleaning would be based on square footage. Where an organisation only charges those departments that are responsible for the overheads or indirect costs, the method is termed ‘absorption costing’ (see above). Direct costs These are costs that are directly attributable to a department’s operation and would typically include: ❑❑ ❑❑ ❑❑ ❑❑ ❑❑

Wages for labour. Overtime and bonuses. Machine breakdown maintenance. Equipment. Purchases.

In general, every department has direct costs and some also have indirect costs. Most direct and indirect costs are also occasionally ‘variable’ costs. An example of this is overtime bonuses in a production department. It is a direct cost as it is directly attributable to production, but it is also a variable cost as it changes with use. The FM department does not directly make money as a cost centre. Therefore, it is an indirect cost to all departments and will be recovered by cost apportionment or absorption costing. However, some FM departments run as profit centres and charge out their services with an extra margin to cover all incidentals. When user departments are charged for the use of FM services, the occupant users take a keener interest in the costs of the services and their impact. When company-wide budget cuts occur, there is a need to renegotiate provision of services and service levels so that each department can meet its new budget constraints.

6.30  Cash flow Cash flow is concerned with the cash generated and spent in any given period. The flow of cash may be monitored daily or less frequently depending on the size and type of organisation. Key principles involved are knowing whether costs are fixed or variable; being aware of the timing of payments (such as utility, rates and rent bills); ensuring there is enough cash to meet commitments (such as payroll and payments to suppliers); and knowing what is owed to creditors and owing from debtors. Cash flow forecasting This requires the following: ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑

Monitoring the outgoing expenditure. Knowing fixed and variable costs. Being aware of the timing of payments. Matching incoming payments to outgoing expenditure. Ensuring there are enough funds to meet commitments. Knowing what is owed to creditors and owing from debtors.

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The cash budget is a vital forecasting tool. When a cash shortage is foreseen in the coming months, an organisation may be able to do something about it. Many businesses fail because they either do not foresee cash flow problems or see them too late. They may be making a profit but the money is not being received quickly enough to balance the payments. Unless they can manage their cash flow, they will run out of cash and be forced into liquidation. Elements of the cash budget Cash budgets include: ❑❑ Receipts – including sales and other cash receipts, such as rent from a tenant, sales of

fixed assets and shareholder cash input.

❑❑ Expenses – including trade purchases and other payments, such as tax and dividends,

purchases of fixed assets and loan repayments.

❑❑ The opening bank balance shows what is expected in the current account at the start of ❑❑ ❑❑ ❑❑ ❑❑

the month. The net cash flow is totalled receipts less totalled payments. The closing balance is the sum expected in the current account at the end of the month. Each month’s closing balance is next month’s opening balance. Brackets indicate an overdraft or negative balance.

Corrective action As long as a company is profitable, most cash flow problems can be dealt with given sufficient notice. Corrective actions that can be taken include: ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑

Negotiating a higher overdraft limit. Reducing credit terms to customers to 30 days or less. Ensuring purchases are paid for at the due date and not before. Selling an asset that is no longer needed. Negotiating credit terms to extend payments. Deferring purchase of equipment (capital expenditure). Renegotiating interest on loans. Delaying salary and expenses payments to staff.

Using cash forecasts It is important to understand that the cash flow forecast is only a forecast, and that even if the cash manager has taken every step to ensure that the business has enough cash, there can still be cash shortages. The basic causes are: ❑❑ Sales income does not arrive on time. ❑❑ Sales revenue falls suddenly. ❑❑ The business has to make unexpected cash payments.

Cash management options It is not usually possible to extend an overdraft at short notice, although banks will sometimes agree to a temporary extension. This option cannot therefore be relied on. If sales income does not arrive on time and the overdraft is already at its limit, accountants can:

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❑❑ Decide what is essential to be paid. ❑❑ Delay or cut non-essential payments. ❑❑ Delay essential payments, such as salaries and taxes.

If sales revenue falls suddenly, the business should: ❑❑ Reduce purchases in line with sales. ❑❑ Reduce expenses and overtime.

6.31 Leases Leasing is an important and widely used financing solution for nearly every business organisation. It enables companies to access and use property and equipment without incurring large cash outflows at the start. It also provides flexibility and enables lessees to address the issue of obsolescence and residual value risk. Sometimes, leasing is the only way to obtain the use of a physical asset that is not available for purchase. Many companies lease a vast number of high-value items, including cars, offices, buildings, office equipment, power plants, retail space, telecommunication towers and aircraft. Many organisations are promoting new business leasing models which focus on the service rather than owning a physical asset. The new IFRS 16 (see Section 6.20) has had a significant impact on the way leases are treated in an organisation’s financial reporting. This standard affects most financial ratios and performance metrics, such as gearing, current ratio, asset turnover, interest cover, EBITDA (earnings before interest, taxes, depreciation and amortisation), EBIT (earnings before interest and taxes), operating profit, net income, earnings per share, ROCE, return on equity and operating cash flows. These changes affect loan covenants, credit ratings and borrowing costs, and could result in behavioural changes, such as decisions to approve or defer projects. As a result, many organisations must reassess certain ‘lease versus buy’ decisions. In particular, balance sheets, gearing ratios and capital ratios will be different. Significant highvalue assets  –  including real estate, manufacturing equipment, buildings and technology – will be most impacted by this new standard. The impact for businesses with numerous small leases, such as tablets, personal computers, small items of office furniture and telephones, is likely to be much less as some of these may be exempt from the new standard.

6.32 Tax The UK government’s annual budget and its attendant Finance Act incrementally change the tax rules each year. FMs do not need to be tax experts but they do need at least a basic understanding of the tax system. This is essential if tax-efficient facilities budgets are to be prepared and managed. Activities such as food sales in catering and vending services, ­provision of uniform and company cars to employees, and funding of capital and disability projects have tax implications (disability projects are generally VAT exempt). There are several general taxes that could affect FM: ❑❑ Value Added Tax. ❑❑ Landfill Tax.

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❑❑ ❑❑ ❑❑ ❑❑ ❑❑

Climate Change Levy. Business rates. Stamp Duty. Income tax (including Capital Gains Tax and Inheritance Tax). Corporation tax.

Value Added Tax Value Added Tax (VAT) is a purchase and sales tax charged by the government on the supply of goods, services, and imports or acquisitions into the UK. It was introduced in 1973 when the UK joined the European Community. It is a self-assessed tax and there are stringent rules for registration based on taxable supplies exceeding, or being expected to exceed, a prescribed annual limit. The seller collects the tax on behalf of the government and sends quarterly VAT returns to HM Revenue and Customs (HMRC). There are heavy penalties for persistent late submissions of returns. VAT has applied to construction and property matters since 1988. Unless the goods or services supplied to their customers are zero-rated or their turnover is very small (the threshold changes each year in the annual budget round in the Finance Act), most organisations are required to register for VAT and charge their customers VAT. The tax on a taxable supply is known as ‘output tax’ whereas the tax paid on supplies received is ‘input tax’. The VAT rate is set at different rates in different countries, so if an FM purchases goods or services from overseas, checks must be made. VAT liability is categorised as follows: ❑❑ ❑❑ ❑❑ ❑❑

Taxable. Zero-rated supplies. Exempt supplies. VAT on rent, leases and service charges.

Taxable VAT is normally liable at the standard rate of 20%. The taxpayer (defined by HMRC as ‘the trader’) must add 20% to the disposal price or other income. However, the trader can offset the VAT paid on business expenditure against the tax due to HMRC. Examples of taxable supplies are construction services and goods, the services provided by professional teams (e.g. architects) and specialists such as mechanical and electrical consultants. There are complex rules relating to the sale of interests in buildings and land, and the grant of leases. Note that under certain circumstances, these may be exempt from tax. A reduced rate of 5% is charged on materials for the installation of certain energy-saving domestic fuel and power facilities used in homes and by charities. Reduced rates are also applicable to car child seats and smoking cessation products. VAT tax rates are subject to change in future years. Governments periodically change the VAT regime to support business as part of financial measures to stimulate the economy. Zero-rated supplies These supplies are taxed at 0%. This category enables traders to recover from HMRC the VAT that they pay on expenditure on their supplies, even though they cannot charge their customers VAT on their products or services. Zero-rated supplies are taxable supplies, even though no tax is payable by the customer. Some examples of zero-rated supplies are:

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❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑

Food and drink (but not confectionery, meals in restaurants and hot food takeaways). Young children’s clothing and footwear. Books, newspapers and journals. Stamps. Drugs and medicines on prescription. Equipment for disabled people. Passenger travel and transport (but not taxis or hire cars). Exports and services to overseas traders. New domestic buildings, mobile homes and houseboats.

Note that for the purpose of VAT, residential buildings include a ‘home’ or other institution, accommodation for school pupils and students, monasteries and nunneries. Exempt supplies These are supplies not within the VAT system. Exempt traders do not have to charge VAT to their customers but they pay VAT on their expenditure. Examples of exempt supplies are those made by banks, charities and educational bodies, and include: ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑

Most sales, leases and lettings of land and buildings. Financial services. Insurance. Certain educational services and training. Most health care. Postal services. Most betting, gaming and lotteries. Certain supplies by undertakers. Membership of professional bodies and trade unions.

The makers of exempt supplies cannot recover input tax – that is to say, any VAT they have paid to their suppliers. Under certain circumstances, there may be eligibility to exercise an option to tax otherwise exempt supplies, depending on the type of disposal or category of use. Examples are qualifying buildings and the freehold sale of undeveloped land or land with mature development. The effect of exercising the option is that taxable inputs relating to that particular supply may be recovered from the date the option was exercised. Where rent is a consideration for exempt supply, then service charges are also a consideration for exempt supply. Where rent is a consideration as a standard rated supply under the ‘option to tax’, then service charges are a further consideration for standard rated supply. Landlords are advised to warn tenants well in advance if they intend to exercise an ‘option to supply’ because the VAT arising from the exercise of the option will be a new charge to tenants, who may not be able to claim it as input tax. It may also have an adverse effect on cash flow. This means that organisations that supply exempt supplies do not have to charge VAT on these goods and services. However, these organisations cannot claim back VAT on expenses either. Note that there have been appeals by leading organisations to HMRC to change the way VAT is charged on business catering and hospitality. FMs are advised to check the situation regarding issue of free food and accommodation to particular groups of staff as this may be considered as a taxable ‘benefit in kind’ that has to be declared. It is important to appreciate the difference between zero rating and VAT exemption. Zero rating carries a theoretical rate of VAT, which just happens to be 0%. Exemption means that no VAT applies at all. On the face of it, there appears to be no difference between the two,

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but there is a significant one. If the goods sold are zero-rated, the seller can still claim VAT on their purchases. However, if a seller’s organisation is exempt, they cannot reclaim the VAT on their inputs (purchases) because they cannot register for VAT. VAT on rent, leases and service charges Many FMs may be surprised to see lettings listed as an exempt supply, knowing that they are charged VAT on rent. Since 1989 landlords have had the option to charge VAT on rent and leases relating to land and buildings. Once having opted to tax, every subsequent sale must be taxed and the option is irrevocable. Some landlords choose this option because it means they can claim back VAT on supplies. This is often VAT which they would be charged anyway but cannot reclaim as long as their rental income is exempt. If a tenant is charged VAT on their rent, then the tenant will also be charged VAT on their service charges due to the landlord. Landfill Tax Landfill Tax is charged on material disposed of at a landfill site or an unauthorised waste site. It encourages efforts to minimise the amount of material produced and the use of nonlandfill waste management options, which may include recycling, composting and recovery. The tax was first introduced on 1 October 1996 to encourage waste producers and the waste management industry to switch to more sustainable alternatives for disposing of material. Liability rests with the landfill site operators, who in turn pass on the costs to their customers by way of commercial disposal rates. The standard rate of landfill tax has steadily increased over time from £72 per tonne in 2013 to £91.35 in 2019, with increases in line with the Retail Price Index to £94.15 in 2020. It was initially applied across all UK countries, but Scotland and Wales now set their own rates. Climate Change Levy This tax was first introduced in 2001 and has thresholds that are reset each year. It was established in response to the Kyoto Protocol to reduce impacts on climate change. To reduce carbon emissions, businesses are taxed depending on how much fossil fuel they use. The levy is charged on taxable supplies of a taxable commodity. Taxable commodities are as follows: ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑

Electricity. Natural gas as supplied by a gas utility company. Petroleum and hydrocarbon gas in a liquid state. Coal and lignite. Coke and semi-coke of coal or lignite. Petroleum coke.

The levy is charged at a specific rate per unit of energy. There is a separate rate for each category of taxable commodity. The rates are based on the energy content of each commodity and are expressed in kilowatt-hours (kWh) for gas and electricity and in kilograms (kg) for liquid petroleum gas and other taxable commodities. Due to the closure of the Carbon Reduction Commitment (CRC) scheme, in 2019 the rates rose significantly (from 45% to 67%), in recognition of the fact that the levy would henceforth be the only ‘carbon tax’ payable by businesses (see Section 30.15). As of 2020, the rates were:

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❑❑ ❑❑ ❑❑ ❑❑

Electricity – 0.00811 £/kWh. Gas – 0.00406 £/kWh. Other – 0.3174 £/kg Liquefied petroleum gas – 0.2175 £/kg (equivalent to 0.07/kWh).

The levy does not apply to fuels used domestically or by the transport sector, or fuels used for the production of other forms of energy or for non-energy purposes. It also does not apply to energy used by registered charities for non-business users and energy used by very small firms. Additionally, it does not apply to oils, which are already subject to excise duty. Renewable energy forms are no longer exempt from the levy. Some organisations can reduce the levy if they have a Climate Change Agreement or Levy Exemption Certificate – for example, if the business uses a lot of energy or uses energy-efficient technology. Business rates Within the UK, a uniform business rate (UBR) is tax charged to every business organisation based on the value of the property that it occupies. All commercial properties are assessed at the prevailing market rent levels by the Valuation Office Agency (VOA), and a rateable value is calculated and fixed for a certain period of time. The revaluation is normally done every 5 years. Increases over 50% are not unusual, as the values of property can change significantly in that time period. Business rates are calculated based on a property’s ‘rateable value’. In recent years, the UK government has changed the rules on UBRs for empty and unoccupied premises, giving certain exemptions or ‘relief ’ for small business. FMs should be aware of these rules, together with the following opportunities for effective financial management: ❑❑ Unoccupied offices and retail property are no longer entitled to a 50% reduction in

rates – the full sum is required.

❑❑ Unoccupied industrial properties and warehouses have 6 months’ exemption from the

rates, and thereafter they pay the full rateable sum.

❑❑ Unoccupied listed buildings still qualify for exemption status and pay no rates when

empty.

❑❑ Appeals may be made against rating assessments, for which an expert surveyor’s ser-

vices should be sought.

❑❑ Where the property assets have changed materially  –  through part demolition, for

example – then rate liability may be reduced.

❑❑ External factors such as neighbouring roadworks or building works can reduce the

rateable value.

Stamp Duty Stamp Duty has been in existence since the 17th century. It is payable on legal documents associated with property transactions or company share dealings. However, it also applies to the surrender of a lease where no document exists. Examples of documents in property transactions are a conveyance or transfer on sale and leases. Rates of Stamp Duty vary from 0% to 5%. FMs should be aware that it applies not only to the purchase of property but also to new leases. The rates of this duty are subject to change in the annual UK government budget announcements. In Wales and Scotland, this tax is known as Land Transaction Tax or Land and Buildings Transaction Tax.

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Income taxes Personal income tax This is charged on the annual income of individuals. The UK enjoys the dubious honour of being the first country to introduce income tax. In 1799, the government introduced a tax at the rate of 2 shillings in the pound (10%) on all incomes in excess of £200, with lower rates applying to incomes between £60 and £200. The tax was introduced to finance the Napoleonic Wars. It was allowed to lapse for a while after the end of the wars but became a permanent feature of the UK tax system as far back as 1880. Corporation tax This is charged on the profits of companies and unincorporated bodies such as members’ clubs. ‘Profits’ include all sorts of income surplus (other than dividends) and also capital gains. Corporation Tax is charged on the world profits of resident companies. Non-UK companies with subsidiaries in the UK are charged on the profits arising in the UK. Double taxation relief is available where profits are taxed twice (i.e. in both the UK and the home nation). Examples of UK income tax on which liabilities arise as a result of income are: ❑❑ Rents from leases. Premiums may also be liable for Capital Gains Tax. ❑❑ Dealing in property, which is assessed on the basis of annual profit. ❑❑ Dividends received from shares in property companies. The basic rate of income tax is

deducted at source and then allowed as Advanced Corporation Tax against any liability a company has for Corporation Tax.

Capital Gains Tax Capital Gains Tax became effective on 6 April 1965. Although it is mainly a personal tax, the rules broadly apply to companies but the gains are charged to Corporation Tax. The Taxation of Chargeable Gains Act 1992 consolidated the law on the matter but the Finance Act 1998 introduced some significant changes. The liability arises if any capital gain accrues as a result of a disposal relating to a period of ownership since 1982. Exceptions include when the gain accrues to property developers who ‘deal’ in property. Inheritance Tax The tax object is the bequest made to a person or organisation. The system includes provision to circumvent the avoidance of Inheritance Tax by making gifts (such as land and buildings) between living persons. It used to be called Capital Transfer Tax and was introduced in 1975 to replace Estate Duty. The relevant law is the Inheritance Tax Act 1984. Corporation Tax Corporation Tax is only payable by limited companies. The owners of sole trader businesses and partnerships are taxed on their profits through the personal taxation system. The provisions for Corporation Tax are somewhat complicated, but the essential elements are as follows. The rates are set according to the size of the business and its profit levels. Marginal relief is given on taxable profits falling between these bands. As these rates

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and thresholds may change over time, it is advisable to check with a professional adviser on matters of tax. Taxable profits The taxable profits of a company are calculated by adding together: ❑❑ Trading income. ❑❑ Capital gains (called ‘chargeable gains’). ❑❑ Rents and interest on other investments.

Trading income is calculated by taking profit derived from the accounts and then adjusting it, adding back certain costs which are not allowable and adding other costs which are. There are two types of FM expenditure that can be taken into account for tax purposes: revenue expenditure and capital expenditure. Revenue expenditure Revenue expenditure embraces routine premises costs such as rent, rates, cleaning, energy, maintenance, repairs and service charges. As a general rule, all the premises costs incurred in the normal running of the business can be offset against income before calculating taxable profit. Capital expenditure Expenditure on capital items cannot be deducted from profits all at once but is spread over a number of years. Capital allowances Capital allowances are amounts that can be deducted from profits in respect of capital expenditure. To calculate taxable profits, depreciation is added to trading profit and capital allowances are deducted – in this way, the cost of the capital expenditure is not deducted twice. This area is frequently misunderstood, resulting in many organisations not claiming for the allowances or underclaiming. There are various allowances for plant and machinery (such as IT, heating and ventilation, and specialist mechanical and electrical installations), energy-saving and environmentally friendly plant and machinery, hotels, industrial and agricultural buildings, and research and development innovation facilities. Specialist advice on these complex allowances should be sought. Tax status of construction workers The objective of the Construction Industry Scheme (CIS) tax system is to stop casual and part-time construction workers abusing the benefits system. Previously, construction industry workers could register for a tax exemption certificate that allowed them to draw gross pay. Non-production of a certificate meant that the employer deducted the basic rate of income tax from the employees’ wages. Problems included high earners being able to pay only the basic rate of tax and some casual workers drawing benefits as well as their pay. The rules require all construction industry workers to have a Tax Registration Card. Without one, they cannot be paid. Under the scheme, organisations may be deemed to be ‘contractors’ and outside bodies hired to carry out construction services may be deemed to be ‘subcontractors’. Under the scheme, payment may not be made to any subcontractor unless they are registered with the scheme and hold a valid registration card (CIS4) or a valid gross payment certificate (CIS5 or CIS6). It is the responsibility of the contractor to check the validity of registration cards and certificates and to have procedures in place for the management of the system. The procedures

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must cover dealing with invoices and the submission of payment vouchers to HMRC and subcontractors at the end of each tax period. The CIS sets out the rules for how payments to subcontractors for construction work must be handled by contractors in the construction industry and certain other businesses. Under the scheme, all payments made from contractors to subcontractors must take account of the subcontractor’s tax status as determined by HMRC. This may require the contractor to make a deduction, which they then pay to HMRC, from that part of the payment that does not represent the cost of materials incurred by the subcontractor. The deduction rates for the scheme are 20% for subcontractors registered with HMRC for payment under deduction and 30% for those not registered. All contractors have to: ❑❑ Be able to demonstrate that the employment status of each subcontractor has been

reviewed each month.

❑❑ Provide to HMRC (within 14 days of the end of each month) a return detailing every

payment made to every subcontractor.

❑❑ Provide (again within 14 days) a monthly declaration confirming every subcontractor

has been verified.

If an organisation cannot prove that it has both verified each subcontractor and considered the contractor’s employment status on a monthly basis, the organisation may be liable to penalties of: ❑❑ Up to £3000 for every month and daily fines if unable to provide records. ❑❑ 100% of any tax underpaid. ❑❑ Loss of their own gross payment status.

6.33 Depreciation Fixed assets are normally discounted in accounts in order to show the true (reducing) value of the capital investment over a period of years. There are two common methods for calculating depreciation: ❑❑ The straight-line method – This divides the capital sum (less final salvage value) by

the useful economic life of the asset.

❑❑ The reducing instalment method – This is when a fixed percentage is applied to the

reducing balance year on year.

6.34  Financial business cases FMs often have to prepare accurate and resilient financial cases to secure access to funds for projects and new initiatives. Organisations have a finite amount of funding. All applications for capital funding will therefore need to be appraised to decide which projects to support and which to reject. Each organisation will have a process for submitting business case applications, usually determined by the value of the project. Some organisations have investment boards or capital investment committees that meet at predetermined times. It is important for FMs to find out when these are, the date for submission of papers and who sits on the committee. In

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some cases, influencing and lobbying are required to gain support for a particular project so that the appropriate approval is achieved. A business case needs to state: ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑

The purpose of the project or investment. The need. The benefit. The financial impact. The options available – including the ‘do nothing’ option. A recommendation for the preferred option.

Following are some examples of typical FM capital projects: ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑

Purchase of a new fleet of cars or vehicles. Extension of an existing building. Refurbishment of an existing building. Relocation. Implementation of a new computer system. Replacement of building equipment, such as boilers, chillers or lifts. Replacement of building infrastructure services, such as power supplies, network cabling, lighting distribution system or fire alarm systems.

6.35  Investment appraisal methods There are a number of methods of investment appraisal that can be used to establish whether the estimates of likely benefits from an investment would compensate for the initial outlay. The main methods used are: ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑

Cost–benefit analysis. Payback period. Discounted cash flow (DCF). Net present value (NPV). Return on capital employed (ROCE). Internal rate of return (IRR).

Each method has its advantages and disadvantages, as shown in Table 6.7. It is important for FMs to establish which type is used in their organisation and which evaluation criteria are used – such as the cost of money to that organisation, the period for payback and so on. Some organisations will require all three types of appraisal to be applied to the project business case so that all aspects of the project’s costs are considered. Cost–benefit analysis This technique is often used in case studies. Table 6.8 gives examples of the costs and benefits that could be considered in an analysis. Costs All the known and likely costs must be listed, for example:

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Table 6.7  Project financial appraisals Type of appraisal method Payback period

Advantages

Disadvantages

Quick, easy to understand and data often readily available. Focus on cash flows. Suitable for simple projects.

Not suitable for complex projects. No account of the value of money over time.

Return on capital Simple and quick to calculate. employed (ROCE) Results shown in percentage format.

Value is relative not absolute. Does not take into account the cash flow or liquidity. Needs a clear and exact definition of profit and capital employed across all projects compared.

Discounted cash flow (DCF)

Need to use present value tables to convert cash flows. More complicated than other methods. Consultation with the finance department is essential to ascertain the appropriate discounted rate is used in the calculation.

Allows comparison of projects over a time period, which accounts for time value of cash flows.

❑❑ Cost of the replacement equipment. ❑❑ Cost of installation. ❑❑ Cost of training staff to use the new equipment.

Benefits All the known and anticipated benefits must be listed and, where possible, stated in monetary terms, for example: ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑

Continued production versus average lost time this year = £x value. Improvements to service. Faster turnaround or improved completion or production rates. Opportunity costs. Improved productivity. Increased sales.

If the overall costs or investment are paid back by the benefits over a short period of time, the budget holder will see that it makes good sense to invest. Table 6.8  Cost–benefit analysis example Costs

Benefits

Contract negotiation and set-up (opportunity costs of x amount of manager’s time = £a). Less direct control over the work done on a daily basis.

Reduction in managerial time of y hours per month = £b. Bulk purchasing ability for cleaning fluids so £c saving made per month.

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Payback period This is a very simple method. It measures the number of years that it is expected to take to recover the cost of the original investment. It is a good indicator of risk but best used with other methods. There are numerous disadvantages of this method: ❑❑ Cash received after payback is completed is completely ignored. ❑❑ It does not relate the total cash earned from the investment to the amount invested. ❑❑ It does not measure the total profitability over the whole life of the investment.

Discounted cash flow In the DCF method, all items of income and expenditure resulting from the investment are clearly and separately identified. The different rates of interest can be used to discount different items of income or expenditure back to their present values. Items of income and expenditure can be allocated to the precise dates when they will occur (rather than assuming it will be at the end of the year). Comparisons can readily be made between alternative investments. Net present value This investment appraisal technique takes into account the value of money over time. The underlying principle of the technique is that an amount of money earned in a year’s time will be worth less than the same sum earned now. It is related to the DCF method, which expresses future cash inflows in present values. The NPV technique assumes a minimum desired rate of return that is used as the discount factor. All inflows and outflows are totalled, outflows are deducted from inflows, and the chosen discount rate is applied in order to arrive at the present value of the cash flow. When making comparisons, the project with the largest positive total NPV is the most desirable. Present value tables are available and are generally used to identify a range of discount rates across a number of years. The technique is used to compare different investments to determine which one will, for any given interest rate, produce the greatest NPV. The NPV technique can also be used directly as a method of valuation, omitting purchase price and purchase costs from the calculations. The total excess of the discounted net inflows over the discounted net outflows will then represent the price (excluding the costs of acquisition) that could be paid for the item, assuming a particular interest rate. Internal rate of return Every organisation will have an internal cost of money, like an interest rate, to compare investments against. This is the percentage earned on the amount of capital invested each year of the life of the project after allowing for the repayment of the sum originally invested. This method finds the rate of interest that equalises the discounted net inflows and outflows (which will give an NPV of zero). The internal rate of return indicates the exact rate at which an investment will earn money.

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Table 6.9  Contents of a business case 1 Introduction

State the scope and background Outline the contents

2 Clarify need

Briefly describe the present situation Highlight the problems that currently exist Explain why the status quo is unsatisfactory

3 Match need

Outline the proposal or ideas Mention alternatives that have been considered and discarded Explain in detail what is required and why

4 State benefits

Explain the benefits that will flow from the proposal Say what the benefits will mean for the organisation, employees and customers Quantify the positive impact on the business

5 Summarise

Restate the current situation Summarise the solution and its key features Confirm the business benefits that will result

6.36  Preparing a financial proposal Any financial proposal, if it is to succeed, needs to set out the business case for the proposed course of action. Whether presented verbally or in writing (and often proposals involving significant sums will demand both), the presentation needs to clearly convey what is suggested and the benefits to the business. Table  6.9 shows the typical contents with likely headings and areas to be covered. Given that the proposal is likely to involve capital investment, the commitment of additional resources and perhaps increased costs in advance of future savings, the case will need to be convincing and well argued. FMs will need to know the actions, processes, procedures, protocols and key dates required to obtain the necessary approvals and signatures for the business case.

6.37  Building life-cycle costs Between first occupancy and demolition, a building will undergo many changes. The interior fabric and fittings in a building can be expected to undergo significant change every 5–7 years in the life of the building. The mechanical and electrical services can expect to survive for between 10 and 20 years. Any estimates such as these are, of course, generalisations, as many buildings do not survive even to maturity, never mind old age, while others seem to have eternal life. Building life-cycle costs, sometimes called ‘whole-life costs’, are: ❑❑ Pre-occupancy costs – As well as the costs associated with the acts of construction,

fitting out and commissioning of the building, these costs will include fees and finance charges incurred in the feasibility and pre-production stages of the building’s life. Land is not usually included, as it is not considered to be a wasting asset. ❑❑ Occupancy costs – These include the majority of FM costs, such as reactive and proactive maintenance, as well as rents, rates, service charges, utilities, FM services costs, insurance costs and all day-to-day costs of occupying a building. Management costs and the likely impact of inflation can also be included here.

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❑❑ Costs associated with adaptation, extension, refurbishment or subdivision – Most

life-cycle cost forecasts will ignore these unless they are part of a phased programme.

❑❑ Demolition costs.

6.38  Life-cycle costing methodology Conventional life-cycle cost analysis is concerned with tangible costs, such as the income and expenditure arising as a result of the physical performance of buildings. Cost–benefit analysis (CBA) can be used for the purpose of appraising options. The effect of using CBA is to bring together all the physical and functional aspects of building performance. There are six stages in a life-cycle CBA. (i) The project and its overall objectives (the benefits) are defined. (ii) A list is prepared of the likely costs and benefits. Social and other intangible benefits and costs are included in a CBA. For example, in the public sector the CBA for a road bypass might include benefits such as noise reduction, local environmental considerations, accessibility and travel time, while the costs might include a wider environmental impact or the effects on other populated areas on the route. (iii) All costs and benefits, either direct or indirect, are given monetary values. While the social/intangible costs must depend on judgement to a degree, providing there is consistency in their assessment they do provide a basis for comparing the total costs and benefits of alternative projects – which is the purpose of a CBA. (iv) The net benefits for each year of the analysis are predicted. These are the value of the benefits less the costs and will be expressed as positive or negative cash flow, depending on whether benefits exceed costs or vice versa. (v) The stream of annual net benefits is compared with the capital cost. Various mathematical methods are used but not all are satisfactory insofar as property investments are concerned. (vi) The final appraisal is made. Fairly obviously, if costs exceed benefits, the option should be rejected. Cost-effectiveness analysis (CEA) is an alternative method of life-cycle costing. CEA compares alternative courses of action in terms of their costs and their effectiveness in achieving specific objectives.

6.39  Evaluating life-cycle costs In evaluating the life-cycle costs of a building, the calculations can be to the power of any number up to the anticipated life of the building, such as n50 where n is the number of years being used in the calculation. Three principal methods are used for evaluating the life-cycle costs of buildings. Provided a consistent approach is used, the calculations can either ignore or take account of inflation and tax. The methods are: (i) Simple aggregation  –  This is a useful rule of thumb sometimes used by the design team in the very early stages of evaluation. The forecast total capital costs and total revenue costs (operating costs, expenditure on repairs, maintenance and renewals) are added together. It is important that the forecasts detail the basis for calculating component life cycles and operating costs.

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The method can make the point that life-cycle costs are greater than initial costs. It can also be used to demonstrate that greater expenditure on capital items will reduce revenue expenditure. However, it is as well to be aware that a building which is of a better quality and thus requires less annual revenue expenditure will eventually require greater capital expenditure on replacements and renewals, albeit later than would be the case for a lower-quality building. Simple aggregation ignores the significant effect of discounting future cash flows. (ii) Annual equivalent (AE) and sinking funds – This is the annual rate of interest per £1 added to a sinking fund (see below) to be set aside to provide each £1 of capital by the end of the period. A sinking fund used for the calculation of depreciation is also calculated using the formula. (iii) Net present value (NPV) – see Section 6.35.

Sinking funds The sinking fund is the investor or developer’s choice for evaluating whole-life costs. Occupiers should note that landlords may choose to set up a sinking fund for major expenditure – lift replacement, for example – and this will be included in service charges. Sinking funds are not popular. Key considerations are: The sinking fund charge should be separately itemised. The operation of the sinking fund must be monitored. Legal advice should be sought to ensure that the fund does not belong to the landlord. If taking an assignment of a lease, the new tenant must ensure that the previous tenant has made the correct sinking fund contributions, otherwise the new tenant might be liable for them. ❑❑ If disposing of a lease by assigning it, the outgoing tenant must ensure that proper recognition is given to the sinking fund contributions already made and, if appropriate, a refund should be paid by the incoming tenant. ❑❑ ❑❑ ❑❑ ❑❑

6.40  The impact of inflation Inflation is often left out of most financial equations because it is not easily predicted. However, there are arguments for and against including it, largely based on whether or not the inflated sums to be paid will be in a similar relationship (i.e. subject to the same change in value) to the finances of an organisation as a whole. The UK government and the Bank of England use interest rates as a way of curbing inflation. This policy is effective because as rates rise, companies and individuals see the cost of their borrowings increase. This can affect not only the costs of servicing mortgage finance but also bank overdrafts. However, high interest rates make borrowing expensive and may reduce investment. Economic activity falls and as a consequence companies shed employees and workspace. At the same time banks may reduce their exposure to commercial property, particularly when the reduction in activity causes business failure and loan default. When inflation is under control and interest rates become stable or are reduced, economic activity should increase. Any increase will be evident from a growth in employment and general confidence. As the economy picks up, bank lending increases to fund an

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improved level of investment in the economy. Eventually, this will result in an increased demand for commercial premises for occupation. Building cost data Successful life-cycle costing in FM depends on the quality of the data generally available for: ❑❑ ❑❑ ❑❑ ❑❑ ❑❑

Overall building life. The life of systems within buildings. Component and element life. Maintenance and repair costs. Replacement costs.

Computerised management systems now generate much information on the physical, financial and functional performance of buildings. The objective of computer-based maintenance management system (CMMS) tools is to improve life-cycle prediction and to better inform both FMs and designers of the consequences of selecting particular materials and systems in buildings. This in turn will help to produce better financial management reports and better-informed decisions.

7

Property and Estates Management

7.1 Introduction The property portfolio or estate is a major element of cost for all organisations. It is often quoted as the second largest cost to an organisation, with the staff payroll as the largest expense in most organisations. Estate management may be the responsibility of a separate department in an organisation or outsourced to a specialist. Either way, it is an area in which FMs (facilities managers, or facilities management) need to gain an overall understanding, as the nature of the property portfolio will have an impact on the facilities’ operation. At a basic level, the FM needs to know whether the buildings are leased or owned, the restrictions or rules of their occupation, and the sizes of the buildings. If an FM is to effectively manage the property portfolio on behalf of their organisation, they need to understand the organisational objectives so that the portfolio meets the infra structure needs of the business. This requires understanding how the properties are used, the nature of leases and covenants that may restrict use, and the future needs of the organisation in terms of space and location.

7.2  Property industry The UK property industry is closely linked with the FM industry; however, it has its own drivers and characteristics. There are many specialists and professionals (such as agents, solicitors and surveyors) in this sector and it is useful to know what they do and how they affect the work of FMs. Financial institutions, pensions fund managers, the church, the government, the Crown, and private and public companies use property as an investment tool. In recent years, awareness of property as an investment tool has grown for various reasons. These include increased uptake of the buy-to-let residential market, the launch of real estate investment trusts in the UK and the 2008 global recession (caused by dubious financial transactions in the property mortgage market). The UK, in common with other market economies, has a sophisticated commercial property market. The market exists because companies and individuals require property for occupation or for business purposes. Investors purchase property in order to benefit from rental income obtained from tenants. Firms of estate agents and surveyors operate in this market and act as brokers for sales and letting of commercial property. They also carry out professional duties such as formal valuation of property or dealing with disputes or complex negotiations.

Facilities Manager’s Desk Reference, Third Edition. Jane M. Wiggins. © 2021 John Wiley & Sons Ltd. Published 2021 by John Wiley & Sons Ltd. 84

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7.3  Market influences The property market is driven by economic factors; values fall and rise dependent upon a range of issues, such as general market confidence, the costs and availability of finance, the level of inflation, the strength of sterling or the local currency, and the balance of a supplyand-demand market. International factors of a strategic or financial nature are also important considerations, as demonstrated by the aforementioned global credit crisis and the more recent global pandemic of 2020. The market is not uniform in its performance across the UK as a whole. Different types of property may show growth in value and others a fall. Economic factors vary from region to region. Demand for certain types of premises may reduce because of changes in employment or changes in the type of work and use of premises. Technological change may render some properties obsolete. New transport infrastructure may improve access to an area and generate demand for space, with an upward impact on values. Regeneration by government agencies can also be beneficial, providing grants for new buildings, assisting with decontamination of land and offering incentives to organisations relocating or establishing in particular areas.

7.4  The cyclical nature of the market Property prices rise and fall in reaction to changes in the overall economic market but lag to some extent due to the relatively long timescales involved in buying and selling property. The simple pressures of supply and demand are important considerations in understanding the property market. An economic slowdown results in larger volumes of floor space coming onto the market. Values fall and incentives may be offered to tenants to induce them to take space. The property market follows the general economic cycle as a whole. The property market has an approximately 7-year cycle of highs and lows, with either the tenant or the landlord being more dominant. In a buoyant economy, property prices rise both in the commercial and the residential market and then fall as activity decreases.

7.5  Property portfolios A portfolio is a list of investments held by an individual or organisation. An investment is an outflow of funds needed to acquire an asset. A property portfolio is a set of investments made in land and buildings. Investors invest to make money. Investors put their money into property for a number of reasons. Either they want the property for their own operational use, as is the case with some commercial and industrial organisations, or they expect to make money as a result of the property being rented to users or from selling it on. Property investors put their money into property because they predict that it will provide a better return than the money would elsewhere.

7.6  The investment market Property as an investment medium is just one of several choices open to investors. Other investment methods include shares, gilts (government stock), unit trusts, commodities, currency, bonds, individual savings accounts (ISAs), insurance policies and works of art.

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Property is an investment that is illiquid, in that buying and selling it takes time and its value cannot be quickly converted to cash. It is expensive to trade in property. It is now possible to buy shares in a property, in the same way that shares can be bought in a public limited company (PLC). These investment vehicles are known as real estate investment trusts (REITs) and they allow organisations and individuals to trade in shares in property companies. Market knowledge remains in the hands of a few expert valuers and it is not readily available. There is no FTSE 100 Index for property. However, the number of countries that now have REIT funds is growing. Property offers an attractive prospect to investors due to rental growth because of the regular rent reviews and security of income, particularly at the ‘prime’ end of the market. Investment property is also tangible and provides the benefit of visible status and prestige. Property is management intensive and requires input from the owner or their representatives to collect rent, ensure that the lease is complied with and ensure that the building remains in good repair. The prime investment market The UK has a highly developed investment market; this market deals in the sale and purchase of properties that are let to tenants that are income producing in the same way that shares produce annual dividends. Prices for investment properties are dependent upon the security of the income stream from rents, the length of the lease and the frequency of rent reviews. Thus the ideal property investment will be one where a quality building is let to a large and secure company for a long lease with regular rent reviews. Such investments are called ‘prime’. A typical investment lease used to be for 20 or 25 years, with regular rent reviews every 5 years. However, the lease length has trended downwards, with fewer break clauses. In recent years, prime rent has gone downwards, more properties are vacant and take-up of new space has also declined. More tenants have exercised their lease breaks to gain advantage of newer and more sustainable premises. The amount of ‘grey’ space – this is the vacant space owned or leased by an organisation – has increased. For example, at any one time, there is generally over 1 million square feet of empty space in Canary Wharf. This is typical of a low point of the property market cycle, when tenants are ‘king’ due to oversupply and less demand. The major pension funds and property investment companies dominate this market. Major landmark buildings in London and other city centres, such as One Canada Square, the Shard, the Gherkin and Salesforce Tower are examples of prime investment property. The market also includes prime shopping centre property, such as Westfields in both west and east London, and well-located distribution warehouses. The secondary investment market The secondary investment market includes property of lower capital values. While it is still of interest to some larger investors, it may have a wider audience among private investors and family trusts. The purchase and sale of these properties in this market is often conducted by auction. Speculative or tertiary investments Increasingly, many individual investors have seen both commercial and residential property as part of a wider investment portfolio. The residential buy-to-let property market has increased in size significantly in the past few years. Again auctions are an important part of

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the market. Many small investors now see property investment as an alternative to other forms of personal investment such as the more traditional pension fund. Global property market Each country in Europe has different property market characteristics. FMs operating in Europe, the Middle East, Africa or other parts of the world will need to understand the local laws, trends and conditions to effectively manage their property portfolio.

7.7  Property investors Setting aside the development of property for owner occupation, owning property to let to tenants is a well-established alternative to investing in stocks and shares. Examples of major UK property investors are described in the following subsections. Private sector These are individuals or private organisations. For example: ❑❑ Grosvenor Estate has been held by the Duke of Westminster’s family for over 500 years.

It consists of extensive holdings of prestigious assets in London and other locations.

❑❑ Insurance companies and pension funds may invest to achieve capital growth in the

long term. The property investment may only be in the region of 5–15% of the organisation’s total investments but can still be measured in many millions of pounds overall. Liverpool Victoria and Prudential are examples of these types of private investor.

Public sector and quasi-public bodies Examples include: ❑❑ Central government, which still owns much of its older operational stock but has

❑❑ ❑❑ ❑❑ ❑❑

moved away from ownership since the extensive development of the private finance initiative (PFI) procurement strategy for building and managing public buildings. Church Commissioners. Crown Estate. Local authorities. Universities.

Before a property crash that took place in 1990, the holdings of English and Welsh local authorities were estimated to have a capital value of some £100 billion. This did not include housing and about a quarter of this sum was estimated to be investment stock. More recently there has been a significant move away from ownership. Health authorities particularly have moved away from publicly funded development. The first PFI development, a 400-bed hospital, was reported by the National Audit Office as making savings of some £5 million. While savings were not as great as expected (£17 million), the development has been held by the health authority and the NHS executive as being good value for money and offering significant health benefits. As well as the construction, the contract included maintenance and the provision of non-clinical support services.

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With the more recent downward economic situation beginning with Brexit in the late 2010s, the PFI model has been severely criticised due to evidence of severe financial pressures being placed on public sector organisations to meet their contracted payments for use of their premises. A new version, PF2, was developed in 2013 to counter these criticisms (see Sections 4.17 and 14.28). The UK government announced in 2018 that the PFI model would no longer be used, with the last PF2 let in 2016. Investors in property are as much at risk as any other investor. Some banks, major office space users and leading retailers still own their own premises. However, there has been a trend by some organisations to sell their properties and then lease them back, thus freeing up capital for other purposes. One such example is British Telecom (BT), whose property was sold to a consortium, Telereal Trillium. The deal, negotiated in 2001, raised £2.4 billion for BT and involved the transfer of 6,700 properties covering some 5.5 million square feet. BT then paid a rental charge for the use of these properties. In 2019 BT announced another major change in its real estate, involving closing 90% of its premises and retaining just 30 locations. It is likely that many organisations will be re-evaluating their estates due to the impact of the 2020 global pandemic on people’s lives – both their working and their social behaviours. As people have adapted to working at home and shopping online, many premises are no longer viable for a variety of businesses.

7.8  Property management Property assets need to be managed to prevent complacency and to avoid missing potential opportunities to minimise the cost of occupancy and/or maximise the property value. Often the larger the organisation, the greater is the need for a robust management strategy. There are four approaches to the management of property portfolios: ❑❑ Management by an in-house team  –  Property companies and larger organisations

usually apply this approach. Such an approach ensures a high degree of confidentiality but it needs an in-house team to respond quickly to provide an effective and efficient response to investment decisions. Even so, it would be unusual for any organisation to have the complete range of expertise required for property investment transactions inhouse and so it still requires the services of appointed specialists. ❑❑ The use of a property agent – Agents offer extensive expertise and experience of the property market, especially in local markets. Agents will compete for appointments, which can be made for between 3 and 5 years. ❑❑ A combination of in-house team and appointed agent – The success of these arrangements relies on the ability, expertise and commitment of both parties and good team dynamics. ❑❑ A hierarchy of management – In this arrangement, the in-house team maintains overall responsibility for the management of the portfolio and uses an appointed agent for the more mundane and transactional property management tasks.

7.9  Property professionals and specialists There are many specialists and professionals who operate in the property industry. They are often appointed and remunerated on the basis of fees calculated as a percentage of all or part of the project cost. The disciplines most likely to be used are as follows.

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Architects Architects will be members of the Royal Institute of British Architects (RIBA). Their responsibilities can include: ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑

Design of the appearance and construction of new buildings and building refurbishment. Administration of a building contract on behalf of a developer or other type of client. Certification of the completion of work. Obtaining any necessary planning permission when a planning consultant is not employed. Project management. Interior design.

Some key considerations in the appointment of an architect include: Early selection of the architect is important. References should be sought from clients of previous commissions. Site visits should be made. Good communication between the client and architect is essential. The objective is good architecture that provides a cost-effective design that is attractive to the occupier. Care must be taken to ensure that a chosen architect has a satisfactory track record as well as experience and resources that are appropriate for the work to be undertaken. ❑❑ Some larger organisations have their own in-house architects and designers. ❑❑ ❑❑ ❑❑ ❑❑ ❑❑

Building surveyors Qualified building surveyors will belong to the Royal Institution of Chartered Surveyors (RICS). Typical responsibilities can include: ❑❑ Surveying existing buildings and advising on alterations. ❑❑ Advising on defects, repairs, service charge issues and dilapidation schedules. ❑❑ Reviewing technical documentation, e.g. schedules of conditions and building

specifications.

❑❑ Working closely with the agent or other property adviser to ensure appropriate terms

in building transactions.

❑❑ Undertaking a project management role, which in some cases can include managing

the tender process.

Some key considerations in the appointment of a surveyor include: ❑❑ Early selection of the building surveyor is important for refurbishment projects as they

are experts in the condition of properties.

❑❑ Good communication between the client and surveyor is essential. ❑❑ Some larger organisations have their own in-house building surveyors, as well as archi-

tects and designers.

Engineers There are many different disciplines within engineering. Civil engineers or highway engineers will be responsible for major infrastructure work (roads and groundworks). Mechanical and electrical engineers will be responsible for the design of all of a building’s

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mechanical and electrical services. Structural engineers will work with the architect and quantity surveyor to advise on the design of the structural elements of a building. They will also have some supervisory responsibility for structural elements of the construction. Financial advisers These are likely to be internal staff in an organisation. Specialist financial responsibilities can include: ❑❑ Advising on the complex tax and VAT regulations that apply to property development,

property leases and service charges as well as the financial standards that must be observed. ❑❑ Analysis of the market prior to consideration of funding proposals. They may also advise on the structuring of partnership, consortium and other financial arrangements, such as PFI or public–private partnership (PPP) schemes. Quantity surveyors Quantity surveyors will also be members of RICS; however, their role is quite different from that of a building surveyor. They are the accountants or cost managers for the project or property development. They will typically report directly to the client and their responsibilities may include: ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑

Advising on the most appropriate form of building contract. Advising on the cost of the building contract and associated works. Costing the designs presented by the architect. Administering the contract tender process. Monitoring the financial aspects of the construction work and approving stage payments. Suggesting cost-effective alternatives to those proposed by the architect. Preparing financial reports for the client.

Lawyers and solicitors These may be appointed by the client for various legal transactions in property management. Some organisations may have an internal legal team, while others may appoint a legal practice to advise on all property law matters. Responsibilities can include preparation of legal documentation in connection with: ❑❑ Acquisition and development of a site. ❑❑ Completion of leases and contracts for sale. ❑❑ Funding or other financial arrangements for the project.

Building contractors Building contractors are employed by the client to carry out the construction work. Some property development companies have their own contracting division. There are numerous types of contract used to engage a building contractor in the property industry. It is important to ensure the capacity and capability of the contractor to carry out the work. This can mean striking a balance between the lowest tender and quality of performance.

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The planning authority With certain exceptions, planning permission will be required if any works come within the definition of ‘development’ given in the Town and Country Planning Act 1990. Development is defined in the Act as ‘the carrying out of building operations, engineering operations, mining operations or other operations in, on, over or under any land or, the making of any material change in use of a building’. The definition therefore covers a wide range of building activities from the erection of a new building to the demolition of buildings and any other significant building works in between. Independent consultants in planning matters can be used to assist in the complex process of obtaining the relevant permissions from local authorities and agents such as English Heritage. The client (or FM) The client or their representative will need to be able to demonstrate the following skills and attributes when assembling a team of property specialists: ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑

Financial management and access to funds. Leadership and team-building skills. Appointment and development of a professional advisory team. Efficient and effective communication of client strategy and objectives. Clear instructions about the expectations of the team and consultants. Ability to involve the professional team in the client’s decision-making process.

Others There are other specialists involved in property management and property transactions. These include archaeologists if the site has any historical significance, and land surveyors and landscape architects if there are extensive grounds to be designed and planted. Marketing consultants may be required if a sale is involved. Public relations consultants may be used, particularly if a development proposal is controversial. Environmental specialists may be used to deal with any ground or water contamination and to prepare or comment on an environmental impact assessment.

7.10  Developing a property strategy Property represents the largest asset of an organisation. Property and occupancy costs come second only to the organisation’s staff costs. In all sectors, public and private, savings in the costs of owning and occupying property can generate funds that can be used elsewhere in the business. Robust, strategic property management can have a significant impact on profitability and share value. FMs must strike a fine balance between observing any financial constraints and satisfying real (and, to some extent, perceived) operational needs of staff and external stakeholders. At a strategic level, the need is for a co-ordinated property strategy that enables overall business needs to be met effectively. There are several objectives for all occupiers and owners of property: ❑❑ Providing only the space essential for the conduct of the core business and any essential

support space in terms of its size, type, condition and specification at an appropriate location and on satisfactory financial terms by way of leasing or purchase.

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Table 7.1  Comparison of objectives Corporate objectives

Property objectives

Property strategy

Profit up by x%

Property costs down by x%

Relocate head office

Turnover up by x%

Expand property portfolio by x square metres Rationalise portfolio and dispose of surplus space

Initiate benchmarking of occupancy costs

Maximise capital value of portfolio

Review portfolio for value enhancement potential

Costs down by x% Share price up by x%

❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑

Introduce flexible working arrangements

Disposing of surplus space by way of sale or subletting. Setting and meeting realistic occupancy cost objectives. Enhancing the asset value of the property by redevelopment (if appropriate). Releasing the asset value of the property by sale and leaseback transactions. Maximising commercial income from surplus property. Ensuring compliance with relevant property, planning and safety legislation.

The property strategy is driven by organisational strategic objectives. These have to be translated into property objectives. This is illustrated in Table 7.1.

7.11  Property and asset registers It is a requirement of the Companies Act 2006 that a property register and asset register are kept for audit purposes. This responsibility may fall to the FM, who needs to understand the benefits and costs of creating the registers, how technology can assist with the task and how the information from the registers can be used for management purposes and to maintain property and asset value. The purpose of an asset register is to: ❑❑ ❑❑ ❑❑ ❑❑ ❑❑

Record details of physical assets. Provide a basis for maintenance plans and activities. Inform replacement decisions. Communicate tasks. Provide information for management to use as a basis for action.

Typically, the register will include description of the asset, location, ownership, initial cost, warrantee details, rent reviews, service charges, condition of the asset, compliance and statutory regulations pertaining to the asset, safety precautions and so on. Typical sources of information for asset registers are: ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑

Operating and maintenance (O&M) manuals. Construction Design and Management Regulations (CDM) files. Building logbook. Drawings and schematic plans. Site and condition surveys. Delivery notes and invoices for goods received. Catalogues, particularly for furniture and consumables. Licensing details in the case of motor vehicles.

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❑❑ Leases on property and equipment. ❑❑ Service contracts.

Assets may include: ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑

Buildings. Furniture and fittings. Office equipment. Building plant and machinery. Vehicles. Operational plant, equipment and machinery.

Many organisations use a computerised maintenance management system (CMMS) to manage the asset register, recording faults and maintenance work against each asset. Key considerations are: ❑❑ ❑❑ ❑❑ ❑❑

A proper evaluation of the requirement. Appropriate hardware and software. Adequate training for users. Data must be accurate, timely and relevant.

Larger organisations may have separate registers  –  one for the property (buildings and land) and another for the inventory of plant and equipment within the premises. This is especially important in a mixed portfolio of owned and leased premises, where some assets are part of the landlord’s ‘demise’ (see Section 8.9). A property database would be expected to include information that is relevant and to provide output that is capable of being summarised into meaningful management reports. Examples of input requirements are: ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑

Site details and address. Name. Reference number. Location. Type (e.g. office, school or hospital). Constraints (e.g. it is a listed building). Size (e.g. GEA, GIA, NUA or NIA in either square feet or metres; see Sections 9.23 and 9.24 for explanations of these concepts). Number of floors and floor areas. Space usage. Age. Replacement value. Occupation costs. Service details. Dates of purchase or sale. Build completion date. Date of occupation. Lease start, break and end dates. Rent review dates. Insurance renewal dates. Licence renewals.

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❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑

Overall building value or costs. Cleaning, catering and security costs. Communications costs (e.g. landline and mobile phones). Energy costs. Fabric maintenance costs. Furniture and office equipment maintenance costs. Mechanical and electrical maintenance costs. Personnel details and costs. Printing and reprographic costs. Professional fees. Rates. Rent. Service charges. Insurance costs and licence fees. The output of a facilities asset management database will:

❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑

Assist with benchmarking (rent, rates, service charges and other costs). Enable financial modelling and ‘what if ’ scenarios. Enable the production of forward maintenance plans. Create life cost and element replacement projections. Prompt the payment of fees and invoices, e.g. for rent, rates, goods and services. Provide budgeting and accounting information. Provide historical financial information. Signal maintenance requirements and produce job sheets. Signal upcoming rent reviews, lease breaks and lease ends. Inform decisions for repair or replacement of assets. Inform decisions for refurbishment of property or relocation to a new premises.

7.12 Dilapidations Dilapidations are items of disrepair, which arise through breach of contract in a lease. The breach of contract, in such instances, normally relates to a failure on the part of the tenant or the landlord to repair the property in accordance with the terms of the lease. A schedule of dilapidations is a list of all elements of a property that require repair or in some cases maintenance at the end of a lease. It may also be served during the lease term, when it is called an ‘interim schedule’. The extent of repairing liability will depend upon the wording of the lease, and tenants should be wary of phrases such as ‘to put and keep in repair’ in a lease, as these imply a significant liability for the tenant. Out of repair For property to be ‘out of repair’, it must be damaged or have deteriorated to a state below that which occurred at the beginning of the lease. There can be prolonged dispute over the condition of the property at the beginning of the lease and this is perhaps quite understandable. The lease may have begun many years ago, and, if the standard of repair at that time was not recorded in either photographs or a schedule of condition, either party may be at a disadvantage.

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Procedure A schedule of dilapidations is drawn up by a surveyor before the end of the lease to establish through inspection whether there has been a diminution (reduction) in value in the freehold interest as a result of the tenant’s failure to repair and maintain the property. The standard of repair required should be reasonable. The premises must be fit for occupation by the type of tenant who would occupy such a property. Although either party in a lease can draw up the schedule, it is most commonly done by the landlord’s surveyor. There are three schedules that could be produced and issued with a claim letter. These are: ❑❑ Interim – produced any time during the lease. ❑❑ Terminal – produced towards the end of the lease (likely to relate to more significant

breaches of the lease).

❑❑ Final – produced after the end of the lease term.

The reduction in value will be defined as the costs incurred in carrying out any works and any subsequent loss in rent. A technical argument between the tenant and the landlord may arise. Other specialists may be required, including mechanical or electrical engineers. Many debates over dilapidations centre on the merits of replacement or repair, the quality of the materials to be used and so on. Normally, an agreement can be negotiated but if not the matter may go to court. The protocols of the Property Litigation Association and the Law Society should be used to resolve a claim for dilapidations. RICS also issues a guidance note to help ensure that matters are dealt with correctly. Quantifying the claim Section 18 of the Landlord and Tenant Act 1927 sets a ceiling on the amount of damages that may be recovered. The damages or claim cannot exceed the amount by which the landlord’s ‘reversion’ (property) is diminished by the breach. No damages can be claimed if the landlord intends to demolish or substantially alter the premises, and so render the repairs valueless. This is an important factor because where a landlord terminates a lease for development purposes under the Landlord and Tenant Act, no claim for dilapidations can be made. In addition, the Leasehold Property (Repairs) Act 1938 gives the tenant protection against a landlord who is intent on pursuing a dilapidations claim for an improper motive. Like many aspects of property management, dilapidations claims are settled by negotiation. The landlord’s surveyor will inspect the property and draw up a schedule showing all the elements of the property which are ‘out of repair’ and the costs of restoring the property to an appropriate condition. The tenant is given an opportunity to comment on the schedule and the costs. Negotiations will not only concern what repairs are to be undertaken but also relate to the costs involved. There may be discussions concerning the best or most economical way of undertaking repairs. A tenant will be expected to respond to a dilapidations claim within 56 days. It is expected that the surveyors representing both parties will meet on site to discuss the issues. If the matter cannot be agreed then the dispute may be referred to court or to an arbitrator. At this stage, the landlord’s surveyor will submit a fully detailed and costed claim to which the tenants’ surveyor will add their own costings and comments. This is known as a ‘Scott Schedule’ after a case concerning a Mr Scott. The judge or arbitrator will then decide

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on the actual claim. In many cases by the time the dispute reaches the court, some items will have been agreed. Diminution in value The actual claim is often reduced by S18 as stated above. A summary of a typical claim is shown in Table 7.2 and Table 7.3. This shows the impact of the diminution in value of the claim when the value of the property is taken into account. It is important to understand that the cost of the works does not necessarily equate to value. If works are undertaken up to a certain sum, it does not follow that the value of the property will be increased by that sum. An extreme example of S18 in action is where a property with a low value – say, in a declining seaside town – may only be worth £50,000 in its current condition and £60,000 when repairs have been finished. However, the cost of repairs is £30,000. The landlord could not claim £30,000, only the diminution in value of £10,000. Dilapidations and good estate management practice At the beginning of the lease, both parties should agree the condition of the property to be let, unless the tenant is taking responsibility for putting the property into good repair. This is undertaken by agreeing and attaching a schedule of condition to the lease. Such a schedule is set out in plain English stating what defects exist at the beginning of the lease. This may be backed up by dated photographic records of the building, which can be used in the future if a dispute arises. It is usual for certain major items of repair to be removed from a tenant’s repairing liability where they are of significant cost to the tenant and are already in poor repair. This could relate to walls that have been subject to settlement over a protracted period and where the disrepair clearly occurred well before the commencement of the lease. This course of action should have the effect of preventing the level of repairs at the end of the lease being such that the building is given back to the landlord in better condition than at the commencement of the lease. Table 7.2  Dilapidations Section 18 claim Claim on cost basis Cost of works of repair

£ 18,000

Supervision, say 12%

 2,160

VAT at 17.5%

 3,528

Loss of rent during repair

 3,000

Total claim

26,688

Table 7.3  Dilapidation claim devalued by diminution in value Valuation of property in good repair

110,000

Valuation in current condition

100,000

Diminution in value

 10,000

Therefore claim limited to

  10,000

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7.13  Vacant property As organisations shrink and reduce the cost of occupancy, the amount of empty and unoccupied commercial buildings increases. FMs need to be mindful of the implications of their responsibilities and the risks that are likely if vacant premises are not looked after. Vacant premises may be subject to theft, malicious damage, fire, flood, loss of income, public liability and loss of reputation. Buildings may become vacant if the landlord is unable to find tenants. In a surplus market, there will be oversupply, so unless the premises are both fit for purpose and the right price, landlords may not attract new occupiers. In addition, tenants and landlords may go out of business. Some properties become vacant due to change of use or demand, as the occupier relocates or downsizes, leaving sections of property or even whole premises empty. Table 7.4 gives some more reasons for premises to be vacant. Whatever the reason for the empty premises, it is essential to maintain and secure the premises so that they can be reused and do not pose a financial, reputational or security threat to the owner and any neighbours. FMs can manage the potential risks by ensuring all health and safety obligations are complied with and putting essential maintenance and good housekeeping regimes in place. A range of actions is shown in Table 7.5. Table 7.4  Reasons for property to become vacant Tenant reasons

Landlord reasons

Undesirable location

Cost of space is too high in relation to potential rent or yield

Inadequate parking

Lease duration not attractive to tenants

Inadequate technology systems

Alternations not permitted; restrictions on use

Poor decor and interior finishes

End-of-lease/break clause exercised

Poor net internal usable space

Service charges and insurance costs too high

New ways of using space

Redevelopment plans pending approval and funding

Table 7.5  Checklist of FM actions to protect vacant property Aspect

Examples of measures

Security

Install CCTV or ensure existing systems are functional and reliable; install or modify lighting to movement-activated systems (both internal and external); ensure regular mobile and foot patrols and inspections; apply anti-climbing paint; install and maintain intruder alarms; modify or seal letterboxes and openings; keep a register of all keys; set up key-holder information with police and other agencies.

Insurance

Check terms of insurance policy; inform insurance company to maintain cover; update business continuity plan.

Housekeeping

Arrange appropriate pest-control measures to deter vermin and infestations; remove combustible and hazardous materials; remove all graffiti promptly; keep windows clean; stop postal deliveries; remove all high-value inventory from premises.

Maintenance

Ensure fire alarm systems, sprinklers and other protection systems are serviced and fully operational; drain down non-essential water services; turn off non-essential water and gas supplies to reduce risk of flooding or leaks; turn off non-essential electrical supplies; ensure roof, gutters, external doors and windows are in good order to prevent weather damage; ensure external fencing and gates are in good order; ensure security devices and locks on doors and windows are in good order.

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Aspect

Examples of measures

Health and Safety

Ensure fire risk assessment is reviewed and updated; implement lone-working policy and conduct risk assessments for lone workers who may visit premises for inspection, security or maintenance activities; inform local emergency services of appropriate contacts; seek co-operation of neighbours in reporting suspicious activity.

Appearance

Make premises look occupied; keep them presentable and fit for occupation or use.

Inspections

Undertake regular inspections, perhaps weekly or fortnightly, to monitor the condition of the premises.

Guardians

Work with a local guardian contractor who will find temporary occupants for a set duration.

7.14  Property guardians Due to changes in the UK legislation affecting squatters in residential premises, the risk of unauthorised occupation of empty vacant commercial property has increased. This in turn has led to the establishment of guardian services, sometimes provided via security contractors or as independent businesses. They tend to operate in main cities where there are higher volumes of empty premises and shortages of affordable residential accommodation. In essence a commercial building is used as a living space by ‘legal squatters’ for a short term. The guardian contractor will set up a contract with the property owner, and they in turn will create a non-exclusive licence agreement for each vetted occupant. Occupants tend to be single and over the age of 21 – different contractors will have different terms in their licence agreements. Occupants need to be given 28 days’ notice to vacate the premises, under the Protection from Eviction Act 1977. BS 8584:2015 (for vacant property protection) gives FMs assurance that the guardian contractor is working to approved compliance standards. Having occupants live in an otherwise empty building can ensure the property is not vandalised, shows that the general area is populated, keeps the neighbourhood busy, improves social opportunity for those who are looking for a temporary home in expensive city centres and reduces security costs. Property owners may also get a small income from the guardian contractor. The use of guardians is now common in other parts of Europe as an alternative option for reuse and temporary use of commercial premises before they are refurbished, demolished or reused by a new commercial occupant.

8

Property Legislation and Leases

Property law in the UK is one of the most complex and difficult fields of law, and a high volume of litigation in this area is constantly underway, leading to new precedents and rulings on a frequent basis. FMs (facilities managers, or facilities management) need a broad understanding of property law, contract law, planning legislation, leases and licences, and landlord and tenant issues. The main pieces of legislation are the Landlord and Tenant Acts (1927–1985), the Town and Country Planning Act 1990, the Building Act 1984 with associated Building Regulations, the Defective Premises Act 1972 and the Occupiers’ Liability Act 1984. FMs with premises in Europe, the Middle East, Africa (EMEA) or elsewhere in the world will face a range of local laws and regulations. Getting expert professional guidance is critical.

8.1  Ownership and tenure The most common forms of property tenure in the UK are freehold and leasehold. There is a separate legal system in Scotland. Freehold Freehold is the most secure form of ownership in that it is in perpetuity and there are relatively few limits to the rights of a freeholder to deal with their property. A freeholder will hold title deeds to prove ownership and by undertaking enquiries about the property before purchase will be aware of any rights held by third parties over the land. Examples of thirdparty rights could include a public footpath across land or a restriction placed on the use of property by a former owner, known as a Restrictive Covenant, which is legally enforceable in most cases. Leasehold Standard commercial leases Leasehold interests are created out of freehold interests. Leaseholders can also create leasehold interests by subletting or assigning their interests. In the commercial property market, occupational leases are normally granted for any period from 1 to 25 years. The length of the lease depends upon the respective requirements of the owner and the potential tenant. There is often a conflict in the requirements of a lease between the landlord and the tenant.

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Landlords seek security and growth in income, which can be achieved by letting to an established tenant for a lease of reasonable length. Tenants may see things rather differently. In selecting premises for occupation, they may be concerned with issues of flexibility in their leasing arrangements, and may be looking for clauses in the lease which allow it to be ended at short notice before the contractual term expires. Lease documents in the UK will run to many pages, so the FM needs to carefully check all sections. There is potential to negotiate terms in all sections in a UK lease. However, in other EMEA countries, the situation could be very different. For example, leases may be shorter – such as 6 plus 6 years or 5 plus 5 years. The use of codified documents in Europe provides a more straightforward process, and there is no negotiation on any elements. Long leasehold interests Longer leasehold interests are common in the residential market. Leases of 99–125 years are often found, particularly for flats and maisonettes. Leases of similar length are found in commercial property. Long leases are granted on land and property because the lease covenants allow the freeholder to exercise more control over the use of the property than if it were freehold. This is because the lease will comprise a series of agreements known as covenants, which are enforceable between the parties. The freeholder will in such cases draft the lease to control the use of the land, the size of buildings and even the quality of tenants. Lease covenants can also be used to control the maintenance of service roadways. Long leases are acceptable to some developers because the period of 99 or 125 years is long enough to use the lease as a security for loan finance – these types of lease are known as ‘ground’ or ‘building leases’. For example, many industrial estates are developed on land where the freehold is owned by a person or firm who then grants a long building lease for a nominal rent. Buildings are constructed and then let on standard 25-year commercial leases to tenants. Once completed and let, the investment can then be sold on the investment market. Thus it can be seen that out of the freehold, several legal interests can be created. For example: ❑❑ Owner A is a local authority. It owns a piece of land on the outskirts of a town that is

ripe for development. It does not wish to develop it itself, but will sell a long leasehold interest in the land to a developer, owner B. Owner B will normally pay a sum of money for the long lease and also a nominal annual rental, often known as a ‘peppercorn rent’. ❑❑ Owner B then develops industrial units in accordance with the terms of the ground lease. ❑❑ Owner B lets the buildings on 25-year leases to business occupier C and receives an annual rental. ❑❑ Owner B then sells the completed and let development to D, an investor, for a capital sum. It should be borne in mind that other arrangements could take place in the future. For example, occupier C might sublet or assign their interest to another, if permitted in the lease. Turnover lease This type of lease is common in the retail sector and widely used in the USA. A feature of this arrangement is that the rent is calculated by reference to the turnover generated at the premises. Turnover rent usually forms only part of the total rent payable. The principal type

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of turnover rent arrangement is where the tenant pays whichever is the higher of a base rent (usually between 70% and 80% of the open market rent) and an amount calculated by reference to an agreed percentage (commonly between 7% and 15%) of the tenant’s trading turnover. The main advantage of a turnover rent lease is that the landlord and the tenant have a common objective to maximise the turnover generated by the subject premises. The downside for landlords is that they must share the pain in times of economic difficulty. However, a turnover rent offers a measure of protection for tenants in the event of difficult trading conditions and, to the extent that it reduces the risk of tenant insolvency in such times, a landlord also gains some advantage. These types of lease are likely to become more common in the current economic climate. Green leases With increasing focus on sustainability and carbon reduction in the built environment, property managers and lawyers have developed green leases to encourage owners and occupiers to work collaboratively to agree energy-, water- and waste-reduction strategies. These arrangements help both parties to reduce operational costs, comply with legislation and enhance their reputation for corporate social responsibility. This new type of lease addresses energy efficiency and sustainability issues throughout the whole life cycle and management of a building. The requirement to provide Energy Performance Certificates (EPCs) or Display Energy Certificates (DECs) means the parties must work together to achieve optimum building performance. Another driving factor in the demand for green leases comes from: ❑❑ The Energy Act 2011 and its provisions that deal with specified energy ratings for

buildings and prohibit letting buildings below a specified rating.

❑❑ The Climate Change Act 2008. ❑❑ The Carbon Reduction Commitment (CRC), now replaced by the Streamlined Energy

and Carbon Reporting Scheme (SECR); see Chapter 30.

❑❑ The Green Deal.

The Better Buildings Partnership has created a toolkit of best practices, a sample memorandum of understanding and a model form of relevant clauses to create a green lease. The practices cover sharing data on water, energy and waste; setting joint targets for waste reduction and for water and energy consumption; establishing a building management system; creating a handbook or plan covering a range of sustainability issues; using metering; and making alterations to improve environmental performance and overall maintenance. The British Property Federation has developed other useful resources  –  the Landlord’s Energy Statement and the Tenant’s Energy Review  –  to assist in data gathering for the Display Energy Certificate. Licences It is important to distinguish between a lease and a licence because a lease can often give rights of security of tenure and prevent the landlord from gaining occupation except on certain limited grounds. An agreement has to be carefully drawn to constitute a licence, and many licences will in fact be leases. A lease is a proprietary right, whereas a licence is a mere personal arrangement. The critical aspects are the nature of the agreement and the intentions of the parties, rather than any name attached to the agreement. The interpretation of commercial occupation as a lease or licence is often unclear. Professional legal advice should be sought.

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Examples of typical licence agreements These can be personal or inter-family arrangements. They may be temporary, for example to permit access to land to do certain tasks for a certain time in a day. In business they may allow various occupiers into the premises for a limited and restricted purpose – for example, in shopping centres to sell from market stalls or in offices to occupy serviced workspaces where clerical or reception facilities are shared but where the arrangement is clearly transitory. Serviced offices are increasingly important in the UK and provide affordable and flexible accommodation, particularly for start-up businesses.

8.2  The Estate Agents Act 1979 This legislation was effected to protect the public from malpractice by estate agents. There is in any event a duty for the agent to act in the best interests of the client in terms of achieving the best price, and in providing appropriate advice. There is no specific duty to act, but if the agent does so it must be in the client’s best interest. The Act sets out the specific duties that relate to estate agency as opposed to any other agent–client relationship. The principal requirements of the Act relate to the following: (i) The agent must disclose any personal interest to the client irrespective of whether the agent is acting on a disposal or acquiring a property. This means that if the agent is acting for a vendor (seller), the agent must confirm in writing if they or any of their family or business associates are interested in the property. If the agent is selling a property on their own behalf, they must disclose in writing, usually on the sales particulars, that they or associates or family members have an interest in the property. (ii) The agent must give full details to the client in writing of the basis of the appointment in terms of fees, advertising costs and the nature of the appointment, which could be one of the following: ⚬ sole agency; ⚬ joint sole agency; ⚬ multiple agency. Only the firm that introduces the buyer is paid commission. (iii) The agent should confirm details of the timescale of the appointment and the procedure for termination of the appointment by either party, and the procedure if the seller wishes to vary the basis of the appointment.

Contract letters The letter must define the agency appointment and explain when commission becomes payable. Particular care should be taken with sole selling and sole agency appointments. This is because it is the agent’s duty to clarify with the client in what circumstances commission is payable. Normally commission is payable out of completion monies and is invoiced upon exchange of contracts. Some firms add a clause to the effect that ‘commission is payable upon the introduction of a ready, willing and able purchaser’. This means that the vendor becomes liable to pay commission when a deposit and a signed contract are deposited with the seller’s solicitor. There has been case law surrounding this wording which confirms that

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if the vendor withdraws from the transaction before exchange but after the buyer has lodged the deposit and signed the contract then the buyer is liable to the agent, even if that particular transaction becomes abortive. Therefore, at this stage, the agent has carried out their duty in accordance with the contract, between themselves and the seller. Some agents now offer their services on a ‘no sale, no fee’ basis. The Estate Agents Act 1979 also deals with the holding of deposits and the passing on of interest to the client.

8.3  Consumer protection regulations The Property Misdescriptions Act 1991 covered statements and written information about property that are inaccurate and/or misleading and was repealed in October 2013. Consumer protection regulations have replaced the legislation affecting the description of properties for lease or sale: ❑❑ Consumer Protection from Unfair Trading Regulations 2008 (CPRs) ❑❑ Business Protection from Misleading Marketing Regulations 2008 (BPRs)

These put more responsibility on both the vendor and the selling agent not to engage in what is seen as unfair practice. The secondary aim is to extend the protection to all consumers in the process and to cover referred service choices such as conveyancing. Breaches of the regulations might include falsely claiming to be a member of a professional body, misdescribing a property for sale or making unfair comparisons with competitors. Agents must: ❑❑ Ensure that any information provided, whether in writing, in pictures or verbally, is

accurate when advertising for new business or when marketing property.

❑❑ Not omit important information that consumers need to make informed decisions. ❑❑ Not put undue pressure on purchasers to act quickly, for example to put in an offer,

raise their price, skip the survey or exchange contracts.

❑❑ Have an effective customer complaints procedure that is understood and followed by

all staff who come into contact with the public.

8.4  Defective Premises Act 1972 This Act imposes duties on those who undertake works in connection with the provision of most types of building, including houses and commercial premises. This includes architects, builders and designers. Section  1 of the Act states that work should be done in a workmanlike manner with appropriate materials. The work should result in the building being fit for habitation when completed. Examples of unfitness for habitation are obviously quite wide but could include poor ventilation specifications that result in excess condensation and damp. The Act is limited to defects which render the building unfit for habitation. Defects that do not render the building unfit for habitation do not give rise to a claim under the Act. In recent times, potential litigation over defective premises in terms of residential property has been covered by claims under National House-Building Council certificates, which guarantee standards of construction to purchasers.

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8.5  Occupiers’ Liability Acts 1957 and 1984 This Act applies to owners who have liability to those who come onto their land with express or implied permission. It imposes a duty on the owner or occupier to take care to ensure that the visitor will be safe in using the premises for the purposes for which they were invited or permitted. The term ‘premises’ includes all buildings and land whether in use or not. Section 2 of the Act reverses the Unfair Contracts Term Act 1977. This enables those who permit access to land for recreational or educational uses to seek to exclude liability for any injuries caused as a result of gaining access to premises. For example, visitor safety can be maintained by ensuring adequate signage is available indicating wet or slippery surfaces when cleaning operations are in progress. In buildings where potentially hazardous processes are being undertaken, protective equipment should be provided, or safety helmets worn by all visitors on building sites. Occupiers and trespassers The situation regarding trespassers is also of relevance. Owners and occupiers may be liable to trespassers who gain access to premises and injure themselves as a result. This is of particular relevance with disused properties where juveniles or vandals are concerned. Properties that are particularly prone to trespassers are derelict, abandoned premises and building sites. The building owner or FM must ensure that fences and gates are secure, that notices are displayed on dangerous properties and that reasonable steps have been taken to prevent entry.

8.6  Energy Performance of Buildings (Certificates and Inspections) Regulations Building owners are required to provide an Energy Performance Certificate (EPC) to inform and advise buyers or tenants about the building’s energy performance. If the property is occupied by a public authority or institute providing a public service and frequently visited by the public, then the owner must also comply with the Display Energy Certificates (DEC) legislation. The FM must ensure the certificate is on display in the public area of the premises. When buildings are offered for sale or rent, the EPC energy performance indicator must be stated in the premises particulars (see Section 30.26). The Minimum Energy Efficiency Standard 2015 (MEES) requires all commercial properties to have a minimum energy rating of ‘E’.

8.7  Health and Safety Legislation Landlords will expect tenants to conduct a fire risk assessment and to advise the landlord of the nominated ‘responsible person’ (this is a specific duty holder in the Regulatory Reform (Fire Safety) Order 2005; see Chapter 17). In shared premises, there is a requirement for co-operation between occupying tenants. Landlords also need to ensure that electrical and gas safety certificates are valid and available for inspections, keeping all records for future audits. The landlord’s duty for safe management of asbestos in properties is covered under the Defective Premises Act.

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8.8  Boundaries and Party Walls There are several laws concerning the boundary between properties that the FM may need to consider. The boundary is the invisible line that separates two adjoining properties. The line is shown on plans mentioned in title deeds. It may be difficult to precisely determine. Sometimes there is a structure to show the line, such as a fence, wall or markings in the pavings. Technically the boundary line is not owned by either party. However, structures placed near the boundary will be owned by the property owner on that side of the line. Boundaries within buildings are known as party walls, with each neighbour owning a part of the wall to the centre line. Special rules apply under the Party Wall etc. Act 1996, and expert legal advice is recommended. There are complex rules to follow regarding arrangements for allowing entry, with notices, counter-notices and detailed timescales to be observed. The FM must ensure that they keep boundary structures in good condition and safe to prevent collapse or damage. When access is required to neighbours’ property to undertake maintenance work, the FM may have some rights under the Access to Neighbouring Land Act 1992.

8.9  The contents and terms of a commercial lease Landlord and tenant legislation has evolved to regularise the relationship between landlords and tenants in commercial leases, most of which are subject to this legislation. Modern commercial leases tend to follow a broadly standard format. The lease is issued in duplicate. The landlord’s copy is known as the counterpart. The tenant’s copy is normally known as the lease. Leases are divided into several sections. Each section comprises certain clauses and each section is numbered, as is each clause within it. These sections and all the various clauses vary from lease to lease. Introduction This section sets out the names of the landlord (lessor) and tenant (lessee), otherwise known as the ‘parties’ to the lease. It also specifies the premises or land to which the lease refers, the contractual term, the rent commencement date, the initial rent, rent review intervals, permitted users and any other items such as details on the parties’ liability to repair. Landlord The landlord is the owner of the land or buildings to which the lease applies. They receive a rent or other payment, and, in return for this payment, grant the right to exclusive possession of the land or buildings to the tenant for a specific period of time. Tenant The tenant is the person or firm which, by agreement with the landlord, is granted exclusive possession of land or buildings for a period of years in return for payment of rent.

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Lease type Ground lease A long lease is granted at a ground rent. This disregards the value of any buildings on the site but may reflect any right to develop land. Developers may lease a site on a ground lease for 99 or 125 years. A developer constructs a building and then grants a standard 25-year commercial lease to an occupier. Thus the developer is in effect a landlord to the new tenant, and the original landlord who granted the long lease is the landlord to the developer. It can be seen that various interests in land can be arranged, with a head landlord, a ground landlord and a tenant. Headlease In the above scenario where a developer took a long leasehold interest, held directly from the freeholder, the developer becomes what is known as a ‘headlessee’. The lease could be subject to one or more underlease(s) or sublease(s). In the above example, the occupier of the property built by the developer is the ‘underlessee’. Sublease Tenants can sublet property, if the lease allows it. Subleases are for a period of time less than the remainder of the lease. The sublessee will pay rent to the tenant, who will continue to keep up payments to the landlord. The sublessee normally has no direct contract with the landlord. There are normally special clauses in a lease which set out conditions for subletting. The tenant is not usually allowed to sublet without the landlord’s consent. The premises Usually at the beginning of the document, the address of the subject premises is stated. However, further information is given later in the document including a plan, which is normally a marked-up extract from an Ordnance Survey map. (Contractual) term The lease is agreed as a contract between the parties. The ‘term’ is the number of years for which the lease will run. Most commercial leases have terms from 3 to 25 years, depending upon what is agreed between the parties. Rent commencement date In some leases rent will not be paid immediately from the commencement of the term. This may be because there is an agreement to fit out the premises by the tenant and in return the landlord will grant a ‘holiday’ on rent, normally called a ‘rent-free period’. Initial rent The amount of rent to be paid during each year up until the rent review date. The permitted use Most leases will specify what use(s) the tenant may put the premises to. Normally there will be a separate clause under tenants’ covenants setting this out in more detail.

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Repair All leases state which of the parties should undertake repairs of the building. Normally the tenant will be responsible for both internal and external repairs if they occupy the whole of a building. This is then known as a ‘full repairing lease’. If the tenant is also responsible for insuring the building then it will be known as a ‘full repairing and insuring lease’. Where the tenant is one of several in a multi-occupied building, then the landlord may be responsible for the repair of the exterior. This is known as an ‘internal repairing lease’. The landlord may then levy a service charge to cover a percentage of their costs for the common parts and external areas. When this occurs, the charge is divided up between the various tenants. Landlords and tenants may agree to an internal repairing lease even if the tenant occupies the whole. Much depends upon the negotiating position of the parties. Definitions In order to avoid repetition, it is usual for the definitions of various phrases and words used in the lease to be set out close to the beginning of the document. Interpretation In the duration of a lease, the landlord may change, and it is important to set out expressions relating to the current landlord and tenant that will apply to their successors. The lease may also refer to gender, or singular or plural. For the avoidance of doubt, a lease will normally state that words importing one gender include all genders and words importing the singular include the plural. In addition, where the term ‘development’ is used, it must be given the correct interpretation. Normally this would mean development under the Town and Country Planning Act. Demise The phrase ‘The landlord demises to the tenant the premises together with any rights specified’ in plain English means that the landlord grants the exclusive right of occupation of the property to the tenant – or, more properly, the landlord grants the right to exclusive possession of the property for a term of less than that held by the landlord. ‘Demise’ is commonly used by FMs to mean the area covered by the lease. Yielding and paying This term relates to the payment of rent and such sums of insurance that may be required as well as the intervals at which they are paid (normally quarterly in advance).

8.10  Tenant’s covenants A covenant is a written obligation made between the landlord and tenant by a party and effected by the signed lease. The lease covenant sets out what obligations are to be met by both the landlord and the tenant. In most leases there will be many more covenants for the tenant compared with the number for the landlord.

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Covenants can be: ❑❑ Absolute, i.e. a complete undertaking not to do something. ❑❑ Qualified, i.e. an undertaking not to do something without the landlord’s consent. ❑❑ Fully qualified, i.e. an undertaking not to do something without the landlord’s consent.

Such consent cannot be unreasonably withheld.

Examples of covenants include: (i) To pay rent, rates, taxes and other outgoings – This phrase would cover rent, insurance costs, business rates and other charges levied on the business. (ii) To repair – The extent to which the tenant will be liable for repair is set out in the lease. The wording can be very important. Contrast the impact on expenditure by a tenant between the following wordings, which are commonly found in lease documents: ⚬ ‘To put and keep and well and substantially repair and keep the premises in a good and tenant like condition throughout the term.’ or ⚬ ‘To keep all parts of the interior including plate glass windows in repair.’ It is clear that the first example is the more onerous repairing obligation. The repairing obligations agreed will have cost implications for both the landlord and the tenant. (iii) To clean the premises – A relatively minor covenant. (iv) To redecorate internally and externally – The tenant will be obliged to redecorate at set intervals throughout the lease. These are normally every 3–5 years, but this depends upon the type of premises. The quality of the building and its finishes will have a cost implication for the tenant. (v) Not to make alterations without the landlord’s consent – Alterations are normally physical changes to a building or structure, which may or may not involve improvements. Landlords normally consent to alterations or improvements which add to the value of their property. The question of whether these affect rent is considered below. (vi) To comply with statutory obligations, i.e. to undertake works to ensure that the premises comply with statutory requirements  –  This could include the Town and Country Planning Act 1990, Building Regulations or the Equality Act 2010, for example. Government legislation controls all business uses to a greater or lesser degree. Some uses, such as restaurants and hotels, have wider concerns over food safety legislation. The tenant agrees to ensure the building is compliant with this legislation if it is appropriate to the property they occupy. (vii) Access by landlord  –  Landlords or their agents will have the right with reasonable notice to enter the premises to view the state of repair and to ensure that covenants have been complied with. (viii) Alienation/assignment – Alienation is the legal name for the transfer of an interest in property to another. The assignment (transfer) of the leasehold interest to another is a complex aspect of the lease. Legal advice should be sought. See Section 8.16. Most leases do not permit assignment of part of the premises. Assignment of the whole is usually granted with the landlord’s consent. Consent is required in order that the landlord can control the quality of the tenants. The landlord can refuse to grant a licence to assign but there must be reasonable grounds for so doing – for example, a poor business reference from a prospective assignee. The legal position at assignment has been changed for leases that have commenced since 1996, as a result of the Landlord and Tenant (Covenants) Act 1995. This new law

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was introduced as a response to growing concerns over the number of former tenants that were being pursued by landlords for breaches of contract by their successors. They were able to take action against former tenants under the principle of privity of contract, which makes the first tenants responsible for the actions of their successors. Therefore, if a company assigns its lease to another company and the assignee fails to pay rent or goes bankrupt, then the landlord, if unsuccessful in suing the assignee, can look to the original assignor for damages. This is seen as unfair and as a result of the above Act, a tenant’s liability now ceases on assignment. In return, landlords can now be more robust in dealing with applications for assignment and have wider grounds for refusal. The Act does provide for tenants to provide guarantees known as Authorised Guarantee Agreements (AGAs), which effectively ensure that the outgoing assignor retains liability for the duration of the first assignment. The imposition of an AGA is quite common in leases and is effectively a compromise between the complete cessation of liability and the position prior to the new law. (ix) To pay landlords’ costs in relation to an application for a licence or consent in respect of the lease or in the preparation of any notice or proceedings against the tenant  –  This is largely self-explanatory; however, proceedings are often brought against tenants. The circumstances in which these could be brought are as follows: ⚬ serving a notice in respect of the commencement of forfeiture proceedings; ⚬ a licence to assign or vary a clause in a lease. (x) Forfeiture – If a tenant breaches covenants in a lease and fails to remedy the breach then the landlord may apply to the court to forfeit the lease. This action ends the lease, although the case law surrounding forfeiture is complicated and there are various other issues to consider. The landlord, if successful in these proceedings, can re-enter the property and claim damages for any breach. Damages are particularly relevant if the tenant has failed to carry out repairs and the property has deteriorated. But the landlord must have a covenant in the lease allowing re-entry into the property in such circumstances. In most instances, the tenant can remedy any breach by paying rent arrears or repairing the building. The law tends to give the tenant the opportunity to remedy the breach. (xi) Tenant breaches – Where a landlord brings a claim for breach of covenant to repair, the Leasehold Property (Repairs) Act 1938 provides relief against enforcement of the covenant to repair in most leases where there is more than 3 years unexpired. The courts will only permit enforcement if the landlord can prove one of the following: ⚬ Immediate remedy is necessary to prevent substantial diminution of the reversion; this means that if the landlord does not obtain possession, the value of the buildings will reduce. ⚬ Immediate remedy is necessary because the tenant has ignored statutory legislation, such as on food safety or lift safety. ⚬ Where the lessee does not occupy the whole property, immediate remedy is required in the interests of another occupier, who may be suffering as a result of this tenant’s breach of the repair covenant. ⚬ The breach can be remedied at small cost now but, if deferred, the costs could increase. This argument is used if the building was deteriorating due to the tenant’s neglect.

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(xi) Not to commit waste – ‘Waste’ is a legal term for an unlawful act in relation to the property. It usually involves deterioration but it can be an unlawful improvement known as ‘ameliorating waste’. The term ‘voluntary waste’ implies a deliberate act of a tenant in damaging the property.

8.11  Landlord’s covenants Examples include the following: (i) To allow quiet enjoyment – This means that the tenant will be given possession of the premises and an entitlement to receive damages if there is substantial interference by acts of the lessor or persons claiming by the lessor. (ii) To insure the premises. (iii) To maintain estate roads. (iv) To repair the whole or part of the premises.

8.12 Schedules A schedule is a list or plan of intended events in the lease. It will include such things as future rent reviews or any rights that the landlord may wish to reserve in terms of re-entry in the case of an emergency. Landlord’s rights reserved This gives the landlord the right to enter the premises in case of emergency to undertake works of repair, or to inspect, or to take schedules of fixtures and fittings to be yielded up at the end of the lease. This could be where sudden or unforeseen damage to the property has occurred. The rent review clause The commercial purpose of the rent review clause is to keep the rent in line with property values. This is perhaps the most difficult part of landlord and tenant relations. Rent reviews on modern leases normally occur at 3-, 5- or 7-yearly intervals. Rent review clauses contain assumptions, which can be different from the actual circumstances of the lease. This can be confusing initially, but these clauses commonly found in modern leases and allow for consistency in approach to lease drafting. Examples of such clauses can include: ‘That the property is: (i) let in the open market and assumed to be vacant; (ii) on a particular date; (iii) on a lease of a certain duration, and this may be actually longer than the number of years left on the lease; (iv) ignoring any increase in rent by virtue of that particular tenants occupation; (v) and that the building is in good repair.’

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Thus a rent review clause can assume: ❑❑ That at rent review a property is vacant (which it is not). ❑❑ That it has been repaired to a certain standard (which it may or may not have been). ❑❑ That the lease is for the same term as at the beginning of the lease (whereas it may have

5 or more years remaining).

Disregarded matters at rent review The Landlord and Tenant Act 1954 sets out statutory disregards for ascertaining the rent at lease renewal. These are set out in Section 34 of the Act. These are now incorporated into modern rent review clauses. These disregards include: ❑❑ Tenant’s goodwill. ❑❑ Tenant’s occupancy. ❑❑ Tenant’s improvements carried out with landlord’s consents.

The disregards tend to favour the tenant to some extent by protecting their investment in the property if they have improved it. Similarly, if the tenant is successful, they are not penalised at rent review if they have a successful business. This latter situation is covered by the disregard of the value of the tenant’s goodwill and also the tenant’s occupation. Repairs and improvements It is important that the difference between repairs and improvements is understood. Repairs are undertaken to maintain the condition of the building as a covenant in the lease. Improvements will add to the building in terms of extra floor space or additional amenities and may add to the rental value of the premises. Improvements carried out by the tenant as a condition of the lease are normally subject to rent, but discounts on initial rent at the commencement of the lease may be given. Thus the landlord is granting a concession to the tenant for improving the property. The landlord will benefit from an increase in value of the property as a result of these improvements and a subsidised rent for a period of time will be some form of compensation to the tenant for their expenditure. If a tenant improves the property without the landlord’s consent, then they must expect these works to be taken into consideration at rent review. If the tenant improves the property with the landlord’s consent then these improvements are excluded at review. Thus sometimes a valuer will calculate the rent of a building but exclude part, if it is an authorised tenant’s improvement (i.e. somewhat counterintuitively, works done by the tenant that have been authorised by the landlord can be excluded, whereas those that are not authorised have to be included). This is not a straightforward task! The proper procedure is for the tenant to obtain the landlord’s written consent to undertake works to improve the holding, prior to commencing the works. Plans and costs may be submitted to support the request and work should only be commenced by the tenant when formal written consent is obtained. The consent may be in the form of a ‘Licence to Alter’. Remember, if a tenant improves a property without obtaining consent then the improvement will be included at rent review. Major extensions or the installation of costly plant or fixtures may add value to the building and contribute significantly to the rental value.

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8.13  Trigger notices Starting rent review negotiations There is a different procedure for rent review clauses than for lease renewals. Rent reviews may incorporate a trigger notice under an express covenant. A trigger notice initiates the start of rent review negotiations. It is often in the form of a letter stating the details of the property and the amount of rent claimed. There has been considerable litigation over rent review trigger notices. In order to avoid uncertainty and costly litigation, notices should be in writing and sent by recorded delivery. The term ‘without prejudice’ is used in correspondence when negotiations have commenced to protect the position of negotiating parties who do not wish their correspondence to be used in court. If this term is used on a rent review notice, it may be misconstrued as a negotiating position and not a notice. This is important; a demand for a rent revision should be in open correspondence and entirely unambiguous.

8.14  Time limits In commercial leases, certain events that are to occur are dictated by strict timescales. Failure to comply with these timescales can result in one of the following: ❑❑ Landlords could lose the opportunity to review the rent, if they fail to serve a notice on

time.

❑❑ Tenants could be obliged to accept an excessive rent increase if they fail to respond to a

notice within a proscribed timescale.

Thus, where strict adherence timescales are found in a lease, time is of the essence. Some leases will establish clear timescales for the serving of notices for revised rents and for the serving of a tenant’s counter-notice. It is good practice to always check, record and diarise the dates of reviews and dates for serving counter-notices. A missed notice can be expensive. Clauses regarding the timing of notices, particularly in old leases, may not be immediately obvious. It is good estate management practice to record all terms of a lease in a précis form in a card index system or by utilising database software. ‘Time of the essence’ is an important phrase in property management. It can interact with other aspects of the lease and the rent review. There may be deadlines set for the appointment of an arbitrator, which if missed may prejudice the right to make an application to the Royal Institution of Chartered Surveyors (RICS) to appoint an arbitrator to resolve a dispute. The type of phrase to look for is, for example: ‘Either party may make reference to a third party (arbitrator or independent expert) within 3 months, but not otherwise.’ Such a wording makes time of the essence and a late notice would be out of time. In many instances, particularly with modern leases, the rent review clause will provide for the rent to be settled at any time, but not normally 6 months before the review date. This is clearly not a problem if a date is missed and in a poor letting market rents are simply not reviewed and the date of review passes without action. Modern drafting has therefore led to less

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litigation. However, there are many old leases still in operation with arcane and sometimes bizarre wording which can catch out the unwary FM or estate manager.

8.15 User A user clause that restricts the use of the premises can affect rental value. In some leases, landlords choose to restrict the permitted use of a property. As an example, a user clause that restricted the use of a property to ‘an architect’s office only’ could arguably be seen to have a downward impact on rental value. Only a limited number of architect tenants would be interested in renting the property. Contrast this with a user clause that permitted the use of the property for offices in general. The latter would be likely to have a far wider appeal to a greater range of office occupiers in general and as a consequence would have a higher rental value. See Section 9.5 regarding the Town and Country Planning (Use Classes) Order 2005, which states clear uses of types of property. Normally a clause will not seek to restrict the use of a property too significantly because the tenant can justifiably argue that the range of prospective occupiers will be limited and this will affect rental growth. Good drafting of user clauses is good estate management practice. The estate manager should keep the user clause separate from the rent review clause. The rent review should concentrate on the open market rent and the wording should disregard the user clause. This is particularly appropriate in modern shopping centres, where the tenant mix is crucial to the overall performance of the centre but rent review uplift on individual units would otherwise be poor if lease rents were restricted to specific trades only.

8.16  Alienation or assignment Alienation, as far as commercial leases are concerned, is the term used to cover the right of the tenant to assign (transfer) their interest to another company or individual. Most commercial leases place a complete bar on the assignment of part of the premises but not the whole of the premises. Consent can be withheld but not unreasonably. A complete bar on alienation will have a downward impact on rent at rent review. Most firms would not even consider taking a lease which barred assignment, because they could not transfer their lease. They would have to wait for their lease to end before their liability ceased. Such an arrangement is too inflexible and not commercially viable. Banks will be reluctant to use a lease as security against a loan if alienation is restricted.

8.17 Arbitration In many instances, if the landlord and tenant cannot settle a rent review by negotiation then the lease will provide for the appointment of an arbitrator or an independent expert to settle the matter. Arbitration is a legal process under the Arbitration Act 1996. The arbitrator will reach a decision based on evidence presented to them by both the parties to the dispute. They are normally only allowed to consider evidence placed before them. This is important because the arbitrator cannot use their own knowledge of the type of property in making their decision. The award will normally be called a ‘reasoned award’ and will state why the arbitrator reached these conclusions.

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The arbitrator’s decision is final as if it were a decision by a court. There are limited grounds for setting aside an arbitrator’s award, normally only on grounds of misconduct. As an alternative, the lease may provide for the appointment of an independent expert to settle the review. The expert generally has to use their own expertise and knowledge in arriving at their decision. They can be sued for negligence and misconduct by either of the parties. This dispute procedure is generally quicker and cheaper than arbitration. Arbitrators and experts are either appointed by agreement between the parties or in the absence of agreement by RICS.

8.18  Additional covenants Certain additional tenant’s covenants may be placed in a schedule. Examples could be: ❑❑ To use the premises for the permitted user only. ❑❑ Not to bring objects or plant and machinery into the buildings that may place strain on

the floors.

If the tenant is to undertake works at the commencement of the lease, these should be set out in a schedule. This schedule will be specific to those works being undertaken and set out the obligations of the respective parties in undertaking these works and also the nature and extent of them. Any rent ‘holiday’ over and above an initial rent-free period will normally be set out in the schedule that relates to rent review and payment of rent.

8.19  Lease renewals The Landlord and Tenant Act 1954 (Part II) and subsequent amendments give security of tenure to tenants and control the procedure of lease renewal and termination for commercial property. There are exceptions: ❑❑ Serviced offices which offer an all-inclusive package of rent, rates and some services are

almost always outside the 1954 Act. These arrangements tend to be licences  –  see Section 8.1. ❑❑ Some leases are contracted out of the 1954 Act. Both the landlord and the tenant agree to exclude the renewal and compensation provisions of the 1954 Act. This is normally the case where short-term leases are agreed and where renewal rights are not appropriate or where development will take place in the near future and compensation to the tenant is to be avoided. Contracting out can only take place with the agreement of the court. The 1954 Act and subsequent amendments are important pieces of legislation and establish a statutory framework for ending and renewing leases. There are many sections to this Act and each deals with a certain part of the process of lease renewal.

8.20  Security of tenure The Landlord and Tenant Act applies to business premises that are widely defined. It includes commercial enterprises and also voluntary societies, clubs, doctors’ surgeries and institutions. The Act excludes tenancies of agricultural holdings, mining leases, service

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t­ enancies and tenancies on a fixed term of 6 months or less, in most instances. The initiation of the process for renewing or ending a lease is governed by certain sections of the Act, which are described in Section 8.21 of this chapter. Where this machinery is not implemented – that is, no action is taken by either party – then a lease will continue until the process of termination/renewal is implemented. The way an organisation reacts to the process will depend upon the circumstances – are they a landlord or are they a tenant? For example, if the property let is required for development, the landlord will wish to commence the termination procedure as soon as possible. In a rising market and where a new lease is acceptable, the landlord will also seek to obtain the notice served to commence discussions for a new lease, in order to benefit from the higher rent. Conversely, if the market is falling then there is less incentive for the landlord to start negotiations as this may result in a lower rent than under the old lease. A tenant who wants a new lease, especially when the market rents are less, can start the process by serving a notice on the landlord requesting a new lease, or the tenant may serve a notice stating that they do not want a new lease.

8.21  The machinery for termination – Sections 24–28 Sections 24–28 of the Landlord and Tenant Act 1954 set out the way in which leases are terminated by either party. The notices are legal documents, and therefore legal advice should be sought when serving or receiving one of these notices. These sections are listed below: ❑❑ Section 24 provides that no tenancy of more than 6 months to which the Act applies ❑❑ ❑❑ ❑❑ ❑❑

can be terminated unless in accordance with the Act. Section 25 – Landlord’s notice to terminate. Section 26 – Tenant’s request for a new tenancy. Section 27 – Tenant’s notice to terminate. Section 28 – Renewal of tenancies by agreement.

8.22  Landlord’s basis for opposing a new tenancy – Section 30 The 1954 Act provides limited bases that a landlord can use in order to prevent a tenant from obtaining a new tenancy. These are stated under Section 30 as follows: (a) Breach of repairing obligations. The landlord must be able to show that this breach is of a serious nature. The courts may accept an undertaking by the tenant to remedy the breach. (b) Persistent delay in paying rent. (c) Other serious breach of covenant. Discretion is given to courts to interpret what constitutes a serious breach. (d) The landlord is willing and able to provide a suitable alternative accommodation on reasonable terms including protection of goodwill. (e) Possession is required of a sub-tenancy in order to let the premises as a whole. This ground is only relevant when the interest of the tenant’s immediate landlord is shortly to end. (f) The landlord intends to demolish, reconstruct or carry out substantial works of construction and these could not be undertaken without gaining possession.

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(g) The landlord intends to occupy the premises either for business or residential purposes but the landlord must have held the superior interest for at least 5 years. There must be proof of the requirement to occupy the premises, e.g. evidence of financial planning, acquisition of specialist trading expertise or the raising of finance. If the landlord is successful in refusing a new lease on the conditions of (d) to (g), then compensation to the tenant will be expected from the landlord. If the landlord is successful in opposing a new tenancy, Section  31 provides that the court will not grant a new tenancy.

8.23  The new tenancy Where the parties to the new lease cannot agree to the terms, the courts can make an order for a new tenancy in the absence of agreement. The terms of the new lease are normally similar to those in the old and the Section 34 disregards apply to the setting of the rent. There must be good conditions for varying the terms of a new lease. These terms are usually controlled by Sections 32–35 of the 1954 Act. The new lease will normally be: ❑❑ For the same property. ❑❑ For a lease of similar length. ❑❑ At the open market rent excluding: ○○ ○○ ○○

○○

Any effect on rent of the tenant’s occupation. Any goodwill attaching to the property. The effect on rent of the tenant’s improvements provided that these were carried out with the permission of the landlord and within the last 21 years or during the current tenancy regardless of its duration. Any other terms that may be agreed between the parties or determined by the courts.

8.24  Section 32 Rule There are limits to the ability of either the landlord or tenant to achieve a variation in the terms of a new lease without agreement between the parties. Section 32 sets out four tests: (i) There must be valid reasons for the change on estate management issues. (ii) The change must be compensatable by a change in rent. (iii) The tenant’s security of tenure must not be adversely affected. (iv) The change must be fair and reasonable in the view of the court. Exceptions to the Section 32 Rule If the tenant occupies only part of the original demise, the landlord could force the tenant to take a lease on the whole property or demise, or permit the tenant to renew in relation to that part of the property which the tenant occupies only. In most instances, the courts will try to establish a reasonable position between the parties and look closely at the tenant’s intention for their business as well as the length of time they were previously in occupation.

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Following an award for a new tenancy, the tenant may decide not to take on the lease by repudiating the proposed lease within 14 days. This would occur typically where the tenant cannot afford the new rent. The lease will then terminate at the next quarter day.

8.25  Market forces and lease renewal In poor rental markets, tenants have challenged the upward-only rent review terms of older leases and there have been cases where at renewal both upward and downward provisions in rent reviews have been established by the courts. Compensation for termination of the lease This is available to the tenant only under grounds (e), (f) and (g) (see section 8.22). The amount of compensation for termination is based on a multiplier of rateable value and depends upon the date of termination in relation to the current rating system at the time. Compensation on quitting The basis for compensation for quitting, where improvements have been undertaken, is set out under Section 1 and Section 2 of the Landlord and Tenant Act 1927. If the landlord is successful in obtaining possession on one of the above grounds as set out above under Section 30 of the 1954 Act, then the court will not grant a new lease under Section 31. The compensation for quitting a lease is payable only under grounds (v), (vi) and (vii). The amount of compensation is dependent upon the time the tenant has been in occupation and is based on a multiplier of rateable value. Currently, if the tenant has been in occupation for up to 7 years then it is calculated as 1 × the rateable value. If they have been in occupation for more than 7 years then it is based on 2 × the rateable value. Where the tenant has been in occupation for less than 5 years, compensation can be excluded under Section 37 of the Act. It should be noted that the amount of compensation can be changed by legislation, normally concurrent with any rating revaluation. Improvements qualify for compensation if they were undertaken with the landlord’s consent and if the improvement undertaken by the tenant has added value to the property. However, the effect of improvements depends upon the landlord’s intentions following occupation at the end of the lease. If these include demolition, refurbishment or structural alterations, or change of use, or the improvements do not add value, then these changes will be reflected to the detriment of the tenant.

8.26 Repairs Section  4 of the Landlord and Tenant Act states that landlords who are responsible for repairs to premises are liable for personal injury and damage to property due to a defect in repair. This liability could extend to passers-by as well as occupants and visitors. Examples of defects that could cause accidents to passers-by would be falling masonry or roof tiling occasioned by poor workmanship. Occupants could be put at risk by poorly installed gas boilers or by defective electrical wiring, as well as a host of general structural problems. The landlord is liable if they know or ought to have known of the defect. The Act goes further in imputing knowledge to the landlord where they are given an express or implied right to enter premises and carry out repairs.

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The landlord will not be liable in respect of any defect in the state of the premises arising because the tenant had failed to carry out a repairing obligation imposed on them. This latter point could become quite contentious. Consider a situation where a tenant has an obligation to repair the interior of the property and the landlord the exterior. A defect arising out of the tenant’s liability if left unremedied could result in a spread of damage that could then cause damage to the external fabric, and become partly the landlord’s liability, if a claim arose.

8.27 Wayleaves A wayleave is a contract between an owner or occupier of land (the grantor) and a third party (the grantee) permitting the grantee to access privately owned land to carry out works in return for some form of compensation. A landowner grants a right of way in the wayleave, generally in exchange for payment and typically for purposes such as the erection of telecommunication cables or laying of utility services. Wayleaves enable infrastructure companies to install, maintain and repair equipment. They may be described as ‘voluntary’ or ‘necessary’. In return for granting the right to use this land, the energy company will usually pay a fee, similarly to a tenant paying rent to a landlord. FMs need to understand the importance of these agreements, check whether there are any in place when a new property is acquired, and understand how to deal with a request from a neighbour and/or utility provider. In particular, it is important to check the status of the agreement as ‘necessary wayleaves’ cannot be removed under any authority. Wayleave agreements are particularly important because they continue to apply to ‘successors in title’, which means all who purchase and own the property since the agreement was taken out. So if an organisation purchases a property with a wayleave agreement in place, the FM will need to continue permitting the utility company the right to use the land. Payments are generally annual or a single lump-sum payment. A wayleave payment may consist of two parts: the owner’s payment and the occupier’s payment. It may include a contribution to the landowner’s or occupier’s legal costs. The grantee should commit to minimising any damage to the property and to make good or pay compensation damage that is caused by their works. Some wayleaves are protected by statutory code powers. Utility companies have the right under the Electricity Act 1989 to make a wayleave agreement ‘necessary and permanent’, which means that despite the termination clause in the agreement, it becomes a fixed part of the property deeds.

8.28 Easement An easement is a right to cross or otherwise use someone else’s land for a specified purpose such as access or maintenance. Easements can also prohibit the owner of the land from using their land in certain ways which could interfere with the rights of neighbours – for example, by building tall structures which would reduce light in adjoining properties. There are three types of easement: express grant, implied grant and prescriptive. FMs are advised to check property details when purchasing property and land, and to seek expert legal advice when disputes with neighbours arise over easements and rights of way. Easements are executed as deeds, are registered with the Land Registry and are permanently attached to the land in return for a one-off payment. This gives better security to the grantee, who may be prepared to pay more than for an easement. An easement may affect the long-term value of the land if the landowner chooses to sell or lease the land.

9

Developing New Buildings

9.1  The development process Property development is a high-risk, complex activity that is directly influenced by global, national and local economics. It involves changing or intensifying the use of land. It also involves tying up large sums of money in a lengthy production process. The development process can be considered in three main stages and a number of sub-stages. Stage 1 – Feasibility A site is considered appropriate for development or redevelopment, or a suitable site is sought. Reasons may be: demand for the development or in anticipation of enhanced value of the site due to changing economic, social, technical or other circumstances. Market research will take place at this stage and the potential for obtaining any necessary planning consent will be investigated. Evaluation The results of the feasibility study will guide development decision making throughout the process. The evaluation includes the financial appraisal of the development proposal, which must establish the value of the site and ensure that development costs are reasonable. In the private sector, it indicates the anticipated level of profit. In the public sector and non-profit organisations, it sets out to ascertain whether costs can be recovered. The developers’ professional team should be involved at this stage. Acquisition Given a decision to proceed, two key activities will be legal investigation and ground investigation. Legal investigation If the developer does not already own the site, it will be essential for the investigation to establish existing planning permissions and other consents (e.g. concerning the alteration or demolition of a listed building), light, ownership and any rights of way across the site. Government departments may become involved if, for example, compulsory purchase is a feature of the project. Failure to conduct a meticulous and detailed legal investigation can endanger the viability of the proposed development.

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Ground investigation This will include investigations into: Access. Assessing the load-bearing capacity of the land or existing building(s). Drainage. Establishing the ability of existing services (electricity, gas, water, sewage and telephones) to meet the requirements of the completed development. In the event of nonavailability of essential services, assessing the cost of their provision. ❑❑ The actual site measurements, via a site survey. ❑❑ Archaeological artefacts (e.g. Roman remains), geological faults, site contamination, underground services and storage tanks. ❑❑ Environmental and ecological issues. ❑❑ ❑❑ ❑❑ ❑❑

Stage 2 – Pre-production Design and costing Design and costing is a continuous process that extends from the initiation stage and continues during construction. In some circumstances the team involved will produce the design likely to be required because they are working with the eventual occupier. Examples include a building pre-let to an industrial or commercial concern, or a private finance initiative (PFI) project to construct a hospital or military installation. The key to success is the design brief document because it gives the architect the various parameters within which to work. Initial cost estimate In the early stages of the development process, before the developer is committed, design work will only be sufficient to enable a quantity surveyor to produce an initial cost estimate. It is this cost estimate that is used in the preparation of an initial financial evaluation. Initial design phase The early design will include: ❑❑ ❑❑ ❑❑ ❑❑

Scaled drawings (the site plan) showing the position of the building on the site. Drawings of the main elevations. Floor plans showing only the internal arrangement of the building(s). An outline specification of the building materials and finishes.

Detailed design information Later in the process, more detailed plans and specifications will progressively be required. These will enable: ❑❑ ❑❑ ❑❑ ❑❑

The creation of a detailed estimate of building costs by the quantity surveyor. The submission of requests for planning permission. Improvement in the quality of the financial appraisal. Preparation of specifications and plans, which will be required in the construction tendering process and for the building contract.

Once committed, the developer must ensure that significant and potentially costly changes to the design are avoided. Incremental design activities do, inevitably, take place during the production phase.

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Permissions Planning consent will be required for anything but minor schemes and it is prudent, even for a small refurbishment scheme that entails alterations, to establish whether it is necessary. Professional advice is essential for obtaining planning consent. Obtaining permissions can be a complex, lengthy and expensive process for which adequate provision must be made in the financial evaluation. Outline planning consent To obtain outline planning consent, the developer submits only sufficient information about the purpose to which the site will be put and the proposed density of the scheme. Outline planning consent cannot be obtained for a change of use, for example from an office block to housing or from a house to an office. Outline planning consent is only valid for a fixed period of time, usually 5 years. If the development has not occurred in this time, then it may be renewed after submission of the appropriate application. Outline planning consent does not give the developer the authority to proceed, only an agreement ‘in principle’ to the proposed scheme. Detailed planning consent is required to actually proceed with the development. Detailed planning consent Obtaining detailed planning consent entails submission to the planning authority of detailed drawings and information about: ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑

Siting. Access. Design. External appearance. Landscaping. Environmental impact. Biodiversity.

If the development proposal changes after detailed planning consent is given, it will be necessary to obtain further consent. If the local planning authority (LPA) refuses planning consent, the developer has the right to appeal. Legal consents These include requirements for: ❑❑ ❑❑ ❑❑ ❑❑

Listed building consent (permission to alter or demolish a listed building). Permission to divert or close a right of way. Agreements to secure the provision of the necessary infrastructure and services. Building Regulations approval.

Planning agreements Also known as planning ‘gains’, these are contracts negotiated as part of a planning approval and deal with matters that are not part of the planning consent (e.g. the provision and maintenance of public facilities). These agreements must be signed before planning consent is given. Inevitably they will involve additional cost, which must be included in the financial evaluation. Section 106 Agreements are common in many development projects. They may relate to funds to support the local community (education, transport, etc.) or funding of improvements or changes to roadways, infrastructure or environmental projects – the key is that the gain is linked to a benefit to the local community.

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Commitment To minimise cost and risk, it is essential that before a developer becomes liable for any outlay of money on anything other than preliminary work, the developer must be certain that all preliminary work has been satisfactorily completed. Completing the preliminary work can itself be a lengthy process and while it has been going on, things might have changed, particularly if the economy is in a volatile state. At worst the scheme may no longer be viable. It is therefore critical that before a scheme is committed to, the evaluation is up to date and soundly based. Up to the time before commitment, the most likely costs are professional fees, general expenses, investigation costs and staff-related costs. In certain circumstances, professional teams may work during the preliminary stages of the scheme on a speculative basis or for a reduced fee. This is on the basis that they will be appointed for the development once the developer commits to it. In the case of major PFI projects, consortia bidding for the work can expend six- and seven-figure sums each in order to become the preferred bidder and only one out of perhaps three or four will get to that stage. Conditional contracts are sometimes a feature of a development project. As an example, the developer may be in possession of land for which planning consent has not been given. Contracts may then be made subject to the developer obtaining planning approval. Stage 3 – Production Construction, commissioning and fitting out take place during this phase, the objective of which must be completion on time and within budget, without detriment to quality. This phase will take upwards of 2 years and in that time things will change. The project must be promoted and, where appropriate, marketed. Change must be minimised but at the same time the finished construction must be fit for purpose, which may involve changes to the specification along the way. Major development projects may of course take longer than the average 2 years. Occupation considerations The developer may have had the ultimate occupation of the building in mind from the start either as a pre-let or pre-sold arrangement or for the owner-occupier. The other possibilities are letting and disposal. In these situations, the developer will need to: ❑❑ Secure a willing occupier at an acceptable rent or price within the period forecast in the

evaluation. In the case of some developments there may be many occupiers (e.g. a retail shopping mall) or in some office developments there may only be one. ❑❑ Appoint an agent or staff member responsible for letting or disposal in the development process from the start. ❑❑ Decide whether to try to let or dispose of the building before or after completion. The financiers of the development can greatly influence this decision.

9.2  Planning legislation The system of planning and development control emerged from the rebuilding programmes following the Second World War, public concern over ribbon development in rural areas and urban slum clearance. The current system dates from laws made in the period 1944–1947. The Town and Country Planning Act came into force on 1 July 1948. The Act was consolidated by the Town and Country Planning Act 1990, although some of the pre-1990

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legislation is still operative. The procedure for obtaining planning permission and the rights of appeal against a refusal are set out together with the role of the Secretary of State. Most forms of development require planning permission. Important buildings and sensitive areas are protected. There are constraints on development of listed buildings and in conservation areas. The planning legislation in the UK is a complex system of statutes, statutory instruments and circulars, administered by local authorities (LAs) or local planning authorities (LPAs), although in some urban areas the functions of the LA have been transferred to other institutions, such as urban development corporations. The Homes and Communities Agency is a government agency set up in 2018 to ensure sustainable development via regeneration projects. The Ministry of Housing, Communities and Local Government has responsibility for planning, building and environmental issues in the UK. Planning legislation is made by central government and implemented at local level, with ministerial supervision. The High Court can intervene in certain circumstances. LAs are obliged to draw up development plans. They show how and where development will occur in the future. They also indicate areas allocated for certain forms of development and others for conservation. Guidance on standards for parking, the density of development and landscaping are examples of issues that are set out in the unitary development plan (UDP). Administering the system The abolition of the Greater London Council and the metropolitan district councils in 1985 led to the creation of a single-tier planning system in most parts of the country, operated by London boroughs or metropolitan councils and the recently formed unitary authorities. Outside these areas in the rural ‘shire counties’, a two-tier system of planning remains in force with both district councils and county councils having planning functions. County councils have a limited planning role where matters of strategic importance are to be considered, which would include mineral-related developments, e.g. mining or the use of land for waste infill. District councils fulfil the majority of planning functions. Local government is controlled by a series of statutory directions, obligations, procedures and consultations. The Secretary of State exercises ministerial control and the ways in which this office may influence planning matters are considered later. In certain instances the courts will intervene. The UK government published the National Planning Policy Framework in 2012. This is part of wider reforms to make the planning system less complex and more accessible, to protect the environment and to promote sustainable growth. The Localism Act 2011 also introduced some changes in planning legislation. The UK government is currently reviewing planning and building regulations to simplify the numerous rules and standards.

9.3  The Town and Country Planning Act 1990 The Town and Country Planning Act 1990 confers powers on county, district, metropolitan, borough and London borough councils. This Act is divided into many sections. There are over 100 sections and some examples of these are shown below: ❑❑ Section 12 requires the preparation of a UDP by each metropolitan district and each

London borough council.

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❑❑ Section 36 requires preparation of district-wide local plans by non-metropolitan dis-

trict councils.

❑❑ Section 57 specifies that planning permission is required for the carrying out of any

development on land.

❑❑ Section 77 specifies powers of the Secretary of State to ‘call in’ a planning application

and then make a decision.

❑❑ Section 97 specifies powers to revoke or modify a grant of planning permission. ❑❑ Section  106 permits LAs to enter into obligations with applicants for planning

permission.

9.4  Planning permission Planning permission is required to carry out any development on land. The term ‘development’ covers the carrying out of operations, such as an extension to a building or making a material change of use. Other examples of development include the construction of a car park or the erection of an advertising hoarding. Such activities normally require planning permission. Another example is a change of use from a small boarding house to a private dwelling. Not all operations require planning permission. This is discussed further below in the section ‘Delegated Legislation’. Making a planning application Planning applications for change of use are submitted to the LA. The application must be made in the correct manner. It may be made by the owner of land, i.e. the subject of the application. The application can be made by the owner’s agent or by a firm or an individual who is looking to obtain consent. The planning application form must include the address of the site, an Ordnance Survey map to scale showing boundaries, and in most cases scale floor plans of the development and details of access to the site. Applicants are also asked to state the present and previous uses of the site. There may be a presumption in the UDP or in a general development order (GDO) against turning certain uses into another. Additional information on such matters as tree felling, refuse collection provisions, drainage, vehicular access, access statements, environmental impact statements and parking may be requested depending upon the type of scheme applied for. The LA or LPA must have regard to the impact of the scheme on services infrastructure, the amenity of the area and public safety. Processing a planning application Following the results of any informal discussions between the applicant and the planning officer, the application will be submitted with the appropriate fee, plans and any supporting information. It is then acknowledged by the LPA. The accuracy of the form is then checked together with the practicality of the proposal. The proposal is then checked against the local plan and policy guidance. A site visit is made by the planning officer and copies of the application are sent to highways authorities, utility providers, parish councillors (if a rural proposal) and, if it is an area of conservation importance, civic societies or environmental organisations. A report sheet is completed following assembly of all the information including the results of consultations. The application forms and plans are then posted on the Planning Portal, for everyone to view.

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Determination of the application In the case of non-contentious applications, the planning committee has powers to delegate the decision-making process to a planning officer. An example of this would be a change of use from an office to a private dwelling, where the officer’s report indicates no adverse impact on the locality in terms of employment loss, visual amenity or traffic congestion. Similarly, where a building is currently in a non-conforming use, such as a motor car spray shop in a residential area, a more environmentally acceptable use may have been proposed. Many applications are approved on the recommendation of the planning officer. Where the application is contentious, the planning committee will discuss representations by pressure groups or neighbours. The committee may overturn the recommendation of the planning officer, grant permissions with conditions attached or refuse it. A formal decision notice is then sent to the applicant. Outline planning permission An application for outline planning permission is normally made to confirm the acceptability of a large-scale proposal and to spare initial expense on detailed plans and investigations that may prove to be abortive. Matters left for future agreement, such as the density of the built development or landscaping or parking, are known as ‘reserved matters’. Planning appeals An applicant may appeal to the Secretary of State if dissatisfied with a refusal or the imposition of an onerous condition. Information on how to appeal is set out in the decision notice. The appeal is sent directly to the Secretary of State with reasons. The appeal is dealt with by a planning inspector and normally by written representations. Significant weight is attached to Planning Policy Guidance Notes in arguing a case and by the inspector in arriving at a decision. In certain cases, a public enquiry or a hearing will be required. Either party may request to be heard, but this is a very expensive procedure and normally reserved for major schemes. The inspector can grant planning permission and can attach conditions. There is further recourse to the courts if a point of law is at issue. Delegated legislation Delegated legislation in the form of statutory instruments is important in planning legislation. These are regulations issued by the relevant minister under the powers of an Act and come into force by being ‘laid on the table’ in the House of Commons. The General Development Order 1988 enables LPAs to grant planning permission for most forms of small-scale development. This would include painting a house, small-scale extensions to factories or replacing window frames. The withdrawal of permitted development rights occurs in environmentally sensitive areas in both urban and rural settings. An example of this would be the use of similar materials in the replacement of a roof to those on existing surrounding buildings in order to preserve the character of the area. The Secretary of State can withdraw permitted development rights for a particular area. For example, withdrawal could be in connection with a permitted house extension size in an urban conservation area.

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9.5  The Town and Country Planning (Use Classes) Order 2005 The Town and Country Planning (Use Classes) Order 2005 controls the activities that take place in or on land as shown in Table 9.1. As an example, shops can also be suitable as restaurants or cafés. However, the characteristics of use in each case will be different, in terms of hours of opening and issues such as refuse collection and noise. The Use Classes Order places shops in class A1. Premises used for food and/or drinking have their own categories. Planning permission is needed to change a shop into a restaurant and such applications are frequently refused. By contrast, planning permission is not needed to change a restaurant back into a shop. Nor is it needed to change from one type of shop use to another. The Use Classes Order adds a degree of flexibility to certain business uses by allowing movement between certain classes without planning permission. Permitted changes do not apply where the change would involve intensification of use on land or buildings or where the change would involve dangerous or hazardous processes. The permitted changes are: ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑

A5 to A1, A2 or A3 A4 to A3, A2 or A1 A3 to A1 or A2 A2 to A1 B2 or B8 to B1 where the floor space does not exceed 235 m2 B1 to B8

Table 9.1  List of classes of use permitted A

Retailing

A1

Shops, e.g. clothes, grocer

A2

Financial services, e.g. bank, estate agent

A3

Restaurants and cafés

A4

Drinking establishments

A5

Hot food takeaways

B

Business

B1

Business use offices and light industry

B2

General industrial

B3 to B7

Special industrial, e.g. oil refining

B4

Warehouses

C

Residential

C1

Hotels and institutions

C2

Residential institutions, e.g. nursing homes, care homes, hospitals, boarding schools

C3

Private dwellings

D

Other uses

D1

Non-residential institutions

D2

Places of assembly and leisure, e.g. bingo halls

Sui generis

Particular uses, e.g. petrol filling stations, amusement arcades

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Changes in legislation have relaxed the permitted changes of use from class to class. Most significantly, it is now easier to change from B1 to C3 and many office buildings are being converted to residential use. Reference must be made to the Town and Country Planning (Use Classes) Order 1987 (as amended) and the Town and Country Planning (General Permitted Development) (England) Order 2015, as amended by the 2016 Amendment Order, the 2017 Amendment Order, the 2017 (No2) Amendment Order, the 2018 Amendment Order, and the Town and Country Planning (Permitted Development, Advertisement and Compensation Amendments) Regulations 2019.

9.6  Planning policy guidance notes Such documents explain the powers and duties of LPAs and the impact of new legislation and policy guidance on planning matters. LPAs must have regard to these when determining planning permissions and in many circumstances they will have a bearing on the success or failure of an appeal. Planning policy guidance notes of major importance are: ❑❑ ❑❑ ❑❑ ❑❑

PPG1 General Policies and Principles. PPG2 Green Belts. PPG4 Industrial Development in Small Firms. PPG13 Out-of-Town Shopping.

9.7  Development plans There are several levels of planning: ❑❑ The Town and Country Planning Act 1990 (Section 12) obliges LAs to draw up plans

in order that they may see how their areas will develop in the future.

❑❑ Structure plans are drawn up by shire councils and are broad-brush statements concen-

trating mainly on major settlements and roads.

❑❑ Local plans are drawn up at district level. They normally relate to a part of a town or an

area of countryside.

❑❑ UDPs are prepared by LAs and replace structure and local plans in metropolitan

areas.

Policies covered by plans include: ❑❑ Settlement patterns and areas for growth or specific control. ❑❑ Areas earmarked for industrial or commercial development. ❑❑ Guidance on the future need for housing, favoured locations for such development and

advice on unit size and supporting facilities.

❑❑ Areas for both rural and urban conservation. ❑❑ Social infrastructure.

9.8  Planning agreements Planning agreements are often a solution where otherwise the LPA would be unable to grant permission under Sections 106, 106A and 106B of the Planning and Compensation

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Act 1991 as amended from the Town and Country Planning Act 1990. A typical scenario would be where planning permission to develop a dwelling in the grounds of a hotel would limit the use of that dwelling to an employee of the hotel. It follows that if it were occupied privately, a breach of the planning agreement would have occurred. Such agreements are executed as deeds which: ❑❑ State that the obligation is a planning obligation. ❑❑ Identify the land and the person entering into the obligation. ❑❑ Identify the authority by whom the obligation is enforceable.

9.9  Breach of planning control If development occurs without planning permission or in breach of a condition or limitation attached to a planning permission, then a breach of Section  171A of the 1990 Act occurs. The LA may then take enforcement action by issue of an enforcement notice or breach of condition notice. Enforcement notice This notice will require the breach to be remedied by issue of a notice, which will state the nature of the breach and the steps necessary to remedy it. An appeal to the Secretary of State can be made. Breach of condition notice This is served where there has been non-compliance with a condition attached to a planning permission. There is no right of appeal to the Secretary of State. Planning contravention notice Such a notice is issued where the LA wishes to obtain information on the nature of operations being undertaken. Failure to comply is an offence. Certificate of lawfulness Unauthorised uses can become lawful when no enforcement action is taken once a limitation period has expired. In order to have a use certified as lawful through passage of time, the Planning and Compensation Act 1991 provides for a 10-year limitation rule after which enforcement action is banned. A certificate of lawfulness is applied for to confirm: ❑❑ That an existing use is lawful. ❑❑ That operations undertaken are lawful. ❑❑ Whether any other matter constituting a failure to comply with a condition or limita-

tion on a planning permission is lawful.

These certificates are often applied for where a property has been in a certain use for many years but with no record of grant of planning permission.

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9.10  Uses pre-1964 Development control came into existence in 1948. Pre-1948 uses are normally granted an exemption from the need for planning permission. Uses between 1948 and 1964 without planning permission were unlawful prior to the Planning and Compensation Act 1991, but at that time not necessarily subject to enforcement action.

9.11  Listed buildings A building of special architectural interest will be protected from demolition or unauthorised extensions, additions and in certain cases internal alterations. Special features that may be listed include: ❑❑ External features such as decorative facades, windows and doors. ❑❑ The spaces and internal layout – the plan of a building is one of its most important

characteristics. Interior plans should be respected and left unaltered as far as possible.

❑❑ Internal features of interest such as decorated plaster surfaces, panelling, floors, win-

dow shutters, doors and doorcases.

❑❑ Details such as mouldings, stucco-work, and wall and ceiling decorations can be just as

valuable in simple vernacular and functional buildings as in grander architecture, and can be a building’s most important features.

Listed buildings are not necessarily old. Certain factories and buildings from the 1930s as well as some even more contemporary buildings have been listed. Buildings are graded to show their relative architectural or historic interest: ❑❑ Grade I buildings are of exceptional interest. ❑❑ Grade II* are particularly important buildings of more than special interest. ❑❑ Grade II are of special interest, warranting every effort to preserve them.

The Planning (Listed Buildings and Conservation Areas) Act 1990 places the Secretary of State under a duty to compile and maintain a list of such buildings in order to protect them. Owners of listed buildings have obligations to repair and maintain their buildings to certain standards. This will normally have significant cost implications. If the building is allowed to fall into disrepair, then the LA will issue a Repairs Notice to the owner. It is a criminal offence to demolish or to carry out any works which would affect the character of a listed building. Fines of up to £20,000 or a prison sentence not exceeding 2 years were introduced under the Planning and Compensation Act 1991.

9.12  Conservation areas LPAs are under a duty to determine which parts of their area are of special architectural or historic interest. A conservation area could comprise a whole town or village, or just a street or square. It does not follow that all the buildings in a conservation area will be of historic or architectural interest, but as a group they will be worthy of attention. There are 9,300 areas designated as conservation areas in the UK. English Heritage, LAs and the Secretary of State share responsibility for ensuring compliance with the Act. Typically the Act ­controls

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demolition of buildings, preservation of trees and the nature of building works. LPAs have a duty to preserve the character of conservation areas. Restrictive development control, known as ‘conservation area consent’, will apply and will be needed for demolition and most building operations. Regulations regarding the display of shop signs and advertising hoardings will be more stringent in the interests of amenity.

9.13  Building design While FMs (facilities managers, or facilities management) rarely get the chance to be fully involved in a new building design, many wish they could. Many day-to-day management issues of buildings stem from the design stage, and there is an increased pressure for the future needs of maintenance and occupiers to be more closely considered by the design team. The increased use of PFI and public–private partnership (PPP) contract methods in large-scale infrastructure projects has helped to raise the profile of FM in design matters. Case studies show how ill-conceived building designs demonstrate a lack of forethought about post-occupancy maintenance. The studies indicate that building designs have significant implications for post-occupancy operating costs and safety. The ratio of design, construction and occupation costs (1:5:200) together with the government percentages of 0.5%, 3% and 85% (over a 20-year period) show that more effort must be put into the design and construction of a building to create a beneficial impact on the future life-cycle costs of occupation. The pre-occupancy or design phase is an appropriate time to: ❑❑ Ensure that early and adequate consideration is given to the influence of proposed

design features on post-occupancy maintenance.

❑❑ Integrate key maintenance staff into the commissioning process. ❑❑ Develop the maintenance systems, procedures and measures to be adopted. ❑❑ Develop a training programme to ensure the smooth operation of the systems and

procedures from handover stage.

❑❑ Set in place specialist service contracts. ❑❑ Establish how IT can help to manage maintenance and decide what IT systems can best

meet the requirements.

9.14  Building types and uses There is a wide range of building types, from temporary to permanent, from small to large. Different uses can be made of the many different types, with some being naturally more suitable than others for specific functions. Buildings can be categorised as simple naturally ventilated, open plan naturally ventilated, standard air conditioned or prestige air conditioned. In addition there are hybrids of the aforementioned, as well as special-purpose buildings such as hospitals, hotels, retail and warehousing. Buildings provide space for user activities. They provide shelter and protection for their contents, e.g. goods, animals or people. Heating, ventilation and cooling help to mitigate the effects of the external and internal environments. Most buildings are permanent structures, although it is possible to find buildings that are temporary, erected for some specific purpose and able to be moved at a future date. Examples of these would include ‘porta cabins’, which are often used as building-site offices or prefabricated school classrooms.

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9.15  Drivers of building design The factors that must be considered in a building design project include: ❑❑ The treatment of time. In the short term, the building must contribute to meeting the

current organisational objectives and requirements of the current working practices of the occupier. Longer-term considerations would include flexibility and adaptability, which can make a building more manageable over time. For example, to what extent will the building lend itself to refurbishment or a different internal layout? Furthermore, will the building be capable of different uses in the future? ❑❑ The physical, functional and financial performance of the building based on the occupier’s perception of need in terms of time, cost and quality. These considerations include: ○○ The suitability of the site; its shape, size and orientation; and the likely impact of climate and any hazards either natural or man-made. Site contamination by chemicals or substances from past uses could be an issue in this respect. The site must be suitable in terms of access and have ample parking and loading facilities. ○○ Locational factors are also important. Is the site in the right place in terms of the prestige and status of the occupiers of the business? Is the location too downmarket or upmarket? Does the site benefit from good road and rail communications? ○○ The functions of the building and the tasks it carries out are major concerns. The needs of a high-tech software house are of course different from those of a manufacturer. Each will have different requirements in terms of the size and layout of the space it occupies. Occupiers increasingly realise that the nature of their business might change over time, due perhaps to technological innovation, changing staff needs or new legislation. ○○ Functional obsolescence can be a problem. Buildings can become outmoded or unsuitable for a use. They may become uneconomic to run or the location in which the building is situated may change in character, due perhaps to local adverse economic circumstances. ○○ The expected contribution to the company’s organisational performance and profitability can be supported by an evaluation of the life-cycle costings and operating costs, as well as capital value increases and decreases.

9.16  Sustainable construction Buildings and structures change the appearance of cities, towns and countryside. Construction and maintenance of buildings use resources and generate waste on a scale far greater than most other industrial sectors. For example, the construction industry is quoted as consuming 6 tonnes of resources and generating half a tonne of waste per citizen. It is also said that in the UK half of all CO2 emissions arise from building energy consumption. It is therefore not surprising that sustainability has become an important construction issue. The concept covers development, resource use and sustainable material sources. Pressure on the industry to get leaner, minimise waste, eliminate non-value-adding activities and minimise resource use comes from central and local government, customers and building users. New buildings can be designed to achieve an externally accredited standard. The Building Research Establishment (BRE) created the first standard, known as the Building Research

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Establishment Environmental Assessment Method (BREEAM). This is a framework that can be used to measure the environmental credentials and performance of a building. The standard initially launched in 1990 and has been refined and relaunched several times, most recently in 2011, to reflect changing views of the impact of a building on the environment. The areas of assessment include the overall management of the building, energy efficiency, health and well-being of occupants, pollution, transport, land use, ecology, materials, waste and water consumption, and innovation. Credits are awarded according to the performance of the building against specific criteria. The credits are added together and the overall rating is based on a weighting system. Ratings range from Outstanding to Excellent, Very Good and Good. The range of standards includes BREEAM In-Use, BREEAM Communities, BREEAM New Construction and BREEAM Refurbishment. The new schemes are aligned with other standards such as Energy Performance Certificates (EPCs), the Carbon Trust Standard and the Code for Sustainable Homes. The BRE has launched a range of standards for use in other countries, such as Germany, Holland, Norway and Spain. Over 250,000 certificates have been issued since 1990. Leadership in Energy and Environmental Design (LEED) is the American standard in building design, launched in 1998. It assesses design in six areas (sustainable sites, water efficiency, energy and atmosphere, materials and resources, indoor environmental quality, and innovation and design process). There are four grades, awarded as follows: ❑❑ ❑❑ ❑❑ ❑❑

Certified: 40–49 points. Silver: 50–59 points. Gold: 60–79 points. Platinum: 80 points and above.

The SKA Rating is a standard for tenants and occupiers of existing premises. Devised by a consortium led by Skanska, AECOM and the Royal Institution of Chartered Surveyors (RICS), it targets fit-out projects and refurbishment projects. The scheme uses over 100 ‘good practice’ measures covering energy and CO2 emissions, waste, water, materials, pollution, well-being and transport. Each measure is scored and ranked. This approach allows flexibility to suit a range of projects and buildings. There are three thresholds of achievement: bronze is awarded for achieving 25% of measures, silver for 50% and gold for 75%. The assessment is conducted over three phases – design, construction and occupancy. There are also sector-specific standards in the healthcare and defence sector. These include: ❑❑ NHS Environmental Assessment Method (NEAT). ❑❑ Defence Related Environmental Assessment Method (DREAM) for Ministry of

Defence premises.

❑❑ Civil Engineering Environmental Quality Assessment and Award Scheme (CEEQUAL).

With over 80 green building councils around the world, it is not surprising to find a range of local standards. Some are new and some are adapted from existing standards (such as BREEAM) to suit local conditions. Examples are shown in Table 9.2. The assessment criteria vary in according to the local environments and the weighting against the various criteria vary too. The Japanese code is more concerned with land use, whereas the schemes in the Middle East focus on water conservation.

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Table 9.2  Environmental Assessment Schemes Country

Standard

Additional notes

Abu Dhabi

Estidama

Developed in 2009

Australia

Green Star

Developed in 2002; also used in New Zealand and South Africa

Canada

Green Globes

Egypt

Green Pyramid Rating System

France

Haute Qualité Environnementale

Germany

Deutsche Gesellschaft für Nachhaltiges Bauen

India

Indian Green Rating System

Japan

Comprehensive Assessment System for Environmental Efficiency

Singapore

Green Building Product Certification Scheme

Developed in 2009; it is also used in Austria, Luxembourg and Switzerland

Developed in 2010

9.17 Passivhaus The term ‘passivhaus’ or ‘passive house’ refers to a new concept in building design which focuses on the fabrics and thermal properties of a building. BRE has developed a new building standard to support this concept. Designs have to minimise the heating demand of the building. All heat produced inside the building can then be recovered and circulated via mechanical ventilation and/or heat recovery. Building design may include use of shading, passive solar gain, the pre-cooling of the supply air, night purging of hot or cool air, natural cross-ventilation through open windows, high standards of insulation and air tightness, and minimal thermal bridges. The passivhaus principles of building design work in many counties and are applicable in residential and commercial building designs.

9.18  Intelligent buildings An ‘intelligent building’ can be defined as one which maximises the efficiency of the occupants while enabling the effective management of resources with minimum lifetime costs. ‘Building intelligence’ can be defined as something that enables the efficient use of buildings, space and business systems to support staff in the effective operating of the business. Both definitions imply a building that is responsive to the needs of its users, that is inherently responsive to change and that has a building shell that enables incorporation of the technology required to make it responsive. The ultimate intelligent building is one that has technology that integrates systems, as listed in Table 9.3.

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Table 9.3  Building technologies Building management

Space management

Business management

Climate control (HVAC systems) Energy management Fire safety Lighting Maintenance management Security, including access control

Computer-aided design (CAD) capabilities Building information Cost-monitoring systems Cable management Equipment databases

Voice systems Data and image transfer Cabling for local area networks (LANs) and wide area networks (WANs) Mobile communications Video conferencing Meeting room management

9.19  Building information modelling (BIM) Building information modelling, known as BIM, is a digital representation of the building process which is designed to facilitate information exchange and interoperability of systems within the building. It refers to the virtual process of gathering building information and the output of that process. This information has been available for some time, but it was not linked or gathered together in a formal way. For example, computer-aided design (CAD), 2D and 3D information has been used for several years by the various parties involved in the design and construction of a building. BIM is an enhanced process which is data rich and ensures data is shared rather than lost as a building goes through its various life stages. BIM will provide a platform for better and more informed decisions about premises during their whole life cycle, from conception and maintenance to demolition. BIM is not a single software package; it is a new way of working in collaboration with all parties concerned with the operation of a building. It is applicable to both new and old buildings. Information must be in open protocols so that it can be used by others further downstream in a building’s life. COBie UK 2012 and PAS 1192–2:2012 are the standards for BIM information. There are many benefits to the use of BIM, including: ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑

Improved design process, encouraging FMs to engage earlier. Greater co-ordination of information from disparate sources. Quicker design revisions. Improved planning and resource allocation. Effective value engineering. Less wastage in the construction phase. More pre-assembly of building components. Better handover of premises. Fully populated asset data set for computer-aided facilities management (CAFM) systems. Design and construction information brought into easier reach and use by FMs. More accurate space and asset data. Time and money savings across the whole project. Smooth transfer of information across the phases in a building’s life. Enhanced post-occupancy evaluation and lessons learnt for future projects. Commitment to the building’s aftercare post-handover.

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The UK government has required BIM to be used in all public sector projects since April 2016. It is anticipated that savings of 20% can be gained from better design, construction and operation of buildings using BIM. One of the outcomes of BIM is a rebalancing of time and effort in the design and build phases, to ensure the optimum building is created. The use of BIM may actually create savings of 30% in the design phase. Some of the issues arising from the new way of designing, building and managing a building will include asserting copyright ownership of data and intellectual property, legal ownership of BIM in a project, and need for clarity between landlord and tenant in use of the data. New technologies such as point cloud surveys using laser scanning will enable existing premises to adopt BIM processes. The laser scans will capture building information in 3D and when linked to digital photographs and AutoCAD files, a model of both the whole building and individual parts can be created. This will provide enhanced information to inform decisions on a range of FM activities such as projects, space allocation and maintenance. It will allow the FM to ‘see’ behind the walls, ceilings and tiles to the infrastructure in the shafts and ducting, via BIM, rather than needing to physically visit the areas. This will bring about a radical change to the way FMs can manage premises.

9.20  Structure and its effect on building use The structure of buildings is a major determinant of possible internal usage and layout. The envelope of buildings is used to classify buildings by type – steel framed, concrete framed, preformed, space framed or timber framed. The types of materials used to construct a building will be determined by the intended use of the building, availability and cost of materials, location of building, local ground and weather conditions, size of building (height, width and span), internal layout requirements, the construction timescale and local planning restrictions. Features of the internal structure, such as window mullions, span, floor depth, slab-to-slab dimensions, distances to the core and floor height, will affect the future use of the space.

9.21  Planning grids and the use of space ‘Planning grid’ is the term given to the way a commercial building is divided into squares or rectangles because of the way in which it is constructed. The pattern of the grid depends upon the following: ❑❑ The size and depth of the building. ❑❑ The distance between window mullions, which dictates the size of each enclosed mod-

❑❑ ❑❑

❑❑ ❑❑

ule of space, i.e. the locations of partitions for individual offices will be dictated by the locations of window frames and supports, known as ‘mullions’. The structural columns supporting the building. The ceiling height of each floor in an office building, which will dictate the potential for installation of a raised floor or for a suspended acoustic tiled ceiling and can therefore have a bearing on how and where services are located. The eaves’ height in a warehouse, which will dictate the height of the racking and also the vehicles that can be accommodated for loading and unloading. The length and width of the building. The need for circulation space and fire safety requirements will determine how the space is divided up.

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❑❑ The ceiling and lighting grid, which should be co-ordinated with the window mullions

to enable partitioning. The same would apply to cable systems for computer and other data services. ❑❑ The installation of computer suites into buildings may require air-conditioning systems to be installed. The grid should allow for adaptation of the workspace to accommodate any such changes.

9.22  Developers’ fit-out The needs of occupiers vary significantly depending upon many factors, and because of this, many buildings are constructed only to a ‘shell finish’, enabling the occupier to fit it out to their precise requirements. The occupier will then install their own partitions, service areas, and other fittings, such as kitchens, toilets and heating systems (in the case of an office building) or furnishings, racking and shelving, and a shop front (in the case of a retailer). However, the main problem with such fittings is that they may not always suit the individual tenant (e.g. in the case of a multiple-layer tenancy). Costly alterations could result at some future date when the functional shortcomings of the speculative fit-out become apparent. It is more prudent for an occupier to work with a developer to establish the most suitable layout during the final construction phase and before entering into a lease commitment. Sometimes developers will undertake a large amount of the fitting out before the property is occupied. This could be a result of a tenant’s requirement being incorporated into the building. If a building is constructed speculatively, the fit-out scheme is solely a marketing device to attract buyers or tenants. Some developers will attach great importance to good presentation of the buildings they are attempting to let. This may help where a tenant has to be enticed to sign up to a lease by a quality fit-out, including suspended ceilings, lighting and carpets. Terms used by developers are ‘shell and core’, ‘category A’ and ‘category B’ fitouts. These are explained below. Shell and core Shell-and-core developments include fully finished landlord areas comprising a main entrance and reception, lift and stair cores, lobbies and toilets. These areas are not part of the space rented to the tenant. The office floor areas are left as shells, ready for category A fit-out by the tenant. Category A fit-out There is no standard definition of a category A fit-out – it can vary between developers. Typically, category A is what the developer provides as part of the rentable office space and usually comprises the following: ❑❑ Raised floors. ❑❑ Suspended ceilings. ❑❑ Extension of the mechanical and electrical services above the ceiling from the riser

across the lettable space.

❑❑ Finishes to the internal face of the external and core walls. ❑❑ Blinds.

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It is also common for the developer to make a contribution to the tenant for the carpets, floor boxes and grommets, which are then installed as part of the tenant’s category B fit-out, rather than being installed during the category A works, as they are subject to damage and may not complement the tenant’s colour scheme. It should be noted that, typically, the landlord does not physically make the contribution until the tenant has installed the item. Shell-and-core completion This can occur when a large tenant moves into a new building and installs a complex kitchen, for example, which would need a very specialist category A fit-out. Often, a tenant will take a financial contribution for the landlord’s entire category A fit-out on the affected floors to offset against their own fit-out costs. Category B fit-out In category B, the fit-out is completed to the occupier’s specific requirements. It typically comprises the following: ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑

Installation of cellular offices. Enhanced finishes. Conference and meeting room facilities. Reception area. Enhanced services and specialist lighting. IT and audiovisual installations. Tea point and kitchen fit-out. Furniture.

9.23  Measuring building efficiency Measuring terminology Four terms are in general use. These are abbreviated as GEA, GIA, NIA and NUA (gross external area, gross internal area, net internal area and net usable area) and described in Section 11.9. Technical drawings and plans Technical drawings and plans are scaled representations of the designer’s intentions or scaled historical records of changes. They may be larger or smaller than that which they represent. Architectural drawings Architectural drawings can be broadly classified as follows: (i) Preliminary drawings – These are often little more than sketches to help clarify the client’s intentions and to point the way to possible design solutions. (ii) Design drawings – These may be development drawings requiring the collaboration of consultants and specialists (e.g. mechanical and electrical [M&E], and

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communications) and are aimed at getting the designer’s thoughts onto paper. They may also be a graphical representation of the finished product, showing a 3D or perspective view. (iii) Production drawings – These are sometimes called working drawings. They are used with other documents to provide precise information about the building and its services to the professional team (e.g. the quantity surveyor), contractors (which would include builders, M&E and specialists) and LAs. They can be used for tender purposes, as a part of contract documents. Working drawings will have a title block that will include the scale, production and revision details. They will normally be produced on cartridge paper and come in standard sizes from A0 downwards through A1 to A4. They can also come produced on tracing paper, cloth and film. Drawings can be ‘plan’ (a horizontal view) or ‘elevation’ (a vertical view). Either can be ‘cut’ into ‘sections’ to show a horizontal or vertical sectional view. Drawings of buildings will usually have more than one plan view (e.g. one for each floor, the roof and foundations) or elevation (i.e. the external walls on each side of the building) and a number of sectional views created for important points requiring detailed emphasis. As well as being important during pre-occupancy, technical drawings and plans are essential tools for the efficient operation and maintenance of buildings. They are a vital element of building records and it is essential that they are kept up to date. The role and importance of building records will become apparent when maintenance is discussed. Many buildings now have these drawings digitised in AutoCAD or similar software. However, it is important to have actual plans too.

9.24  Building efficiency There are two views of building efficiency. One is that of the landlord, the other is that of the occupier. The landlord seeks to maximise the letting potential. From the landlord’s point of view, the efficiency of the building is measured by the percentage of NIA relative to GIA. For example: ❑❑ 84–87% is considered to be excellent. ❑❑ 80–83% is considered to be good. ❑❑ Below 80% is considered to be poor.

Clearly, therefore, a tightly planned building core will be more efficient. The occupier seeks to get the highest possible percentage of NUA relative to NIA. For example: ❑❑ ❑❑ ❑❑ ❑❑

85% or more is considered to be excellent. 80–84% is considered to be good. 75–79% is considered to be fair. Anything less than 75% is considered to be poor.

9.25  Layout impact Significant factors that will affect both the size and arrangement of enclosed spaces and internal partitioning layouts are given in the guidelines shown in Table 9.4.

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Table 9.4  Features of building structures and layouts The shape, size and depth of the building

Glass-to-core depth: 9–12 m. Glass-to-glass depth: 13.5–18 m.

The window mullions

The distance between the vertical divisions of the windows, centre to centre, will govern the degree of flexibility available.

The structural columns supporting floors above

The size, layout and number of columns within the space will govern the degree of flexibility available.

Floor loading

There is a tendency to overspecify requirements. 4 kN/m is usually sufficient but there may be special requirements to support heavy furniture or equipment.

The distance from the floor to This will dictate the potential for the installation of a raised the underside of the floor above (slab floor or false ceiling and thus influence how the services will to slab) be distributed. It should be considered in conjunction with the floor depth. Four to five metres provides maximum flexibility in larger buildings. Smaller, narrower buildings may not require such a generous height. With current technology, the need for false ceilings and raised floors should be carefully considered in the design. This will determine the overall height of the building and the consequent cost. The size, shape and location of the building core

Smaller floors are inefficient in terms of the ratio of gross to net usable floor area. Landlord and tenant building efficiencies are a factor to be borne in mind.

The length and width of the building

The need for primary circulation space and other fire safety requirements will dictate how the space can be divided up.

The building skin

This should be considered as part of the servicing strategy, not just as a barrier to the weather. Building management systems (BMSs) should include solar control and openable windows. These should be linked to the BMS to enable reconfiguration of the heating, ventilation and air-conditioning (HVAC) system.

9.26  Building performance The design and performance considerations of a building can be related to the diverse range of functions that it is intended for. This diversity is represented in commerce, education, health care, defence, nuclear power generation, travel and many other areas. There are three main considerations – physical, functional and financial. Physical performance Factors include accessibility, building services, the capacity of the building, its durability, its energy efficiency, internal and external environmental considerations, its maintainability, its manageability over time and its structural integrity. Assemblies, components and materials All buildings can be specified in terms of the characteristics required for their elements of construction. The properties or criteria of construction components relevant to required performance standards are defined in Table  9.5 and explained in detail in the following sections.

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Table 9.5  Properties of elements of construction Element

Performance criteria

Unit of measurement

Strength

Uniform loads or point loads Compression

N or kN

Tension

N or kN

Bending

Nm or kNm

Shear

N/mm2 or kN/mm2

Deformation by

Weathering by

Deterioration through

Thermal response

Electrical Acoustic Optical

Aesthetic

N or kN

Bond

N/mm2

Deflection

mm

Buckling

mm4

Thermal movement

mm × 10–4/°C

Moisture movement

mm × 10–3/5/mc

Moisture

g/m2

Wind

N/mm2 or kN/m2

Frost

mm/°C

Abrasion

mm × 106/m/year

Thermal change

mm × 103/°C

Corrosion

g or mm/year

Chemical attack

g or mm/year

Moisture

N/mm2

Abrasion

mm/year

Fire

Hour

Biological decay

N

Heat loss

W/m2 K

Air temperature

°C

Mean radiant temperature

°C

Humidity

%mc

Reflectivity

%

Absorption

W/m2 K

Resistance

Ohm

Power requirement

Watt

Sound insulation

dB/freq

Reverberation

sec/freq

Intensity

Lux

Glare

Unit

Colour balance

Lux/col

Shading

Lux/lux

Colour

CIE or Munsell code

Texture

Compare

Shape

Proportion

Security

Level

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Use and performance A performance specification defines the expected performance of a building. Details of performance in use cover, among other things: ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑

Space requirements. Temperature and humidity control. Acoustic response. Access. Storage. Servicing. This information can be used throughout a building’s life:

❑❑ ❑❑ ❑❑ ❑❑

To develop a design brief. To advertise a building and, later, to form the basis of a lease. To assess a building’s performance accurately towards the end of a lease or at review. To indicate the end of a building’s life.

Security Security includes physical and psychological protection of property and people. As buildings are bound to deteriorate, protection is designed for a specified period of time. Strength Depending on the application of the element, compressive, tension, shear, bending and torsional stress must be considered. Point loading will affect certain structures in a different way to uniform loading, e.g. a piece of furniture on legs will require different loading conditions from a wardrobe on a framed base. Some materials, particularly mastics and flexible plastics, have low elastic stress. For stiffer materials, plasticity and ductility need to be considered as well as permanent deformation (known as ‘creep’). Movement Thermal and moisture movement may significantly affect the overall performance of a material. Thermal properties All construction systems allow the transmission of heat. This is measured in W/m2K. The transmission calculated by taking the reciprocal of the total resistance of all elements in the system is measured as U-value. This includes allowance for the surface conduction of reflective finishes and any reduced skin effect due to wind. Although moisture content may affect conductivity by as much as 20%, this factor is not normally considered. Optical properties Translucency and transparency should be considered as well as the quantity of light transmitted at each frequency. Acoustic properties The following should be borne in mind: ❑❑ If the noise level is above 70 dB, speakers will need to be as close as 150 mm to each

other in order to speak normally and be understood.

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❑❑ If people are exposed to high noise levels for a long time, they can suffer illness and

hearing problems. The Health and Safety at Work Act 1974 and the Control of Noise at Work Regulations 2005 recognise this in laying down maximum levels of noise and exposure time in certain working situations. ❑❑ If a telephone is used, the environment sound level must be below 75 dB. Even at 60 dB it can be difficult to be understood on the telephone. ❑❑ Mass and density are important in preventing the passage of sound. Impact (structureborne) sound and airborne sound each need to be considered in building construction and each need a different treatment. Fire Fire requires fuel, oxygen and an initial source of heat. The following should be borne in mind: ❑❑ In a building, fuel is present in the materials which form the structure and the

contents.

❑❑ The ordinary materials used for the structure and finishings do not combine directly

with oxygen when they burn. They give off flammable vapours when heated above a certain temperature, and it is these vapours which burn in the form of flames. ❑❑ The initial source of heat is usually quite small, e.g. a lighted cigarette end. This small source of heat may, however, ignite some readily combustible material, such as waste paper, which is capable of generating sufficient heat to ignite adjacent, less combustible materials. The intensity of fire depends on the nature of the materials and the supply of oxygen. Materials which have a high calorific value and those which have an open fibrous nature burn more fiercely. If all the combustible materials within a room are heated above their ignition temperature at the same time, the ensuing simultaneous ignition of the evolved vapours is termed a ‘flash-over’. Fire may spread to other parts of a building by one of the following processes: ❑❑ Conduction – Heat is conducted rapidly along steel members and may ignite combus-

tible materials in other rooms. Other non-combustible materials may become so hot that heat is conducted through them. Although a reinforced concrete floor is fireresisting, it may nevertheless conduct sufficient heat to ignite combustible materials on the side furthest from the fire. ❑❑ Convection – The hot products of combustion rise and heat everything in their path. A burning waste paper basket at floor level may set fire to a combustible ceiling lining. Openings in floors may then permit fire to spread rapidly from floor to floor throughout the building. ❑❑ Radiation – Fire radiates heat in all directions, the intensity varying according to the square of the distance from the source. Heat radiated through window openings may be sufficient to set fire to adjacent buildings. Staircases and lift shafts leading to open windows act as flues, discharging hot gases and smoke and at the same time drawing more oxygen over the fire and thereby increasing its intensity.

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The fire performance standards for buildings are usually measured in: ❑❑ Fire resistance. ❑❑ Resistance to passage of smoke. ❑❑ Combustibility/fire spread.

Functional performance This is the performance of the building in terms of the quantity and quality of space, the building shape, orientation and layout. It includes the image the building reflects, and other locational considerations such as the availability of appropriate infrastructure and utilities, the amenities the building offers, and its inherent health, safety and security attributes. An important consideration is the avoidance of unnecessary, or inappropriate, functional performance. Other important functional considerations are the building’s adaptability and flexibility. These two terms are sometimes used interchangeably. They should not be, for they are not synonymous as far as buildings are concerned. The definitions below are worth noting. Adaptability This is the extent to which the inherent versatility of a building makes it suitable for adaptation to different forms of building use. Examples are the adaptation of a house to turn it into an office, the adaptation of an office block to become housing, or the adaptation of a disused power station to become an art gallery or leisure centre. Flexibility This is the extent to which a building will accommodate different internal layouts, e.g. different sizes of office or a reusable partitioning system. Financial performance In the case of a building that is owned by the organisation, financial considerations are the preservation and enhancement of the building and the value by which it is expected to appreciate over time. Other considerations are capital and revenue expenditure, depreciation and the contribution the building makes to profitability. In the event that the financial performance of a new building is not a consideration because the occupier is a tenant, then rent and service charges are some of the factors determining financial performance of a leased building.

9.27  Design Quality Indicator Following studies into the effectiveness of new public buildings, a performance measurement tool, the Design Quality Indicator (DQI), was created to allow public sector organisations to benchmark various types of premises. The DQI provides a framework to determine performance of a building from user, FM and organisational perspectives; it can be used by everyone involved the development process to contribute to improving the quality of the built environment. This method involves a non-technical questionnaire looking at functionality, build quality and impact. The process is envisaged to be used throughout the life cycle of a development including briefing, mid-design, readiness for occupation and in use.

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9.28  Commercial building materials The types of construction materials used in a building depend upon its proposed use. However, other factors may play important roles  –  for example, ground conditions, the availability and cost of materials, and any requirements that may be placed on the designer in terms of planning and building regulations. Climate is also an issue, although in the UK the problems associated with climate can hardly be described as extreme. Building materials have different thermal insulation capacities; some conduct heat more than others. For example, buildings with a large amount of glazing can generate high temperatures in the warmer months and cause rapid heat loss in the winter. Other important factors in terms of construction material selection relate to the size and use of the building. For example, with pressures on land availability and price in major city centres, it is often necessary to build offices of 10 or more storeys. The growing requirement for open-plan office floors will also influence the selection of building materials. Brick-andmasonry construction is not considered suitable for high-rise buildings due to its cost, weight and problems associated with movement. A steel frame is usually a more economical solution for a high-rise building, with a series of external and internal columns supporting the structure. As stated earlier, cost is also a factor. Some materials are more expensive than others and money can be saved by careful choice of materials. Designers and occupiers will carefully consider the trade-off between cheap, lightweight construction with greater thermal variation, and the higher cost of a heavyweight brick and concrete structure. The latter is less prone to uncomfortable temperature spread and may be more resilient. Increasingly, a number of building contractors offer prefabricated components that can reduce the construction period and in some cases actual building contract costs. Prefabricated components can be quite large and include entire room suites that can be ‘dropped’ into a framed structure. External wall panels can be transported to a site and erected very quickly. The use of prefabricated components limits the amount of work that has to be undertaken on site. There is also a further advantage in this respect. Employment costs on site are reduced where prefabricated components are used. This is because fewer skilled trades are needed for assembly. The skilled work takes place in the factory.

9.29  Building Regulations The first Building Regulations came into force as a statutory instrument in 1966. Areas covered at that time included: ❑❑ ❑❑ ❑❑ ❑❑

Structural fire precautions. Requirements for division or compartment walls. Sound insulation. A list of exempted buildings.

The Building Regulations are constantly being reviewed. The Regulations are a statutory instrument stemming from the Building Act 1984. The purpose of the Regulations was to establish standards in the construction and alteration of buildings to ensure health and safety of persons using them, energy efficiency and use by disabled persons. Thus, the Regulations by clear implication promote high standards of construction. Since the Grenfell Tower fire in 2017, there have been reviews of the

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appropriateness and adequacy of the regulations. The Building (Amendment) Regulations 2018 (SI 2018/1230) came into force on 21 December 2018. These Regulations ban the use of combustible materials in the external walls of high-rise residential buildings and apply to: ❑❑ All new residential buildings above 18 m in height. ❑❑ New dormitories in boarding schools, student accommodation, registered care homes

and hospitals more than 18 m above the ground.

The ban also applies where building work constitutes a ‘material change of use’ that brings an existing building within one of these categories. More information on the outcome of the Hackitt Review (which followed the Grenfell Tower fire in London) can be found in Section 17.3. Enforcement Building control inspectors employed by the LA undertake enforcement of the Regulations. The Regulations establish the standards required for the carrying out of building works. Failure to comply is an offence. The Regulations are supported by a series of Approved Documents. These provide guidance on the minimum expected standard but are not mandatory. Obtaining approval Approval of works by building control officers can be gained through either a full plan application or a building notice. A full plan application seeks approval in advance of any works and gives greater certainty. A building notice has to be served to the LA 48 hours in advance of works being undertaken. The Regulations are divided into five parts including three schedules. These schedules are: ❑❑ A summary of the technical requirements set out in the Regulations. ❑❑ A list of exempt buildings, such as nuclear installations, archaeological monuments,

greenhouses, and temporary and other non-habitable buildings.

❑❑ A list of revoked Regulations, including past Building Regulations.

9.30  Approved Documents Approved Documents provide guidance for most conventional building procedures. There are 167 Approved Documents – contained across documents A to R and Regulation 7 – that cover such aspects of building as structure, fire safety, toxic substances, drainage and waste disposal. There is no obligation to adopt any particular solution contained in an Approved Document. However, where a contravention of the Regulations occurs and the Document has not been followed, the onus is on the contractor to show that they have complied in other ways with the Regulations. Thus, it is recommended that Approved Documents are followed to reduce the potential for disagreement later. The Approved Documents are constantly being reviewed and updated, so it is important to ensure that the latest version is consulted. Approved Documents refer to named standards for materials and components. The contractor should ensure that the correct components and materials are used to the stated

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standards. These standards include EU marks, British Standards, technical approvals such as Agreement Certificates and Building Regulations. The Approved Documents are as follows: ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑

Part A – Structural stability Part B – Fire safety Part C – Site preparation and resistance to contamination and moisture Part D – Toxic substances Part E – Resistance to the passage of sound Part F – Means of ventilation Part G – Hygiene Part H – Drainage and waste disposal Part J – Combustion appliances and fuel storage systems Part K – Protection from falling, collision and impact Part L – Conservation of fuel and power Part M – Access to and use of buildings Part N – Glazing: safety in relation to impact, opening and cleaning Part P – Electrical safety Part Q – Security Part R – Physical infrastructure for high-speed electronic communications networks Regulation 7 is an Approved Document on workmanship and materials, issued in 2013 and amended in 2018.

10

Project Management

10.1 Introduction FMs (facilities managers, or facilities management) may need to act as project managers (PMs) for a range of projects from small internal moves to major building works. A project can be defined as a significant, non-routine change with agreed objectives and clear start and end points, and requiring an investment decision. It needs to be planned, monitored and controlled. Typical facilities projects are minor refurbishment and repairs in buildings, relocation, major capital works or construction, and design and build. Projects need to be planned, monitored and controlled. They are about a need, a change programme and a plan of action. Projects need sponsors, owners, partners and of course a manager!

10.2  Project management process (i) Agree precise specification for the project. (ii) Plan the project – time, team, activities, resources, financials. (iii) Communicate the project plan to your project team. (iv) Agree and delegate project actions. (v) Manage, motivate, inform, encourage, enable the project team. (vi) Check, measure, review project progress; adjust project plans and inform the project team and others. (vii) Complete project, review and report on project performance, give praise and thanks to the project team.

10.3  Fundamentals of project management The fundamentals of a project are initiation, planning and control. Projects are controlled in three main areas – time, cost and quality. A system or method to monitor these aspects of a project needs to be implemented at the earliest possible stage. ❑❑ Time is typically monitored via a programme plan, such as a Gantt chart. ❑❑ Cost is typically monitored by a cost consultant or quantity surveyor and may include

a detailed value-for-money or value-engineering exercise. The project budget will be

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monitored by a programme plan, with regular prediction of final costs. All extras need to be priced and approved. ❑❑ Quality can be monitored via the use of approved standards such as the ISO 9000 series. Specifications need to be clear, consultants and contractors must be carefully selected, and the project output must be regularly checked and tested. All aspects of control require regular feedback that is accurate and relevant at all stages of the project. The control mechanisms allow comparison between the actual and the proposed or planned. This allows adjustments so that the project is kept on track.

10.4  Project manager role FMs are often expected to take on a project management role that has unique objectives and responsibilities. The role will include target setting, risk analysis, planning, controlling, monitoring and management. There is an expectation of technical competence that could include product or services knowledge, an ability to understand the overall process, how to avoid and mitigate problems, how to effectively overcome and rectify errors, when to seek expert advice, and an awareness of new technology and methods in project management. When initiating a project, it is good practice to develop a document called the terms of reference (TOR) and establish a steering committee. Members of this group may include the sponsor, the client, and the main supplier or provider. The PM will need to identify, seek and manage the project finances and master budget. They will have to develop and manage project change control procedures, set up a master project file, and define appropriate quality standards and monitoring procedures. The PM must also undertake a project risk management study to ensure contingencies are mitigated in the overall project strategy.

10.5 Responsibilities The PM has a number of responsibilities, including: ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑

Managing the project team. Selecting the project team members. Defining the project objectives and goals. Managing risk. Managing change. Negotiating with the client and the host organisation. Problem resolution. Financial management and reporting. Measuring progress. Completion and handover. There are four areas to consider:

(i) The customer who will receive or use the project’s end result. (ii) The project team. (iii) The host sponsor or client organisation. (iv) The project itself.

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The PM has a balancing act to perform – the end-user and the host organisation’s interests and needs versus the project team and the project itself. To be effective, the PM must be able to communicate, delegate, lead and negotiate. The FM PM must therefore consider the issues of: ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑

End-user involvement. Security and privacy aspects of key information. Determination of the methodology to be used. Selection of appropriate planning and IT tools to use. Criteria for team selection. If and what the external resource requirements may be. How and when to brief the team. Team cohesion and team dynamics. Project performance.

10.6  Project briefs The project brief is equivalent to a project specification. Problems could arise if there is no project brief. It is important to appreciate the role and benefit of a brief, the content and who is responsible for developing one. A project brief or specification should be an accurate description of what the project aims to achieve, the criteria and flexibilities involved, and the project’s parameters, scope, range, outputs, sources, participants, budgets and timescales. Usually, the PM must consult with others and then agree the project specification with superiors or with relevant authorities. The specification may involve several drafts before it is agreed. A project specification is essential in that it creates measurable accountability for anyone wishing at any time to assess how the project is going, or its success on completion. Project TOR also provide an essential discipline and framework to keep the project on track, and are concerned with the original agreed aims and parameters. A properly formulated and agreed project specification also protects the PM from being held to account for issues that are outside the original scope of the project or beyond the PM’s control. This is the stage to agree special conditions or exceptions with those in authority. Once the PM has published the TOR, a very firm set of expectations is created by which the PM will be judged. So if the PM has any concerns, or wants to renegotiate, now is the time to do it. The largest projects can require several weeks to produce and agree project TOR. Most normal business projects, however, require a few days of thinking and consulting to produce a suitable project specification. Establishing and agreeing a project specification is an important process even if the task is a simple one. A template for a project specification: ❑❑ Describe purpose, aims and deliverables. ❑❑ State parameters (timescales, budgets, range, scope, territory and authority). ❑❑ State the people involved and the way the team will work (frequency of meetings,

decision-making process).

❑❑ Establish ‘break points’ at which to review and check progress, and how progress and

results will be measured.

For every project, a brief needs to be prepared which identifies and addresses the objectives, outcomes and critical success factors such as targets, risks, timing, customer requirements

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and dependencies. A brief will typically contain a TOR. The minimum TOR can be created using the mnemonic BOSCAM: Background Objectives Scope Constraints Assumptions Management

10.7  Terms of reference (TOR) This document must use appropriate language for the reader, avoid jargon and be clearly written. It will include: ❑❑ Background of the project – This will put the project into context. For example, ‘Why do

it and why now?’ The background may include the business benefits from the project.

❑❑ Objectives of the project – These can be both business and project objectives. They

should be SMART (specific, measurable, achievable, realistic and timely).

❑❑ Scope of the project – This may include the business areas, business processes, geo-

graphical locations, interfaces, inclusions and exclusions.

❑❑ Constraints which may affect the success of the project, such as limitations on time

and cash flow, external agency approvals, legislation, technology, location, equipment, environment, landlord–tenant issues and experience of the project team. ❑❑ Assumptions surrounding the project, such as funding, approvals, risk profile and cooperation. It is important to check the assumptions with the sponsor, end-users, client, stakeholders and partners. ❑❑ Reporting structure and the communication plan – This will detail how project progress is reported, in what format, to whom and how often. An escalation process should be documented in the event of problems that may arise. ❑❑ Deliverables or milestones in the life of the project  –  These are the ‘physical outcomes of a piece of work’. Deliverables are the elements that can be checked to confirm that the work has been done and whether it has been done to the appropriate quality. The TOR must identify the major deliverables with when and who, state the quality required, and confirm who accepts or approves the completion of that element.

10.8  Project programmes Project programmes are the output of detailed planning of the various stages and activities of the project. A useful tip is to work backwards from the end aim, identifying all the things that need to be put in place and done, in reverse order. First, brainstorming (simply noting ideas and points at random) will help to gather most of the points and issues. For complex projects, or when the PM lacks experience of the issues, others may need to be involved in the brainstorming process. Thereafter it is a question of putting the issues in the right order, and establishing relationships and links between each issue. Complex projects will have a number of activities running in parallel. Some parts of the project will need other parts of the project to be completed before they can begin or progress. Some projects will require a feasibility stage before the completion of a detailed plan.

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10.9  Project timescales Most projects come in late – that’s just the way it is – so don’t plan a timescale that is overly ambitious. Ideally plan for some slippage. If the PM has been given a fixed deadline, they will usually plan to meet it earlier and work back from that earlier date. It is best practice to build some slippage or leeway into each phase of the project. It is better to err on the side of caution wherever possible, otherwise the PM could be setting themselves up to fail. An FM acting as a PM will organise a project programme to meet the requirements of the brief. Progress against the programme has to be monitored to ensure that deadlines are met and problems are addressed as they arise. Changes to the programme have to be agreed according to a predetermined process. Project sponsors and other interested parties also have to be kept informed. Change control mechanisms are intended to enable change, not to prevent or limit change, but not all changes are necessary or valid. The PM must keep a change request register for future audit of acceptances, costs and rejections.

10.10  Quality plan This is typically used in large projects or projects of over 6 months’ duration. A quality plan can be defined as a document created and maintained by the PM which describes the project and measures to be taken to ensure the project delivers a quality outcome. It will include the TOR, risk summary, organisation, structure, quality standards, project programme and review dates, change control mechanisms, and training and communications plan.

10.11  FADE project methodology FADE is an example of an approach to project management, as illustrated in Table 10.1. It is a problem-solving system in which each phase has an output. It can be applied to all problems and to projects both small and large. There are three basic steps per phase, which work for most projects and problems. Different tools can be used in each step or phase. These are: ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑

Brainstorming. Multi-voting selection grid. Impact analysis. Problem statement. Checklist. Data-gathering plan. Sampling. Survey. Pareto analysis. Fishbone diagram. Flowchart. Innovation transfer. Cost–benefit analysis. Force-field analysis. Process description. Specification. Action plan.

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Table 10.1  The FADE project approach Focus stage

Analysis stage

Develop stage

Execute stage

•• Identify the project •• Clarify background •• Investigate customer objectives •• Initial risk analysis •• Agree roles and responsibilities •• Create and agree quality plan •• Plan next stage in detail, rest in outline

•• In-depth examination of ‘as is’ •• Detailed requirements of ‘to be’ •• Detailed cost–benefit analysis •• Confirm project approach •• Plan next stage and update outline •• Obtain approval to proceed

•• Confirm requirements •• Negotiation •• Design solution •• Build •• Internal test •• Plan next stage •• Obtain approval to continue

•• •• •• ••

Prepare site Install equipment Training Implement product of the project •• Gain acceptance/ •• sign-off •• Review project

The FADE methodology can be applied to each stage or across the whole project. It is important to be aware of staff expectations and awareness of the project and be capable of using these tools. One approach does not suit all projects and so the PM may have to consider other methodologies or tune the method to suit the circumstances. For some large projects, it is possible to use more than one method. Estimating techniques are common, and may involve guessing or personal experience (but this must be recent and relevant).

10.12 PRINCE Projects In Controlled Environments (PRINCE) is a project management method and is based on the formal life cycle of a project. Its origin can be traced to computer systems projects and it has since been applied to a wide range of projects in government and commercial organisations. PMs can attend courses and gain a qualification in the PRINCE project methodology. The fundamental concepts of PRINCE are the separation of management and technical tasks, clear definition of the project team structure, integration of quality management, control mechanisms to keep the project on track and clear identification of activities needed to deliver the project. PRINCE2 is a structured approach to project management and it is the second method established by the UK government. It provides a method for managing projects within a clearly defined framework. PRINCE2 describes procedures for co-ordinating people and activities in a project, how to design and supervise the project, and what to do if the project has to be adjusted if it does not develop as planned. In the method, each process is specified with its key inputs and outputs and with specific goals and activities to be carried out, which gives automatic control of any deviations from the plan. Divided into manageable stages, the method enables an efficient control of resources. On the basis of close monitoring, the project can be carried out in a controlled and organised way. Being a structured method that is widely recognised and understood, PRINCE2 provides a common language for all participants in the project. The various management roles and responsibilities involved in a project are fully described and are adaptable to suit the complexity of the project and the skills of the organisation.

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10.13  Project planning The planning stage of a project is the most important aspect of all the managerial tasks that a PM must do. A PM is expected to: ❑❑ Forecast. ❑❑ Set objectives. ❑❑ Decide ways of achieving the targets.

To ensure the success of subsequent activities, the plan itself must be: ❑❑ ❑❑ ❑❑ ❑❑

Realistic and capable of achievement. Flexible and allow some contingency. Based on the best available information. Able to support the identification of critical events and the setting of clear targets.

Planning a project involves identifying the steps and their sequence in a project and the use of appropriate scheduling techniques. There are now many software programmes that can assist in this task. Project planning can be defined as action taken now to arrange future events to bring about a desired conclusion. It is about organising what is to be done, by whom and when to achieve success. It can be viewed as a positive step to control future events. The benefits of good planning are many and include: Consideration of alternative approaches and potential pitfalls. Seeing at the outset if the project has a chance of succeeding. Organisation in advance of resources required later. Communication with others about what is about to take place and what is their part/role. ❑❑ Obtaining an agreement now on the subsequent involvement of others. ❑❑ Establishing a basis against which to plot progress. ❑❑ ❑❑ ❑❑ ❑❑

So why does planning not always happen? Those opposed to planning may say that it: ❑❑ Takes time away from doing the project itself. ❑❑ Involves sticking one’s neck out against the odds. ❑❑ Is difficult to produce plans to accurately predict the future.

But remember: time spent planning is saved in future actions. A plan is a basis for future action which can be modified if necessary. Plans are destined to be modified! The steps involved in creating a project plan or programme include: ❑❑ ❑❑ ❑❑ ❑❑ ❑❑

Agree TOR (quality plan). Identify work and effort required. Identify dependencies in the work and tasks. Schedule the work to clarify the appropriate sequence of tasks. Identify control measures and critical points in the programme.

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The criteria of a good project plan include: ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑

All activities are included and considered. Resources required are shown. Dependencies of tasks and activities are clearly identified. Review dates are shown. The format is easy to communicate with all team members. Contingencies are considered and visible. It is easy to read, use and update.

10.14  Planning techniques There are a number of techniques that can be used to help plan the project tasks. These include: ❑❑ Network analysis involving job sequence, scheduling and time analysis. ❑❑ Gantt (bar chart) programmes. ❑❑ Program Evaluation and Review Technique (PERT)  –  an example is the US Navy

Special Projects Office, which saved 2 years on the Polaris Project.

❑❑ Critical path analysis (CPA) – Dupont used CPA and saved $1 million in the first year

of using this technique.

❑❑ PRINCE2 – this is a structured process, developed by the UK government for larger

projects.

❑❑ Precedence diagrams. ❑❑ Linear programming. ❑❑ Computer modelling.

The software now available to help manage projects may include: ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑

Modelling of the relationships between task, time, cost and resource. Progress tracking. Task scheduling. Resource allocation. Project evaluation diagrams. Generation of reports and project plans. General management documents.

10.15  Gantt charts Gantt charts are extremely useful project management tools. A Gantt chart can be created using Microsoft Excel or a similar spreadsheet. Every activity has a separate line. The first step is to create a timeline for the duration of the project (normally weeks – or, for very big long-term projects, months). The next stage is to colour code the time blocks to denote type of activity (e.g. intense, watching brief, directly managed, delegated and left to run, and so on). All the project review and break points need to be added to the schedule. At the end of each line, cost columns for the activities can be added as needed. A Gantt chart can be used

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to keep track of progress for each activity and how the costs are running. The time blocks can be moved around to report on actuals versus planned, to reschedule, and to create new plan updates. Costs columns can show plan and actuals and variances, and calculate whatever totals, averages, ratios, etc. are needed. Gantt charts are the most flexible and useful of all project management tools. However, they do not show the importance and interdependence of related parallel activities, and they will not show where it is necessary to complete one task before another can begin.

10.16  Critical path analysis This tool allows the PM to identify the critical path for getting a project done. It will identify those activities in the project that are dependent on others and those on the critical path will require careful management and scrutiny. CPA establishes which activities have to be completed before the next activity at any stage in the project. Each activity is assigned a time or duration, with the earliest start date and the earliest finish date. Once all the activities are mapped in order, then the latest finish date of each activity can be determined, followed by new earliest start dates. If an activity’s start time is the same as another activity’s end time, they will both be on the critical path – there is no scope for slippage or slack. Activities that have different times have a ‘float’ or spare time so that there is time to delay the start without it impacting on other activities. In many projects, simultaneous activities will take place, and this tool allows the PM to focus on the activities that could jeopardise the overall project.

10.17  Project control Projects must be controlled according to the time allocated, the costs approved and the quality standards expected. Controlling a project can be challenging when the client requests changes to the scope of works that put pressure on time, cost and quality dimensions of the project. Sometimes the FM may also need to include a change in the project – perhaps a product is no longer available or the lead time for materials is longer than forecast. Changes need to be managed in a change request log. There will also be a certain point in time when a change request has to be rejected due to the disruption it would cause to the overall project in terms of cost and time. Minor changes can be permitted up to that point, as the cost implications are much less. PMs need to identify that critical point in a project plan. The key ingredients for a successful project include: ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑

Recognition of the key elements that will indicate success. Agreement on the criteria for success. A clear and well-understood TOR. Effective planning and control procedures. Adequate resources. Continuous customer or end-user involvement. Roles and responsibilities of the project team members that are clearly understood. The adoption of a partnership concept.

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10.18  Risk management Projects are potentially risky activities. All projects should have a risk assessment carried out. The first stage is a risk analysis – this looks at the probability and the impact of business risks, and what mitigating factors or containment measures are in place. In analysing business risk, the PM needs to ascertain what the risks of failure are likely to be and to consider the impact of project failures or delays on: ❑❑ ❑❑ ❑❑ ❑❑ ❑❑

Organisation. People. Image. Performance and profit. Other projects.

This could be done in a forum, brainstorming the options and actions. The typical symptoms or outcomes of risky projects are: ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑

Late delivery. Over budget. Contains errors or omissions. Not working or functioning as expected. Difficult to operate or use. Costly to support, maintain or enhance. May never be implemented.

These outcomes can be prevented by managing the risks. The PM can: ❑❑ Quantify the cost of failure. ❑❑ Quantify the cost of mitigation. ❑❑ Quantify the cost of management.

This information can provide a starting point to undertake a cost–benefit analysis to find out whether the project is worth doing and whether the steps required to ensure its success are feasible. Risk monitoring is an ongoing feature of project management. It should be built into every programme as it is essential to manage project ‘show-stoppers’. Risk management reporting needs to be an agenda item for every project review meeting. This requires that the responsibility and accountability of monitoring tasks in the project are clearly identified to the: ❑❑ Project sponsor. ❑❑ Project owner. ❑❑ PM.

10.19  Project budget Project budgets will reflect the project brief and programme. The budget must be managed using project control techniques, ensuring that cash flow is in line with the financial approvals. Financial reports on the project’s status must be regularly issued to the project sponsor

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and other stakeholders. Project budget control is about knowing the current spend profile, the committed spend profile, the forecast outcome, and variations up or down of actual expenditure against the budget estimates. The focus of effort should be on monitoring cash flows in and out and having the expertise to bring the budget back on track should the monitoring reveal deviations from the budget allocation. While most projects use capital (capex) funds, some smaller projects may use operational (opex) sources of funds. Most projects will use staged payments to release funds to the contractor and supplier for materials purchased and/or works completed. This aspect of project management needs careful monitoring and control. When the overall project length is greater than one financial year, accruals and prepayments have to be managed from one financial reporting year to the next. This has impacts on the cash flow of the FM department, client budgets and whole organisation (see Section 6.30). In addition, the FM must consider future operational budget implications from capex-funded projects. Year-on-year future maintenance and day-to-day activities associated with the completed project must be considered in the original business case so that the full financial impact of the project is calculated and can be considered during approval of the funding streams (see Section 6.34).

10.20  Project teams Another important part of the planning stage is selecting the right team. The PM must take great care, especially if the project has team members imposed by the project brief. Selecting and gaining commitment from the best team members – whether directly employed, freelance, contractors, suppliers, consultants or other partners – is crucial to the quality of the project and the ease with which the PM is able to manage it. Generally it is recommended to try to establish the team as soon as possible. Identifying or appointing one or two people even during the TOR stage is possible sometimes. Appointing the team early maximises their ownership and buy-in to the project, and maximises what they can contribute. But be very wary of appointing people before you are sure how good they are, and not until they have committed themselves to the project upon terms that are clearly understood and acceptable. Don’t imagine that teams need to be full of paid and official project team members. Some of the most valuable team members are informal advisers, mentors and helpers, who want nothing other than to be involved and a few words of thanks. Project management on a tight budget can be a lonely business – get some help from good people who can be trusted, whatever the budget. The FM project team will be made up of several disciplines or specialists, often from different departments or organisations. The membership will reflect the nature and scope of the project. The team must be led and managed to ensure the desired outcome is achieved.

10.21  Project support A project team will require support in both technology and administration. Software examples include Microsoft Project and Project Commander. The general administrative support includes project documents, minutes of meetings, progress reports, programme charts, contacts, agendas and so on. Having good systems in place will give assurance to sponsors and clients that the project is in safe hands. It will ensure that a project history is maintained, that reporting is consistent and that review dates are kept to.

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Ideally a spirit of partnership needs to be nurtured in a project to ensure that the team members have common goals, total commitment, and shared risk, responsibility and accountability. It is assumed that everyone in the team wants success! The performance of the team will depend on effective team building, communications, well-managed meetings and shared information. Having up-to-date contact details is essential. Ways to create a good team may include team away-days, a social event or celebration, co-location of the members in a project office and a project newsletter. A good team needs a supportive framework, and prompt rectification of issues and show-stoppers. Team members’ individual and collective contributions must be valued, recognised and rewarded. Members deserve to be treated with respect and will require regular contact with the PM. Some projects and project teams are given specific names or brands, making them more clearly identifiable to others. In some cases, the name may hide the real project purpose but nevertheless gives a sense of identity to those in the team and others externally.

10.22  Project handover At the close of a project, all aspects must be properly completed including the customer sign-off. The pre-handover stage is critical to ensure that training, testing, witnessing and commissioning are carried out. Certification of compliance, the operating and maintenance procedures, ‘as-built’ drawings, the health procedures and safety file, and the building logbook are examples of documents that need to be ready for the formal practical completion stage. PMs will also need to create the snagging list (a list generated by the clerk of works or PM to show all defects and items of concern identified during the inspection of the project at handover). The defects period (11–12 months depending on the nature of the defect, the type of contract and the size of the project), details of warranties and guarantees, and the post-project defect- or fault-reporting procedure also need to be confirmed. At practical completion, there are several implications for FMs, including insurance of the site, building and equipment; responsibility for maintenance; site security; and transfer of responsibility for health and safety compliance. It is important to evaluate and learn from completed projects, identifying successes and development needs which will improve performance next time. There are several evaluation methods: ❑❑ Post Implementation Analysis (PIA). ❑❑ Post Occupation Evaluation (POE).

A PIA is a financial audit of a project. The financial business case is checked and the savings and benefits proposed are verified. Recommendations may arise from a PIA when considering future projects of a similar nature. A POE will assess the performance of a building. It will find out if the occupiers are satisfied, gather any evidence of ‘sick building syndrome’ (see below), determine the effects of the building on staff productivity, check if the building supports the occupants’ functional performance, identify if the project purpose has been achieved, and identify any management or personnel problems. POEs can be carried out via standard questionnaires, interviews, observations, physical monitoring, focus groups, analysis of energy consumption data and benchmarking with other organisations.

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Note that ‘sick building syndrome’ is a term used to describe a sickness experienced by occupants while they are only inside a building or an enclosed space. Symptoms range from dizziness to nausea, headaches, rash and general discontent. More information can be found in HSG132 (How to Deal with Sick Building Syndrome: Guidance for Employers, Building Owners and Building Managers). There are many benefits of POEs to client, designer and FM. For example, project sponsors are assured that the investment has been well spent, that the project aims have been met, and that the views of end-users are valued and will be considered to improve future projects. It is useful to be aware of the typical reasons why projects fail to deliver the expectations of the sponsor or client. Reasons may include project objectives not being clearly specified, an inexperienced PM, too few people in the project team, lack of experienced team members, new technology, inaccurate or restricted information, poor performance of suppliers, inadequate communications, and lack of control of decisions and changes.

11

Space Management

11.1 Introduction Space management is a very practical skill. The need to be fully conversant with the space in the organisation’s property portfolio is a fundamental aspect of FM (facilities management, or facilities manager). It brings the FM into contact with every person and every aspect of the organisation and the premises. FMs are usually responsible for the use and management of space within their buildings. Space management covers many aspects such as the formulation of a space strategy or policy, consideration of the impact of structure and services on space use, preparing briefs for office layouts, managing changes in accommodation, and managing costs and charges for space. It also requires the FM to keep abreast of relevant legislation, and new developments in the way space can be used to support an organisation and its employees. As in all good management practices, regular reviews are required to check that the working environment is providing the medium for the organisation to achieve its operational objectives. Policies and standards may have to be reviewed, moves and relocations managed, and new ways of working introduced. The landscape of the working environment needs a good manager to keep it productive, creative, cost-effective and compliant.

11.2  Data and information gathering A competent FM will need to know: ❑❑ The amount of space they manage, and the proportion of occupied and empty ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑

space – this could be in either square metres or square feet. The details and type of ownership (landlord, lease, licence, etc.). The type or kind of space (industrial, office, residential, retail, leisure, etc.). Details of the occupiers and people who use it (department and/or functions). Details of the activities that take place and in which areas (quiet work, meetings, creative work, desk sharing, socialising, collaboration, team working, etc.). The utilisation of the space over time. The churn rate (how often do people move and how often is the space reconfigured). The costs of occupying the space (often expressed as £ per square metre or foot). The costs of servicing the space (such as cleaning, security, energy, fit-out and maintenance). The impact of the space on the overall purpose of the business and its contribution to the organisation’s objectives.

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11.3  Importance of space Space is an expensive resource and must be used effectively and efficiently. Space is expensive to buy, costly to maintain and slow to dispose of, and it can easily become ineffectively utilised. In today’s competitive world, people work in a variety of ways and locations. FMs must balance the needs of the user with the amount of space available at the right cost. They have to maximise the user’s opportunity to work effectively, while enabling the space to be used as efficiently as possible. With the increasing use of home working, desk sharing and remote working in client sites, it is challenging to gather information about the true use of space. Space can also be a valuable source of income (such as conference and accommodation lettings) and a key resource for the organisation. It can provide a creative stimulus to the occupants and a tangible identity for the organisation. Space can establish the ways that work is done and the culture of the organisation. Traditionally, the amount and quality of space allocated to a person at work was a function of a person’s status and/or their job title. In traditional hierarchical organisations, the best space was given to the most important employees or the owners of the business. With the impact of new types of work and new organisational structures, the allocation of space is more likely to be based on type of work and the needs of the occupants, rather than status. FMs need to have space management guidelines which specify the organisation’s space and furniture standards, to manage the allocation of space. These guidelines will reflect the culture and image of the organisation.

11.4  Space management policy Key to successful space management is the organisational policy for space. The policy should include: ❑❑ A strategy for space which reflects the organisational culture and helps to support the

achievement of organisational objectives.

❑❑ Guidelines for the optimum use of buildings and the space in them, based on current

knowledge and best practice.

❑❑ An allocation policy explaining the type of space and work equipment provided. ❑❑ A change request procedure allowing planned accommodation moves. ❑❑ Proper provision for space costs in the organisational business plan, and a charging

mechanism if appropriate.

❑❑ Proper provision for an efficient and effective space-planning technology, such as

computer-aided design (CAD) linked to a computer-aided facilities management system (CAFM). ❑❑ Agreed principles for conducting regular space utilisation surveys, including methods to be used. To manage space effectively, it is necessary to understand the nature of organisations. The term ‘organisational culture’ is often described as ‘the way we do things around here’ or ‘what makes the organisation tick’. The extent to which the organisation’s culture will permit space to be properly managed will depend on: ❑❑ The degree to which the organisational strategy for space reflects the core assumptions

and beliefs inherent in the organisation.

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❑❑ The organisational attitude to space guidelines and standards. ❑❑ A willingness to make proper provision for space costs at both departmental and

organisational levels.

❑❑ The ability of the facilities team to operate successfully within the organisational

culture.

11.5  Space guidelines Guidelines are defined as codes of practice that help decision making. Key features of bestpractice space guidelines are: ❑❑ The promotion of flexibility and an understanding of the constraints and opportunities

afforded by the available space.

❑❑ A definition of the role of space in the achievement of organisational objectives, which

❑❑ ❑❑ ❑❑ ❑❑ ❑❑

❑❑ ❑❑ ❑❑

as well as financial performance include consideration of social and environmental factors such as well-being, collaboration, sustainability, energy use and recycling. An appropriate corporate standard for space, equipment and furniture based on functionality in preference to standards based on status. Guidelines for the provision and use of ancillary space and common support space, including ‘swing space’ (see Section 12.4). A system for monitoring user attitudes to the space that feeds back to the spaceplanning process. Measures that monitor space use, service provision and service delivery. Effective control mechanisms for space management and accountability. An example would be a well-managed system for charging use of space and services back to the users or occupiers. This could be on a desk basis or area basis. The use of technology and sensors as space-planning tools to collect data on space use and produce reports for decision making. Regular utilisation surveys to monitor use of space. Use of off-site accommodation, such as serviced offices, home working, co-working sites and temporary accommodation.

Space standards Space standards are measures applied to the provision of space, equipment, furniture and services. Key points are: ❑❑ They should be derived from organisational guidelines, which form part of the organi-

sational strategy for space.

❑❑ The number of standards should be kept to a minimum, to reduce complexity. ❑❑ The standards should be based on functionality rather than status. ❑❑ The standards must comply with legislation  –  according to the Workplace (Health,

Safety and Welfare) Regulations 1992, each person requires 11 m3. This is equivalent to 4.4 m2 if the ceiling height is 2.5 m. Standards in other sectors, such as education, may vary. Standards in other countries will vary too, so FMs working in diverse geographical locations will need to select a suitable standard that fits all locations across the organisation. ❑❑ The standards should also apply to ancillary and common support space as well as workspaces.

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❑❑ The standards could adopt the Global Estate Measurement Code for Occupiers

(GEMCode), produced by IPD, or the International Property Management Standards (IPMS) protocol. Both of these are compatible with financial reporting and valuation standards (e.g. the International Financial Reporting Standards, or IFRS). These provide a common language for space measurement and are especially useful for FMs with international portfolios of space.

11.6  Effective use of space Matching supply and demand for space requires the FM to have an in-depth knowledge about the space, the client organisation, its purpose and its people. The first step in managing space is to understand how the business uses it, and what it requires to support its business objectives and needs. Is the organisation: ❑❑ ❑❑ ❑❑ ❑❑

Expanding? Contracting? Merging? De-merging?

Does the organisation need: ❑❑ ❑❑ ❑❑ ❑❑ ❑❑

Innovative, creative or collaborative space? Private space? Open-plan, shared space? Public access or community space? Secure space?

FMs need to understand the building stock in their portfolio and how this matches the requirements. Understanding the users’ needs, the triggers for change and the likely future demands is essential in developing a space brief and informing longer-term plans. A rigorous and well-documented space policy with clear guidelines will enable the FM to manage the space. This will also enable measures of space utilisation and performance to be monitored. Functionality and diversity People, organisations and buildings are as diverse as is the space used by people and organisations within buildings. In space management, the concept of diversity acknowledges that people are individuals and this could give rise to an alternative space management policy. Given that people work differently and that they have different personal and workingenvironment-related needs in order to be effective and efficient, a space management ­policy needs to offer flexibility and choice. This concept allows individuals and groups to exercise choice within a decision framework. It is a sort of ‘free range’ idea for using space, furniture and equipment. The framework is defined by the cultural attitude to status and functionality and one or more of the following: ❑❑ Cost – A limit will be placed on the amount of money that can be spent. Expenditure

may be limited to making selections from a predetermined range of furniture, work

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surfaces, storage and equipment but may be extended to include carpets, curtains and finishes. ❑❑ Quality – Selection will be limited to a range of options and may be strongly influenced by legislation and status issues. ❑❑ Footprint – Groups and individuals may be able to exercise their freedom of choice relating to cost and qulity so as to organise their work areas on a functional basis, within a predetermined footprint or allocation of an area to a team or department. A key consideration is that, except for the most senior employees, choice is likely to be restricted to ranges of furniture, equipment and finishes adopted on an organisational basis. The reasons for this are: ❑❑ Inventory control – Overall control of the furniture and equipment inventory needs to

be maintained so that items can be interchanged between individuals and work groups. In this way, the problems associated with the replacement or purchase of additional ‘specials’ will be reduced and possibly avoided. ❑❑ Cost control – Limiting choice to centrally selected and procured ranges will increase the opportunities for economically advantageous procurement decisions. In addition to economies of scale in procurement, closer and longer-term relationships with suppliers will be possible. In some cases, suppliers will be able to manage many of the aspects of space management for their client – such as layout plans, furniture moves and reconfigurations. ❑❑ Image – Although what might be termed ‘free range’ arrangements of space may reflect varying degrees of individuality, an appearance of chaos can be avoided via the uniform design, size and colour of the centrally procured ranges. In some organisations, the space needs to complement the overall business brand and other design attributes. ❑❑ Compliance  –  Legislation such as the Provision and Use of Work Equipment Regulations 1998 (PUWER), the Health and Safety (Display Screen Equipment) Regulations 1992 (DSE), and laws about electrical fire safety affect the selection of appropriate furniture for occupants. The objective of diversity as a space management concept is to achieve the best possible use of people’s talents and the available space, equipment and furniture. It encourages individuality, ‘ownership’, group and individual effectiveness and efficiency. However, the potential for chaos of excessive diversity is a danger not to be underestimated. Clear guidelines are required and it is important to ensure that the ‘free range’ space conforms to the minimum legislative and regulatory requirements.

11.7  The FM cost driver There is a direct relationship between the amount of space and occupancy costs. All FM services, utilities and premises costs relate to the amount of space being managed. Space can be considered as the FM cost driver for both the premises (rent, rates and utilities) and the services (cleaning and maintenance). The cost of space can have a major impact on FM and the organisation. Typically, organisations will benchmark their costs per square foot, so accurate space occupancy data is essential. The Royal Institution of Chartered Surveyors (RICS) suggests that owner-occupied space is less effectively and efficiently used than leasehold space where the cost hits the organisation’s balance sheet directly. Utilisation surveys

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typically show the best use of space is only about 55%. Not using up to 45% of a building is a huge drain on an organisation’s FM costs. When space is air conditioned, the cost of space is even higher. Translating this into carbon emissions, air conditioned space generates 2.1 tonnes of CO2/annum/m2. A workstation in prime offices in London could cost the organisation £15,000 to £20,000 per year to provide. The way space is used will also affect other aspects of how space is managed: ❑❑ An agreed procedure in the cleaning and housekeeping service to remove all items left ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑

on floors and furniture (clear desk policy). Confidentiality, security and privacy. Document filing and archiving. Furniture procurement. Churn, accommodation and office relocation management. Brand identity and image. Internal space-charging policy. Treatment of surplus empty space. Compliance to risk assessment, health and safety and hygiene requirements.

11.8  Business performance Space has an important impact on business performance – either limiting or enhancing the productivity of the organisation. The quality and nature of a workspace affects staff morale, productivity and creativity. It is also known to affect recruitment and retention of staff and presents a powerful image to customers and suppliers. Most importantly, the way space is used and managed will determine whether the organisation complies with legislation governing the working environment. Space is an expensive organisational resource. It must be flexible, encourage productivity by being aesthetically pleasing, be comfortable, and be conducive to individual and group interaction. Driven by status, headcount largely determined space requirements in the past. However, social, environmental and technological changes have combined with frequent worldwide recessions to compel the rejection of the hierarchical legacy of traditional organisations in favour of the needs of a knowledge-based society. This means functionality and need are the way forward, not status, when it comes to space management. The principles of space allocation must underpin the process of reconciling demand and supply. On the one hand, social, environmental and technological changes have increased the demand for more and better space. On the other hand, pressure to conserve resources and reduce costs requires more efficient and effective management of the available physical, environmental and financial resources in order to meet these increased expectations. Savings of up to 40% can be expected if flexible or agile working practices are introduced, with productivity gains of 15% for an individual and 10% for a team. The Stoddart Review (2016) examined the role of the workplace in organisational and UK productivity. It concluded that better use of workplaces would enhance the UK’s output and that well-designed and fit-for-purpose workspaces provide a significant productivity boost to the workforce, from 1% to 3.5%. Applied to the UK as a whole, this could create an additional £20–70 billion for the economy. With over 50% of employees saying that the workplace affects how they work, it is important for FMs to engage with their client organisation to discuss ways to enhance the workplace to support better productivity of the occupants, users and employees. Greater use of home-working during global pandemic has also highlighted the need for well-designed work spaces for effective work output.

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11.9  Space planning Space planning is essentially the task of fitting an organisational structure into a building structure. To achieve this, the FM needs to determine how much space a certain number of people need and how many people the space can hold. Space planning involves reconciliation of these opposite approaches to inform the detailed study of how the space can be effectively used. The space brief is a statement of intent developed during the design process and forms the basis for initial space planning. Planning tools are typically schedules of accommodation, adjacency matrices, proportional bubble diagrams and flow diagrams. Space estimates At the feasibility stage, a rough estimate of the amount of space required by the organisation is needed. A simple method is to divide the net internal area (NIA) by an average gross area per person (say, 15–20 m2). This provides an indication of the number of people that a particular building or space can accommodate. Another approach (the additive approach) is to add space needs together: 12–14 m2/person × working population = net usable area Add to this: 20–30% primary circulation 10% partition allowance 10% building inefficiency factor = Total net internal area Yet another approach is the subtractive method. This takes the gross internal area (GIA) and then deducts core area and primary circulation to derive a net usable area (NUA), which can be used to determine the population that could be accommodated: Gross internal area Less core area Net internal area Less primary circulation Net usable area

100% (20) 80% (15) 65%

Adjacency matrix The next stage is to identify the needs of individuals, groups and teams of people and if they must be near other groups or teams. Their need for particular activities or FM services, such as ancillary and support services (e.g. filing, meetings and refreshments), must also be considered. The relationships and linkages between and within departments and functions are essential components of space planning. Figure 11.1 shows examples. Questions that need to be asked at this stage are: ❑❑ Does the relationship involve the physical movement of people or objects? ❑❑ How important is the relationship?

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Interactive matrix Finance Sales

2

Marketing Engineering

1

Design

3

3 2

1

HR Legal

Design

Engineering

Marketing

Sales

Finance

HR

2

1

Legal

Each person or department is listed. Then questions are asked to determine the amount of interaction between the people or departments .

1 Very important – continuous interaction 2 Important – several times a day 3 Desirable – several times a week Linkage matrix

Product control Purchasing Engineering This diagram portrays ideal relationships between the teams in an organisation, from not permitted to essential.

Plant engineering New facilities planning Manufacturing information Financial operations Internal controls Financial planning Key to linkages:

Essential

Important

Desirable

Unimportant

Figure 11.1  Adjacency matrix

❑❑ How frequently is the linkage enacted? ❑❑ How many linkages make up the relationship?

Prohibited

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With the increasing use of IT systems in many organisations, the physical linkage between and within organisational structures has meant there is less demand on physical adjacencies. The information gathered in an analysis of relationships can be used to create an adjacency or interaction matrix. The matrix will show the relationships between pairs of functions, indicating which have important relationships, which functions could be further apart and the frequency of contact. Bubble and proportional bubble diagram The next stage is to create a bubble diagram which graphically shows how the various functions of an organisation are linked. When combined with an initial space analysis, the relative sizes of the functions can be shown to produce a proportional bubble diagram. Figure 11.2 shows examples of these diagrams. This informs the outline space plan. Zone, stacking and block plans The next stage is to create plans to show how to fit the functions into the available space. ‘Zoning’ is the term used for planning in the horizontal plane whereas ‘stacking’ relates to the vertical floor-by-floor set of plans for the whole building and organisation. Together they produce block plans to show where functions can be best located in a building. Circulation Circulation forms the arteries of a building. Routes need to be wide enough for people and equipment, such as wheelchairs and trolleys. The primary circulation route will link the fire escapes and the core areas. It needs to be as wide as the fire doors, typically 1.2 m (at least two people wide). Allowances of 1.5–2.0 m are used in planning. Depending on the depth and shape of the space, secondary circulation routes may also be required. These will be a minimum of 0.9 m wide (one person wide) and provide clear access to the primary circulation routes. Allowances of 0.9–1.5 m may be used in planning. Distances to fire escapes will determine space layouts. The maximum distance to a single escape should be 18 m, with a travel distance to an alternative escape of 45 m. Planning grids The planning grid governs how flexible the building is in relation to the organisation’s needs for enclosed spaces and open areas. The grid is the division of the floor into a series of squares or rectangles. There are many grids that can be used in space planning. The most common are: ❑❑ Structure – beams and columns. ❑❑ Shell – window mullions and spacings. ❑❑ Services  –  power services; heating, ventilation and air conditioning (HVAC); and

lighting fittings.

❑❑ Settings – raised floors, partitioning and ceiling systems. ❑❑ Furniture – workstation components and layouts.

Significant factors that will affect both the size and arrangement of enclosed spaces and internal partitioning layouts are:

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Simple bubble diagram 10

Each circle could represent individuals in a department or departments in an organisation.

3 11 2

1 4

Lines of different thickness indicate levels of relationship importance. The thicker the line, the more important the relationship.

5 6

9

8

7

Proportional bubble diagram

13

2

Circles of different sizes show the relative sizes of teams or groups of people.

14 15

1 4 Circles can be put in clusters to indicate team relationships with department or the whole organisation.

3 6 5 8

10 7

9

11 12

Figure 11.2  Bubble diagrams

❑❑ The shape, size and depth of the building. ❑❑ The spacing between the window mullions. The distance between the vertical division

of the windows, centre to centre, will govern the size of the enclosed modules. For example, a 1.5 × 1.2 m grid will mean that two-window modules are at least 3 m wide. The larger (or smaller) the grid, the wider (or narrower) an enclosed two-window module will be.

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❑❑ The size, layout and number of structural columns and load-bearing walls supporting

the floors above.

❑❑ The distance from the floor to the underside of the floor above. This will dictate the

❑❑

❑❑ ❑❑ ❑❑

❑❑

potential for the installation of a raised floor or false ceiling and thus influence how the services will be distributed. The size, shape and location of the building core. The building core includes plant rooms, ducts and risers, toilets, lifts, staircases and lobbies – these are all fixed in the building design. The length and width of the building. The need for primary and secondary circulation space and other fire safety requirements will dictate how the space can be divided up. The size of the ceiling and lighting grid. The ability to partition the space will be inhibited if it is not co-ordinated with the window mullions. The availability of small power, voice and data services. Cable management systems are complex and they are expensive to install. Ideally, these services need to be easily relocatable to keep down the overall cost of moving or rearranging workstations. Options are delivery of services via surface trunking around the perimeter, from the ceiling or from under the raised floor. Although wireless technology reduces installation costs, there are more issues to consider, such as location of hubs and routers, security and interference with other technologies in the building. Built-in services (for power and communications) may not offer as high a degree of flexibility as flood-wired or wireless options. The type and flexibility of the HVAC system – i.e. its ability to cope with the workspaces being rearranged and any variations in heat load arising from the proliferation of IT and solar gain.

11.10  Impact of building structures on space use The structural form of a building will affect the way in which the space inside can be configured and used. The shell of the building has several criteria that directly affect space planning, as shown in Table 11.1.

11.11  Impact of building services on space use A wide range of mechanical and electrical services may be required in a business or a building, and both affect the way space can be used in premises. Services that affect space include: ❑❑ Power distribution system – Via perimeter, floor grommets or ceiling poles, or inte-

grated into systems furniture or partitioning systems.

❑❑ Lighting – Numbers and sizes of lights and their fittings, relationships to ceiling grid,

and lux levels required.

❑❑ HVAC – Location of ducts, vents, grilles, radiators, sensors, and systems for changing

temperature, humidity and air.

❑❑ Lifts and escalators  –  Impact on vertical circulation and department adjacencies.

Location of stairs and fire staircases.

❑❑ Voice and data services – Location of cable runs, wireless transmitters, servers main-

frame and uninterruptable power supply.

❑❑ Location of welfare facilities – Toilets, changing rooms, tea points and printer/copier

service areas

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Table 11.1  Impact of building structures on space use Shape

Buildings may be L-shaped, square, rectangular, H-shaped, curved, pointed, low storey, high storey or terraced. Many iconic buildings are remembered because of their external shape. Examples include the Ark in Hammersmith; the Dome in Greenwich; the Gherkin, Cheesegrater and Walkie Talkie in the City of London; and the Shard near London Bridge.

Floor depth

The depth of the space will determine the planning grids and the potential layouts of offices, workstations, and meeting and support spaces. Typically, the glass-tocore depth will range from 9 to 12 m and the glass-to-glass depth will range from 13.5 to 18 m.

Storey height (floor This feature should be considered in conjunction with floor depth. A height of 4–5 to underside of m provides maximum flexibility in larger buildings. Smaller, narrower buildings floor above) may not require such a generous height. Floor size and configuration

Small floors are inefficient in terms of their ratio of core to usable floor area. Landlords and tenants will be looking at the highest building efficiencies when buying or leasing space. Between 500 and 2500 m2 will provide the most usable space. The positioning of core services (such as lifts, risers, toilets and stairwells) and the size of window mullions will also determine the way the space can be used.

Floor loadings

There is a tendency to overspecify requirements. A loading factor of 4 kN/m is usually sufficient for most business functions. If floors are required to support heavy furniture or equipment, then strengthened floors will be required.

IT and the workplace The impact of technological change on the office has been dramatic, and it continues to shape how space can be used. Cheaper computing power and easier-to-use application software have revolutionised office work. The digital revolution has included advances in the fields of voice, data and image transfer; information management; document handling and storage; and reprographics technology. Many occupants may not be using technology to best advantage – with increasing use of laptops and tablets, productivity gains of up to 17% can be achieved if these devices are correctly positioned. Many knowledge workers in offices now expect large flat monitors, and often two to allow simultaneous working practices. These changes have contributed to the premature obsolescence of some buildings and have significantly affected workplace ergonomics. While technology has been changing rapidly, the design of buildings is changing more slowly. This has resulted in many buildings that are more challenging to modify to provide a suitable aural, visual and comfortable work environment. Physical comfort The desirable work environment is one where comfort is derived from there being an acceptable level of noise, adequate lighting, effective and suitable draught-free ventilation, and conditions that are neither too hot nor too cold. There are two issues that concern space management: (i) The association between IT, noise, light, heat and how these affect the working space or environment. (ii) The legislation and control principles which can be adopted to limit the negative impact on the space used by people.

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Acoustics Noise in the office is generally regarded as being unwanted sound that serves to distract, disturb or annoy. Noise can spoil concentration, be stressful and in extreme cases cause physical damage. It can also cause dissatisfaction with both the workplace and the job for an individual. Noise control principles are summarised in Table 11.2. Research into office noise has found the most disturbing sources of noise to be telephones ringing, co-workers’ conversations, and visitors or passers-by. Another source of disturbing noise is office equipment. Computer printers and photocopying machines are prime examples. Other sources include the background noise from building services and externally generated noise (e.g. traffic noise or the noise created as a result of construction or other work). Compliance The Control of Noise at Work Regulations 2005 set out to reduce damage to hearing arising from loud noise in the workplace. The DSE require that ‘noise emitted by equipment belonging to any workstation shall be taken into account when a workstation is being equipped, with a view in particular to ensuring that attention is not interrupted and speech not disturbed’. Light Light influences perception, mood and behaviour. It is an aspect of the design of space, as shown in Table 11.3. There are two aspects of light to be considered – the ambient light that provides general lighting in a space, and the additional light that may be needed at the point of work to do it properly and safely. Light is therefore required to: ❑❑ ❑❑ ❑❑ ❑❑

Illuminate the task. Provide a desired ambience. Contribute to safety and security. Contribute to the health and well-being of occupants.

The principles that control lighting are summarised in Table 11.4.

Table 11.2  Noise control principles Separation

Planning and managing space so that the noise source is separated from the employees to whom it poses a nuisance or threat. The background sound level should be of a similar frequency to the offending source.

Enclosure of the noise source

An example would be to have a separate room for printers and/or photocopiers. Where complete enclosure is impractical, separation or partial enclosure using acoustic screens would be a helpful alternative.

Apply control at source

There are two options. One is to select quiet equipment, the other is to modify the equipment. A simple modification would be to put a sound-absorbing pad under a noisy desktop printer and/or provide an acoustic cover for the equipment.

Local sound absorption

This can be achieved by the use of acoustic screens, whether for separation, complete enclosure or partial enclosure of noisy areas.

Sound absorption This involves the use of sound-absorbing materials to cover floors, walls, internal at room boundaries partitions and ceilings.

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Table 11.3  Factors affecting light and its effectiveness in the workplace The individual

Personal judgement as to what is suitable, sufficient, adequate or appropriate lighting will be different. Individual visual ability will change with age.

The task

The precise performance of particular tasks will not be the same for each individual. The degree of visual difficulty of the task will be a factor.

Daylight

The quality and quantity of daylight will depend on the orientation of the building, its depth, its fenestration, the weather, the season, the time of day (or night) when the task is being performed, the distance the individual is from the daylight source, the space layout, individual workstation design, and the degree to which the daylight is or can be internally or externally attenuated.

Glare

This relates to the reflectance properties and glare-producing potential of the vertical, horizontal and other reference planes of the work surfaces and surrounding areas. It is also affected by use of colour and texture. Wall finishes, equipment, work surfaces and lighting colour will be factors.

Direction

Clarity of objects and shadows will be affected by the direction of light. Diffusers are typically used to give an even diffused light.

Appearance

Light can be of contrasting colours and renditions. Ideally, colours in a space need to appear as they would in natural daylight.

Table 11.4  Lighting control principles Daylight is the There must be a system for attenuating daylight. Horizontal or vertical blinds are one preferred solution. option Local control

This is highly desirable in the interests of user satisfaction. Lighting in meeting and conference rooms should be controllable

Illuminance levels (lux)

These should be checked by a competent person to see whether they conform to recommended design values for particular areas, and any deviations should be corrected.

Glare

Distracting or disturbing reflections can come from room surfaces, work surfaces and lighting. Glossy work surfaces are to be avoided. Matte surfaces of light or neutral tone are required. Note that dark work surfaces are not a good option. They contrast sharply with white paper. Distracting or disturbing room surface reflectance may need to be overcome by decoration or screens.

Task lighting

Having task lighting, whether table mounted, free standing or screen mounted, gives the worker performing the task a greater degree of local light control. It is important that it gives the best illumination for the task.

Source of lighting

The advantages and disadvantages of downlighting and uplighting or a combination of both should be assessed by a competent person. Downlighting should ideally enable flexibility in the deployment of workstations. One option would be the use of directional spotlights capable of being rotated through 360° to serve different layouts while avoiding glare at the work surface. Uplighting, either free standing or wall mounted, is an important alternative, or supplement, to overhead lighting. It can sometimes enable a degree of local control not available in large downlit areas.

Compliance The Workplace (Health, Safety and Welfare) Regulations 1992 require that every workplace should have suitable and sufficient lighting and that it should, as far as is reasonably practicable, be by natural light. The DSE state that any room lighting or task lighting provided should

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ensure satisfactory light conditions and an appropriate contrast between the screen and background, taking into account the type of work and the vision requirements of the user. There are other requirements for lighting, such as the requirement for emergency lighting. Lighting levels for typical spaces are shown in Table 11.5. The DSE require that: ❑❑ Any room lighting or task lighting must ensure satisfactory lighting conditions and an

appropriate contrast between the screen and the background environment, taking into account the type of work and the vision requirement of the operator or user. ❑❑ Possible disturbing glare and reflections on the screen or other equipment must be prevented by co-ordinating workplace and workstation layout with the positioning and technical characteristics of the artificial light source. ❑❑ Workstations must be designed so that sources of light, such as windows and other openings, transparent or translucent walls, and brightly coloured fixtures or walls, cause no direct glare and no distracting reflections on the screen. ❑❑ Windows must be fitted with a suitable system of adjustable covering to attenuate the daylight that falls on workstations. Detailed guidance on lighting is given by the Chartered Institution of Building Services Engineers (CIBSE) in a range of publications from its subsidiary, the Society of Light and Lighting. LG0 to LG18 provide guides for specific sectors and uses. Additional information on lighting is given in Sections 26.30 to 26.34. LG7, Lighting for Offices, provides detailed guidance on office lighting design criteria, lighting systems, equipment and recommendations for specific office-based applications. BS EN 12464 specifies lighting requirements for people in indoor workplaces to meet their visual comfort needs and to ensure performance of people with normal eyesight. BS EN ISO 9241:2000 gives ergonomic requirements for office work with visual display terminals or computer screen work. Heat and workplace comfort The principles that control thermal comfort in the workplace are shown in Table 11.6. Heat in any given workplace can be supplied by: ❑❑ The installed heating system. ❑❑ Heat given off by people.

Table 11.5  Guidance on lux levels Studios and drawing offices

Up to 750 lux

General office space

400–500 lux

Reception, kitchenettes and ancillary areas

300 lux

Corridors, toilets and changing rooms

100–200 lux

Store rooms

100–150 lux

Meeting and conference rooms

500 lux

Archives

200 lux

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Table 11.6  Thermal control principles Appropriate settings for temperature and humidity should be maintained. Check that thermostats and thermometers are accurate and that they are located in the most appropriate positions. Control solar gain. Energy-efficient methods of lighting, heating and ventilation should be used. The same principle applies to air-conditioned premises. Consider the use of high-energy-efficiency office equipment and equipment that automatically goes into standby mode when not in use. Investigate the causes of complaints about discomfort. If appropriate, arrange for a competent person to survey the thermal environment.

❑❑ Heat produced by the local equipment. ❑❑ Heat given off by the artificial lighting. ❑❑ Heat from solar gain from the effect of the sun’s rays on the fabric of the building and

the glazing.

Compliance The Workplace (Health, Safety and Welfare) Regulations 1992 require that temperatures in all workplaces inside buildings should be reasonable. In static working areas of offices, a minimum of 16 °C is required within 1 hour of operation. The CIBSE recommends a reasonable temperature to be 19–21 °C during winter and 20–22 °C in summer for office workers. Although there is no maximum temperature stated in legislation, the employer has the standard duty of care to provide a safe and healthy place of work. Excessive thermal conditions of over 30–35 °C may require action to reduce the impact on staff, processes and equipment. The DSE require that ‘equipment belonging to any workstation shall not produce excess heat which could cause discomfort to operators or users’. These regulations also require that there be an adequate level of humidity. The recommended levels are 40–60% relative humidity (RH). BS EN ISO 9241 provides guidance and recommendations concerning temperatures, heat build-up around equipment and RH in the working environment.

11.12  Space allocation FMs are often responsible for the development of a space allocation plan. They will be expected to analyse the needs and priorities of the business and prepare a clear and concise plan for space allocation, including space guidelines where appropriate. The impact of change within the space and premises has to be carefully managed to minimise its implications for the occupants and other users. Matching supply and demand requires the FM to have an in-depth knowledge of the space and organisation and its people. Space allocation policy will provide a framework for space planning. The policy should determine the standards in space, furniture, style and layout options. It will determine how the space is used and a policy on furniture procurement will deter rogue purchases and one-off items appearing in the workspace.

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Questions to consider are: ❑❑ Is the business expanding, contracting, merging or acquiring? ❑❑ Is space allocated based on status, function or need of the user? ❑❑ Does the organisation, department or occupant need space that is innovative, creative,

private, secret or at client sites? What are the space standards for particular uses and functions? How many types of space does the business need? Do job functions and type of work determine how the space is allocated? Is there a clear desk policy? What is the archiving and filing policy, how much personal filing is permitted, are there central files, and is there an efficient off-site archiving service? ❑❑ How many furniture and equipment suppliers are used, how are new orders managed, does everyone have the same product, and what are the options for ergonomic and special needs? ❑❑ ❑❑ ❑❑ ❑❑ ❑❑

Traditionally, space allocation has been based on adjacencies so that communication and close working of departments is achieved. However, with the need to increase creativity and  overall communication within an organisation, it may well be better to create disadjacencies so that more effort is made to communicate with sections and functions of the business. With increasing concerns about obesity and well-being of staff, space management can also be a tool to increase movement and circulation within the premises. Space layout briefs FMs need to be able to capture information about the space and operating requirements of customers and prepare clear briefs for layouts. It is essential to understand the users’ needs, the triggers for change and the likely future demands so as to be able to develop a space brief and inform long-term plans. A rigorous and well-documented space policy with clear guidelines will enable the space to be managed and monitored over time.

11.13  Space utilisation Organisations can use heat maps or snapshots of the workplace to establish how space is used. This could involve the FM team walking around the building, perhaps once an hour, observing the use of each workstation, meeting rooms, classrooms and so on. Technology could also be used to harvest data on activities in the premises. An audit will determine what space the organisation has now, how it is used, by whom and why. Ideally, the audit will take place every year at the same time. An ideal time is in either November or February when fewer people are off sick or taking holidays. Each organisation may have different peak times in its business cycle, so it is important to tailor the annual data collection to the most appropriate time. To gather sufficient data, the survey needs to last for 3 weeks and it will record who is doing what and where. One methodology uses the categories of hot, warm and cold to denote use of the space. Hot = someone sitting there, i.e. occupied; warm = evidence of occupation of space, e.g. jacket on chair, paper on desk; and cold = unoccupied, e.g. the desk is completely free of all personal effects and is available for use. The results of this exercise usually reveal the ‘bird’ of space image (representing the typical dip in usage in the middle of the day, as staff leave their workstations for lunch), as shown in Figure 11.3.

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Desk utilisation

100% 90% 80%

Cold - not occupied

Desk usage

70% Warm

60% 50% 40% 30%

Hot - occupied

20% 10% 0% 07:00

08:00

09:00

10:00

11:00

12:00 13:00 Working day

14:00

15:00

16:00

17:00

18:00

Figure 11.3  Results of utilisation survey

This methodology has several drawbacks. Observations on how the space is used are for just a few seconds, and only over a fixed time period. So there is a limit to the accuracy of the information and there may be doubts about whether the data collected is truly representative of people’s behaviour and use of the space. The observation of whether someone is at a desk may not be indicative of their real activity or productivity. Someone sitting at a desk may in fact not be working at all. Additionally, employment of observers over a given period of time can be very expensive. Deployment of sensors in the workplace makes tracking much more cost-effective. Space utilisation data typically shows that workspaces are frequently underused. Taking holidays, sickness, training, meetings and other absences into account, spaces may be unoccupied for a significant part of the working day. No organisation will ever reach 100% but the aim may be to achieve 80% (the other 20% is the gap taken up by holiday, sickness or absence on business). However, even this is unlikely. The UK’s highest rates are in the range of 49–65%. A recent survey by a large FM contractor gives the UK average as 49.5%. Space utilisation data can raise more key questions, for instance: ❑❑ ❑❑ ❑❑ ❑❑

How well are the workstations, meeting rooms and social spaces being used? When people are not at their desks, where are they? Who really needs to be closely located with whom? Are the meeting rooms being well used, are they the right size, and are dedicated rooms needed for all meetings?

Radio frequency identification (RFID) tracking technology can be used to help measure space utilisation. The use of a credit-card-sized badge attached to an item or a person enables sensors in defined locations to track the exact location of the individual or item in real time. This technology gives a constant stream of information about the patterns of space use, and it is potentially cheaper than employing observers and consultants to conduct a space study. Time-lapse studies, under-desk sensors and heat maps can also provide data on space utilisation. Studies show that building occupants typically perceive that they spend

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68% of their time at a desk or workstation, whereas the reality is that typically 44% of desks are occupied at any one time.

11.14  Space audits When setting up a space audit, it is important to establish its intention and purpose. Typically, a space audit will state the reasons for conducting the audit and provide a focus for the audit team. Consider the following examples of space audit criteria: ❑❑ To propose actions to reduce costs by changing the amount, location and use of space. ❑❑ To review the impact of changing space requirements on the organisational premises

policy and recommend appropriate changes.

❑❑ To establish the potential for the present building stock to meet strategic requirements for

space over the next 5 years and propose how any deficiencies or oversupply will be dealt with.

❑❑ To propose action that would be necessary to respond to space requirements in the

event of the sudden, unforeseen loss of a building or part of a building.

Benefits of a space audit Space audits present the FM team with a number of opportunities for reassessment. These are presented using the mnemonic RESCUE, which in some cases might perhaps be an appropriate title for the auditing operation: ❑❑ Review the way work is organised, the patterns of work and the space used to perform

the various work activities. Examine the suitability of existing building stock for the business operations. See whether space costs and use match best-practice benchmarks. Critically review the organisation’s space strategy. Use the audit to assess the real and perceived performance of the FM function with regard to space. ❑❑ Examine the demand for space arising from the impact of technological change, staff expectations, and legislative and regulatory requirements. ❑❑ ❑❑ ❑❑ ❑❑

The desired outcome of the audit is that the audit team will be able to provide management with the feedback it requires for decision making. The space audit will provide up-to-date information on the available space, the way in which it is being used and what it costs. This is hard evidence, which can be used by the FM team to support judgement and avoid controversy with regard to the use of space. Space-related databases and CAFM systems can be updated and the evidence can also help to bring about essential changes to the way space is managed, improve performance and reduce costs. The space audit process The audit should be arranged and conducted in such a way as to avoid generating mistrust or work group rivalries. The purpose of the audit and its ground rules need to be communicated to those on the receiving end to ensure there are no misunderstandings. The results of the audit should be communicated objectively and unambiguously so as to avoid the possibility of them being misinterpreted.

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Supply

Demand Research

Buildings Ceiling grids Depth of space Floor grids Floor sizes Lighting grids Number of storeys Structural grids

In use Legislative compliance Occupational density Patterns of work Space cost comparisons Space utilisation Space use comparisons User perceptions

Space related Ancillary space Circulation space Filing strategy Furniture standards Personal workspace Space standards Support space

Analysis

Figure 11.4  The space audit framework

The audit framework The framework for the audit is research into and analysis of the supply, demand and use characteristics of space in quantitative and qualitative terms. The audit research is conducted by means of investigative surveys (Figure 11.4). The aim of the audit is to establish a range of information as shown in Table 11.7. The output of the research is analysed and related to the intention of the audit. It is unlikely that any one particular survey methodology will provide sufficient information. It is also unlikely that the audit process of research and analysis will be completed in one hit. Methodology There are five options for conducting the survey. It is unlikely than one option alone will satisfy the research requirement. The options are shown in Table 11.8.

11.15  Building efficiency As explained in Section 9.22, landlords and tenants tend to view building efficiency quite differently from one another. In addition to the ratios or percentage of NUA to NIA, the following are also likely to be occupier concerns: ❑❑ The potential of the building for adaptation for change of use. ❑❑ The potential for expansion or contraction offered by the building. What is the poten-

tial of the site and/or building to accommodate growth, or to subdivide the building in order to let surplus space? ❑❑ The implications for space planning of the shape, size and depth of the building; the size and location of the building core; the planning grid; the columns supporting the floors; the floor-to-ceiling height; the distribution of HVAC systems; small power,

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Table 11.7  Critical examination of the organisation and use of space Topic

Example findings and considerations

What type of space there is

Simple, naturally ventilated Open plan, naturally ventilated Standard air conditioned Prestige air conditioned

Where the space is

The ad hoc acquisition of additional space to cope with unforeseen growth, leading to disjointed core operations. Road, rail or air communication difficulties, or even the lack of public transport facilities or parking space. The deterioration of a location to the extent that it adversely affects organisational image, or affects recruitment and retention of staff. Environmental considerations – the control of pollution, which might include the need, or otherwise, for air conditioning or problems associated with the disposal of hazardous waste.

When the space is used

If space is permanently allocated to staff who only use it for, say, 25% of their contracted time, might non-territorial use of space merit consideration? If a staff restaurant is underutilised because local facilities are perceived to offer greater choice or flexibility, might a financial incentive such as a lunch allowance free up space for more productive use?

Who uses the space

There might be circumstances when it would be more effective if departmental or work-group ownership of some ancillary areas (such as meeting rooms and training space) were terminated and the space became common support space, bookable centrally and available to everyone. Are there drawings that show occupational details?

How the space is used

The extent to which scientific or technological change has made the space inappropriate. Whether, or to what extent, organisational guidelines for the use of space have become eroded as incremental changes have taken place. The identification of discrepancies in the provision and use of space by departments and work groups. How often or for how long particular areas or workspaces are used. This might entail monitoring usage over more than one time frame – hourly, daily, weekly or seasonally. Numbers of individuals accommodated. The number of times individuals move over a given period of time.

How much it costs

Comparison of space costs against internal and external benchmarks. The cost of space per square metre, per workstation, per employee or per unit of organisational output.

Why it is The extent to which the organisation’s culture is inhibiting space utilisation. Factors would used the include outdated or unnecessary hierarchical conventions, historical considerations and way that it is resistance to change. The identification of wasteful workflow and/or duplication of effort. User perceptions of their workplace. However, the perception is not always the reality. Inefficient space, well managed by a responsive FM team, may not be perceived to be bad space by users. On the other hand, a good building badly managed may not be perceived to be so by users.

voice and data services; and the ability of the building services to meet known requirements and their potential for expansion. Building selection Selection of a building is not as simple as choosing the one with the highest ratio of NUA to NIA. The potential occupier’s selection is made against the background of the organisational policy regarding space; technological requirements; time, cost and quality imperatives; and

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Table 11.8  Methods of data collection Interviews

These can be structured or informal, with the objective of obtaining hard and soft data from all categories of space user. The accuracy of existing drawings and the space database can be verified.

Observation

Informal observations about the way space is being used or arranged can provide the trigger for formally recording the level of space use and its operational relevance. Existing drawings can be used to make an initial assessment of the way space is used for core and support functions, the amount of space given over to circulation or the amount of space in non-productive use.

Recording

Recording can be used to provide hard evidence to confirm (or debunk) casual observations or perceptions about the what, where, when, who, how and why of space use. An accurate but time-consuming process.

Sampling

Thirty random samples in any given circumstance will give a good impression of what the situation is for the organisation as a whole.

User and in-use surveys

Well-designed questionnaires can obtain feedback about the degree of user satisfaction with the work environment or the service from the FM team. Relationship surveys can be used to establish the broad requirements for space as a basis for the development of detailed recommendations. ‘Walkabouts’ can identify areas of noncompliance with legislative or regulatory requirements, overcrowding, deviation from space guidelines/standards, and departures from organisational space management policy.

design considerations. In addition, the physical, functional and financial performance attributes of the building might outweigh the cost savings of a higher ratio of NUA to NIA. The cost of building inefficiency Rent and the freehold value of the building are based on the NIA, not the NUA. In other words, a building advertised as being one of 10,000 m2 NUA will actually be 10,000 m2 NIA. On the basis that all other variables are taken into account and the choice is reduced to two apparently similar buildings offered at 10,000 m2 NIA, the importance of the higher ratio of NIA to NUA is demonstrated in Figure 11.5 and the following calculations: ❑❑ Building A yields 7500 m2 NUA. Using the rent, rates and operating costs from

Figure 11.5, the NUA will cost £406.11/m2. (The total costs divided by the yield.) The occupier’s building efficiency is 75%. ❑❑ Building B yields 8500 m2 NUA. Again, using the rent, rates and operating costs from Figure 11.5, the NUA will cost £358.33/m2. The building efficiency is 85% and the NUA costs £47.77/m2 per annum, less than the NUA in Building A.

All other things being equal, Building B would be the appropriate choice. Of course, all other things are not equal. There is 1000 m2 difference in the NUA measurements between buildings A and B. It would therefore be possible to either increase the building population or sublet the surplus space. Increasing the population would have an impact on the building operating costs.

11.16  Building operating costs Operating costs can be categorised, although the headings may vary from organisation to organisation. Examples are shown in Table 11.9.

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NIA (107,642.6 square feet) Workspaces to be deployed

10,000 square metres 606

Rent @ £150.70 per square metre (psm) (£14 per square foot [psf]) Uniform Business Rate (UBR) @ £96.88 psm (£9 psf) Building operating costs @ £57 psm Total rent, rates and building operating costs

£1,507,000 £ 968,800 £ 570,000 £3,045,800

Cost per workstation per annum

- £5,026

Cost psm per annum

- £ 304.58 (approx. £28.30 psf)

Figure 11.5  Space cost illustration Table 11.9  Operational costs Cleaning and housekeeping

Internal and external general cleaning, internal window cleaning, external cladding and window cleaning, cleaning equipment and materials, toilet supplies, laundry. Pest control not included in grounds maintenance.

Energy

Electricity, gas, oil or other fuel.

Grounds

Internal and external landscaping, car parks, pest control.

Maintenance

Building fabric, internal and external decoration, fixtures and fittings, mechanical and electrical services (including plumbing), fire and safety equipment.

Management

Operating cost element of the staff compensation package.

Public health

Sewage and waste disposal, environmental testing, disinfection and hygiene.

Security

Staff costs, equipment, systems, systems maintenance costs.

Service charges

Where the cost, or part of the cost, of the above is included in the landlord’s service charges and a management charge is levied.

Change

Elements of the above directly attributable to churn, minor modifications or improvement.

Strategies to reduce space costs In addition to having buildings with the most efficient ratio of NUA to NIA, two other options will help to mitigate the high cost of space. Both are concerned with density: (i) Devise and implement a strategy for non-territorial working. The strategy should take advantage of the opportunities available as a result of technological advances, particularly in the field of wireless and mobile communications. (ii) Where non-territorial working is not an option, plan the available space on the basis of functionality and in consultation with the workforce. The objective must be the highest possible level of productive occupational density, commensurate with effective and efficient working conditions.

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Table 11.10  Examples of potential space and operating costs Building size: 10,000 m2 NIA Space per capita

Workspaces deployed

Operating cost per capita

Total operating costs

Assessed cost per square metre

Total cost per square metre

20 m2

500.00

£1300

£650,000

£50

£500,000

15 m2

666.66

£1050

£700,000

£60

£600,000

Increased density will result in increased wear and tear and higher energy consumption. There will be increases in some cleaning and housekeeping costs. Some maintenance costs will increase and there will be increased security requirements. Physical distancing of workspaces to provide safe working environments is now a critical consideration. It is likely that the management and service charge cost elements will be higher. Churn costs are also likely to increase. Therefore, both the total operating costs and the cost per square metre of NIA will increase. However, the operating cost per capita will come down and there will be a significant increase in productivity. In Table 11.10, a reduction osf 5 m2 of NIA per person permits a 33% increase in the number of workspaces deployed for an increase in total operating costs of only 7.69%. While cost per square metre rises by 20%, the cost per capita reduces by 19.23%. These figures illustrate that density and thus productivity can be significantly increased for a proportionately smaller increase in total operating costs and cost per unit of space.

11.17  Measuring terminology The key measures used in space management are shown in Figure 11.6, with definitions given below. Gross external area* (GEA) Area of the building measured externally at each floor level. This is known as IPMS 1 (see Table 11.11) in the IPMS global space management standard (see Section 11.5). ❑❑ Includes perimeter wall thickness and external projections; areas occupied by internal

walls and partitions; columns, piers, chimney breasts, stairwells, lift wells, etc.; atria measured at base level only; internal balconies; covered lift rooms; plant rooms etc.; some outbuildings; loading bays; areas with less than 1.5 m headroom; and pavement vaults. ❑❑ Excludes open balconies, open fire escapes, open-sided covered ways and canopies, open car park areas. Gross internal area* (GIA) Area of the building measured to the internal face of the perimeter walls at each floor level. This is known as IPMS 2 in the global space management standard (see Section 11.5). ❑❑ Includes areas occupied by internal walls and partitions; columns, piers, chimney

breasts, stairwells, lifts, other internal projections, vertical ducts, etc.; atria measured at

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External walls could take up to 2% of the GEA; core areas could account for up to 20% of the GIA; primary circulation space could take 15 to 20% of the NIA

NIA is also the net lettable area (NLA)

Building supply

A fit factor or churn space of 5 to 10% will allow an organisation to comfortably match its space demand with building space supply

The space budget External walls Core

Gross external area (GEA)

Primary circulation

Gross internal area (GIA)

Organisation demand Support

Net usable area (NUA)

Net internal area (NIA)

Ancillary

Workspace

Nett usable area (NUA) will typically account for 80 to 85% of the NIA

Ancillary space is for the support activities of a particular department, such as a dedicated meeting room

Support space can be 20–30% of the NUA, depending on the range of common facilities and services required by the occupiers; examples include catering, reception, post, reprographics, meeting rooms and other spaces used by the whole building’s occupants

Figure 11.6  Building space measures

base level only; internal open-sided balconies; fire corridors; smoke lobbies; lift rooms; plant rooms, etc.; toilets, toilet lobbies, bathrooms, showers and changing rooms; cleaners’ cupboards; voids over stairwells; lift shafts on upper floors; loading bays; areas with a headroom of less than 1.5 m; and pavement vaults. ❑❑ Excludes perimeter wall thickness, external projections, external open balconies, fire escapes and canopies. Net internal area* (NIA) The usable area measured to the internal face of the perimeter walls at each floor level.

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Table 11.11  International Property Management Standards (IPMS) definitions IPMS 1

The sum of areas of each floor of a building measured to the outer perimeter of external construction features and reported on a floor-by-floor basis.

IPMS 2 Office

The sum of the areas of each floor level of an office building measured to the internal dominant face and reported on a component-by-component basis or for each floor of a building.

IPMS 3 Office

The floor area available on an exclusive basis to an occupier, but excluding standard facilities, and calculated on an occupier-by-occupier or floor-by-floor basis for each building.

❑❑ Includes atria measured at base level only, entrance halls, notional lift lobbies, kitchens,

cleaner’s cupboards accessed from usable areas, built-in units and cupboards, etc. which occupy usable area, ramps of lightweight construction to false floors, floor areas which contain ventilation, heating grilles, areas occupied by skirting and perimeter trunking, areas severed by non-structural walls, demountable partitions where the purpose is partition of use not support and providing the area beyond is not used in common, pavement vaults. ❑❑ Excludes toilets, toilet lobbies, bathrooms, etc., lift, plant and tank rooms, fuel stores, stairwells, lift wells, permanent lift lobbies, those parts of entrance halls, atria, landings and balconies used in common for essential access, corridors and other circulation areas including fire corridors, smoke lobbies, etc., meter cupboards, etc., internal structural walls, walls enclosing excluded areas, columns, piers, chimney breasts, etc., space occupied by permanent air conditioning, heating or cooling apparatus and ducting, areas with headroom less than 1.5 m, parking areas. Net usable area* (NUA) ❑❑ Includes gross workspace (which includes secondary circulation), ancillary space,

common support space and any fit factor. This is known as IPMS 3 in the global space management standard (see Section 11.5). ❑❑ Excludes core areas, primary circulation space and any other non-usable areas included in the GIA or NIA. *Source: RICS Code of Measuring Practice. Standard facilities These are the parts of a building providing shared or common facilities that typically do not change over time, including (for example) stairs, escalators, lifts and elevators, motor rooms, toilets, cleaners’ cupboards, plant rooms, fire refuge areas and maintenance rooms.

11.18  New developments in space use Space is usually one of the principal elements of cost to an organisation. More efficient ways of using space are constantly under review, and FMs need to keep up with innovations in the use of space. Impacts of COVID-19 on design of workspaces include screens and protection of workers to ensure safe separation.

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‘Space is seen as a way of creating an environment that attracts the best people, keeps the best people and gets the best out of people, and markets the company as a good employer who values people.’ (Anon.) Many organisations use new ways of working and new space standards as catalysts for largescale transformational change and innovation. The FM press frequently features these initiatives, showcasing the ‘before and after’ impacts with the business case for the reimagination of the space to support new business demands. There is increased focus on ensure best use of expensive premises, to provide a range of space options to facilitate collaboration, creativity and innovation. This underpins the definition of FM – integration of people and place to ensure optimum productivity and well-being. With over 50% of occupants who have participated in the Leesman Index surveys reporting that their workplace design contributed to their productivity, it is imperative that FMs and their clients explore the many options for providing better-quality spaces for occupants. Today the desk is not always the place of work – work can in fact be done in many different settings. The impact of change External events such as the rise of the BRICS (Brazil, Russia, India, China and South Africa) nations and the speed of information sharing across the world via social media platforms  –  together with increasing complexity of organisations, the requirement for leaner and more agile organisations, the diversity of workforces, the increasing use of interim and contract labour, and the cross-pollination of skills and knowledge – form the framework for considering the future of work and the workplace. These social, technological and economic changes have led to important modifications in the ways organisations use space. Firstly, there has been a move away from the functional hierarchies in organisational structures to networking matrix organisations. Secondly, a continuing trend towards nonterritorial working has led towards flexible, shared and multi-use spaces. Some of the benefits and disadvantages of these dynamic changes are: ❑❑ Staffing and space savings, sometimes resulting in job losses and either surplus or

redundant space in some sectors. The space requirements of non-territorial working and the use of interactive audiovisual, teleconference and broadband facilities are resulting in demands for less, new and different space. ❑❑ An improved working environment, sometimes resulting from better overall space utilisation. At the same time, technological advances in communication and document management have led to the premature obsolescence of some space which cannot be easily adapted to new needs. ❑❑ Protective legislation aimed at improving employee health, safety, security and wellbeing increases the complexity of the space management task. ❑❑ Creativity and innovation may be enhanced or stifled depending on the range of working environments and access to appropriate technology, resulting in conflicting demands for quiet space for research and collaborative work for team interaction. People like to work in a visually attractive space that both is comfortable and offers them some personal control over their environment. As well as responding to the pressure of legislation, employers appreciate that a good working environment helps to attract, retain

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and motivate staff. A staff restaurant, vending machines, crèches for working parents and social areas in workplaces are important facilities. A deteriorating or unsatisfactory working environment may be a potent indicator for the need to conduct a space audit. Symptoms of space management problems include: ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑

An inability to maintain an appropriate aural, visual or comfortable environment. Inability to apply agreed space standards. Space guidelines are ignored. Overcrowding. Absenteeism and productivity issues. Long-term booking of meeting rooms and support space for departmental or individual use.

Status, power and space Space can symbolise status and power. Traditionally, in a hierarchical organisation, the higher a person climbs up the organisational tree, the larger their office is likely to be, the more lavishly it will be furnished and the more privacy they will enjoy relative to the individuals lower down the tree. Some organisations have an ‘executive suite’ which is virtually a no-go area for those other than the board, their staff and VIP visitors (and, of course, the facilities staff who maintain it). Status can also be aligned with the actual building in which a person works – whether it is the corporate HQ or a less prestigious building. Even the floor on which a person works in any building can be a status marker. In an open-plan environment, status can be symbolised by the size of the workspace footprint, the amount and size of the furniture, and location in the open-plan area. A workspace with an outside aspect is seen as more desirable than one with no view. As the trend towards flatter organisations continues as levels of management are reduced, space can no longer be used or viewed as a status symbol. However, space is still one of the things that visibly signifies individual rank and power, both within the organisation and to strangers who visit it. For many people, these symbols are important and in some cases will have been hard earned. It is not surprising, therefore, that there will be resistance to their surrender, even in the face of indisputable evidence that they are counterproductive or expensive. The removal of space-related status symbols is a challenge that has to be approached with great sensitivity and must have absolute and unequivocal top-down support. Furthermore, it needs to be supported by a cost–benefit analysis. As well as making a monetary assessment of the total costs and financial benefits of the proposed course of action, the analysis needs to pay particular attention to social and psychological costs and benefits, which do not normally feature in costing exercises. Table 11.12 shows some of the reasons for resistance and concerns that may be expressed by employers and employees. Non-territorial working Non-territorial working can be defined as where the responsibilities of the job can be fulfilled without a requirement for an individually dedicated space at an organisational base location. Various labels have been put on non-territorial working. These include out-working, teleworking, space sharing, hotelling, hotdesking and home working. Each is covered by the above definition.

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Table 11.12  Resistance to changes in space use Employer concerns

An inability to release capital tied up in space and current IT-based systems. Existing employment practices will be difficult to change and may inhibit the process. Loss of control of staff and work. Reduced productivity Reduced confidentiality and privacy of work

Employee fears

Remote working will inhibit their employment and/or promotion prospects and training opportunities. Lack of social contact and spontaneous interaction between colleagues. A feeling of isolation from the organisation and customers. Home may not be a suitable work environment. Lack of privacy may be a problem. There may not be space for any furniture or equipment appropriate for the job. Distractions and diversions reducing employees’ motivation to be productive in non-workplace settings

Not all jobs in an organisation will be suitable for non-territorial working. The ones that are likely to be suitable will include: ❑❑ Those dependent on the availability of information, not a full-time physical presence at

the point where the information is held. In such cases, the work will travel to and from the worker via a telephone line and the Internet (usually broadband). Examples of tasks that can be carried out in this way are document creation, desktop publishing, computer software development, insurance claims processing, helpdesk or enquiry-type operations, retail catalogue order taking and space planning. ❑❑ Those dependent on information but where a ‘hands-on’ service is provided at a location remote from the employer’s base. Examples would be financial auditors, some consultants, visiting sales personnel and maintenance engineers. Expected space-related benefits

Examples of space-related savings are reductions in workstations or work areas (savings of over 40% have been quoted); reduced numbers of car parking spaces; reduced cleaning, energy, maintenance, and security requirements and costs; and reduced accommodation changes and associated churn costs. Other benefits include recruitment and retention advantages, reduced sick leave absenteeism, reduced carbon footprint, improved work/life balance for employees, and flexible employment contracts. Flexibility to work remotely will be easier to implement for organisations that have already embraced non-territorial space management practices. Constraints and disadvantages In some organisations, introducing space sharing to achieve non-territorial working is both costly and slow. It is likely to represent a significant cultural change and will be seen as a threat to the status of some supervisory and manager grades. For some organisations, there is a significant investment in new types of furniture and technology to provide the necessary resources for staff. Training and compliance checks will also be a potential constraint to adopting non-territorial working patterns.

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General enabling requirements A detailed analysis of space use and work activities is necessary. A space audit framework could either provide essential information or be adapted to do so. Key considerations and questions would be: ❑❑ How the available space is used, when it is used and by whom. ❑❑ What work is being performed and what is necessary to support it in terms of space and

services.

❑❑ Why the space is used in the way that it is. Whether its use is geared to meeting client

❑❑

❑❑

❑❑

❑❑

❑❑

❑❑

❑❑

requirements and the formal or informal needs for interaction within the organisation. The development of organisational and individual remote-working management techniques, including appropriate risk assessments. Both employer and employee concerns have to be satisfied. The provision of a workspace at home or at a base at a remote location such as a ‘tele cottage’ or serviced office, appropriately furnished and equipped, would suit those peripatetic employees who are working on a variety of client sites (such as auditors, consultants and maintenance engineers). The provision of a suitably equipped drop-in or touchdown working space in the organisation’s premises to allow remote workers to occasionally come in to work. In most cases these areas and services will be bookable in advance. There may also be requirements for meeting spaces, privacy, secretarial support or presentation aids as opposed to the use of a desk space and communications links. For those working remotely, appropriate electronic voice, data and image interface technology must be provided – telephone, scanning equipment, email, video conferencing, voice messaging, and access to the intranet and electronic databases. A PC or laptop and mobile phone are the likely minimum. In addition to the IT requirement, appropriate furniture and equipment may be required. When the remote workers are working at the employer’s base, then appropriate furniture and equipment needs to be provided. This could include individual mobile storage to enable the use of available space and a storage area to accommodate it when the ‘owner’ is away from the base. Development of a ‘users’ protocol’ to advise staff of appropriate behaviour and etiquette when using shared spaces. Training in the use of new technologies and booking of services may be required. A significant investment in computer and communications convergence technology will be necessary. Employees must be able to perform equally well, whether operating remotely or back at base. It will be necessary to achieve a seamless transition for the employee between their operating requirements in the remote location and the base, and back again.

Work types Organisations have opportunities to use spaces to attract, engage and develop new and existing talent; to establish new cultures and brands; to promote wellness; and to provide social interaction – humans’ most basic needs. Workspaces need to enable groups to solve problems via collaborative working. Research shows that groups of six people are effective, and those of over 12 are ineffective. Researchers have identified four types of work: collabo-

190  Facilities Manager’s Desk Reference

rative, focused, learning and social. These provide a framework for planning space to suit organisational and individual needs: ❑❑ ❑❑ ❑❑ ❑❑

Collaborating – Working with other people face to face or at a distance. Focusing – Individual work that requires concentration. Learning – Sharing information and experiences, and coaching colleagues. Socialising – Informally exchanging information with a small group of people.

Using a framework of ‘shared’ versus ‘owned’ and ‘we’ versus ‘I’ spaces, researchers have devised a palette of workplaces to suit these four modes of work. The objective of this framework for space planning is to create an environment of interrelated settings that allows people to work in whatever location best suits them, allowing them to choose the amount of sensory stimulation, the amount of physical support and the tools that are appropriate for the work they are doing at that time. Another aspect of recent research is the impact of distance on how workers communicate. If a person is more than 21 m from someone, they will send an email rather than walk and talk. One way to reduce the distance is the use of ‘wormholes’ – virtual connections that are ‘on’ all the time, linking groups of workers. This helps to build trust via social interaction. Space efficiency As organisations continue to seek greater performance and efficiency from the workspace, a focus on new standards is required. There are three measures that indicate efficiency: NIA, occupants per workstation and utilisation percentage per workstation. In an ideal world, these three metrics should be 12 m2, 1.3 people and 80%. However, many organisations may still be operating at 20 m2, 0.8 people and 50%, showing that there is considerable room for improvement in the way workspaces and workplaces are used. Co-working Co-working is a style of work that involves a shared working environment, often an office, and independent activity. Unlike in a typical office environment, those co-working are usually not employed by the same organisation. Typically this arrangement is attractive to work-at-home professionals, independent contractors, and people who travel frequently and end up working in relative isolation. Co-working can also refer to a social gathering of a group of people who work independently but who share values, and who are interested in the synergy that can happen from working with people who value working in the same place alongside each other. Co-working offers a solution to the problem of isolation, which many freelancers experience while working at home, while at the same time letting them escape the distractions of home. These spaces will change to conform to new safety measures to reduce spread of virus infections, potentially making them less attractive or economical to operate.

11.19  Legislation and compliance FMs must understand and comply with the legislation relating to space use. There is a wide range of legal requirements to consider including Building Regulations, environmental legislation, fire safety legislation, health and safety legislation, and inclusive access legislation.

Space Management  191

The Acts in the UK that affect space management are: ❑❑ The Building Act 1984, Building Regulations and Approved Documents. ❑❑ The Health and Safety at Work Act 1974 with numerous regulations, such as the

❑❑

❑❑ ❑❑ ❑❑ ❑❑

Workplace (Health, Safety and Welfare) Regulations 1992, the Health and Safety (Display Screen Equipment) Regulations 1992, the Provision and Use of Work Equipment Regulations 1998 and various Approved Codes of Practice. The Town and Country Planning Act 1990, the Planning (Listed Buildings and Conservation Areas) Regulations 1990 and the Town and Country Planning (Use Classes) Order 1987. The Disability Discrimination Act 1995 and Equality Act 2010. The Regulatory Reform (Fire Safety) Order 2005. The Electricity at Work Regulations 1989. The Landlord and Tenant Act.

12

Workplace and Accommodation Management

12.1  Workplace and accommodation changes FMs (facilities managers, or facilities management) must ensure that changes in workplace accommodation proceed smoothly, cost-effectively and with minimal interruption to business. This requires careful planning and co-ordination of all the elements of the move and keeping the various stakeholders (clients, end-users, customers and colleagues) informed at all stages of the process. Workplace moves need to be effective and efficient due to the potential impact on the productivity of the people being moved. The per person or per workstation costs of workplace accommodation moves in commercial premises vary hugely depending on the location and timing. This cost variation is due to the space guidelines in each organisation  –  if all workstations are identical, then moves just concern people; however, if organisations permit personalised office equipment and other artefacts, then there is a lot more disruption and associated costs. As in all good management practices, a regular review is required to check that the space is providing the appropriate resources for the organisation to achieve its operational objectives. Policies and standards may have to be reviewed, moves and relocations managed, and new ways of working introduced. With the majority of commercial organisations embracing new or agile ways of working, there is less equipment to move, but employees are likely to have higher expectations of comfort and services in the new location. Users may sacrifice their personal spaces and workstation set-ups – such as pedestals, printers, desks and filing cabinets – in exchange for height-adjustable tables, multi-use areas, shared spaces, touchdown zones (areas design to be used for short periods), free quality refreshments, chill-out spaces and well-being zones. Move management requires a great deal of expectation management to ensure the users are well briefed, well informed and looked after before, during and after the move.

12.2  Move requests Organisations need to have a process for managing requests for internal moves. There may be management approvals required and budgets to obtain. In some cases, the FM department may undertake small moves, say up to five people, within its operating budget, as part of the FM cost centre. This work has to be fitted in around the other daily routines and workloads of the team. The FM team must be careful not to agree to undertake too many small moves, as they will then soon use up their operational budget and also get behind with their routine workload. Users will also get used to the idea that the FM team can easily accommodate their requests – which may not be the case at all. Facilities Manager’s Desk Reference, Third Edition. Jane M. Wiggins. © 2021 John Wiley & Sons Ltd. Published 2021 by John Wiley & Sons Ltd. 192

Workplace and Accommodation Management  193

Ideally all move requests must be considered in terms of impact, cost, timing and space allocation policy. Moves of more than five people must be given a project status and be separately managed with their own project budget and dedicated team funded by that unique budget. A time limit should also be set for new requests to be actioned, to avoid lastminute requests at the end of the working week or day with expectations that changes can happen instantly overnight or by the next working day. While most FM teams will be able to deal with this pressure, it is unwise to allow an instant response to be the norm.

12.3 Churn Churn is a term used to describe the amount of moves in a building. Bernard Williams (Facilities Economics, 1994) defined churn as: ‘The facilities manager’s jargon for the movement of personnel, groups and departments as a direct result of changed operational departments.’ Churn rate is the volume of office moves taking place in an organisation. It is the ratio between the number of workstation moves made in a year and the number of personnel working in the premises. Some organisations may have very high churn rates – up to 50%. This means that 500 people or workstations have moved during 1 year out of the 1000 people or workstations that occupy that site. The churn rate is indicative of the fluidity of an organisation. High churn rates will be costly to an organisation. FMs can improve churn rates by persuading organisations to adopt more flexible space and accommodation offerings, so that moves are only needed when a person changes jobs, rather than there being a need for the whole-scale upheaval of a department due to organisational structural changes. Some other ways to reduce the cost of churn include: ❑❑ Use of standardised fully adjustable furniture throughout the organisation to suit all ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑

needs. Use of cloud-based systems and standardised technology throughout the organisation. Full connectivity to voice and data services throughout the premises. Cross-charging the costs of moves to the client department or function. Use of size or volume thresholds for internal moves for the local FM team to manage – say, up to five people. Allocation of project status for accommodation moves of large groups – say, more than five people – to a designated project team and move manager. Use of an agreed template for every move request and status report. Use of computer-aided design CAD to keep accurate records of before and after the move. Planning moves in standard work rate time, rather than the more expensive overtime rates at the weekend or evenings. Use of cloud-based services for document filing and storage. Reduction in printer and stationery zones – perhaps just one per floor. Use of lockers for personal storage items. Use of agile and shared working spaces to give more flexible locations for work.

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12.4  Swing space Swing space is the spare space in a building that can be used to facilitate accommodation changes. Some organisations keep a small percentage of their total space always empty, say 5 to 10%. In space planning, this is the ‘fit factor’ – an allowance of extra space above the organisation’s space budget to allow for odd-shaped spaces and net usable areas (NUAs) that are actually unusable (see Chapter 11 for more on NUA). Having spare space in a building helps to quickly facilitate a relocation or ‘restacking’ (reorganisation) of the building’s occupants. If there is sufficient capacity in the premises, then a permanent project office could be set up with, say, 5 to 10 workstations. This could be on or off site. This would allow capacity for moves and ad hoc projects, and provide the swing space to enable relocations. Such a facility is an expensive overhead, but it can give the much-needed ability for FMs to respond quickly to accommodation change requests.

12.5  Planning a move The Commercial Moving Group (CMG) of the British Association of Removers (BAR) has a Code of Practice for its members to follow, giving a measure of assurance for the FM. Tendering for contractors should include this membership and compliance with the BS 8522 standard. The FM must consider a number of issues when planning an office move. These include: ❑❑ Obtaining local authority building control and landlord planning permission (this will

❑❑ ❑❑ ❑❑

❑❑

❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑

depend on the nature of the business, the scale of the changes and the type of occupancy of the premises). Reviewing the terms of the lease or Licence to Occupy documents, if appropriate. Updating the fire plans and risk assessments. Ensuring customer or end-user satisfaction at all stages of the move, applying good communication skills, being approachable, and carrying out before and after customer care visits. Appointing reliable relocation specialists who have the correct equipment and trained labour, and who follow the BS 8522 standard to ensure health and safety legislation and trading standards are observed. Ensuring project plans are drawn up to keep all those involved in the move appraised of the project. Ensuring sufficiency of the project budget – funds for contingencies and preliminaries that could be encountered during a major move. Ensuring adequate timescales for the move among users and the business, and the contractors engaged for the move itself. Minimising the impact of the move on the business – i.e. reducing the downtime due to packing and unpacking. Agreeing the level of acceptable disruption in the business and the most appropriate time of year, month, week and day for a move. Ensuring early involvement by the FM in the planning process with client business departments. Appointing a dedicated IT department person to ensure alignment of the FM and IT aspects – the physical, technical and technological elements of the move.

Workplace and Accommodation Management  195

❑❑ Ensuring access to space or premises – this is critical if moving to a new location. ❑❑ Ensuring IT and telephone connectivity  –  especially lead times for new lines and

services.

❑❑ Introducing new ways of working, such as hotdesking, shared spaces and agile

working.

❑❑ Ensuring suitability and treatment of space – acoustics, heating, lighting, decor, brand-

ing, ventilation and welfare areas.

❑❑ Ensuring confidentiality of the move project – the General Data Protection Regulation

❑❑

❑❑ ❑❑

❑❑ ❑❑ ❑❑

❑❑ ❑❑ ❑❑

❑❑ ❑❑ ❑❑ ❑❑ ❑❑

❑❑ ❑❑ ❑❑ ❑❑

(GDPR) may apply due to characteristics of the personal data of those being moved and/or the documents and technology that are being relocated. Checking document management, archiving and storage – a move is a good time to dispose of old and unused files, documents and artefacts, which tend to accumulate in any business over time. Arranging insurance cover for the project (goods in transit, public and employer’s liability). Creating a labelling scheme for crates, workstations and equipment, using ‘low-tack’ products to reduce damage to surfaces, and ensuring the use of a comprehensive colour and/or numbering system. Creating maps or plans to show user locations in the new space or accommodation. Removing all old labels on crates or boxes from previous moves to avoid confusion during the current move. Appointing move champions or representatives in each affected department or business unit who will act as contact points between the FM team and the user department. Creating a packing checklist, a user pre-move guide and/or a ‘frequently asked questions’ (FAQ) list. Conducting risk assessments and examining health and safety considerations for the actual move activities. Ensuring the security of items during the move – open doors, open vehicles and outof-hours working create potential opportunities for theft; additional security presence, CCTV and spot checks are useful in larger moves. Recycling waste paper, furniture and technology equipment to appropriate organisations before, during and after the move. Arranging parking for removal vehicles  –  permits may be needed for parking in restricted areas. Appointing standby lift maintenance contractors to guarantee full working of lifts for passengers and goods. Arranging for lift protection materials to prevent unintended damage to the inside of the lift cars. Ameliorating the impact on neighbours due to noise and light pollution, and extra vehicle movements current and future issues can be prevented with good communication with both commercial and residential neighbours. Implementing a process for lost property and damaged items. Renting or purchasing crates or boxes, including checking the terms and conditions of hire and the sustainability of these items. Checking whether hazardous items must be moved  –  specialist contractors may be needed. Checking hazardous items in premises  –  asbestos, lead paint and chemicals require clear labelling and identification.

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❑❑ Considering heavy items – check weight loadings of floors to ensure they can be used

for moving excessive loads.

❑❑ Considering artwork and precious objects – the insurance provider should be advised

due to the added risk of the move.

❑❑ Checking tax incentives and capital allowances – fit-out costs may qualify for tax allow-

ances; repairs are part of the normal costs of operation.

❑❑ Adhering to equalities and diversity requirements  –  ensuring compliance with the

Equality Act 2010 and the Building Regulations 2010 Part M.

❑❑ Checking use of existing and new furniture, technology and equipment – what is stay-

ing, moving or for disposal?

❑❑ Checking ancillary areas – printing, stationery, vending and waste areas: what is stay-

ing, moving or for disposal?

❑❑ Arranging a trade union or workers’ council consultation to ensure there is no likeli-

hood of industrial disputes or activity that may jeopardise the move.

❑❑ Arranging signage – wayfinding during the move and permanent signage in the new

space.

❑❑ Arranging for notice boards, white boards, plasma screens and posters. ❑❑ Registering the premises for food preparation and catering services (if appropriate). ❑❑ Registering the occupier (for whole-organisation moves) with the local authority for

business rates.

❑❑ Redirecting post – registration with local Post Office. ❑❑ Notifying others of change of address (suppliers, contractors, customers, government

agencies, regulators and other stakeholders).

❑❑ Producing new stationery, letterheads, business cards and printed documents. ❑❑ Creating complimentary branded products to promote the move project to users – e.g.

mug, mouse mat, bag, t-shirt; this can motivate and uplift the mood during a move.

❑❑ Creating a user guide for the new location – determine the most appropriate medium,

such as a handbook, leaflet, pocket guide, video or intranet web page.

12.6 Implementation The actual implementation of the move may take considerably less time than the planning and approvals stages. It is essential that the FM team and their specialist contractors are ready to undertake the move at the agreed time. It is essential to have a project plan, a communication plan, and an overarching co-ordinator or move manager to avoid any mishaps on the day. Provision of refreshments, secure storage of personal belongings, local vehicle parking, first-aid box, charged mobile phones, petty cash and a contact list will enable effective management of the move on the day. A designated help point on the day of the move may be useful as well as a holding area for all unmarked and unlabelled items that cannot be delivered to a location. A lost property procedure will also help to resolve any issues arising. Concierge personnel can be appointed for a more personal ‘meet and greet’ service for each staff member as they arrive at the building to help them find their new workspace. This high level of service may be helpful to reassure and educate staff during a move from traditional to new ways of working. Floor walkers are another initiative to give a high visible FM presence in a large move or relocation project. Waste management issues have become a particular challenge for most office moves. Many clients and organisations need to see a full audit trail of the safe, legal and sustainable disposal of redundant furniture and equipment to achieve zero landfill (see Section 35.11).

Workplace and Accommodation Management  197

12.7 Post-move After the move, it is important to check whether the occupants are satisfied. On-the-day, 1-week, 1-month and 1-year time intervals could be used to assess the success of the move. Details of post-project evaluation tools are described in Section 10.22. One aspect where the FM team must be proactive in the post-move phase is the collection of all empty crates and boxes, other packaging materials and waste. It is important that the crates and boxes do not become a permanent storage solution or that users delay the unpacking of their items, files and equipment. Crates are expensive to hire and penalties for late returns can soon escalate – sometimes on a sliding scale increasing each week. The FM may wish to consider an internal agreement with departments so that costs are recharged to the business unit, instead of the FM cost centre.

13

Procurement

13.1 Introduction FMs (facilities managers, or facilities management) often manage the most dynamic purchasing budget in an organisation. Cost savings are required in procurement activities to ensure that value for money is achieved. FMs have traditionally been able to offer significant savings in corporate spend with the use of a range of procurement strategies. FMs need to develop a purchasing strategy for various goods and services, create appropriate specifications, appreciate the impact of contract terms and conditions, evaluate supplier proposals using suitable cost models, and ensure compliance with relevant contract and procurement legislation. The term ‘procure’ can be defined as ‘to obtain by care or effort, to acquire or to bring about’ whereas the term ‘purchase’ describes the transaction of buying and the items bought. Purchasing is therefore just one aspect of procurement. Many purchasing departments have changed their name to ‘procurement’ to reflect the wider remit of their roles. The list of potential goods and services that are required in FM is endless. Table 13.1 shows a list of a range of goods and services that an FM may have to procure.

13.2  Purchase criteria The key criteria to consider in procurement and purchasing include: ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑

The right product (or service). At the right place. In the correct quantity. At the right quality. Delivered when it’s needed. From a reliable source. At the right price.

13.3  Procurement policy FMs have to consider whether they are buying a service or a product and whether the item(s) will be a one-off purchase or part of a continual supply. Procurement policy for a broad range of goods and services will be developed and implemented. Often this will involve liaison with colleagues in other parts of the client organisation to ensure that there Facilities Manager’s Desk Reference, Third Edition. Jane M. Wiggins. © 2021 John Wiley & Sons Ltd. Published 2021 by John Wiley & Sons Ltd. 198

Procurement  199

Table 13.1  Examples of goods or services purchased by an FM Stationery supplies Vehicles and fuel Uniforms Furniture Catering items, vending supplies and equipment, cash tills Computer supplies Consultancy Training courses Car hire Mail services/post

Printed materials Signage Personal protective equipment and safety equipment Consumables such as tissue, soap, sanitary products, light bulbs, bin liners and visitor pass badges Specialist equipment – security, CCTV and audiovisual Energy and utilities Publications Travel and hotel accommodation Couriers Specialist service contracts, e.g. lift maintenance and fire alarm maintenance

is a central database of information about suppliers and their performance, so different groups can work together to leverage better terms from the supply chain. Effective procurement requires: ❑❑ ❑❑ ❑❑ ❑❑

Detailed specifications of the products or services required. An investigation of the market and the potential suppliers. A process of selection and appointment. A performance-monitoring scheme to evaluate the supplier and their goods or services.

In some cases, an FM may act as central procurement and may procure non-FM-related goods or services on behalf of the end-user or client. Examples include chemicals in a pharmaceutical business, textbooks in education or computer components in the IT sector. Understanding the core business needs is therefore critical. The procurement of all goods, services and items should be based on detailed specifications to ensure value for money and accountability.

13.4  Service contracts FMs will be particularly concerned with contracts for services and maintenance. Critical assets supplied and supported by contracts should be identified (e.g. maintenance contracts on plant, equipment and IT systems). Issues to be identified include manufacturers’ warranties and guarantees; operational requirements; length of contract; location of supplier; call-out, attendance or travel fees; unique parts or software required; software licences; performance incentives and penalties; and availability of other suppliers. Another aspect of such contracts is whether they are fully comprehensive, including all labour, parts, consumables, and travel costs, or whether there are exclusions in the contract. Contracts can be set up for labour only, or labour and parts, to suit the particular situation. Chapter 14 gives more details on contract management.

13.5  Procurement strategy An organisation’s procurement strategy will be unique, reflecting the culture of that organisation. For example, in the public sector, where accountability for the public purse is a key

200  Facilities Manager’s Desk Reference

concern, the strategy is formal and highly procedural. By contrast, a small entrepreneurial business might treat each purchase individually and the only overarching strategy might be that the goods purchased must be fit for the need. As organisations get larger and more complex, FMs may have to contend with the issues of centralised versus decentralised purchasing. This is particularly important in a multi-site operation. Better deals from suppliers may be available via the economies of scale in national purchasing contracts of common products and services. In some sectors, the use of purchasing consortia can leverage even better deals with suppliers for the members of the consortia. Consortia are particularly common in public and not-for-profits economic sectors, as spend profiles are externally scrutinised and best value must be obtained. It is essential to determine the most appropriate policies, procedures and processes for acquiring the various categories of supplies on a day-to-day basis, which may involve calloff contracts, e-procurement, purchasing cards or framework contracts as appropriate to the category of services or goods being procured. Plans also need to be developed for managing key suppliers; this might include partnering, joint ventures or strategic alliances. It is also the responsibility of the FM to ensure that benefits that are expected are monitored, measured and acted upon. The supply matrix, as illustrated in Figure 13.1, is a useful tool for determining the effort that must be afforded to the procurement of any particular item or service required by the business. Those items in the top-right box will require the most effort and resources. It is important to analyse the current purchasing position – this may involve identifying the changing patterns of buying behaviour, marketplace trends (such as mergers reducing the number of suppliers), and the sources and types of funding (e.g. private finance initiatives). A useful analysis tool is Porter’s Five Forces – this can help to ascertain the power of

Importance to organisation

High

Strategic critical

• Complex contracts • In-depth research and investigation • Complex specification and service level agreements • Key measures • Supplier evaluation

Tactical acquisition • Simple purchases

Low • Simple purchase orders • Input specifications

Figure 13.1  Supply matrix

High Cost to organisation

Procurement  201

suppliers, which can affect the overall procurement strategy. The options for the supply requirements can then be generated along with recommendations.

13.6  Procurement stages The typical stages of procurement are: (i) Specification of requirements. (ii) Procurement strategy. (iii) Contract or external supply versus in-house option. (iv) Assess availability and suitability of type of contract. (v) Assessment of risks. (vi) Tender process. (vii) Contract duration and award. (viii) Mobilisation or on-boarding of new supplier or provider.

13.7  Strategic sourcing Strategic sourcing is a core activity in purchasing and supply management. In Developing and Implementing a Strategic Sourcing Strategy, the Chartered Institute of Procurement and Supply (CIPS) defines this activity as ‘satisfying business needs from markets via the proactive and planned analysis of supply markets and the selection of suppliers with the objective of delivering solutions to meet predetermined and agreed business needs’. It is important to identify the current purchasing position, which can be used as a starting point, or baseline, for developing the strategic sourcing activity. Changing patterns of buying behaviour are examined to identify any trends in the marketplace (such as a reduction in the number of suppliers) and identify the sources and types of funding (e.g. PFI).

13.8  Spend analysis It is important to know who is buying what, from which suppliers, when, how often and on what terms. The objective of this analysis is to identify the buying patterns and trends, and in particular the contracts and agreements already in place, their terms and their expiry dates. Ideally, this management information should be instantly available but unfortunately many organisations rely on a manual analysis of purchase ledgers. In addition, FMs will need to identify the extent of variation and the time to reorder particular items in the workplace. For many FMs, the control of maverick spend by end-users on various office artefacts, equipment and services is the first area on which to focus. While some organisations have put an end to the one-off specials in senior management offices, many FMs still have to manage urgent requests to engage with a particular consultant or contractor. The time taken to manage a variety of suppliers is an issue that the FM must use as leverage to insist on preferred supplier lists and standards for office supplies, fixtures and fittings, consultants, and contractors. Products that require long lead times also pose particular problems for FMs. A postoccupation evaluation study carried out in 1995 for a new building revealed that if it took

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more than 3 days for services to be restored, such as taps to be fixed or defective lights to be replaced, end-users suffered serious productivity losses. The issue for FMs was to ensure that the future specifications included continuity of parts within a reasonable lead time. Some FMs will pre-empt potential problems with a call-off stock or inventory held on the suppliers’ premises for an agreed length of time.

13.9  Identifying the need The first stage of procurement is liaison with the person or group who has the requirement to determine what the requirement is and obtain an appropriate specification. This should normally involve an analysis to ensure that there are no better alternative solutions. A process of challenging the requirement should be undertaken, including discussing whether it can be deferred (acquired later), diminished (reduced requirement) or deleted (avoided). It may be appropriate to use industry-based standards or simplify the requirement. The specification of requirement can take a number of forms, including output/ outcome based, functional, standards employed or input based. At the same time, the FM must also determine the budget available. Without this, it is too easy to get the ideal specification priced, only to find insufficient funds are available. Much time can be wasted in modification of the specification and renegotiation to fit the supply of goods or services to the budget available.

13.10  Demand management Proactive demand management means working with internal customers to ascertain the organisation’s requirements over a future given period and then working with them to identify the best sourcing options that have, ideally, been generated from the strategic sourcing analysis as described earlier. Most organisations have broadly two types of requirement: direct and indirect. Direct Direct means the requirements of the core of the business. For example, in a car manufacturing plant, it would be all the items, such as sub-assemblies, that are required for the production of the cars. Indirect Indirect generally refers to the rest of the organisation’s requirements and includes many of the FM functions (such as cleaning, security and energy), insurance and IT. This indirect spend can be as high or even higher than direct spend in some organisations. It includes all the supplies necessary to run an organisation, such as electricity, computers, furniture and capital expenditure works, and is therefore a significant part of an organisation’s turnover. Internal services such as catering, FM, legal services and IT may be outsourced (increasing the indirect spend of many client organisations even more). Many organisations will have hundreds if not thousands of suppliers, with possible duplications. The cost of managing so many supplier relationships with high transaction costs has led many organisations to review their supplier base and reduce the number of suppliers permitted. Perhaps 80% of requirements can be supplied from 20% of the original supplier list.

Procurement  203

13.11  Supplier selection A supplier appraisal is necessary to evaluate and check suppliers’ credentials. Supplier appraisal involves assessing the company profile (e.g. through its annual report and accounts), checking its financial standing, determining its capacity, assessing its quality procedures, taking up performance references, and evaluating its policies, track record and attitude. This is where an analysis of the supply base is useful. A supplier appraisal is sometimes undertaken via a pre-qualification system, or when new suppliers respond to adverts or submit responses to requests for information (RFIs), or even at the time their tenders are evaluated. It is usually more efficient to appraise a supplier’s suitability prior to inviting them to tender. Pre-qualification questionnaires (PQQs) and RFIs are tools used to do this. Suppliers and their own supply chains should be audited as part of this evaluation in respect of their ethical business practices. Statements of compliance with the Modern Slavery Act 2015 may also be sought at this stage.

13.12 Specifications A critical aspect of procurement is the brief or the specification for the goods and services. Specifications define what is to be purchased, and what the items or services will be used for. The various types of specification are shown in Table 13.2. Different specifications will create more or less work for the client and supplier. Some will encourage more creativity by the supplier; some will need certainty from the client as to the precise need. There are pros and cons of each specification type. Some specifications may be hybrids, with elements of more than one type. Standard specifications ensure that suppliers can be evaluated on a like-for-like basis, and avoid confusion over the assumed requirements. The ideal specification criteria are clear, concise, comprehensive and consistent.

Table 13.2  Comparison of specifications Type

Focus

Example

Issues

Input

Tools, skills, equipment, hours and activities required

Cleaning, catering, security service contracts Projects such as building refurbishment

Prescriptive and detailed. Relies on huge input from the client to detail the how, why, when, who, how much and so on Contract performance is based on ability to do exactly as prescribed. Costly, difficult to change and less flexible.

Output

The end product

A lunchtime food service

Output oriented – little detail on the how or who does the work or delivers the service. Agreement on standards (service level agreements) is required for measurement.

Outcome

Results

Target percentage Focused on end-users’ expectations of levels of satisfaction, products and services. Both qualitative and e.g. 100% compliance quantitative measures needed.

Function

Purpose

Computer system, machinery, or equipment to do or make something

Useful for new design or service, when scope includes conceptual information and ideas. Fitness for purpose is the critical test.

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FMs will use a variety of methods to investigate the market, such as word-of-mouth recommendations, exhibitions, networking events and external purchasing consultants. It is important to find out who is the best or most suitable supplier to suit the specification.

13.13  Tendering process There are several stages in the overall tender process when procuring most goods and services, as shown in Table 13.3. Each stage is important in order to gather information and to test which contractor or supplier offers the best service or product to meet the specification. Allocation of sufficient time for the tender process is critical if the process is to be well executed. An example of a schedule is shown in Table 13.4. As with all projects, time can be reallocated from one area to another. However, it is important not to underestimate the time it takes to get replies to queries or to convene meetings with stakeholders to discuss options. At least 3 months is required; however, 6 months is more realistic due to the time needed to exchange information between parties involved in the process. Additionally, it is recommended that more than one person is involved in the exercise. Ideally, a small number of representatives with different skills or from different departments (such as FM and finance, or the client) can provide broader input and feedback on the tender process. Table 13.3  Stages in procurement 1

Specification of services

2

Prepare tender document

3

Pre-qualification process

4

Visits by contractors

5

Visits by client to sites where the contractor provides services

6

Evaluation of written documents

7

Presentations

8

Negotiation

9

Award

10

Mobilisation

Table 13.4  Tender schedule Activity

Time required

1

Gather information and compile tender document

Weeks 1 and 2

2

Send tender document to contractors

Week 3

3

Contractors’ survey site

Week 4

4

Site visits

Weeks 5 and 6

5

Tender documents returned

Week 8

6

Presentations

Week 9

7

Tender evaluation

Weeks 10 and 11

8

Meetings to discuss evaluation

Week 12

9

Appoint successful contractor

Week 13

10

New contract commences

Week 17

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13.14  The tender document Once the specification has been completed and agreed, it can be inserted into a tender document. A basic structure of a tender and some of the headings are shown in Table 13.5.

13.15  Invitation to tender process The shortlist Some organisations have detailed knowledge concerning the contractors they wish to invite to tender. If this is not the case, an alternative is to hold a pre-qualification exercise to help identify those that have the necessary resources and attributes to supply the service satisfactorily. Pre-qualification process and selection criteria This is a matter of preference and perhaps deference to specific purchasing regulations within the organisation. The recommended minimum number of contractors to invite to tender is generally four. This is to optimise the choice of provider against the time taken to manage the tendering process and evaluate all the information collected. The selection criteria used to identify appropriate contractors will be driven by the needs of the organisation. Once preferred contractors have been selected and have confirmed they are interested in proceeding, the tender document can be dispatched.

Table 13.5  Tender document structure example Introduction

General background to the company Overview of the services The reason for tendering the service

General information given

Timetable Response format Contract type Costs to be included and not included How the Transfer of Undertakings (Protection of Employment) Regulations 2006 (TUPE) will be handled

Detailed specification

As identified in Section 13.12

Information requested

Descriptions of each service Description of support resources Job matrices, specifications and descriptions Company policies Service innovation and alternative options

Financial proformas

Cost analyses relevant to the services specified Labour schedule and costs Equipment schedule and costs Miscellaneous costs Management fee A total cost summary of the individual analyses

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Site survey It is recommended that the shortlist of contractors is invited on site to view the current facilities and services. The positive side to inviting all parties together is that it saves time by not having to duplicate the process four times over and it also ensures that all contractors receive identical information. The reasons for them to view the site are fourfold, namely: ❑❑ To enable the contractors to view the facilities, equipment, services and standards required. ❑❑ To test the contractors’ understanding of the tender document and to clarify any points

raised.

❑❑ To give the contractors an opportunity to ask questions about the organisation and its

objectives.

❑❑ To establish a relationship and knowledge of the contractors’ management style.

The more the contractors have an understanding of the facilities and the culture of the company, the more accurate and tailored their responses should be. Site visits It is strongly recommended that visits are arranged to view operations currently run by each bidding contractor. Although this may appear to be a heavy investment of time in the process, it will afford much greater understanding of the written tender responses and illustrate what is being described during the presentations. These can take place while the contractors are completing their written response. This not only shortens the timetable but also enables the contractors to tailor their responses to specific issues raised during the visits. The visits should be relevant to the services specified within the tender document and bear a relation to how each particular contractor proposes to develop the services at the site. There is a great temptation for contractors to escort potential clients to their biggest and best flagship operation. However, if the services bear no relation to the tender specification then the visit is wasted.

13.16  Cost models FMs need to understand all the elements that make up the cost of contracts or goods. These may include labour, materials, design, management overhead, preliminaries, mobilisation, expenses, contingencies, delivery charges, VAT and other taxes. The implications of warranties, guarantees and exclusions, as well as issues such as whole-life costing, value engineering and the price–quality relationship, must also be understood.

13.17  Whole-life costing Life-cycle costing (LCC), also called whole-life costing, is a technique used to establish the total cost of ownership. It is a structured approach that addresses all the elements of this cost and can be used to produce a spend profile of the product or service over its anticipated lifespan. The results of an LCC analysis can be used to assist management in the decisionmaking process where there is a choice of options. The accuracy of LCC analysis diminishes as it projects further into the future, so it is most valuable as a comparative tool when longterm assumptions apply to all the options and consequently will have the same impact.

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Table 13.6  Cost examples One-off costs

Recurring costs

Procurement Implementation and acceptance Initial training Documentation Facilities Transition from incumbent supplier(s) Changes to business processes Withdrawal from service and disposal

Retraining Operating costs Service charges Contract and supplier management costs Changing volumes Cost of changes Downtime/non-availability Maintenance and repair Transport and handling

The visible costs of any purchase represent only a small proportion of the total cost of ownership. In many organisations, different departments of an organisation hold the responsibility for acquisition cost and subsequent support funding and, consequently, there is little or no incentive to apply the principles of LCC to purchasing policy. Therefore, the application of LCC does have a management implication because purchasing departments are unlikely to apply the rigours of LCC analysis unless they see the benefit resulting from their efforts. There are four major benefits of LCC analysis: ❑❑ ❑❑ ❑❑ ❑❑

Evaluation of competing options in purchasing. Improved awareness of total costs. More accurate forecasting of cost profiles. Performance trade-off against cost.

The types of costs incurred will vary according to the goods or services being acquired. Some examples are given in Table 13.6.

13.18  Value engineering Value engineering (VE) can be defined as organised effort directed at analysing the functions of systems, equipment, facilities, services and supplies for the purpose of achieving the essential functions at the lowest LCC consistent with required performance, reliability, quality and safety. In the construction industry, VE, value analysis and value management describe a structured process of examination of the function of a building to ensure that it is delivered in the most cost-effective way. Table 13.7 shows the benefits of this approach. VE is a systematic and function-based team approach to improving the value of products, projects or processes. The process helps all team members to communicate across boundaries, understand different perspectives, innovate, analyse and agree best solutions. Good value is achieved when the required performance can be accurately defined and delivered at the lowest LCC. VE improves value by using a combination of creative and analytical techniques to identify alternative ways to achieve objectives. The use of function analysis differentiates VE from other problem-solving approaches. VE focuses on delivering the product or service at the best price by incorporating those value characteristics deemed most important by the

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Table 13.7  The value-engineering approach to cost management Life-cycle cost

The total cost of a system, building or other product computed over its useful life. It includes all relevant costs involved in acquiring, owning, operating, maintaining and disposing of the system or product over a specified period of time, including environmental and energy costs.

Cost savings

A reduction in actual expenditures below the projected level of costs to achieve a specific objective.

Cost avoidance

An action taken in the immediate time frame that will decrease costs in the future. For example, an engineering improvement that increases the mean time between failures and thereby decreases operation and maintenance costs is a costavoidance action.

customer. VE follows a structured thought process to evaluate options. Every VE session, chaired by an expert facilitator, goes through a number of steps: (i) Gather information. (ii) What is being done now? (iii) Measure performance. (iv) How will the alternatives be measured? (v) Analyse functions. (vi) What must be done? (vii) What does it cost? (viii) Generate ideas (brainstorming). (ix) What else would do the job? (x) Evaluate and rank ideas. (xi) Which ideas are the best? (xii) Develop and expand ideas. (xiii) What are the impacts? (xiv) What is the cost? (xv) What is the performance? (xvi) Present ideas. (xvii) Sell alternatives.

The benefits of VE VE has a number of benefits: ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑

Clarification of the brief, separating needs from wants. Improved performance through efficiency savings. Identification of alternative designs, solutions or locations. Identification of alternative construction methods. Empowered staff through multi-disciplinary teamwork. Enhanced service/product quality. Identification of risk. Identification of additional functions that improve the outcomes of the project. Improved staff morale, commitment and relationships. Rationalisation of the project programme.

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Risks of VE There are potential risks that must be guarded against. They can be managed effectively if recognised, identified and dealt with. These risks might include: ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑

The exercise may be undertaken too late for changes to be effective. Inadequate information causing incorrect assumptions. Insufficient participation by stakeholders. Insufficient time allocated for the process. Inadequate support by senior management. Unskilled facilitators using improper application of the methodology.

13.19 E-purchasing Online purchasing has greatly affected FM. The use of e-procurement (e.g. desktop online ordering of stationery) is now commonplace in many organisations. In addition, the increasing use of e-bidding to renew contracts of commodity supplies (e.g. energy and stationery) is threatening more streamlined forms of procurement. However, total reliance on the Internet can present pitfalls and dangers, as it may be hard to see the seller or goods, or get a true feel for the supplier. When websites are hacked or the Internet service is disrupted, then FM teams will need backup procurement processes.

13.20 Legislation Unfair Contract Terms Act 1977 This Act states that any term which attempts to exclude or limit the following liability will be ineffective: ❑❑ Liability for death or personal injury caused by negligence (Section 2[1]). ❑❑ Liability for other negligence, unless the term satisfies the reasonableness test set out in

the Act (Section 2[2]).

Sale of Goods Act 1979 It is implied in the contract that the goods: ❑❑ ❑❑ ❑❑ ❑❑ ❑❑

Effectively belong to the seller and no third party has rights over them (Section 12). Will be as described by the seller (Section 13). Will be of satisfactory quality (Section 14[2]). Will be reasonably fit for any purpose made known to the seller (Section 14[3]). Will be delivered to the seller’s place of business, if no place for delivery of the goods has been agreed (Section 29). It now only applies to goods purchased on or before 30 September 2015.

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Supply of Goods and Services Act 1982 This Act requires that any person providing a service in a business should provide that service with reasonable care and skill (Section 13). It now only applies to goods and services purchased before 1 October 2015. Housing Grants, Construction and Regeneration Act 1996 Part 2 of this Act was introduced to address two main issues within the construction industry: payment abuse and disputes. From 1998, all ‘construction contracts’ have to be compliant with the Act. Many FM contracts are classified as construction contracts – these can include but may not be limited to: ❑❑ ❑❑ ❑❑ ❑❑ ❑❑

New builds and extensions. Repair, maintenance and internal refurbishment. Cleaning of buildings. Alterations and renovations. Painting and decoration.

Late Payment of Commercial Debts (Interest) Act 1998 For many businesses, especially smaller ones, late payment of bills can be particularly damaging, causing major cash flow difficulties often so severe that the future of the business can be in jeopardy. There are three stages to this Act’s implementation: (i) Small businesses are able to claim interest from large businesses and the public sector if they are paid late. Small businesses are classed as having 50 or fewer full-time employees or part-time equivalents. Large businesses are classed as having more than 50 fulltime employees or part-time equivalents. (ii) The Late Payment of Commercial Debts Regulations 2002 extended the scope of the late payment legislation by enabling creditors to sue for reasonable debt-recovery costs and by giving the right for small businesses to challenge grossly unfair contract terms. (iii) Eventually, legislation is foreseen that will make these rights exercisable by all businesses against all businesses. Businesses are encouraged to agree their own contractual terms for charging interest in the event of late payment. However, the Act contains provisions to prevent parties ‘contracting out’ of the legislation by setting very low rates of interest on late payments, by extending credit terms excessively, or by using any other method which prevents any substantial penalty for late payment: ❑❑ The term ‘late payment’ is defined as a payment which is received after the expiry of a

contractually agreed credit period, the credit period which is the usual trade practice in that sector, or the default credit period specified in the legislation  –  whichever is applicable. ❑❑ A commercial debt is a debt under a contract for the supply of goods or services where the purchaser and supplier are each acting in the course of business.

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❑❑ Where no credit period is defined or no contract exists, there will be a default period of

30 days for payment from delivery of the invoice, goods or services – whichever is the later. ❑❑ There will be an interest rate of 8% above base rate, which reflects the cost of borrowing to the most vulnerable sector of business. So if the base rate were 2% then the statutory rate of interest would be 10%. Consumer Rights Act 2015 The Consumer Rights Act came into force on 1 October 2015. From that date, new consumer rights became law covering: ❑❑ What should happen when goods are faulty. ❑❑ What should happen when digital content is faulty. ❑❑ How services should match up to what has been agreed, and what should happen when ❑❑ ❑❑ ❑❑ ❑❑

they do not or when they are not provided with reasonable care and skill. Unfair terms in a contract. What happens when a business is acting in a way which is not competitive. Written notice for routine inspections by public enforcers, such as Trading Standards. Greater flexibility for public enforcers, such as Trading Standards, to respond to breaches of consumer law, such as seeking redress for consumers who have suffered harm.

Most of these changes were updates of existing laws, with the exception of the following two new areas of law, which were included to reflect changes in responsibilities in a digital era: ❑❑ Rights on digital content have been set out in legislation. The Act gives consumers a

clear right to the repair of e-books. The law here had been unclear and this change mandated replacement of faulty digital content – such as online film and games, and music downloads  –  bringing industry up to date with how digital products have evolved. ❑❑ There are new, clear rules for what should happen if a service is not provided with reasonable care and skill or as agreed. For example, the business that provided the service must bring it into line with what was agreed with the customer or, if this is not practical, must give some money back. Alternative dispute resolution (ADR) is now available to all businesses to help when a dispute with a consumer cannot be settled directly. Before the Consumer Rights Act became law, this service was only available in certain sectors. A business which is involved in a dispute will now need to make the consumer aware of a relevant certified ADR provider. The business should also let the consumer know whether or not they are prepared to use the ADR provider to deal with the dispute.

13.21  European procurement legislation In January 2004, the European Parliament approved a new Consolidated Procurement Directive covering the purchase of supplies, services and works by the public sector. The purpose of the EU procurement rules and legislation is to open up the public procurement market and to ensure the free movement of supplies, services and works within the EU. The

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Table 13.8  EU Thresholds 2020/2021 thresholds

Supplies

Services

Works

Central government bodies

£122,976 (€139,000)

£663,540 (€750,000)

£4,733,252 (€5,350,000)

Other public sector contracting authorities

£189,330 (€214,000)

£663,540 (€750,000)

£4,733,252 (€5,350,000)

Small lots

£70,778 (€80,000

N/A

£884,720 (€1,000,000)

Table 13.9  EU tender procedure types The open procedure

This is available in all circumstances and involves a single-stage approach where all candidates may respond to an OJEU advertisement and all offers received must be considered.

Costly, lengthy process. Negotiations limited.

The restricted procedure

This is available in all circumstances and involves a two-stage approach where candidates who respond to an OJEU advertisement will be considered to have expressed an interest and, from these, the buyer will then shortlist a number of candidates to submit offers.

Preferred method. Only 37 days for receipt of expressions of interest, then 40 days must be allowed for offers to be returned from those shortlisted (could be 26 days if a Prior Information Notice is used).

The negotiated This is only available in a very limited number of procedure circumstances and is subject to strict conditions.

EU rules reflect and reinforce the value for money (VFM) focus of the UK government’s procurement policy. VFM may be defined as the optimum combination of whole-life cost and quality to meet the user’s requirements. Thresholds of supplies, services and works dictate whether the procurement will have to comply with the formal EU procedures of advertising in the Official Journal of the European Union (OJEU). Thresholds are updated annually as shown in Table 13.8. Under the EU regulations, there are three types of tender procedure available to buyers, as shown in Table 13.9. The impact of Brexit on public sector procurement is likely to be significant.

13.22  Bribery Act 2010 The Bribery Act must be considered in dealings with organisations during the procurement process. FMs may need to check that their existing procurement controls will prevent bribery. Organisations must have policies and procedures that govern activities at risk of bribery. Particular consideration should be given to: ❑❑ ❑❑ ❑❑ ❑❑

Gifts, hospitality and entertainment. Facilitation payments. The use of agents, consultants and other intermediaries. Political and charitable contributions.

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❑❑ Due diligence procedures relating to business partners, including acquisitions, joint

ventures and other relationships.

❑❑ Contracts and bids.

Communications, training and guidance need to be provided to ensure all concerned are aware of the risk of bribery, its consequences and controls to prevent it. It is critical that front-line employees in procurement, contracts and FM departments understand what circumstances they are likely to encounter that put them at risk of offering or accepting a bribe, as well as how to seek additional guidance and support. FMs should also communicate a clear message to business partners such as suppliers, distributors, agents and consultants about how the company expects its partners to conduct business with it or on its behalf. Monitoring of the effectiveness of training and policies to prevent bribery is required. A system of alerts to indicate improper behaviour is advised.

14

Contracts and Contract Management

14.1 Introduction A contract may be defined as an agreement enforceable by the law, between two or more persons, to do or abstain from doing some act or acts. Its intention must be to create legal relations and not merely to exchange mutual promises. Both parties must have given something or have promised to give something of value as consideration for any benefit derived from the agreement. The essential elements of the formation of a valid and enforceable contract can be summarised according to the following principles: ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑

There must be an offer and an acceptance. There must be an intention to create legal relations. There must be an agreement about the same thing. The parties must have the capacity to contract. There must be possibility of performance. There must be certainty of terms. There must be legality of objects. In the case of simple contracts, there must be a consideration that has a value (i.e. the consideration is the exchange between two parties in a simple contract; there must be a loss to one party and a benefit to the other).

Most of the contracts entered into by FMs (facilities managers, or facilities management) are ‘simple contracts’. Simple or ‘parol’ contracts are ‘informal’ contracts and may be made: ❑❑ Orally. ❑❑ By implication from conduct. ❑❑ In writing.

Most maintenance and service contracts are in writing. Formal agreements, for example for the supply of electricity, are contracts ‘under hand’.

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14.2 Consideration Consideration need not be adequate but must have some value, however slight. There would be no question of a contract being void because the payment agreed upon for the work or service to be provided was a very small sum. Additionally: ❑❑ Consideration must be sufficient. This situation arises where the consideration offered

by the provisor is an act which they are already bound to carry out.

❑❑ Consideration must be legal. ❑❑ Consideration must move from the promisee (i.e. the person to whom the promise is

made) to the promiser (who must in turn give some consideration for it to the promisee).

14.3  Communication of offer and acceptance A contract is brought into existence upon communication of the acceptance. The posting of a letter of acceptance, where the post is the normal means of communication, brings a contract into existence even though it has not yet reached the other interested party or parties. Once accepted, a contract cannot be retracted.

14.4 Acceptance It is important to be satisfied that the offer has been expressed with precision and that the unqualified acceptance is in accordance with the requirements. The terms of acceptance must be identical to the terms of the offer.

14.5 Withdrawal An offer can be revoked at any time before acceptance. To be effective, however, withdrawal and revocation must be brought to the knowledge of the other party before acceptance takes place.

14.6  Contracts by deed Contracts of this class are made by employing a formal agreement, as opposed to a simple contract which is effected by the exchange of documents. Speciality contracts or contracts by deed are used in the following circumstances: ❑❑ Land. ❑❑ Leave of property. ❑❑ Articles of partnership.

A deed becomes operative when it is signed and dated. The signing in the case of an individual must be witnessed. Because of the form in which they are expressed, contracts by deed are legally enforceable even though they are made without valuable consideration, and

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the right of action arising out of such contracts is not barred for 12 years. Although deeds may be used if desired for any other contracts, however unimportant, in practice they tend to be confined to cases required by law.

14.7  Contracts which are not binding Mistake There are two legal categories of mistake: ❑❑ Where both parties make the same common mistake. ❑❑ Where the parties have different intentions.

Misrepresentation The rights and remedies that flow from misrepresentation depend upon whether it was fraudulent or innocent. Illegal contracts Contracts that contravene the law are, in general, void and no action may be brought upon them. The illegality may involve doing an act prohibited by statute, such as building contrary to the building regulations, or it may exist in a project which is prohibited, such as an agreement to commit a crime or tort. Incapacity of the parties Certain parties are restricted in their contractual capacity and liability, for example: ❑❑ ❑❑ ❑❑ ❑❑

Crown and government departments. Minors (those under the age of 16). Infants. People who are diagnosed or certified as insane.

Privity The common-law rule of privity is that a contract cannot be enforced by or against a person not party to that contract.

14.8  Contract types Trading contracts are called many different things, including supply agreements, service agreements, services agreements, management contracts, service contracts, trading agreements, supply contracts, details of supply, details of services, schedules of services, services schedules and just about any other permutation of these words that can be constructed. What matters is not what the contract is called – it is what the contract contains, and how the contents are worded, that count most. This is why for large, important contracts, which

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carry significant legal responsibilities and potential liabilities, it is sensible to involve a solicitor or lawyer in producing the contractual documents. Service contracts and supply agreements are used for all manner of trading and commercial arrangements and relationships, such as: ❑❑ Provision of services from one organisation to another. ❑❑ Provision of services from an organisation to a private consumer. ❑❑ Management of services by an organisation or provider on behalf of a client

organisation. Direct contracting of services. Subcontracting of services. Licensing arrangements between two organisations or bodies. Franchising arrangements between a franchisor and franchisee or franchisees. Rental supply of products and/or services by a services provider to clients, either corporations or private individuals. ❑❑ Provision of equipment in conjunction with leasing or other financing arrangements. ❑❑ Many other types of supply agreements and commercial trading arrangements. ❑❑ ❑❑ ❑❑ ❑❑ ❑❑

Trading and supply arrangements apply in all industry sectors, and can involve any type of service or product supply. FMs will be particularly concerned with contracts for services and maintenance. Critical assets supported by contracts should be identified, such as maintenance contracts for mechanical, electrical and plumbing (MEP) plant, equipment and IT systems. As the scope of services delivered by the FM is so varied in nature, it is often difficult to find a form of contract that fits the entire range of services provided. Attempts have been made to create a standard FM contract – see Section 14.22. A bespoke contract can be created by engaging specialist lawyers; however, this will be expensive. Many FMs use a standard contract, as shown in Section 14.22, but then alter the terms and clauses to suit their needs. This can create more problems later if there is no legal validation of the changes.

14.9  Contract methods There are a variety of purchasing methods involving formal contracts: purchase orders, call-off orders, preferred suppliers, term agreements and framework agreements. FMs will need to be familiar with the method most appropriate for the particular purchase and any particular purchasing rules and regulations present in the organisation. For example, those working in the UK public sector will need to be aware of the EU public procurement rules on tenders for supplying services and goods and how this may change in the post-Brexit legal situation. Issues to be identified in service and maintenance contracts include manufacturers’ warranties and guarantees; operational requirements; length of contract; location of supplier; call-out, attendance and travel fees; unique parts or software required; performance incentives and penalties; and availability of other suppliers. There are many types of contract that can be used in the purchase of FM services and products: ❑❑ Purchase order. ❑❑ Fixed price.

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❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑

Reimbursable. Schedule of rates. Reimbursable and fixed fee. Partnership. Lump sum. Measured time contract. Standard contract proforma.

Selection criteria With so many different contract types available, FMs need to understand the advantages and disadvantages of the contract agreements available so as to make a decision as to the most appropriate contract to use for a particular situation. Some points to consider when choosing a contract are: ❑❑ Flexibility  –  How rigid is the specification and how rigid are the service delivery

timescales?

❑❑ Price – Is a guaranteed or fixed price needed? ❑❑ Change – How likely is the organisation to add to or reduce the scope of its services or

items for supply in the future?

❑❑ Terms and conditions – Does a standard contract meet the needs of the parties in the

contract? In other words, do any of the terms and conditions need to be rewritten or is a bespoke contract required? Are the terms from a pre-existing contract? ❑❑ Performance – Is there provision for performance management or monitoring, and escalation in the case of non-performance? How is the contract to be managed?

Contract document checklist The nature of the goods and/or services being supplied will dictate the content of the contract, but the following key questions will always apply: ❑❑ Are the parties to the contract clearly named and identified? ❑❑ Does the contract set out (in sufficient detail) the goods or services to be supplied?

Technical details may be incorporated into a schedule.

❑❑ Are there clear start and end dates? If there is no fixed end date, can the customer ter-

❑❑ ❑❑ ❑❑

❑❑ ❑❑

minate the contract by giving reasonable notice (and without suffering unreasonable consequences)? Are all prices/fees clearly set out (and what rights does the customer have to withhold payment)? What provision does the contract make with regard to the quality of the goods and/or services to be supplied? Are clauses excluding or limiting liability of the supplier reasonable (in the light of the potential damage which might be suffered by the customer if there were a serious breach of contract)? In what circumstances can the parties cancel or terminate the contract? If the customer cancels the contract or terminates early, what are the consequences (and are they reasonable)?

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14.10  Contents of a contract Trading and supply contracts come in all sorts of shapes and sizes. In broad terms, the ideal content of a FM contract will include schedules of additional information, as shown in Table 14.1. The following checklist may be useful when checking an existing or new contract: ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑

Heading/title. Description/purpose/the service (basically the product/service description). Parties (supplier and client – including addresses). Date. Territory/geographical coverage. Definitions – essential glossary of frequently occurring items in the document. Term – period of agreement. Pricing (refer if appropriate to attached schedule). Pricing adjustment (e.g. annual increases linked to a suitable index). Responsibilities of the provider – include or append details of services and service level agreements. Responsibilities of the client. Payment terms. Confidentiality. Dispute and arbitration process. Termination and force majeure (unknowns and unforeseeable circumstances that would prevent a contract from being fulfilled, e.g. terrorism or natural disaster). Renegotiation/renewal. Prevailing laws. Signatures and witnesses.

14.11  Lump-sum contract A lump-sum contract is essentially one where the whole of the requirement to be supplied can be specifically defined, a firm (not necessarily a fixed) price can be agreed in advance, and it can be agreed on what basis the contract will be awarded and paid. The distinction between a firm price and a fixed price is that in the latter case the cost is not subject to increases due to fluctuations in the cost of materials and/or labour. It is therefore possible to have a fluctuation-based lump-sum contract or a fixed-price lump-sum contract. Table 14.1  Contract contents The specification A service matrix Mobilisation and transition Pricing and payment Performance management and measurement, and the contract key performance indicators (KPIs) Site-specific data Contract management and governance Reporting requirements Contract exit

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In summary, a lump-sum contract has these features: ❑❑ Length of contract is relevant to the time required to complete the work. Original

tender/contract price may change if variations apply.

❑❑ Suitable for one-off items of work. ❑❑ Pre-tender process allows control of quality. ❑❑ Quality may deteriorate as profit margin erodes.

14.12  Measured-term contract A measured-term contract, on the other hand, represents the ‘best estimate’ of the quantity of work that is likely to be done during a defined period of time, such as over the next 2 years. A schedule of items that is expected to be carried out is priced, along with some indication of the total amount of work that is likely to be undertaken over the period of time of the contract. However, there is no guarantee to the contractor that all of the items will in fact be required or carried out. As such, there is an element of risk in pricing the schedule for the contractor, where quantity discounts can skew a particular price significantly. Payment for work is made against actual work undertaken, i.e. the work is measured after it is done. In summary, a measured-term contract has the following features: ❑❑ ❑❑ ❑❑ ❑❑ ❑❑

Must have agreed schedule of rates. Work is measured and priced on completion. Each item of work is ordered individually (specified). General specification (quality and so on) is already established. It is set up for a specific period of time, i.e. the term of the contract.

14.13  Term contract This type of contract is appropriate for a planned programme of work or call-off items. It is set up for a specific period of time (term) and is inflexible as the term is fixed. Known quality, timescales and price are features, and so it is critical to have a clear understanding of requirements needed prior to negotiation of the contract.

14.14  Fixed-price contract In this type of contract, the customer describes what they want, gets quotes from the marketplace and chooses the best one. The work is done for the tendered price. This type of contract is typically used for simple purchases or for requirements which are easy to describe and not likely to alter. It is distinct from a lump-sum contract (see Section 14.11) in that there is no variation in the price.

14.15  Reimbursable contract In this type of contract, the customer hires in resources from a supplier and gives instructions on what to do. The supplier is not pressured into finishing early at the expense of quality. The customer reimburses all the costs of labour and materials.

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14.16  Schedule of rates In a schedule of rates, a contractor or supplier gives the customer a menu of prices for all the standard tasks. There are standard schedules of prices published by industry, such as the Building Cost Information Service (BCIS) books and Spon’s price books. These prices are averages, and so may be greater or lower than fixed prices. Schedules of rates can be useful when work needs to proceed quickly with minimal time for estimates and pricing work before the job starts. Time is needed at the end of the project or activity, however, to agree that the work has been completed to the level expected, in accordance with industry standards. Contractors can gain greater profits from this method of contract if they can work more efficiently than the schedule agreed.

14.17  Reimbursable and fixed-fee contract In this type of contract, the customer pays the supplier’s costs and a fixed fee for their profit. It can be used in circumstances where a reimbursable contract could be used but it provides more support to the supplier (e.g. if they experience challenges with their supply chain or as a result of the weather). The supplier is not pressured into finishing early at the expense of quality.

14.18  Contract relationships A well-designed service contract provides a really useful platform and constant reference point for good, positive, mutually beneficial trading relations, so it is worth thinking about it and getting it right at the outset. It is often said that contracts and agreements are usually shut away in a drawer and never looked at again after they are signed, and in many cases this is true. The supplier’s and client’s freedom to get on with the business is largely enabled because they have properly considered each other’s position and agreed the basis of supply in the form of a proper contract. They have no need to look at the agreement contract as the trading relationship has been properly established by the process of drawing up and agreeing a sound and suitable contract. The process of agreeing a contract is, therefore, aside from anything else, an excellent way to flush out and make transparent all aspects of the supply or service arrangement, much of which is otherwise commonly taken for granted, usually including many wrong or mismatched assumptions on both sides. A good trading contract enables such risks to be averted.

14.19 Partnership There are various types of partnership contract, where things are set up such that the supplier can only make money by achieving what the customer wants. The advantage for both parties is that no time or effort is wasted tendering for individual smaller jobs. These types of contract also allow the supplier to get closer to the customer. Partnerships are not for the faint hearted or for those afraid of innovation.

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14.20  Contract extensions Contracts can be extended for a limited period, for example a few months to bring the end time in line with other contracts or financial operating periods. Contracts can also be extended by longer periods (typically 1 or 2 years) if there is a good relationship between the parties. The benefits of contract extensions are: ❑❑ ❑❑ ❑❑ ❑❑

Extending the existing contract under the same terms and conditions. Can be used to employ the same contractor on a similar job. Removes or defers the need for a tender process but also removes competition. Allows continued use of a known contractor.

14.21  Service level agreements (SLAs) SLAs are basically detailed standards of performance for individual service aspects, such as response times, reporting and monitoring, liaison with other suppliers, and specific detailed deliverables. Large, complex agreements may have many pages of complicated SLAs appended, with these referenced in the sections on service description and the responsibilities of the provider. These more complex agreements also need to state the terms governing the alteration of SLAs – otherwise high legal costs will be incurred. SLAs are not unique to the FM industry and can be found in other functions, industries and professions. SLAs may or may not form part of the contract. SLAs tend to be included when the details in the contract need clarification; they can then be used to verify standards and performance measurement of key activities or services. If SLAs are excluded from the main contract, then annual review and revisions can be applied with limited or no extra legal cost to either parties. In summary, a SLA can: ❑❑ ❑❑ ❑❑ ❑❑ ❑❑

Provide an agreed quality and performance standard. Include penalties for non-compliance. Be internal or external to the client organisation. Form part of a contractual arrangement. Be used in benchmarking activities.

14.22  Standard contract forms Many standard contract documents have been written by various professional organisations and experts within the industry. Some are no longer available but could still be in use depending on the contract term length. It is important to purchase the most appropriate standard contract to avoid too many costly amendments, which may also negate the benefits of the pre-tested contract document. Variations to the standard clauses may create legal problems in the future as clauses are designed to work collectively, so removing or altering a few is not advised. Examples include: ❑❑ CIOB Facilities Management Contract. ❑❑ JCT suite of contracts. ❑❑ GC/Works/10 Facilities Management Contract (2000).

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❑❑ NEC framework of contracts, e.g. NEC3, NEC4 and the Term Service Contract. ❑❑ BSRIA Soft Landings. ❑❑ Crown Commercial Service FM framework contract.

14.23  CIOB Facilities Management Contract This contract was developed jointly between the Chartered Institute of Building (CIOB) and Cameron McKenna in 1999 and revised in 2004 and 2008. It provides a simple-to-understand set of terms and conditions, to which a choice of specifications and pricing options can be easily appended. Pricing can be fixed fee, cost plus or index linked. The contract includes guidance notes called ‘Facilities Management Contract Guidance’, which covers team working, plant maintenance and business transfers. The contract has three appendices, as shown in Table  14.2. Caution is required in terms of the Transfer of Undertakings (Protection of Employment) Regulations 2006 (TUPE) and the Construction (Design and Management) Regulations 2015, which both affect these large-scale project contracts.

14.24  JCT suite of contracts The Joint Contracts Tribunal (JCT) was established in 1931 and has for many years produced standard forms of contracts, guidance notes and other documentation for use in the construction industry. The main feature of this type of contract is a fair allocation of risks between all parties. The JCT is an independent organisation, comprising seven member bodies, which represent all parts of the construction industry. JCT is the leading provider of standard forms of building contract, accounting for about 70% of all projects in the UK. The latest version (2016) of its suite of contracts can be purchased via various agents, online and in bookshops. These include Construction Management, Design and Build, Framework Agreement, Measured Term, Minor Works Building Contract, Standard Building Contract, Major Project Construction Contract, Repair and Maintenance Contract and many others. There is no specific FM contract in the JCT library. The standard format of a JCT contract includes four parts: ❑❑ ❑❑ ❑❑ ❑❑

Articles of agreement. Contract particulars. Conditions of contract. Schedules.

A JCT contract has nine provisions covering definitions; carrying out the works; control of the works; payment; variations; injury, damage and insurance; assignment, third-party rights and collateral warranties; termination; and settlement of disputes. Table 14.2  CIOB FM contract appendices Appendix 1

Identification of premises.

Appendix 2

A list of services – such as ‘arrange, administer and manage all contracts and subcontracts for the provision of the Services at the Premises’ and ‘undertake the operational tasks and attendance requirements set out in the Specification’.

Appendix 3

Specification – a list of FM services including building maintenance, energy management, landscaping, project management of refurbishment and space management.

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14.25  GC/Works/10 Facilities Management Contract (2000) The General Contract Works (GCW) 10 FM contract owes its origins to PACE, the UK Property Advisers to the Civil Estate. It was one of a suite of contracts developed in late 1990s which are no longer in common use. It is a fixed-sum, fixed-term contract and includes two alternatives: (i) unless the relevant clause is expressly removed, the supplier assumes all costs, expenses and risk or (ii) rates can be adjusted annually in line with agreed cost or price indices. It was first published in 2000 by HM Stationery Office.

14.26  NEC framework of contracts The NEC Engineering and Construction Contract (commonly called the NEC Contract) is a legal framework of project management procedures designed to handle all aspects of the management of construction and engineering projects. Initially created in 1993 and updated in 1995 and 2005, the framework has been expanded to include a wide suite of contracts. Their benefits include use of plain English, stimulus to good collaborative management style of working, flexibility and simplicity. They can be applied to any construction or facilities project, large or small. NEC3 and NEC4 comprise a suite of contract documents and guidance books. The Term Service Contract (TSC) can be used to appoint an FM supplier for a period of time to manage and provide a service. There are various options for short contracts, bundles and subcontracts to give organisations flexibility to choose the most appropriate form of contract.

14.27  BSRIA Soft Landings The ‘Soft Landings’ concept was first proposed in the early 2000s by architect Mark Wey. BSRIA developed the Soft Landings contract into a framework, first published in 2009, that can be used in new construction, refurbishment and alteration projects; the latest update was released in 2018. There were originally five key phases in the framework, but it now extends to six phases, as shown in Table 14.3. The term ‘soft landings’ comes from the analogy of an aircraft landing with no bumps – the idea is that a successful project will easily be used by the customer at handover due to the Table 14.3  Phases in the Soft Landings Contract Inception and briefing

Clarification of the duties of the design, client and construction teams; management of expectations relating to future performance.

Design development and review

Specification reviewing the likely performance against the original expectations.

Construction

Physical implementation of the project.

Pre-handover

Involvement of all parties (design, operators, builders and commissioning specialists) to ensure operational readiness of the building.

Initial aftercare

Resident representative on site to respond to queries, react to problems and ensure transfer of knowledge during the first year of occupation – the settling-in period.

Extended aftercare

Covering years 1 to 3: post-occupancy evaluation, and periodic monitoring and review of building performance.

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terms of the contract. The design and construction team remain involved with the premises users during the first year of occupation, known as the ‘initial aftercare’ phase, to ensure that the premises are usable and meet the design intention. The ‘extended aftercare’ phase (in years 1 to 3) is unique and gives this form of contract a distinctive advantage to the FM. The UK government actively promote this form of contract and expect all public sector projects to use this contract type in new building projects.

14.28  Private finance initiatives (PFIs) The PFI was conceived during the early 1990s. It provides a mechanism for industry to partner government in long-term, high-cost projects and to share the potential benefits – as well as risks – of such ‘partnering’ opportunities. The idea is to use private sector finance and expertise to achieve better value for money; in this way, the UK government has become a purchaser of services rather than a commissioner of major capital projects. A single integrated supply team is appointed with design, construction and FM expertise to design and build a development and then to operate it for a period of time. A specialpurpose vehicle (SPV) finances the project and leases it to the government for an agreed period (20 to 35 years), after which the development reverts to government ownership. There are a number of different partnering arrangements, depending on the nature of the project and the objectives of particular initiatives. The main categories are: ❑❑ ❑❑ ❑❑ ❑❑

Build, Operate, Transfer (BOT). Build, Own, Operate (BOO). Design, Build, Finance, Operate (DBFO). Design, Construct, Manage, Finance (DCMF).

For example, in a BOT project, the government grants a private sector organisation the concession to build a facility, operate it during the concession period and then transfer it back at the end of the period. However, in a BOO project, the industrial partner finances, designs, constructs and operates the facility over a given period but the facility does not revert back to the principal, the government. PFIs are very complex contractual arrangements. The integrated supply team has separate agreements covering funding, design and construction, and FM. Each of these agreements may have multiple subcontracts. There will also then be separate agreements between the client and the SPV (concession or project agreements). A government review in 2011 led to a new version, known as PF2. This removed the ‘soft’ FM services (such as catering and cleaning) from the contract. There are 700 PFI and PF2 contracts in place in the UK. The debt (of the public sector bodies that signed the contract) to pay charges will continue for many years – up to 2040 in some cases. The general decline in use of PFI contracts led to another review in 2018 and their subsequent withdrawal in 2019 as a form of contract. The principles of the PFI forms of contract are: ❑❑ The new building owner has a real incentive to design and construct a good-quality

building in order for maintenance costs to be kept to a minimum.

❑❑ The contractors take responsibility for revenue and replacement costs as well as their

capital costs. Over the contract term, FM costs accumulate to become an enormous sum, funded by future revenue, and they therefore need to be predicted accurately during the initial contractual negotiations.

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❑❑ Comprehensive SLAs can help to ensure good maintenance of the facility, and penalty

clauses may provide further incentives for the private sector organisation to perform well. ❑❑ Construction and refurbishment costs, together with all FM costs, may be progressively recovered through staged payments during the period of concession. ❑❑ Risk is transferred to the private sector. Staff and equipment may be transferred from old to new property. Any risks associated with project slippage may be placed with the private sector. Some risks may be better managed and handled by the public sector, so it is not necessary to equate a PFI with transfer of all risks.

14.29  Terms and conditions Purchase orders will state the buyer’s conditions, and often the supplier will dispute these, requiring their conditions of sale to prevail. FMs will often be presented with the supplier’s ‘standard terms and conditions’ in contract documents. FMs need to minimise risk by ensuring that suppliers work to the client organisation’s terms wherever possible. Purchaser and supplier should agree upon reasonable terms and conditions. The typical terms found in the small print on the reverse of purchase orders and included in the general terms of other types of contract include: ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑

Payment terms. Responsibilities of both parties. Liabilities. Insurance. Penalties. Title of goods. Time periods. Force majeure. Termination and cancellation terms. Jurisdiction and legislation. Warranties and guarantees. Delivery terms. Intellectual property and copyright.

FMs should look out for the following words in suppliers’ terms and conditions: ❑❑ Any wording with terms such as ‘the sole opinion of the Supplier’. ❑❑ Any indemnities flowing from the customer to the supplier. ❑❑ Any reference to goods or services provided ‘at the customer’s additional expense’

(­particularly if unquantified).

❑❑ Any right of the supplier to vary the contract without the customer’s consent. ❑❑ Any term which should apply to both parties but has been drafted so that it favours

only one party.

❑❑ Any options which are exercisable by the supplier on a unilateral basis. ❑❑ Prices that are quoted as ‘ex-works’ – this is the price at the supplier’s factory. Delivery,

shipping and import costs could be very high.

❑❑ VAT or purchase tax rates; these vary across the world.

15

Legislation

15.1 Introduction FMs (facilities managers, or facilities management) have many regulations and much legislation to know and understand if they are to be competent in the discharge of their duties. FMs need to look after the well-being of the visitors, employees and contractors working in their buildings and facilities, provide a safe place of work with safe equipment, and mitigate the risks of loss of productivity, prosecution, litigation and claims. It has been suggested that FMs need to be aware of up to 400 legal rules that are to be found in various Acts of Parliament, statutes, regulations, orders, by-laws, Approved Codes of Practice and guidance notes. For FMs with European and international property portfolios, an appreciation of the relevant local laws is also required.

15.2  UK legal system The UK legal system has a long history. Although not based on a written constitution, it is based on the separate powers of: ❑❑ The legislature or rules made by Parliament. ❑❑ The executive agencies, departments and public bodies acting on behalf of the

government.

❑❑ The judiciary system, which comprises a range of courts and tribunals that check eve-

ryone acts within the law laid down by legislature.

In the UK, there is common law (based on judges’ decisions over many years) and statute law (based on parliamentary decisions). The main types of law can also be classified as shown in Table 15.1. The legal justice system is based on a hierarchy of courts, as depicted in Figure 15.1. With more settlements made ‘out of court’, most cases are dealt with within the magistrates’ courts. The law is constantly changing to respond to different needs and circumstances. There is a time lag from the drafting of a new Bill to it becoming a Statute or Act of Parliament and the legislation coming into force. There are about 60–70 new Bills each year. In recent years, the range of legislation pertaining to health and safety, use of land, housing, property, apprenticeships, transport and a range of general matters has been simplified and consolidated, via the Deregulation Act 2015.

Facilities Manager’s Desk Reference, Third Edition. Jane M. Wiggins. © 2021 John Wiley & Sons Ltd. Published 2021 by John Wiley & Sons Ltd. 227

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Table 15.1  Types of law Type

Examples

Civil

Contract law, employment law, tort (civil wrongs)

Criminal

Breaches of regulations, enforcement of notices, punishment for acts (such as assault, burglary, murder), breaches of duty of care (such as waste management, water pollution, health and safety)

Public

Planning regulations, building regulations

European Court of Justice

European Court of Human Rights

Supreme Court

Court of Appeal

High Court County Courts

Tribunals

Crown Court

Magistrates’ Courts

Figure 15.1  The UK justice system

The UK court system is predominantly adversarial – the parties investigate their own cases to provide their own evidence. In court, two opposing sides argue their case by finding and presenting facts. Courts interpret the law, and, as new legislation is enacted, there may be changing emphasis in the interpretation. It is therefore very important to: ❑❑ Interpret the legislation by reading the Act or legal rule very carefully. ❑❑ Ensure that the legal source is completely up to date, making certain that the particular

legislation has not been amended, revised or repealed.

❑❑ Determine where and when the breach of rights or legislation occurred. ❑❑ Establish the causal links in the chain of events in the act or omission which led to a

failure to comply with legislation.

❑❑ Seek expert help early. ❑❑ Check that the level of employers’ liability insurance is sufficient to cover any potential

claims and the cost of a defence.

Civil law principles are based on a justice system designed to resolve disputes between two or more parties. They provide redress for damages suffered. The main remedy is compensation or injunctions to either prevent someone from doing something or force an

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action to be carried out. In general, the claimant has to initiate proceedings and prove on a balance of probabilities (more than 50%) that they have a case. Criminal law principles are based on the need to punish wrongdoers and impose sanctions on those who are in breach of regulations. Fines and imprisonment are typical sanctions imposed. The State will initiate proceedings via a number of public bodies – a few are listed in Table 15.2. The officers acting for the prosecuting authorities have more powers than the average police constable and must comply with the Police and Criminal Evidence Act 1984 (PACE) Code of Conduct. Offences under criminal law are said to have ‘strict liability’, which means that even though there was no intention to cause harm, the defendant will be guilty. In these cases, the State must prove beyond reasonable doubt (more than 95%) that the criminal act occurred. The defendant may be able to provide evidence to support various assertions, such as: ❑❑ That reasonable precautions were taken  –  this is sometimes referred to as ‘due

diligence’.

❑❑ That they have a reasonable excuse for their actions. ❑❑ That actions or activities were undertaken in an emergency to avoid harm to the

public.

❑❑ That the best practical means were used to prevent or counteract the effects of the

actions or activity.

Criminal proceedings may result in sanctions being imposed on the organisation. If the offence was committed with the consent (knowledge and awareness of the risks), connivance (knowledge but doing nothing about it) or neglect (unreasonable breach of duty of care) of a director, manager or other officer, that person may also face sanctions. Public law principles are based on judicial review and control. This is a way of ensuring that everyone follows the law. This is particularly important for FMs with property management responsibilities because the main area of public law is the control of land use. In most health, safety and environmental legislation, offences attract vicarious liability. This is when the liability falls on one person as a result of the actions of another. Typically, this is liability of the employer for the acts and omissions of their employees.

Table 15.2  Government agents and areas of responsibility in law Health and Safety Executive

Health- and safety-related offences

Environment Agency

Water-related, more serious waste and integrated pollution control (IPC) matters

Local authorities

Less serious waste offences, air pollution, planning control, food and hygiene, noise and general environmental health offences

Crown Prosecution Service

Offences against the state

Director of Public Prosecutions

Serious offences

TV Licensing Authority

Licences for watching television

HM Revenue and Customs

Revenue fraud, tax evasion

Security Industry Association

Security offences relating to the Private Security Industry Act 2001

Police

Criminal activities

Information Commission’s Office

Breaches of data security

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15.3  Impact on FM Some of the main issues regarding legal compliance for FMs are shown in Table 15.3. FMs cover a broad range of responsibilities and so, not surprisingly, the knowledge areas of legislation are also very broad and often extend beyond the normal health, safety and environment remit. Table  15.4 shows the range of legislation against the typical areas of responsibility. In health and safety legislation, FMs have obligations as employees. Like other employees, they cannot interfere with or misuse safety equipment, they must observe instructions and co-operate with procedures, and they must take reasonable care of themselves and others by their acts and omissions. In addition, FMs have responsibilities as duty holders for many of the regulations in health, safety and environmental legislation. This depends on the exact nature of their job and what other roles are held by other employees in the organisation. For example, does the organisation employ a fire officer, a health and safety officer or a principal designer? FMs working in smaller organisations may find themselves with greater responsibilities than those in larger organisations. FMs will often find that they are representing or acting on behalf of their employer; responsibility for contractors, third parties and the public in an organisation’s premises often comes under the FM function. The management of a safe place of work is ultimately the FM role. With so many FM operatives needing personal protective equipment, this is another reason for FMs to have a sound knowledge of health and safety. Table 15.3  List of concerns ranked in order of importance 1 Contractors 2 Risk assessment 3 Equality Act 2010 4 Asbestos 5 Fire

6 Accident/incident investigation 7 Lone working 8 Workplace inspections 9 Enforcement 10 Competence

Table 15.4  List of FM activities and the relevant laws Employment

Equal opportunities, discrimination, recruitment, pay, transfer between employers, part-time and fixed-term employees, termination of service, paternity and maternity rights, flexible working, disciplinary and grievance procedures

Acquired Rights Directive 2001; Employment Act 2002; Employment Equality (Religion or Belief) Regulations 2003; Employment Equality (Sexual Orientation) Regulations 2003; Employment Relations Act 1999, 2004; Employment Rights Act 1996; Equalities Act 2010; Equality Act 2010; Health and Safety at Work Act 1974; Maternity and Parental Leave Regulations 1999; National Minimum Wage Act 1998; Public Interest Disclosure Act 1998; Race Relations Act 1976; Social Security (Medical Evidence) and Statutory Sick Pay (Medical Evidence) Regulations 2010; Transfer of Undertakings (Protection of Employment) Regulations 1981; Work and Families Act 2006; Working Time Regulations 1998 (amended in 2002)

Legislation  231

Health and safety

Providing a safe place, safe people, safe processes and safe equipment

Chemicals (Hazard Information and Packaging for Supply) (Amendment) Regulations 2002; Confined Spaces Regulations 1997; Control of Asbestos Regulations 2006; Control of Major Accident Hazards 1999; Control of Substances Hazardous to Health Regulations 2002; Control of Vibration Regulations 2005; Electricity at Work Regulations 1989; Employer’s Liability (Compulsory Insurance) Regulations 1998; Gas Safety (Installation and Use) Regulations 1998; Health and Safety (Miscellaneous Amendments) Regulations 2002; Health and Safety (Safety Signs and Signals) Regulations 1996; Health and Safety at Work Act 1974; Health and Safety Offences Act 2008; Ionising Radiations Regulations 1999; Lifting Operations and Lifting Equipment Regulations 1998; Noise at Work Regulations 1989; Notification of Cooling Towers and Evaporative Condensers Regulations 1992; Provision and Use of Work Equipment Regulations 1998; Registration, Evaluation, Authorisation and Restriction of Chemicals 2006; Working at Height Regulations 2005; ‘Six Pack’ Regulations 1992

Environment

Waste management, environment protection, use of resources

Climate Change Act 2008; Control of Pollution (Amendments) Act 1989; Controlled Waste Regulations 1992 (amended 1993); End of Vehicles Regulations 2003; Environmental Damage (Prevention and Remediation) Regulations 2009; Environmental Permitting Regulations 2010; Environmental Protection (Duty of Care) Regulations 1991; Environmental Protection Act 1990; Hazardous Waste Regulations 2005; Landfill Regulations 2002; Producer Responsibility Obligations (Packing Waste) Regulations 2007; Waste Batteries and Accumulators Regulations 2009; Waste Electrical and Electronic Equipment Directive (2002); Waste Management Regulations 1996

Human rights

Privacy, information on people, monitoring employees; right to training

Apprenticeships, Skills, Children and Learning Act 2009; Copyright, Design and Patents Act 1988; Data Protection Act 2018; Freedom of Information Act 2000; Human Rights Act 1998; Regulation of Investigatory Powers Act 2000

Construction

New buildings, maintenance and refurbishment activities

Construction (Design and Management) Regulations 2015

Property

Planning permission, ownership of property

Building Act 1984; Building Regulations 2002; Commonhold and Leasehold Reform Act 2002; Defective Premises Act 1972; Land Registration Act 2002; Landlord and Tenant (Covenants) Act 1995; Landlord and Tenant Act 1927, 1954, 1985, 1988; Law of Property Act 1925; Leasehold Property (Repairs) Act 1938; Occupiers’ Liability Act 1957, 1984; Party Wall Act 1996; Rating (Empty Properties) Act 2007; Rating (Valuation) Act 1999; Town and Country Planning Act 1990

Fire safety

Fire risk assessment, Regulatory Reform (Fire Safety) Order 2004 equipment provision, training and maintenance (Continued)

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Table 15.4(Continued) Welfare

First aid, accident reporting

Control of Major Accident Hazards Regulations 1999; Health Act 2006; Health and Safety (First Aid) Regulations 1981; Misuse of Drugs Act 1971; Reporting of Injuries, Diseases and Dangerous Occurrences Regulations 1995; Smoke-Free (Premises and Enforcement) Regulations 2006; Coronavirus Act 2020

Food

Catering, vending and hospitality services

Control of Pesticides Regulations 1986; Food Hygiene Regulations 2006; Food Labelling Regulations 1996 (amended in 1999 and 2003); Food Premises (Registration) Regulations 1991; Food Safety Act 1990; General Food Regulations 2004; Genetically Modified Organisms (Contained Use) Regulations 2000; Prevention of Damage by Pests Act 1949; Public Health Act 1961

Security

Door supervision, wheel clamping, guards, key holding, consultants and investigators

Civil Contingencies Act 2004; Private Security Industry Act 2001

Purchasing

Buying of goods, contracts with suppliers, sale of goods and services

Arbitration Act 1996; Bribery Act 2010; Consumer Protection Regulations 2009; European Procurement Directive 2014; Housing Grants, Construction and Regeneration Act 1996; Modern Slavery Act 2015; Sale of Goods Act 1979; Supply of Goods and Services Act 1982; Unfair Contract Terms Act 1977

Directors and senior management

Accountability and financial management

Companies Act 1985, 1989, 2006; Corporate Manslaughter Act 2007; Insolvency Act; Value Added Tax Act 1994

Telephones, Communication devices, mobiles, pagers Radio licensing and handheld radio devices

Communications Act 2003; Radio Equipment and Telecommunications Telecommunications Act 1984; Terminal Equipment Regulations 2000

Transport

Car fleet, carparks, campus roads, travel plans, logistics

Control of Pollution (Oil Storage) Regulations 2001; Crime and Security Act 2010; Highway Code; Motor Vehicle Regulations 2003; Road Safety Act 1988; Road Traffic Act 1988; Smoke-Free (Exemptions and Vehicles) Regulations 2007; Traffic Management Act 2004; Traffic Signs Regulations and General Directions 1994; Transport and Works Act 1992

Document management

Reprographics, printing; music licensing

Copyrights, Designs and Patents Act 1998; General Data Protection Regulation 2018

15.4 Duties There are three types of duties in health and safety legislation: (i) Absolute – This is something that must be done. (ii) So far as is practicable – This is something that must be done if physically possible disregarding the costs involved. (iii) So far as is reasonably practicable – This is something that can be done after a cost– benefit analysis has been carried out.

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15.5 Negligence Where there is a close relationship between two parties, a common-law duty of care arises. This means that one party could sue the other for negligence via the civil courts. A civil liability arises if the acts or omissions caused harm to the other party or damaged their property. Compensation may be due to the claimant, usually via the negligent party’s insurance company.

15.6  Vicarious liability Employers are vicariously liable for the acts and omissions of their employees while the employees are at work. A third party whom an employee injures, or who suffers some other loss, would sue the employee’s employer for negligence. Compensation is usually paid via the insurance policy for employers’ liability. Vicarious liability does not extend to nonemployees or those not at work. So if the employee is not authorised by their employer, or carrying out private activity at the workplace, then the employer is not vicariously liable. It is important to ensure that only authorised activities take place in accordance with the employer’s instructions.

15.7 Consultation The employer has a duty to provide information to employees. There is a duty to consult with staff or their elected representatives on health and safety issues. Examples of scenarios that require consultation include: ❑❑ ❑❑ ❑❑ ❑❑ ❑❑

Information on new workplace measures. Appointments of competent persons. Procedures for managing serious incidents. Training in health and safety matters. Impact of new technologies on health and safety procedures.

15.8 Competence Under the Health and Safety at Work Act 1974, the employer has a duty to provide competent employees. A competent person is someone with qualifications, knowledge, understanding, skills, experience, appropriate personal qualities, awareness of their own limitations, and willingness and ability to obtain external help and advice. Competent people are generally safe people; they have the necessary knowledge and experience to undertake tasks in an effective and safe way. However, human factors have to be considered – accidents are caused by people and their actions or omissions. For each case, the FM needs to consider job descriptions; accountability; the nature of the work; associated hazards, dangers and risks; mental and physical capacity required; pre-existing health conditions; need for further information, instruction, training and supervision; health screening, monitoring and surveillance; and adequacy of resources to undertake the work safely.

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15.9  Operational compliance As custodians of the common spaces in most workplaces, FMs and their appointed contractors will be the duty holder per Regulation 4 of the Workplace (Health, Safety and Welfare) Regulations 1992: ‘every employer shall ensure that every workplace, modification, extension or conversion which is under his control and where any of his employees works complies with any requirement of these Regulations’. The Regulations also state that ‘every person who has, to any extent, control of a workplace, modification, extension or conversion shall ensure that such workplace, modification, extension or conversion complies with any requirements of these Regulations’. Many of the other specific sections of the Workplace Regulations will feature in the daily work of an FM, and it is therefore essential to have a good level of understanding of this particular legislation and its many sections (see Table 16.4). Dealing with non-employees and visitors is also a role that often falls to the FM team to manage. This includes giving suitable information regarding health and safety arrangements to visitors, assessing risks, and issuing permits to work.

15.10 Records As UK society has become more litigious, with increasing compensation expectations and demands, due diligence must be applied to all activities. Records of all incidents and nearmisses must be kept. Records of investigations into breaches of company or statutory rules and regulations must be kept for at least 7 years. Employees and others may claim up to 6 years after an incident, so it is important to keep the necessary evidence to assist with or defend potential claims. There is also a direct impact on the organisation’s insurance costs and liabilities.

15.11  Strategic impact There are some longer-term impacts of compliance affecting whole business activities, such as employment contracts, property acquisition and development, service contracts and continuity of business activities. Some organisations will be more risk averse than others, and different organisations will have different attitudes to the management of uncertainty. There needs to be an understanding of the impact of FM activities upon the business, and how these may support or jeopardise the client’s or employer’s business activities. Policies and procedures supporting the business goals of an organisation must take into account the relevant legislative duties and responsibilities. In addition, the long-term implication of inappropriate operational activities that may lead to prosecution, fines, business closure and litigation must be considered. It is important to keep in mind the reputation of the organisation among employees, suppliers and the general public. Further aspects to consider include the time taken to defend cases and the cost of experts, potential hospital charges and compensation claims. FMs and others with specific duties to provide a safe working environment are under increasing pressure to keep their senior management as well as themselves out of jail.

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15.12  Corporate manslaughter The Corporate Manslaughter and Corporate Homicide Act 2007 permits courts to examine the management systems and practices across the whole of an organisation in the event of a death caused by a corporate management failure. Despite the Act having been in place for several years, there have been few prosecutions, although 200 to 300 people die at work each year. One reason is the time it takes cases to proceed through the courts. FMs and others in management roles are advised to ensure that they have suitable health and safety arrangements in place and that there are adequate records of all steps taken to reduce the risk of serious accidents. FMs are advised to consider obtaining professional indemnity insurance to provide assistance and support in the event of a claim or prosecution.

15.13  Bribery Act 2010 The Bribery Act 2010 came into effect in July 2011. It requires organisations to put in place adequate procedures to prevent persons associated with the organisation (employees, suppliers, contractors and customers) from engaging in bribery in their business dealings and processes. Bribery is defined as giving someone a financial or other advantage to encourage them to perform their functions or activities improperly or to reward them for having already done so. This includes trying to influence a decision maker by giving some kind of extra benefit to that decision maker other than what can legitimately be offered as part of a tender process. Hospitality is not prohibited by the Act. The Act is not concerned with fraud, theft, books and record offences; Companies Act offences; money laundering offences; or competition law. The UK Ministry of Justice offers guidance on the procedures required to comply with this law. It advocates the consideration of six principles in the design of suitable ­procedures – proportionality, senior management commitment, risk assessment, due diligence, communication, and monitoring and review.

15.14  Modern Slavery Act 2015 The Modern Slavery Act 2015 required compliance by 2018, with published annual statements. Section  54 of the Act requires a commercial organisation that supplies goods or services, and has a total turnover of £36 million, to prepare a slavery and human trafficking statement for each financial year. This annual statement must give details of the steps the organisation has taken to ensure that slavery and human trafficking are not taking place in any of its supply chains or in any part of its own business. An organisation’s slavery and human trafficking statement may include information about: ❑❑ The organisation’s structure, business and supply chains. ❑❑ Its policies in relation to slavery and human trafficking. ❑❑ Its due diligence processes in relation to slavery and human trafficking in its business

and supply chains.

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❑❑ The parts of its business and supply chains where there is a risk of slavery and human

trafficking taking place, and the steps taken to assess and manage that risk.

❑❑ Its effectiveness in ensuring that slavery and human trafficking are not taking place in

its business or supply chains.

❑❑ The training about slavery and human trafficking available to its staff.

A slavery and human trafficking statement must be approved by the board of directors (or equivalent management body) and signed by a director (or equivalent). An organisation may publish its slavery and human trafficking statement on its website, and include a link to the statement in a prominent place on that website’s homepage. Alternatively, it may provide a copy of the statement to anyone who makes a written request for one, and must do so before the end of the period of 30 days beginning with the day on which the request is received. Organisations may undertake a risk assessment and investigate their business each year by carrying out a process of mapping their suppliers, auditing their workforces, interrogating bids for contracts which are too low cost to ensure labour is being properly paid, and training front-line staff in spotting the signs of potential slavery and human trafficking. Given that many FM teams comprise contractors and subcontracts and the contracts tend to include low-cost labour, the FM and procurement teams in an organisation must work together to identify areas where modern slavery may be found.

16

Legislation Affecting Facilities Management Activities

16.1 Introduction FMs (facilities managers, or facilities management) must be familiar with the legislation that affects FM services and activities. With much legislation impacting on the work of the FM, a qualification in health and safety has become more important to demonstrate competence. Qualifications that are often stated as requirements in job advertisements include the National Examination Board in Occupational Safety and Health (NEBOSH) General Certificate and the Institution of Occupational Safety and Health (IOSH) Managing Safely qualification. FMs should be aware of the legislation, regulations, Approved Codes of Practice (ACoPs) and guidance documents that relate to the buildings, the services and the employment of people providing those services. A list of some of these is shown in Table 15.4. ACoPs provide good-practice information and are often viewed as the minimum standard of compliance. Guidance documents are also published to aid interpretation of laws and cover a wider range of subjects. A full list of publications can be found at HSE.gov.uk. All managers must also be aware of the basic principles of the Health and Safety at Work Act 1974, as shown in Table 16.1.

16.2  Safety policy A written safety policy is required by the Health and Safety at Work Act (Section 2[3]) for organisations of five or more employees. Advice on drafting or checking a policy can be found in Managing for Health and Safety (HSG65). There should be three parts to an organisation’s policy: (i) Intentions – Objectives of the policy specific to that organisation. (ii) Organisation – General responsibilities of who does what in the context of health and safety in the organisation, and how their objectives will be achieved. (iii) Arrangements – Details on how safety is actually managed, in terms of procedures, training, information and supervision. The policy should be precise, short and easy to read. It will have a quasi-legal status, showing the duty of care by management, and may be used as evidence in claims. The FM needs to know where they fit into the organisation’s structure in terms of the safety policy. The organisation may be large enough to warrant a separate safety department or function,

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Table 16.1  The Health and Safety at Work Act 1974 Employer’s responsibilities

Employee’s responsibilities

To ensure safe place, safe people, safe process To ensure safety of non-employees/third parties To ensure consultation, safety committees and safety policy To provide free personal protective equipment

Not to interfere with or misuse of safety equipment To observe instructions and co-operate with procedures To take reasonable care for self and others by acts and omissions

otherwise the facilities or personnel function may have the responsibility for safety. Either way, FMs are frequently involved in many safety aspects of organisations. They may be required to set up, chair or attend safety committee meetings; draft, amend and publish the organisation’s safety policy; and determine appropriate procedures and systems of work. As the manager of the workplace, with particular responsibility for third parties such as visitors and non-employees, it is important that the FM understands the wide range of legislation that affects the workplace.

16.3  Enforcing authorities Enforcing officers representing the local authority, the HSE and other government agencies have many powers. It is important for the FM team to recognise this power and for the front-of-house team to alert the FM when a government agent arrives on the premises. The powers of an enforcement officer include: Right of entry. To bring a policeman or other expert. To bring equipment and materials, and use them. To examine, inspect, investigate and dismantle. To direct that things or places are left undisturbed. To require anyone to give facilities and/or assistance and to provide advice. To take measurements, photographs and recordings. To take samples from premises or atmospheres. To interview people and obtain signed statements of truth. To inspect and take copies of documents, entries in books, and other paper and digital records. ❑❑ To issue enforcement notices. ❑❑ To initiate prosecution. ❑❑ Any other power to do their job. ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑

The client or FM has limited rights when the enforcing officer enters the premises. They can check the identity and warranty of an Environmental Health Officer or enforcement officer. They can also query their powers by asking for a list of their powers, and they can ask for a signed statement of the infringement. The HSE can now charge a fee for its services, known as a ‘fee for intervention’ (FFI). This was introduced under the Health and Safety (Fees) Regulations 2012, updated in 2016. The hourly rate in 2019 was £157. The HSE’s inspectors can inspect work activities and investigate incidents and complaints. If they see material breaches of the law, the organisation will have to pay a FFI. The fee is based on the amount of time that the inspector has had to

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spend identifying the breach, investigating and taking enforcement action. No fees are charged for organisations that are compliant.

16.4  Management of health and safety regulations The Health and Safety at Work Act requires employers to maintain a healthy and safe system of work, which, under the Management of Health and Safety at Work Regulations 1999, should be achieved through risk assessment. These Regulations are particularly important due to the section relating to risk assessment. They were amended in 1994 to include expectant and nursing mothers, young persons and fire; in 1999 to include the need for competent persons and arrangements for contacting the emergency services; and again in 2002 to permit civil claims for failure to comply. The Regulations include the need for preventative measures, safe systems of work, health surveillance, use of competent advisers, an emergency plan, information and training for employees and others, and co-operation and co-ordination of arrangements in shared premises. Employers are required to carry out suitable and sufficient assessments of all the risks to employees and others affected by their work activities. This requires an ability to know what is wrong now or could go wrong in the future, and what can or could be done about it. The aim is to be proactive and deal with hazards before they cause an accident. A competent person should have knowledge of the workplace and experience of the work being carried out – this gives them the ability and confidence to carry out risk assessments.

16.5  The HSE five-step approach The HSE recommends a competent person uses the five-step approach when conducting a risk assessment: ❑❑ Step 1 – Look for hazards and identify them. ❑❑ Step 2 – Decide who might be harmed and how. ❑❑ Step 3 – Evaluate the risks and decide whether the existing precautions are adequate or

whether more should be done.

❑❑ Step 4 – Record the findings and implement control measures. ❑❑ Step 5 – Review the assessment and update if necessary.

A competent person is someone with sufficient training, experience and knowledge to properly assist the employer to undertake measures to comply with health and safety legislation (see Section 15.8). Organisations may adapt this approach to suit their specific circumstances, using this five-step framework.

16.6  Risk assessment standards In order to be suitable and sufficient and to comply with legal requirements, a risk assessment must: ❑❑ Identify all the hazards associated with the operation, and evaluate the risks arising

from those hazards (taking account of relevant Acts and Regulations).

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❑❑ Record the significant findings if more than five persons are employed (even if they are

spread across two or more locations).

❑❑ Identify any group of employees (or single employees as the case may be) who are espe-

cially at risk.

❑❑ Identify others who may be especially at risk, such as visitors, contractors or members

of the public.

❑❑ Evaluate existing controls, stating whether or not they are satisfactory and, if not, what

action needs to be taken. This should include training and information provision.

❑❑ Judge and record the probability or likelihood of an accident occurring as a result of

uncontrolled risk. Also record the ‘worst case’ likely outcome.

❑❑ Record any circumstances arising from the assessment where serious and imminent

danger could arise.

❑❑ Identify what information is needed for employees on the risks to their health and

safety identified by the assessment, the precautions to be taken and any emergency arrangements. ❑❑ Provide an action plan giving information on implementation of additional controls, in order of priority and with a realistic timescale.

16.7 Hazards FMs need to be able to identify the hazards that have potential to cause harm. These hazards may be people, things or places. As part of the identification process, a number of questions can be asked, such as ‘Who?’, ‘What?’, ‘How?’ and ‘Where?’. Hazards can be chemical, physical, biological, ergonomic and/or psychological. Hazards can arise from different sources – as inputs, outputs or the process itself. The likelihood and the severity of the hazard(s) being realised will need to be quantified. All risk assessments must be recorded and reviewed on a regular basis, but especially after an incident, change of personnel or equipment, or change of process. Control measures to mitigate and reduce the risks need expert management, and in many cases this falls to the FM and their specialist team.

16.8  Risk control The risk control measures that can be applied to manage risks are known as the ‘hierarchy of control measures’. It is important to apply these in order as listed in Table 16.2, with the use of personal protective equipment (PPE) only being used as the last resort. It is more cost-effective, and safer, to undertake the control measures in this order to reduce the numbers of staff who have to be issued with, trained in and monitored in the use of PPE. Health and safety management tasks that may be part of the operational role of FMs include: ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑

Physical workplace inspections. Hazard spotting. Safety audits. Discussions with staff and contractors. Job safety analysis and/or task analysis. Study of past accidents, incidents and near-misses. Benchmarking.

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Table 16.2  Hierarchy of control measures 1 Elimination 2 Substitution 3 Avoidance 4 Isolation 5 Segregation 6  Engineering controls 7  Procedures and safe systems of work 8  Personal protective equipment (PPE)

16.9  Risk register A risk assessment register must be maintained and updated. This means that any significant change to a process or activity, and any new process, activity or operation, should be subject to a new risk assessment. Furthermore, if new hazards, accidents or near-misses come to light, these should also be subject to a risk assessment. In addition, the risk assessment should be periodically reviewed and updated. The frequency of the review depends on the level of risk in the operation, and should normally not exceed 2 years. It may be found useful to carry out a review of risk assessment as part of the annual safety policy review as the two activities are closely linked.

16.10  Definitions of hazard and risk The terms ‘hazard’ and ‘risk’ are frequently used in the Regulations, ACoPs and Guidance. It is important to appreciate what these terms mean. ‘Hazard’ is the potential for harm. ‘Risk’ is a function of the probability (or likelihood) of that harm actually occurring and the severity of its consequences. The extent of the risk should also take into account the number of people exposed to the harm. It should be carefully noted that this assessment does not need probability to be quantified, except for higher-risk activities where the outcome could be multiple fatalities.

16.11  Hazard identification There are a number of simple ways in which hazards can be identified. In order to achieve a suitable and sufficient risk assessment, it is essential to identify all the hazards associated with an activity. Therefore, all the methods of identifying hazards will need to be assessed and the most suitable mix used. Before going on to the next stage, a check needs to be made that all the hazards have been identified. In all cases, team consultation is a powerful aid. This can involve an appropriate selection from line management and safety representatives. Some people use a floor-to-ceiling approach to ensure all hazards in a given space are identified. Another approach is to use the categories of biological, chemical, ergonomic, psychological and physical to identify hazards. For complex activities, it can be useful to break down the activity into its component parts, perhaps using job analysis or job descriptions. For example, the operation and use of a large machine could comprise: ❑❑ Normal operating. ❑❑ Breakdown.

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❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑

Cleaning and spillage. Lubricating. Setting and adjustment. Overhaul. Installation. Dismantling.

Potential hazards from an activity might include: ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑

Fall of a person from height. Fall of an object or material from height. Fall of a person on the same level. Manual handling. Use of machines. Operation of vehicles. Fire including static electricity. Electric shock. Drowning.

16.12  Work activities Examples of work activities that require a risk assessment include: ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑

Excavation work. Handling stored energy. Work that may result in explosions (chemical dust). Contact with cold or hot surfaces. Using compressed air. Mechanical lifting operations. Activities that generate noise or occur in noisy environments. Work involving biological agents. Work using ionising radiation. Vibration from hand- and power-operated tools. Work carried out in adverse weather. Work with chemicals and substances. Stacking and moving materials. Housekeeping activities, such as bed changing and curtain hanging. Working in a confined space. Cleaning. Working on display screen equipment.

16.13  Risk assessment For each activity, a risk assessment needs to be made. There are many techniques for risk assessment ranging from complex techniques such as fault-free analysis and reliability studies to simple subjective judgement. In straightforward terms, if there is a risk of a single event or fault killing many people, then a complex assessment method is justified. On the other hand, if the worst case would be a serious injury or a single fatality, then a simpler method is justified.

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Table 16.3  Probability outcomes Probability/likelihood

Description

Likely/frequent

Occurs repeatedly; event only to be expected

Probable

Not surprised; will occur several times

Possible

Could occur sometimes

Remote

Unlikely, though conceivable

Improbable

So unlikely that probability is close to zero

A judgement must be made as to whether or not a risk is acceptable. For each hazard identified for each activity or situation, the question ‘What if?’ must be asked to test the likely outcome of that risk being realised. The FM must consider and investigate what is realistically the worst likely outcome. Is it: ❑❑ ❑❑ ❑❑ ❑❑

A fatality? A major injury or permanent disability including permanent ill health? A minor injury? Environmental or plant damage?

Two important laws of human nature should always be taken into account. Firstly, never rely solely on common sense as it is much less common than is generally assumed. Secondly, always rely on Murphy’s law: ‘if someone can do it, sooner or later someone will’. Likelihood A judgement of the probability or likelihood of harm occurring is needed, often using simple descriptions as shown in Table 16.3. Best practice A further crucial aspect is to bear in mind what is the best practice for controlling the hazard which is under consideration. This means the FM needs to be aware of relevant practice in the client’s business sector. This can best be done by reference to HSE guidance notes, the publications of industry advisory committees, the trade press, suppliers’ manuals and sector regulators’ websites.

16.14  Risk assessment records In order to produce a suitable and sufficient assessment, the following points must be recorded in a retrievable format: ❑❑ Activity or situation. ❑❑ Number of persons at risk. ❑❑ Any group of persons especially at risk (e.g. especially vulnerable employees such as

disabled or lone workers, young persons, visitors, members of the public or contractors). ❑❑ Any serious and imminent risk (in which case, written procedures are required and one or more competent persons should be appointed to carry out the procedure).

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❑❑ Probability of harm occurring and the realistic worst-case outcome (e.g. fatality, major

injury, minor injury, no injury, or environmental or plant damage).

❑❑ Relevant health and safety information needed by employees and others (as a mini-

mum, this would mean reviewing the provision of safety signs and audible/visual warnings). ❑❑ Any additional training needs. ❑❑ Reference to existing controls and whether or not these are satisfactory. (Existing controls need not be reproduced in full where they are documented elsewhere. Referring to these other documents, as appropriate, is sufficient.) ❑❑ Action required in order of priority with proposed timescale and who is responsible for action.

16.15  The Workplace (Health, Safety and Welfare) Regulations 1992 (amended 2002) The Workplace (Health, Safety and Welfare) Regulations 1992 (amended 2002) (WHSWR) are fundamental to the FM. As the name implies, the WHSWR concern the workplace, and any person who has any control of the premises is the duty holder and must ensure compliance with the Regulations. Table 16.4 gives an outline of the main areas. The implications of the WHSWR are diverse, affecting nearly every aspect of the FM function. Reference to the Regulations can help to defend cleaning and maintenance budgets, help with spaceplanning conflicts, and ensure that suitable FM contractor accommodation and changing areas are provided. The HSE publications Workplace Health, Safety and Welfare (L24) ACoP and Workplace Health, Safety and Welfare (INDG244) provide useful guidance. The WHSWR are required to be taken account of by designers of workplaces under the Construction (Design and Management) Regulations 2015.

Table 16.4  Scope of the Workplace Regulations Topic

Reg no.

Scope of requirement

Workspace

10

Sufficient floor area and height: 11 m3 per person.

Workstations and seating

11

Suitable for any likely work or person.

Drinking water

22

Adequate supply of wholesome drinking water at readily accessible places, conspicuously marked. Sufficient number of drinking vessels, unless jet stream device.

Sanitary conveniences

20

Readily accessible, adequately ventilated and lit, separate for men and women unless in separate room, secured from inside, approximately 1 per 25 persons.

Workplace and equipment

5

Kept clean and maintained, in efficient working order, in good repair, with a suitable system of maintenance.

Lighting

8

Suitable and sufficient, if possible by natural light; emergency lighting if there would be a risk to safety if artificial light failed.

Windows, skylights, ventilators

15 and 16

Designed and constructed for safe cleaning. If openable, then safe for person opening, closing or adjusting.

Ventilation

6

Suitable and effective by fresh or purified air. Indication of failure.

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Topic

Reg no.

Scope of requirement

Floors and traffic routes

12 and 17

Suitable for purpose; free from obstructions and anything that could cause a slip, trip or fall. Effective drainage. Assess and protect holes, slopes and slippery surfaces. Provide guard rails and handrails. Sufficient number, size and quantity of traffic routes; segregation from pedestrians.

Temperature

7

Reasonable temperature. Sufficient thermometers to be provided.

Washing facilities

21

Suitable and sufficient, in accessible places; sufficiently ventilated and lit; clean, orderly and well maintained. Near toilets and changing rooms. Clean supply of hot and cold running water, soap and towels. Separate for men and women, unless designed for one person at a time and secured from inside.

Meals and restrooms 25

Suitable and sufficient restrooms. Facilities with adequate tables and chairs with backs, suitable for disabled persons, pregnant women and nursing mothers. Protection from tobacco smoke. Suitable and sufficient to eat meals.

Clothing

23 and 24

Suitable and sufficient location for clothing to be stored while individuals are at work. Secure and separate to avoid risks of contamination. Facilities for drying wet clothes. Suitable and sufficient facility, accessible, with sufficient capacity and with seating, separate for men and women, to enable individuals to change into work clothing.

Disabled persons

25A

Facilities to be organised to take account of disabled persons – access, workstations, washing facilities and sanitary conveniences.

Cleanliness and waste

9

Fixtures, fittings, walls, ceilings, floors and furniture to be kept sufficiently clean. Waste not allowed to accumulate except in suitable receptacles.

Falls and falling objects

13

Suitable and effective measures to prevent anyone being injured through falling or being stuck. Tanks, pits and structures to be securely covered or fenced.

Doors and gates

18

With safety catches and devices; clear view either side.

Transparent/ translucent windows, doors, gates and walls

14

Safety material, protected against breakage. Appropriately marked or incorporate features which make it apparent.

Escalators

19

Function safely, safety devices, accessible safety stops.

16.16  Control of Substances Hazardous to Health 2002 The Control of Substances Hazardous to Health Regulations 2002 (COSHH) cover practically all substances, including bacteria and organic matter, capable of causing harm to human health. The HSE ACoP Control of Substances Hazardous to Health (L5) and the publication Working with Substances Hazardous to Health (INDG 136) offer more guidance. There are eight principles to observe: (i) Processes and activities must be designed to minimise emission, release and spread of hazardous substances. (ii) All routes of exposure must be taken into account (inhalation, skin absorption and ingestion).

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(iii) Exposure must be controlled by measures proportionate to the health risk. (iv) The most effective and reliable control options must be used to minimise and control spread. (v) Suitable PPE must be used. (vi) All control measures must be checked and reviewed. (vii) All employees must be informed and trained. (viii) Control measures must not increase overall risks to health and safety. Substances can be chemicals, cleaning materials, metals, pesticides, biological agents or organisms. These can be in various forms such as solids, liquids, vapours, gases, dust, fibres, fumes, mist and smoke. Data sheets of products purchased and used are required as part of the risk assessment. The Regulations require the employer to set procedures to cover: ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑

Assessments. Prevention or control of exposure. Use, maintenance, examination and test of control measures. Monitoring. Health surveillance. Information, instruction and training. Exposure limits: ⚬ MEL (maximum exposure limits). ⚬ OES (occupational exposure limits).

16.17  Work at Height Regulations 2005 These Regulations require that all work at height is properly planned and organised, that the work is carried out safely, and that employees are trained and competent in their work. These regulations also cover falling objects, fragile roofs and equipment. The FM has a duty to do all that is reasonably practical to prevent someone from falling. The application of risk control and a hierarchy of measures is required. The first consideration is whether the work at height can be avoided altogether. If not, the FM must consider the most appropriate equipment and means of access for that activity. The FM should also consider when planning any work at height, the impact of adverse weather conditions, what to do in an emergency, and the steps needed to prevent objects falling. The use of scaffolding, access platforms, ladders and fall-arrest equipment requires specific competence, training, instruction and supervision. These Regulations also cover the maintenance of fragile roofs and other fragile surfaces. The use of ladders is an area of particular concern. The HSE publication Safe Use of Ladders and Stepladders (INDG455) provides guidance on the safe use of ladders and stepladders. The type of ladder recommended is EN131 or Class 1 Industrial.

16.18  Provision and Use of Workplace Equipment Regulations 1998 First introduced in 1992 alongside five other significant Regulations that impact on the FM, the Provision and Use of Workplace Equipment Regulations 1998 (PUWER) cover all types of equipment used for work, such as hand tools, ladders, power tools, lifting equipment, machinery, computers, vehicles and so on. Some equipment may also be covered by the

Legislation Affecting Facilities Management Activities  247

Lifting Operations and Lifting Equipment Regulations 1998 (LOLER) (see Section 16.21). Work equipment is defined as any machinery, appliance, apparatus, tool or installation for use at work (whether exclusively or not). Such a wide definition therefore extends to desks, chairs, pens, trolleys, vehicles and employees’ own equipment that they use to do their job. The Regulations require the employer to ensure that the equipment is suitable for the task, that it is maintained and that it is inspected, with suitable records kept. Users must be given instruction, information and training on its use, especially the correct use of safety features/controls. The HSE publication Safe Use of Work Equipment (L22) provides additional guidance.

16.19  Manual Handling Regulations 1992 These Regulations, updated in 2002, were introduced to reduce the risk of injuries to the upper body through lifting, lowering, pushing, pulling, reaching, twisting, turning, holding and carrying activities. Repetitive strain injuries and other disorders can result if people do their work in a way that puts strain on their arms and back. In FM operations, there are many activities requiring manual handling – cleaning, document distribution, deliveries, maintenance and porterage. In many cases, the nature of the activity can be changed by use of equipment and technology to reduce the load and method of handling. It is important to have a good regime of health surveillance, training and awareness for all the team in best-practice manual handling operations. If possible, the best approach is to eliminate or avoid the need for manual handling, or to use alternative methods. If equipment is provided, then it will be covered by the PUWER legislation. When assessing the risks of manual handling, the FM must consider the tasks, the loads, the working environment and the individual (age, gender and prior injuries). The HSE ACoP Manual Handling Operations Regulations 1992: Guidance on Regulations (L23) provides guidance.

16.20  Personal Protective Equipment at Work Regulations 1992 These Regulations concern the provision and use of protective work equipment that may be provided by employers and used by people to protect their health and safety at work. Amendments to the Regulations in 2002 and 2018 concern the manufacturers and providers of equipment – such as the need for a CE quality safety mark on all new PPE. Protective clothing can include aprons, gloves, safety footwear, safety helmets, and highvisibility jackets and waistcoats. Protective equipment can include eye protectors (glasses, goggles and masks), life jackets, respirators, underwater breathing apparatus, safety harnesses, fall-arrest equipment and so on. There is also specific protective equipment required in other legislation, and so the PPE Regulations are not applicable in these cases. Other legislation includes the Control of Noise at Work Regulations 2005, the Control of Asbestos Regulations 2012, the Control of Lead at Work Regulations 2002, the Ionising Radiations Regulations 1999 and COSHH. In cases where a worker’s activities require PPE, then the equipment must be compatible with their activity. The HSE ACoP Personal protective Equipment at Work (L25) gives guidance. Employers must decide whether PPE is necessary and, if so, must select suitable PPE, issue it free of charge, and then maintain it and replace it as necessary. Employers must also provide suitable space or lockers to keep the PPE safe, and information, instruction and training on its safe use. A system for reporting PPE defects and losses must also be

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established. PPE is the last resort in the hierarchy of risk control measures. Employees must take reasonable care of the PPE that they are issued with, and they have a duty to use it as instructed. The increased use of PPE in Covid-19 pandemic has put increased pressure on FMs to source and manage appropriate PPE for their teams and workplace occupants.

16.21  Lifting Operations and Lifting Equipment Regulations 1998 The Lifting Operations and Lifting Equipment Regulations 1998 (LOLER) cover a wide range of equipment used in buildings – for example, passenger and goods lifts, cranes, hoists, scissor lifts, cherry pickers and cradles. Equipment and accessories attached to lifting machinery, for anchoring, fixing or supporting (such as shackles, clamps, swivels, slings and eyebolts), are also included in the Regulations. Lifting is defined as an operation that lifts or lowers a load. The HSE ACoP Safe Use of Lifting Equipment (L113) gives more guidance. Equipment must be marked clearly with a safe working load (SWL). It must be inspected when first put into service and then regularly checked. Passenger lifts need to be examined every 6 months, as do lifting equipment accessories. Other types of lift can be examined every 12 months. These examinations must be carried out by a competent person, who will report the defects identified to the owner of the equipment. Copies of these reports must also be sent to the relevant enforcing authority within a month. This equipment may be used in many FM activities, such as cleaning, general access, maintenance, deliveries and inspection. There is a statutory requirement for insurance inspections and checks. Accidents in passenger lifts are reportable under RIDDOR (see Chapter 20).

16.22  Control of Noise at Work Regulations 2005 Originally introduced in 1999, these Regulations were updated in 2005 with new threshold levels, as shown in Table 16.5. Employers have a legal duty to safeguard their employees’ hearing. They must assess the risks of hearing loss and implement risk control measures. The action level at which employers must make hearing protection available is 80 dB(A). There are two further action levels, over an 8-hour day, of 85 dB and 87 dB. Steps to reduce noise exposure may include issuing personal ear protection, soundproofing structures and enclosures, buying quieter equipment or changing processes to make them quieter. A regime of regular surveillance of those likely to be exposed to noise is required. Zones where ear protection is required must be clearly demarcated and signed. An ACoP is provided by the HSE  –  Workplace Noise (L108), with general information in Noise at Work (INDG362).

Table 16.5  Noise levels requiring action to safeguard hearing 80 dB(A) daily personal limit

Peak sound pressure of 135 dB

Suitable and sufficient ear protection, but individual may choose not to use it.

85 dB(A) daily personal limit

Peak sound pressure of 137 dB

Noise must be reduced; ear defenders and ear protection compulsory.

Maximum limit of 87 dB(A)

Peak sound pressure of 140 dB

Exposure limit level must not be exceeded.

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16.23  Confined Spaces Regulations 1997 Many FM-controlled spaces in buildings can be defined as confined. Typically, these may be lift shafts, lift motor rooms, plant rooms, tunnels, access chambers, risers and other equipment chambers. In some premises, there may also be operational business process equipment that is defined as confined. The characteristics of a confined space are that there is only one way in or out, and the activities in the space may result in a change in the composition of the air (depleting oxygen). The spaces have a reasonably foreseeable risk to workers of fire, explosion, loss of consciousness, asphyxiation or drowning. These Regulations require a risk assessment before work in a confined space is permitted. A critical aspect is planning communications throughout the work between those operating in the confined space and those external to the area, such as a banksman. Plans for dealing with an emergency rescue must also be considered prior to the work commencing. Work in confined spaces must be controlled by a permit-to-work system.

16.24  Building Regulations 2010 – Part L Approved Document Part L of the Building Regulations is concerned with conservation of fuel and power. There are four Approved Documents (L1A, L1B, L2A and L2B) and compliance guides for non-domestic and domestic properties. The Part L Approved Documents provide detailed guidance on the installation of fixed building services in new and existing non-domestic buildings to aid compliance with the energy efficiency requirements of the Building Regulations. The compliance guide covers 12 sections, helping the FM to check their building service installations. These sections are shown in Table 16.6. FMs responsible for buildings which are being built, improved, refurbished and updated need to comply. Due to new EU directives and other legislation on energy and environment issues, there were updates in 2013, 2016 and 2017 to improve energy efficiency in the management and maintenance of buildings to achieve ‘nearly zero-energy buildings’. The Building Regulations apply to new and renovated buildings (see Sections 9.29 and 30.24). Examples of actions required include: ❑❑ Ensure boilers are assessed by a competent person and obtain a certificate of

compliance.

❑❑ Ensure that the air-conditioning system is checked by a competent person and obtain a

certificate.

Table 16.6  Part L Compliance Guide Contents – Non-domestic Buildings Boilers Hot water Heat pumps Comfort cooling Air heaters Air distribution systems Radiant heaters Pipework and ductwork Combined heat and power (CHP) Lighting Space heating Circulation and pump systems

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❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑

Ensure that a building air tightness test is carried out and a certificate is obtained. Update the building logbook. Implement an energy policy and plan to ensure energy costs are reduced. Obtain energy supplies via renewable sources. Work with supply chain and buildings engineering service partners to include carbon reduction in all activities and projects. Enhance the air supply rate from 8 litres/second per person to 10 litres/second per person. Consider high-efficiency alternative energy systems for all new buildings (co-generation, heat pumps, district systems, combined heat and power). Reduce carbon emissions. Use low- and zero-carbon technologies. Set tighter performance standards for works carried out to existing buildings.

16.25  Data Protection Act 2018 The Data Protection Act gives protection to individuals and requires organisations to protect information they have on individuals. It replaces the former Data Protection Act 1998, and works alongside the General Data Protection Regulation 2018 (GDPR). The updated legislation covers issues relating to digital information such as biometric data. A data protection impact assessment (DPIA) is recommended by the Information Commissioner’s Office. It requires users of personal information and their employer to observe the eight principles of the Act, which have been updated. These are: ❑❑ Obtain the consent of the individual to obtain and process their information fairly and

lawfully.

❑❑ In a manner that is specific to the purpose for which the data will be used, be open and

transparent about the planned use of data.

❑❑ Ensure information is relevant and adequate but not excessive in relation to the p ­ urpose

of holding the information.

❑❑ Ensure its accuracy and actively ensure it is kept up to date. ❑❑ Ensure data is not kept longer than needed, review the length of time it is retained, and

destroy or delete out-of-date data.

❑❑ Keep data secure and protected. ❑❑ Take into account people’s rights, giving individuals the right to know, have access to,

correct and erase data held on them.

❑❑ Do not transfer the data to countries outside the EU without adequate protection.

Privacy notices and ‘use of information’ guides need to be clearly written and available. The individual must be informed of exactly what their data is being used for. Organisations must inform the person of their right to withdraw consent at any time. There must be protection against accidental loss, destruction or damage, using appropriate technical or organisational measures. A new ‘right to be forgotten’ in the GDPR means that someone can request that online content is removed from an organisation’s database. The Data Protection Act 1998 specifies that a person can request all their personal data to be transferred to another system at no cost. Organisations must receive explicit consent from their customers for their ­personal information to be transferred outside the European Economic Area.

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Companies that process over 5,000 personal records per year and employ over 250 employees are now required to appoint a data protection officer (DPO). The DPO is responsible for everything related to keeping personal data secure and the FM may need to check that their databases on workplace occupants, staff and contractors are compliant. The GDPR introduced a duty on all organisations to record and report certain types of personal data breach to the relevant supervisory authority, within 72 hours of becoming aware of the breach.

16.26  Regulation of Investigatory Powers Act 2000 The Regulation of Investigatory Powers Act 2000 (RIPA) gives a legal basis for monitoring employees’ telecommunications and emails. The codes of practice were updated in 2014, taking into account requirements of the Protection of Freedoms Act 2012 and other associated legislation that affects local authorities’ surveillance of potential criminal activities. The recording and monitoring of telephone calls can only be carried out: ❑❑ ❑❑ ❑❑ ❑❑ ❑❑

If it could be useful in establishing facts relevant to the business. To monitor standards and compliance with standards or procedures. To test security or operation. To investigate and/or detect unauthorised use of the telecommunications system. To prevent and/or detect crime.

16.27  Human Rights Act 1998 Under Article 8 of the Human Rights Act 1998, everyone has the right to respect of their private and family life, their home and their correspondence. A FM must respect these in the way staff and team members are treated.

16.28  Transfer of Undertakings (Protection of Employment) Regulations 2006 The Transfer of Undertakings (Protection of Employment) Regulations 2006 (TUPE) apply in many situations in FM where the in-house team is being transferred to a contractor or when outsourced staff are transferred to a new contractor after a retendering of those services, or if outsourced teams are being transferred back in-house. New leases and licences where the business continues are also covered under TUPE. The legislation was first introduced in 1981 and then updated in 2006 and 2014, and it ensures UK compliance with the EC Acquired Rights Directive 1977 and the Transfers of Undertakings Directive 2001. It concerns the legal rights of staff to transfer on the same terms and conditions of employment if they are still performing the same job. A transfer must satisfy a few conditions, such as being of ‘an economic entity which retains its identity’. An ‘ETO’ reason is an ‘economic, technical or organisational reason’ to make staff changes, or changes to terms and conditions, following a TUPE transfer. ETO reasons can be challenging to establish. Staff who are dismissed for a reason that is directly related to a TUPE transfer will ‘automatically’ be able to bring a claim for unfair dismissal.

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There are a number of issues to address in the application of these complex regulations, and FMs will need advice from expert lawyers. The issues include: ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑

The type of undertaking being transferred. Whether tangible assets are transferred. Whether intangible assets are transferred. Whether the majority of the employees are taken on by the new employer. Whether the customers are transferred. The degree of similarity in the activities carried on before and after the transfer.

Employees must be provided with information and consulted. Sufficient time must be allowed for this process to avoid fines and compensation. During this period, there will be issues of loyalty and performance that may affect the services provided to occupants in the premises. Since 2014, changes to workplace location have been included in the ETO criteria.

16.29  Working Time Regulations 1998 These Regulations affect the workers in many FM services. They were updated in 2001, 2003 and 2007 to reflect additional sectors. They implement the European Working Time Directive, which regulates hours worked, rest breaks and holidays. It states that a person should not be required to work more than 48 hours per week – this includes all employment for all employers. This can be averaged over a 17-week rolling reference period. The Regulations also state that a 20-minute break must be provided to staff every 6 hours, that they must have an 11-hour rest between work periods, that they must have 5.6 weeks’ paid holiday per hear and that there must be a 24-hour uninterrupted rest period every 7 days. Records need to be kept to show compliance. There are special cases in which a worker can continue to work without breaks and also for the reference period to be extended to 26 weeks. Staff may choose to opt out of these regulations either as individuals or as members of a collective group. Records must be kept for at least 2 years to show that the statutory limits are not being exceeded. The issues for FMs include: ❑❑ Arrangements for payment of out-of-hours attendance and call-out arrangements. ❑❑ The treatment of on-call/duty cover in the hours of working. ❑❑ Workers may have several jobs across multiple organisations that all count towards the

total working time.

❑❑ More breaks may be needed when the work is monotonous, such as security

surveillance.

16.30  National Minimum Wage Act 1998 The National Minimum Wage is the minimum pay per hour of all workers, with a few exceptions. It is set by the National Minimum Wage Act 1998 and the National Minimum Wage Regulations 2015. Exceptions include work where accommodation is provided, apprenticeships, work experience and temporary work. The National Living Wage is higher than the National Minimum Wage. The National Living Wage is the legally binding hourly rate for workers aged 25 and over. The rates are set each year by the government in its annual budget.

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FMs are likely to have low-paid workers in their direct or indirectly employed teams, so a working knowledge of the minimum and living wage rates set each year is important. In some cities, such as London, there are enhanced local living wage rates, to reflect the additional costs of living. The Living Wage Foundation promotes fair wages that reflect the real cost of living. Many FM contractors are among the 5000 employers in the UK who support the concept of living wages and pay a higher rate voluntarily.

16.31  Greenhouse Gas Emissions (Directors’ Reports) Regulations 2013 As part of the Climate Change Act 2008 and other mandatory reporting regulations, FMs need to work with colleagues to identify which activities in their organisation are responsible for greenhouse gas (GHG) emissions being released into the atmosphere. A number of gases contribute to climate change; the six main GHGs are covered by the Kyoto Protocol: carbon dioxide (CO2), methane (CH4), hydrofluorocarbons (HFCs), nitrous oxide (N2O), perfluorocarbons (PFCs) and sulphur hexafluoride (SF6). It is standard practice to report GHG emissions in tonnes of CO2 equivalents (CO2e). The most widely accepted approach is to identify and categorise emissions-releasing activities into three groups: direct, indirect and other indirect emissions. The Greenhouse Gas Emissions (Directors’ Reports) Regulations 2013 require reports for whole global operations, for both direct and indirect emissions, for organisations that are quoted on the London Stock Exchange.

16.32  Companies (Directors’ Report) and Limited Liability Partnerships (Energy and Carbon Report) Regulations 2018 Organisations of all sizes are increasingly expected to measure and report on their environmental performance. Streamlined Energy and Carbon Reporting (SECR) is a government policy aimed at improving reporting by large companies. Size is determined by turnover (over £36 million) number of staff (over 250) and energy consumption (over 40 Mwh). The 2018 Regulations created a framework for implementation of this policy, replacing early mandatory GHG reporting. The reporting of an organisation’s environmental impact needs to be relevant, quantitative, accurate, complete, consistent, comparable and transparent. At least three key performance indicators (KPIs) must be reported, covering greenhouse gases, water, waste, materials and resource efficiency, biodiversity and emissions. Organisations with an energy management system in place will have most of this data already as part of their environmental quality management system. A five-step approach is recommended to provide evidence of compliance: (i) Determine the size, scope and boundary of the organisation. (ii) Determine the time periods for data collection. (iii) Determine the key environmental impacts. (iv) Measure agreed KPIs. (v) Report – this must include methodology, actions and recommendations.

17

Fire Safety and Legislation

17.1 Introduction Fire safety and legislation is an area in which the FM (facilities manager, or facilities management) needs a good working knowledge. Firstly, the FM needs to be aware of safety aspects in terms of design and space planning. Secondly, the FM is often the duty holder for general fire safety of occupied space. Fire needs three things to be present – fuel, an ignition source and oxygen – as illustrated in Table 17.1. Fire prevention depends on avoiding these three elements coming together. The absence of one of these elements can prevent a fire starting. The main consequences of fire are: ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑

Death. Personal injury. Building damage. Flora and fauna damage. Loss of business and jobs. Disruption to transport. Environmental contamination.

Fires can be extinguished by four main methods: ❑❑ ❑❑ ❑❑ ❑❑

Cooling. Smothering. Starving. Chemical reaction.

Heat is transmitted in fires by several means – convection, conduction, radiation or direct burning. These principles govern how buildings are designed to prevent and control fires. Fires are classified according to the fuel source and the means of extinguishing them (see Table 17.2).

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Table 17.1  The components of a fire Sources of ignition

Naked flames External sparks Internal sparks Hot surfaces Static electricity

Sources of fuel

Solids (paper, wood, plastics) Liquids (paint, varnish, adhesives, petrol, paraffin, acetone) Gases (liquefied petroleum gas, acetylene, hydrogen)

Oxygen

Air Chemicals (nitrates, oxides, chlorates)

Table 17.2  Classes of fire Class

Nature of fire

Extinguishing method

Class A

Solid materials

Water

Class B

Liquids: B1: soluble liquids

Carbon dioxide, dry powder, water spray, foam

B2: non-soluble liquids

Carbon dioxide, dry powder, foam

Class C

Gases

Foam, dry powder

Class D

Metals

Special dry powder

Class F

Cooking fats or oils

Wet chemical

Electrical

Electrical

Carbon dioxide, dry powder

17.2  Legislation and standards The main laws and standards that affect fire safety are: ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑

BS 5839: Fire Detection and Alarm Systems for Buildings. BS 7273: Part 1:2000 Code of Practice for the Operation of Fire Protection Measures. BS EN 54 Fire Detection and Alarm Systems. BS 7974 Application of Fire Safety Engineering Principles to the Design of Buildings . Regulatory Reform (Fire Safety) Order 2005. Furniture and Furnishings (Fire) (Safety) Regulations 1988/1989, 1993 and 2010. Dangerous Substances and Explosive Atmospheres Regulations 2002. Health and Safety (Safety Signs and Signals) Regulations 1996. Carriage of Dangerous Goods (Signs) 2009 (updated 2019). Fire and Rescue Services Act 2004.

17.3  Building design When designing a new space for an organisation, or refurbishing an existing space, the FM and design team must observe the legislation governing how the space can be safely used to

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meet various standards and Approved Documents. Three objectives to be achieved in effective building design are: (i) It must be possible for everyone to leave the building quickly and safely. (ii) The building must remain standing as long as possible. (iii) The spread of fire and smoke must be reduced. Fire safety engineering is a critical building discipline in response to the need to provide fire-safe solutions for larger and more complex buildings. Following the serious impact of the Grenfell Tower fire in London in 2017, there is an increased focus on better building design and sharing of information about the structure and fabric of a building. A report by the UK Ministry of Housing, Communities and Local Government showed that 470 buildings were covered in the same unsafe aluminium composite material cladding as the Grenfell Tower. Affected buildings included hotels, hospitals and schools as well as high-rise residential structures. Dame Hackitt’s Independent Review of Building Regulations and Fire Safety identified that major changes and improvements to the building safety system are needed. Dame Hackitt identified ignorance, indifference, lack of clarity on roles and responsibilities, and inadequate regulatory oversight and enforcement tools as the principal issues. The UK government has issued proposals titled Building a Safer Future, which set out new rules and clearer responsibilities for those constructing or managing buildings which are six or more storeys high. The proposals include new duties of care that apply during the entire life cycle of a building from design to construction, management and occupation. They relate to sharing and management of information and evidence gained through regular inspection, reviews and maintenance of the building. Giving a voice to the residents is also a key aspect of the proposals, as is the establishment of a new regulatory framework. Commonly referred to as ‘a golden thread’, the idea of having accurate and up-to-date information about the design, construction and ongoing maintenance of buildings is already good practice in commercial workplace premises, especially those built with building information modelling (BIM) standards. Although initially focused on multi-occupancy high-risk residential buildings, the new framework is likely to extend to other high-risk buildings, such as schools, hospitals, care homes and prisons – in fact to all significant residential, commercial and leisure buildings. Property and insurance agents already challenge the status of a property, with many questions asked of FMs and asset owners when a property is being bought or sold, such as its location, local environment, condition, energy efficiency and running costs. They are now also asking more detailed questions about a building’s fixtures and fittings, such as. ❑❑ What materials are used in the building? What is their composition and fire safety

record?

❑❑ When were they last checked for their integrity? ❑❑ What are the make and specification of the fire doors and fire extinguishers? ❑❑ Can you provide digital evidence that these items have been checked and maintained,

and that the maintenance details have been logged regularly?

A summary of the UK government’s proposals is shown in Table 17.3

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Table 17.3  Proposals to improve fire safety in high-risk, high-rise buildings (HRRBs) New regulatory framework

Initially for multi-occupancy HRRBs that are 10 storeys or more in height.

New Joint Competent Authority (JCA)

A new body that will comprise local authority Building Standards departments, fire and rescue authorities and the Health and Safety Executive.

Mandatory incident reporting mechanism for duty holders New duty holder roles and responsibilities

Aligned with those set out in the Construction (Design and Management) Regulations 2015.

A series of robust gateway approval points

Duty holders to show to the JCA that their plans are detailed and robust; that their understanding and management of building safety are appropriate; and that they can properly account for the safety of the completed building. This will be required to gain permission to move on to the next phase of work and, in due course, allow the building to be occupied.

Change control process

All changes made to the detailed plans previously signed off by the JCA must be logged; more significant changes will require permission from the JCA to proceed.

A single, more streamlined regulatory route More rigorous enforcement powers A clear and identifiable duty holder

A new duty holder with responsibility for the safety of the whole building during occupation and maintenance. This person should maintain the fire and structural safety of the whole building, and identify and make improvements where reasonable and practicable.

Create a safety case to the JCA

At regular intervals, a report should be submitted to the JCA to check that building safety risks are being managed so far as is reasonably practicable.

Clearer rights and obligations for residents

This is based on a combination of transparency of information and an expectation that residents will support the duty holder to manage the risk across the whole building. This will result in better involvement in decision making, through the support of residents’ associations and tenant panels.

A regulator for the whole of the building (the JCA)

Independent, with the ability to apply sanctions.

More robust and transparent construction products regime

Industry expertise.

More effective testing regime with clearer labelling and product traceability

Including periodic reviews of the methods used to test the materials and of the standards used to test the materials process of test methods and the range of standards. Promotion of continuous improvement and higher performance. Encouragement of innovative product and system design under better quality control.

Creation of a digital record

Obligating the creation of digital information records of new HRRBs from initial design intent through to construction and including any changes that occur throughout occupation. This package of building information will be used by duty holders to demonstrate to the regulator the safety of the building throughout its life cycle.

Better procurement processes

High-safety, low-risk options are prioritised and full life-cycle cost is considered when a building is procured.

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17.4  Building Regulations The Building Act 1984 requires buildings to comply with various standards, which are published in the Approved Documents, to ensure health and safety compliance, energy conservation, and the welfare and convenience of disabled people. While there is no obligation to adopt any particular solution contained in the Approved Documents, as there may be other ways of achieving compliance, the Documents outline a minimum standard. Building Regulations Approved Document B (Fire Safety) requires that the building is designed and constructed so that there are means of escape in case of fire from the building to a place of safety. It comprises five main sections, as shown in Table 17.4. In most buildings, the place of safety would be a secure area outside the building. The Approved Document acknowledges that in certain circumstances a place of safety may be reached within some buildings, if suitable planning and protective measures are in place. Other issues taken into account by this Approved Document include: ❑❑ Measures required to prevent the spread of fire within the building. This requires the

use of linings that will resist the spread of flames but that, if ignited, must have a reasonable rate of heat release. ❑❑ Design in buildings must allow for the stability of the structure to be maintained for a reasonable period and also retard as far as possible the spread of flames from building to building. ❑❑ The design should allow satisfactory access to the building by fire appliances. ❑❑ The escape routes should be free from all obstacles that might impinge movement, e.g. ironmongery, steps or raised thresholds.

17.5  Designing space In general terms, good building design will reduce the spread of fire from one area of a building to another. Logically, it would seem that large open spaces within buildings are more hazardous because there is a large area to burn and draughts through open areas may fan flames. Buildings with a large number of compartments are less vulnerable to fire spread Table 17.4  Building Regulations Approved Document B B1 Means of warning and escape

Ensures satisfactory provision of means of giving an alarm of fire. Ensures a satisfactory standard of means of escape for persons in the event of a fire in a building.

B2 Internal fire spread Ensures that fire spread over internal linings of buildings is inhibited. (linings) B3 Internal fire spread Ensures the stability of buildings in the event of fire. Ensures that there is a (structure) sufficient degree of fire separation within buildings and between adjoining buildings. Inhibits the unseen spread of fire and smoke in concealed spaces in buildings. B4 External fire spread

Ensures that the external walls and roofs have adequate resistance to the spread of fire over the external envelope. Ensures that the spread of fire from one building to another is restricted.

B5 Access and Ensures satisfactory access for fire appliances to buildings and the provision of facilities for the fire facilities in buildings to assist fire fighters in saving people’s lives in and around service buildings.

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than open-plan offices or factories. However, heavily compartmented buildings may have problems with clear means of escape. Certain materials used within buildings are more combustible than others. Buildings with a large amount of timber within their construction are more likely to combust than those made of concrete. Steps can of course be taken to reduce the risks; for example, the isolation of a fire within a timber-framed building could be achieved by ensuring that the floors are constructed with a high degree of flame-resistant panels, thus isolating a fire onto the floor where the fire originated.

17.6 Standards Guidance on fire safety engineering for buildings is given in BS 7974 Part 1, which is supported by seven guidance documents on various aspects of fire safety engineering. For large, complex and innovative buildings, fire engineering can be used to develop a fire strategy that considers the building holistically, including how its occupants are likely to respond in a fire, to develop the fire strategy and determine appropriate fire safety measures. However, a fire engineer’s involvement in a project will more typically involve looking at an aspect of a building that cannot easily comply with one aspect of building regulations, such as extended travel distances. The fire safety engineering solution, therefore, requires sufficient compensatory features to justify the extended travel distances, but the rest of the building can be designed and constructed in accordance with the requirements of Approved Document B.

17.7  Balanced solution A fire safety solution will look at providing a combination of active, passive and design features that achieve the required balance between the needs of the building design and those of safety. The features that need to be considered include: ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑

Means of escape. Fire alarm and automatic fire detection. Behavioural response of the occupants. Measures taken to prevent fire. Spread of smoke and fumes and, if necessary, measures to control it. Fire development and its containment. Structural response to fire.

17.8  Fire separation Facilities for the fire services and the standard of fire safety management are both aspects of achieving fire separation. Fire engineering can also be useful in determining the fire safety requirement for existing buildings. In general, any new-build element should achieve the current standard of safety, but the rest of the building does not have to comply as long as the alterations have not made the existing standard worse. The exception to this is if a serious fire safety issue is identified in the refurbishment project; if it can be rectified as part of the building work, then this must be done.

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17.9  Classification of materials, buildings and fixtures The principal documents concerned with the fire rating of materials are BS 476 Parts 6 and 7 (Method of Test for Fire Propagation for Products; Method of Test to Determine the Classification of Surface Spread of Flame). They detail how the tests are undertaken and the method of classifying products by the results achieved. The following notes outline some of the terminology used in fire tests. Fire ratings Approved Document B limits the flammability of ceiling linings and walls to prevent rapid fire spread affecting escape in the early stages. However, the flammability of floor linings is not controlled by the Building Regulations. The flammability of linings is established by subjecting samples to a surface spread of flame test, as defined in BS 476 Part 7. Depending on the extent of fire spread across the sample, the lining is classified as follows: ❑❑ Class 1 (best performance and required by Approved Document B for linings of

rooms).

❑❑ Class 2. ❑❑ Class 3. ❑❑ Class 4 (unclassified).

In addition to their surface spread of flame characteristic, materials can be subjected to testing under BS 476 Part 6, which measures their likely contribution to the intensity of fire. Samples that exhibit low fire propagation indices along with a Class 1 surface class of flame characteristic are classified as Class 0. Class 0 is the highest material classification and is required by Approved Document B for the linings on all escape routes. Certain products such as plasterboard are accepted as achieving the Class 0 classification because of their proven performance in fire. Roof ratings Under BS 476 Part 3, two letters are quoted: ❑❑ First letter – Time to penetrate. ❑❑ Second letter – Measure of spread of flame.

The scale is from A to D (A being the best performance). Table A5 in Section B of the Building Regulations gives design ratings for common types of roof construction. For example: Natural slate on a timber-constructed roof with an underfelt: designation = AA. Fire resistance Building structures and components within them must have fire resistance to ensure that their premature failure in fire does not endanger the building’s occupants or the attending fire brigade. The element of fire resistance of a material or component is established by subjecting it to a furnace test.

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The three criteria used to assess the fire resistance of a material are: (i) Ability to support its load by retaining its strength in fire. (ii) Resistance to fire penetration (integrity). (iii) Insulation. Some elements have to exhibit all of the above characteristics, while others only have to achieve one, e.g. fire doors only have to exhibit fire resistance in terms of maintaining integrity. Guidance on the periods of fire resistance required for building structures and components is given in Appendix A of Approved Document B. Fire doors Fire doors are self-closing doors with high fire resistance properties. They are installed in areas to provide fire compartments and to protect the means of escape. Doors can give either 1 or 2 hours of structural integrity, and are classified accordingly. Manufactured fire doors are tested to conform to BS 476–3:2004 for the whole door (the frame, door, glazing and door ironmongery). Fire doors are fitted with intumescent edge strips around the door or the doorframe lining. The strip expands in heat or flame, and fills in the gaps around the doors to create a barrier. Electromagnetic door releases can be used to control frequently used fire doors. These will be linked to the automatic fire detection system, and on activation will close shut. This helps to minimise the problems that may arise when fire doors are propped open for ease of circulation around busy areas of a building. Glazing If fire-resistant glass is required in windows, doors or partitions, there are several types available: ❑❑ ❑❑ ❑❑ ❑❑

Georgian wired glass. Copper light glazing. Borosilicate glass. Laminated float glass.

17.10  Building classifications Approved Document B divides buildings into different purpose groups, for example residential, institutional, office and industrial, dependent on the nature of the occupants and what a building is being used for. The purpose group then determines the construction requirements for the building, such as maximum fire compartment size. The required period of fire resistance for a building is partially governed by its purpose group but is also dependent on its height. Buildings with occupied storeys higher than 18 m require a longer period of fire resistance as they will take longer to evacuate and the fire brigade may face increased difficulties.

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17.11 Furnishings The furnishings of a room are likely to make the greatest contribution to fire growth and fumes. The ease of ignition and rate of burning of flames are controlled by the Furniture and Furnishings (Fire Safety) Regulations 1988/1989. The Building Regulations do not attempt to control the furnishings within buildings, because it is recognised that this cannot realistically be achieved or enforced. However, in premises subjected to greater central control, for example hospitals and certain government buildings, they do impose internal standards on the ignitability and flammability of the furnishings.

17.12  Means of escape The fundamental objective of fire precaution and safety is to ensure that there are adequate provisions and time to ensure safe evacuation of the premises. This requires a means of giving a warning of fire, adequate signage, illumination of escape routes and, most importantly, means of escape that are suitably protected from the effects of fire. There is also a requirement that there are routes of sufficient number and capacity which are suitably located to enable persons to escape to a place of safety in the event of a fire. Guidance on achieving adequate means of escape relative to a building’s occupancy and size is given in Approved Document B. Guidance is also provided in the BS 5588 Code of Practice, which can be used instead of the Approved Document. BS 5588 sometimes has to be used to determine the means of escape requirements for more specific building types, such as those given in Part 10 for enclosed shopping centres. The common terms used in the design and specification of means of escape are shown in Table 17.5. Factors influencing the design of a means of escape There are many factors that will determine the requirements for an adequate means of escape, as shown in Table 17.6. Design features of a means of escape The objective is to ensure that a building’s occupants have a sufficient number of escape routes within reasonable travel distances. For a simple building, with escape routes in two directions, the maximum recommended travel distance is generally in the order of 45 m. When escape is in only one direction – that is, the occupants are not able to turn their backs on fire – the recommended maximum is shorter, typically only 18 m. Typical features of a means of escape strategy or design include: ❑❑ All escape routes should be provided with adequate fire signage indicating final exits

and directional signs leading to them. In addition, fire action notices giving instructions on what actions to take in a fire should be displayed throughout the building. ❑❑ All escape routes should be adequately illuminated and for many buildings it is necessary to ensure that this is backed up with emergency lighting, which comes on if the mains power fails.

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Table 17.5  Common means of escape terminology Access room

A room that forms the only escape route from an inner room.

Accommodation stairway

An open staircase used for general circulation that cannot be counted as part of the means of escape, except in conditions of limited, non-public occupancy and short travel distances.

Circulation space

A space (including a protected stairway) mainly used as a means of access between a room and an exit from a building or compartment.

Escape lighting

Part of the emergency lighting provided to ensure that the escape route is illuminated at all material times.

Escape route

A route forming part of the means of escape from any point in a building to a final exit.

Evacuation lift

A lift that may be used for the evacuation of disabled people in the event of a fire.

Final exit

The termination of an escape route from a building giving direct access to a street, passageway, walkway or open space, and sited to ensure the rapid dispersal of persons from the vicinity of a building so that they are no longer in danger from fire and/or smoke.

Firefighting shaft

A protected enclosure containing a firefighting stair, firefighting lobbies and, if provided, a firefighting lift, together with its machine room.

Firefighting stair

A protected stair communicating with the accommodation area only through a firefighting lobby.

Means of escape

Provision, such as emergency exits and protected stairs, which ensures that in the event of fire the occupants can leave the building in a reasonable time.

Pressurisation

A method of protecting escape routes against the ingress of smoke by maintaining an air pressure difference between the protected area and the adjoining accommodation.

Protected corridor/ lobby

A corridor or lobby which is adequately protected from fire in adjoining accommodation by fire-resisting construction.

Protected entrance hall/landing

A circulation area in a dwelling consisting of space enclosed with fire-resisting construction (other than any part which is an external wall of a building).

Protected shaft

A shaft which enables persons, air or objects to pass from one compartment to another, enclosed with fire-resisting construction.

Protected stairway

A stair discharging through a final exit to a place of safety (including any exit passageway between the foot of the stairs and the final exit) that is adequately enclosed with fire-resisting construction.

Single direction of travel

Part of a room or building from which escape is possible in one direction only.

Table 17.6  Means of escape Nature of occupancy

The type of occupancy is a major factor in deciding appropriate measures for escape. Buildings in which people sleep demand a high standard of compartmentation, and buildings serving the public require a large capacity of escape routes because they can often be crowded. In comparison, the means of escape requirements for offices are relatively simple.

Type of building

Its construction, degree of openness, fabric fire rating and ability of fire to spread throughout the premises.

Degree of risk

Are flammable materials stored in the building? What types of manufacturing processes are undertaken? If there was a fire, what would be the likely consequences?

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❑❑ Lifts and escalators are not normally considered as part of the means of escape, unless

❑❑

❑❑

❑❑

❑❑

❑❑

❑❑

❑❑ ❑❑

the former are provided with the additional measures recommended in BS 5588 Part 8, to enable them to continued to be used in a fire by disabled people. Exits must be sized to ensure that occupants can leave the building. This typically involves allowing 5 mm of exit width per occupant. A typical 750 mm door allows 40 people to exit per minute. Exits should be reached within a reasonable travel distance of 45 m when there are two directions of escape; 45 m is measured as the actual distance an occupant will have to travel to reach the exit allowing for the internal layout. When a building is being designed and the internal room layout is not known, the codes recommend that exits are set out so that occupants can reach them within two-thirds of the actual distance, i.e. 30 m. If only one escape route is provided, then the maximum travel distance in one direction to the one escape route is 18 m. In assembly areas, or areas with rows of seating, this distance reduces to 15 m and also reduces further to 9 m in plant rooms. In premises with no more than 60 people, it may be sufficient to provide one escape route. A minimum of two routes is required for premises with a capacity of up to 600 people. At least three escape routes must be provided for buildings with over 600 occupants. Escape from upper storeys should be via a protected stair that leads directly to outside, and double door protection should be provided in some instances to protected staircase shafts (via a protected lobby). Tall and large buildings can follow phased evacuation, where the fire floor and the one above are evacuated first, followed progressively by the rest of the building as required. For phased evacuation to be permissible, the building must be constructed with compartment floors and have an automatic fire detection system, a method of internal communication between floors and a central control point/room. Services such as gas pipes should not pass through protected stairs, unless they are fire clad. Protected routes should be kept free from all obstructions at all times and all doors should be readily openable without having to manipulate even the simplest of devices, such as ‘panic bolts’. For some escape routes, typically in residential buildings, it is necessary to provide smoke clearance, including smoke ventilators at the top of stairs.

17.13  Fire signage Exit signs on doors or indicating exit routes should be provided where they help people to find a safe escape route. Signs on the exit routes should consist of directional arrows, using the conventional white or green colour scheme, to comply with the Health and Safety (Safety Signs and Signals) Regulations 1996. Emergency exit signs must include a running man symbol. In assembly rooms, theatres and lecture rooms, signs must be illuminated. In high-risk areas, such as plant rooms in basement or roof areas, signs may be luminescent, making them easier to see in lower light levels.

17.14  Fire detection and fire alarms Fire detection and alarm systems are complex and often interact with other building service systems, such as air conditioning, ventilation systems and lifts. There may be conditions imposed by the organisation’s insurer and the local fire authority that determine the nature of the detection and alarm system.

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17.15  Fire detection system categories BS 5839 gives details of the requirements. The specific capabilities of a system will depend on many factors including building size, budget, type of occupants, complexity of the premises and essential safety requirements. There are five broad categories of system, as shown in Table 17.7. More complex and more capable systems will be addressable – this allows each detector or call point to send a signal to the control panel to allow each to be individually identified. Addressable systems can be analogue or non-analogue. In an analogue system, the output signal from each device varies in proportion to the amount of smoke, heat or flame, giving an early indication of fire. These systems allow detection of defects with particular detectors, and can help to reduce the number of false alarms.

17.16  Control panels A control panel is the heart of all fire alarm systems. Its function is to provide the means of control of the system, provide a user interface to display the status of the system, and allow regular tests to be carried out. It is best practice for the control panel to be installed near the entrance to the building, allowing easy access by the fire emergency services. A control panel needs to: ❑❑ Provide information on the status of the detection line that connects the detectors and

manual call points.

❑❑ Activate the sounders if an alarm condition occurs. ❑❑ Indicate which zone is the source of the alarm signal.

Table 17.7  Fire detection systems L Automatic fire detection systems to protect life L1 Installed throughout the building.

Residential care homes; hotels; buildings with specific access or structural risks.

L2 Only installed in defined parts of the building.

Large, complex offices; older buildings; buildings with many corridors and small rooms.

L3 To give early warning.

Medium-sized offices; retail and factory; buildings with large numbers of people, with relative easy escape routes.

L4 Installed in circulation spaces in escape routes, such as corridors and stairways. L5 Specific fire risks. M Manual systems, no automatic fire detectors Small office buildings with clear escape routes and occupants who know the building. P Automatic fire detection systems to protect property P1 Installed throughout the building.

Complex office buildings; high risk profile; small fire could easily spread.

P2 Installed only in defined parts of the building.

Listed buildings; older style of premises; fire damage would be expensive to rectify.

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❑❑ Indicate if a fault occurs with the sounder or detection line. ❑❑ Indicate the condition of the system’s backup power supply. ❑❑ Provide a means of activating and silencing the sounders.

In more complex and large fire alarm systems, there will be repeater panels. These may be installed in the lobbies of each floor, in a central control room or in other strategic locations. In some instances, an alarm system may be installed with radio links for communication between the various system components. This eliminates the need for hard-wired circuits and reduces installation time and costs. Such systems can be useful when connecting separate buildings on a campus.

17.17 Zoning An important aspect of building design and fire safety is the ability to locate the fire and smoke as quickly as possible. A building can be divided into zones to make this identification easier and quicker. Guidance on zoning can be found in BS 5839. There are some general principles to consider when zoning a fire alarm system: ❑❑ The floor area of a zone should not exceed 2000 m2. ❑❑ A zone must not cover more than one floor (unless the whole building is less than

300 m2). ❑❑ A zone cannot be divided between different tenants in multiple-occupancy buildings.

17.18  Fire, smoke and heat detectors There are two basic types of heat and smoke detector used in fire alarm systems: ❑❑ Linear heat detection  –  These respond to changes in temperature along the whole

length of the installed cable.

❑❑ Point detection  –  These respond to smoke, flame or changes in temperature in the

vicinity of the detector.

Table 17.8 gives a summary of the range of systems in use. Point detectors may use a variety of techniques to detect the presence of smoke, heat or flame and this gives rise to a variety of detectors that can be installed. The environment being protected and the types of combustible materials contained in that area will determine the choice of detector.

17.19 Sounders These can be bells, sirens or klaxons. The requirements are detailed in BS 5839. They are installed for both property protection and life protection. The decibel level of sound in a life-protection system should be sufficient to produce a minimum sound level in accessible parts of the building of 65 dB(A), or 5 dB(A) greater than any background noise which may last more than 30 seconds. In areas where people sleep, the sounder should produce at least 75 dB(A) at the bedhead. Normally, two sounders are installed even if one sounder would be sufficient to produce the required level of sound. At least one sounder must be installed per compartment.

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Table 17.8  Fire detector types Fixed-temperature heat detectors

An alarm is triggered when a fixed temperature is exceeded. Useful in areas when temperatures fluctuate significantly, such as kitchens, plant areas and boiler rooms.

Rate of rise heat detectors

These react to the rate of temperature increase. Suitable in spaces which could be dusty or contain high airborne pollution.

Flame detectors

These sense the flicker of the non-visible light produced by flames. Used in dusty or smoky environments. Could be sensitive to either infrared or ultraviolet light.

Ionisation smoke detectors

An alarm is triggered when the current between two electrodes in the detector chamber is disturbed. These are very sensitive detectors.

Optical smoke detectors

These rely on the change of light reflection onto a device that is monitoring beams of infrared light transmitted across an area. Suitable in areas with fabrics, furnishings and foams.

Optical beam smoke detectors

These detect smoke across the length of a beam of infrared light.

Voice evacuation systems can be installed as a means of alerting people. Various systems of pre-recorded messages can be selected. Fire alarm warnings for people with impaired sight or hearing may be required. These can be fixed, movable or portable tactile alarm systems and they need to be interfaced with the fire detection and alarm control equipment.

17.20  Call points Manual call points will be the primary means of triggering an alarm condition in a manual fire alarm system. They can also be included in automatic systems. Basic guidance on call points includes: ❑❑ All call points must be operated in the same way. ❑❑ Only 3 seconds’ delay is permitted between operation of the call point and the alarm

sounding.

❑❑ Call points must be located in staircases, landings, exit routes and exits from

buildings.

❑❑ The travel distance to a call point must be 30 m or less. ❑❑ A call point must be mounted 1.4 m above the floor. ❑❑ Call points must be well lit, easily accessible and free from obstructions.

Depending on the location and environment, call points can be weatherproof or specially designed to cope with flammable or explosive environments. They can be fitted with a striker to assist in the breaking of the glass and a light diode to indicate their activation.

17.21 Cabling The connection of the various components of a fire alarm system must be made via fireresistant cables. The types of cabling are shown in Table 17.9.

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Table 17.9  Fire cabling types Type

Features

Description

Mineral insulated copper cable (MICC)

Very robust, has a long service life, does not burn or emit smoke or gases. Care required in termination to prevent ingress of moisture.

Copper sheath on outside. Inner insulation of magnesium oxide. Copper conductors.

Soft-skinned cable

Can be rigid or flexible. Quick and easy to install. Aluminium.

Thermoplastic sheath on outside screen in rigid format. Heat-resistant insulation around conductors.

17.22  Suppression systems Depending on the equipment and environment that needs to be protected from fire, a fire suppressant system may be used to protect delicate or irreplaceable data and equipment or for certain hazardous processes. Table 17.10 gives a list of those used. Gas-based suppression systems work on the basis of flooding the space or equipment with an inert gas extinguishing medium. Since the banning of halon, other gas systems have had to be developed and used. If people work in the same space, then a warning system is required for evacuation of occupants before the suppression system operates.

17.23  Fire extinguishers The most common type of fire extinguisher is the water extinguisher or hose reel. Generally, one water extinguisher covers 200 m2 of floor space, with a minimum of one per floor. Portable fire extinguishers operate by releasing the medium under pressure. Some extinguishers contain a gas cartridge, which is activated to expel the contents. Fire extinguishers can be identified by their colour, in accordance with BS 7863:1996 and as shown in Table 17.11. Table 17.10  Fire suppression systems FM200

Synthetic liquid; used in low concentrations; takes up little storage space; zero ozone depletion potential (ODP).

Also known as HFC-227ea. Takes effect within 10 seconds and suppresses the fire immediately.

Argonite

A blend of nitrogen and argon; zero ODP.

Useful where an environmentally acceptable system is essential, where an electrically non-conductive medium is needed and where people may be working, such as control rooms or substations.

Inergen

High-pressure agent; stored in banks of cylinders; natural substance; zero ODP.

Used in computer and data- processing equipment.

Carbon dioxide

Control systems needed.

Used in electrical switchgear, generator or transformer rooms.

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Table 17.11  Fire extinguishers Water

Red

Class A

Foam

Red with 5% cream

Class A, Class B

Powder

Red with 5% blue

Class B, Class C, Class D

Carbon dioxide

Red with 5% black

Electrical

Vaporising liquid

Red with 5% green

Class B

All extinguishers should be affixed to walls so that the carrying handle is approximately 1 m from the floor. They should be in conspicuous positions such as escape routes, near exits or in the line of an exit. In larger premises, it is good practice to group the firefighting equipment into fire points. Such points should be clearly visible, conspicuously signed and in similar positions on each floor.

17.24  Hose reels Large premises may be equipped with hose reels. They may be used in addition to or instead of portable water extinguishers. Table 17.12 shows their benefits and disadvantages. They will be operated by a valve and may be of various lengths and diameters depending on the floor area. They are usually installed in corridors or on escape routes, in recessed areas. They need regular maintenance and must conform to BS EN 671-1:2001.

17.25  Fire blankets These are normally located in areas where smothering is required as a extinguishing method. This could be in kitchens or laundries where cooking oils or clothing may be ignited, or pan fires may occur. Heavy-duty blankets are used in manufacturing operations. Regular checks must be carried out.

17.26 Sprinklers These must be installed in certain buildings due to their size or height, or they may be a requirement of the insurer, and they must conform to BS 5306. Typical criteria for sprinklers include: ❑❑ Buildings over 30 m high. ❑❑ Unpartitioned areas of more than 2000 m2 in retail, commercial and industrial premises. Table 17.12  Use of hose reels Advantages

Disadvantages

Cost-effective maintenance Easy to use Unlimited supply of water Reach fires at some distance Usable by fire service

Hard to use due to pressure Trip hazards Need water pressure in mains supply Hose may deteriorate over time

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Table 17.13  Fire sprinkler systems Wet pipe

Most commonly used. Fast to operate as water is always present in pipework above heads. Only feasible where there is no chance of freezing.

Alternate systems

These have water only in summer. System is drained and filled with air in winter. Used in unheated buildings.

Dry pipe

Pipes are filled with air under pressure. A control value holds back the water until the sprinkler head opens.

Pre-action

Similar to above, but the sprinkler head relies on activation by detectors. Useful when it is not possible to have water-filled pipes.

Deluge

These are firefighting systems in industrial areas, such as manufacturing and workshop areas.

There are several types of sprinkler system, as shown in Table 17.13. They are comprised if there is a drop in water pressure or water supply ceases. Alternative fire precautions will be required – potentially closure of the building if the risk is too high.

17.27  Fire hydrants Fire hydrants are standard fittings provided in buildings to allow the emergency fire services to attach their equipment to the public water supply. A private hydrant system may be installed in a large business campus or complex site. Hydrants need to comply with BS 5306 and will need to be tested annually. Foam inlets may also be installed to allow the fire services to apply firefighting foam to burning flammable liquid fire.

17.28  Dry and wet risers Dry and wet risers are essentially pipes that run vertically through the core of a building. These risers are found in high-rise buildings to provide fire services with an easier means to tackle fires on upper floors. The essential difference is whether the riser is primed with water or kept dry. Both types require regular maintenance, and, in the case of wet risers, checks on water pressure and leaks are essential.

17.29  Regulatory Reform (Fire Safety) Order 2005 The Regulatory Reform (Fire Safety) Order 2005 (RRO) governs fire protection and means of escape in all buildings in England and Wales. It requires continuous compliance and is therefore of significant importance to maintenance regimes. The main effect of the legislation is an increased emphasis on prevention and life safety, putting greater responsibility on building owners and users. The RRO abolished fire certificates, which now have no legal status. Changes to the fire legislation in Scotland and Northern Ireland have occurred, and these countries have their own local legislation. FMs working in other regions and countries will obviously need to check their local legislation.

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Responsible person The RRO requires the appointment of a responsible person for each premises. This person must carry out a fire risk assessment and take reasonable steps to reduce or remove that risk. Article 3 of the RRO defines the responsible person as someone who has control of the workplace in connection with their job or role. This could be the owner or employer if there are no premises or FMs. A competent person may have to be appointed to assist the responsible person in carrying out their duties. Emergency plan A written emergency plan must be created to provide information to others on the arrangements for fire safety. The plan is normally kept on the premises and can be inspected by fire authority personnel. In premises that are shared with other users, the plan may be created in consultation with neighbours. The plan will contain clear information on the following: ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑

The method of communication to warn the occupants if there is a fire. Details on how the evacuation should be carried out. Details and locations of the assembly points. Details on how the workplace is checked for complete evacuation. Identification of key fire escape routes – often best shown in a drawing. Details on how occupants can gain access to the escape routes. Duties of competent persons. Identification of competent persons. Arrangements for high-risk occupants such as visitors, contractors, disabled people and members of the public.

Fire precautions These are defined in the RRO as measures to: ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑

Reduce the risk of fire. Reduce the risk of spread of fire. Provide a means of escape. Ensure that the means of escape can be used safely and effectively at all times. Detect fire. Give a warning in the case of fire. Fight fire on the premises. Instruct and train employees in the action to be taken in the event of fire. Identify action to be taken in the event of fire to mitigate the effects of fire.

Types of buildings and activities The RRO affect various types of buildings for which FMs could be responsible. These include: ❑❑ ❑❑ ❑❑ ❑❑

Sleeping accommodation. Organisations that provide care or treatment. Places of entertainment, instruction or recreation. Places of teaching, training or research.

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❑❑ Any place where people work. ❑❑ Premises which permit the public access.

Maintenance activities Fire risk assessment and codes of practice may specify the requirements to comply with the RRO. Maintenance activities may include: ❑❑ ❑❑ ❑❑ ❑❑

Maintenance of means of escape. Maintenance of fire protection systems, e.g. sprinklers and alarms. Maintenance of firefighting equipment, e.g. fire extinguishers, blankets and hoses. Record keeping of the above activities.

17.30  Risk assessment A fire risk assessment needs to specifically address the following issues: ❑❑ ❑❑ ❑❑ ❑❑ ❑❑

Risks arising from young people. Risks arising from dangerous substances. Evaluation of arrangements for disabled people and any particular risks arising. Firefighting equipment. Fire detection equipment.

There are five main hazards produced by fire to consider when conducting a risk assessment: ❑❑ ❑❑ ❑❑ ❑❑ ❑❑

Oxygen depletion. Flames and heat. Smoke. Gaseous combustion products. Structural failure of buildings.

There are 11 guidance documents produced by the UK government to help with specific types of premises, such as schools and hospitals. Evaluation of existing fire precautions needs to be undertaken in order to address the extent of available measures to offset identified risks. Assessment of precautions can be undertaken using any of the three assessment methods outlined below.

17.31  Assessment methods There are essentially three means of evaluating risks: equivalency, probabilistic and quantified assessments. These methods vary in complexity and in the expertise necessary to utilise them properly, yet the objective is always identification of what is likely to happen and what the consequences of an incident would be. The choice of assessment method will depend on the nature of the case to be analysed and in some circumstances a combination of one or more methods may be appropriate. It is considered that for ease and practicability, most premises will benefit from the application of equivalency assessment with either probabilistic or quantified methods being used when equivalency is impossible or inappropriate.

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Equivalency assessment Equivalency assessment, or comparative analysis, is a method of evaluation based on comparing one element (of the building, e.g. wall, window, floor or fabric) or set of elements with another providing the same function. Thus, in fire safety and risk assessment terms, one or more precautions or risk reduction measures which are lacking may be compensated for by providing one or more substitutes which will perform the same or an equivalent task. In other words, can the bits that make up the built environment be substituted with something that is less hazardous when ignited but that will give the same functional performance (e.g. vinyl versus carpet, paint versus wallpaper)? Probabilistic assessment Probabilistic risk assessment is a methodology which is used to identify whether the likelihood of a certain event occurring is sufficiently small to be acceptable. It can be complex in that it involves a number of other individual methodologies within which specific probabilities are considered. Furthermore, it normally requires, as a basis for probabilities to be determined, sufficient statistical or anecdotal information from which to evaluate similar occurrences in similar situations. This is done using complex statistical methods to calculate the probabilities of hazards being realised. Probability is a measure of uncertainty; it measures the chance or likelihood that a particular event will occur, usually on a scale of 0 to 1, with 0 being no chance, 0.5 being equally likely to happen or not happen, and 1 being certain to happen. Fire engineers will have a wealth of data to use to do accurate calculations based on all the fires that have occurred so that they can see the likelihood of particular elements in buildings becoming a fire risk. Quantified risk assessment Quantified risk assessments are based on physical relationships derived from scientific theories and empirical results, and are intended to show that a given set of conditions will always produce the same outcome (to take a simple example, 2 + 2 – 1 = 3). This may be commonly regarded as the quantification of risk by examination of each element in detail for each set of circumstances. In some situations, this method can predict the worst-case scenario by calculating the outcome and effect on persons, premises and business. One method of doing this is the Monte Carlo simulation, a technique which randomly generates values for uncertain variables over and over to simulate a model. The name ‘Monte Carlo’ derives from the games of chance for which the principality is famous, such as roulette and baccarat. The randomness displayed on the roulette table can be displayed in many situations including stock prices, weather and behaviour of hazards in the workplace that may create a fire risk. To run the simulation, all the data is entered into a computer and an answer is produced. However, this is complex and expensive to undertake, and is only carried out on very big projects, where there are a great many variables to consider.

17.32  Training records A record of all fire safety training given to staff needs to be kept to demonstrate compliance with the Management of Health and Safety at Work Regulations 1999. The details should include: ❑❑ Dates of the instruction or exercise. ❑❑ Duration of the training.

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❑❑ Names of the attendees. ❑❑ Details of the trainer or instructor. ❑❑ Details of the instruction, exercise or drill.

17.33  Fire-trained staff The responsible person can appoint others to help in the implementation of fire safety measures. These could include a designated fire safety manager, fire marshals or fire wardens. Each will need to be appropriately trained to ensure competence. Security personnel who are often required to patrol buildings and premises will also need a higher level of training in fire safety. Training in fire safety should include: Action to take on discovering a fire. Instructions on how to raise an alarm. Action to take on hearing an alarm. Arrangements for calling the fire brigade. Procedures for alerting visitors or members of the public. Evacuation procedures – stay put or move to safer areas. Location of fire assembly point. Location and use of firefighting equipment. Location of escape routes. How to open exit doors and the use of emergency fastenings. The importance of fire doors and why they must be completely shut and kept closed. Details on how to switch off equipment and processes. Information on how to isolate power supplies. Reasons for not using lifts. Good housekeeping and how to be vigilant for smoke, electrical faults and the erratic behaviour of others. ❑❑ Measures relating to specific hazards at the workplace. ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑

Training is usually best given as part of the new employee or staff induction. Written instructions may need to be adapted for people whose first language is not English, those with hearing or sight impairments, and those with learning difficulties. Fire safety briefings are also required for contractors and third parties on the premises, such as visitors. Fire safety training will need to be repeated as refresher training on an annual basis or more frequently if the risk assessment identifies specific issues (such as changes to procedures, staff turnover or changes to the building) that affect the evacuation process or level of risk in the workplace. Practical training should be conducted twice each year.

17.34  The fire drill It is important to plan ahead so that the annual or 6-monthly evacuation drill is conducted in a professional manner to reduce the inconvenience and interruption to business. Ideally, the date should be set about 3 months ahead. Only a few people need to be involved in the planning, such as fire wardens. The drill is similar to an audit and helps to identify improvements. The drill is an opportunity to evaluate the effectiveness of the responsible person and the appointed fire wardens.

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The existing procedures must be checked for their relevance and to determine whether they are up to date. Aspects to consider include evacuation routes, risk assessment findings, number of employees and new personal emergency evacuation plans (PEEPs) (where new disabled staff have joined or staff have become newly disabled). Changes identified will require an update to the procedures and communication with all those affected. Evacuation methods may be via several methods, depending on the type and use of the premises concerned, as illustrated in Table  17.14. The outcome of the risk assessment and advice from local fire authority officers will determine the most suitable method. Ideally, everyone in the building should be able to get to the nearest place of safety in 2 to 3 minutes. If premises have only one escape route, or there is a higher risk of fire, this evacuation time should be reduced to 1 minute. Some areas will require more time to prepare for evacuation, such as visitor areas or workshops where machinery has to be switched off. The responsible person (not the emergency fire and rescue services) has a duty to make adequate provision for the safe evacuation of all personnel. This includes the safe evacuation of people who need extra help. Fire wardens may need additional training and support to assist people who require assistance. A PEEP will be required for each individual who needs special assistance. During the evacuation drill itself, it is important to have sufficient support and observers to check for backlogs and the overuse or underuse of escape routes. Information about the drill needs to be recorded, such as: ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑

The timings of ‘all clear’ reports to the chief warden at the assembly point. Areas not checked. Areas not accessible. Visitors. Contractors. Supervision at the assembly point. Overall time for complete evacuation. Successful grounding of lifts. Successful switching off of air conditioning and gas supplies.

After the drill, a debrief meeting should be held with the fire wardens and others involved in the drill, such as security personnel, other tenants, adjacent neighbours and maintenance staff. This is an opportunity to review the positive aspects and identify areas for improvement. A summary report may be necessary, with changes to the procedure for the next drill. Table 17.14  Fire evacuation strategies Single stage

This is a total evacuation.

Horizontal

This is when evacuation is from fire-affected areas only in the initial stages.

Staff alarm

This is when there is a controlled evacuation by staff (such as in shops, theatres and cinemas).

Two stage

This is when there is a warning or alert signal which is then followed, if necessary, by an evacuation signal.

Phased

This is when the evacuation is controlled in phased sequence.

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17.35 Refuges A refuge is a place of safety in which a disabled person can wait for assistance in the event of an evacuation of a building. The assistance could be the use of an evacuation chair, a lift or a buddy to help them up or down the stairs. The location of a refuge will depend on the fire safety design of the building. A refuge could be in a lobby, corridor, stairway or open space and will depend on the fire compartmentalisation and protection system in place. Refuges need a method of communication, such as telephone, radio or mobile phone, so that the person waiting there can be informed of the situation. Evacuation chairs and lifts need to be regularly tested and checked for safe use.

18

Electrical Supplies and Electrical Safety

18.1 Introduction There are many different ways to make electricity. Each method involves the use of a turbine to spin and convert kinetic energy into electricity. A turbine is a type of engine that can extract energy from a fluid, such as water, steam, air or combustion gases. Electricity is made when a turbine moves a large magnet around a very large wire. Three coils are set around the magnets and the movement serves to electrify the wire. This generates threephase supplies – referred to as red, blue and yellow. Each phase is 230 V supply. Electricity is then pushed away from this generator through special transformers. Steam, combustion gases and water are commonly used to turn industrial turbines for the creation of electricity. Electricity behaves like water – it flows. It therefore follows the path of least resistance. If resistance is encountered, then the energy is discharged. The further the electricity has to travel from where it is made to where it is used, the more resistance and loss of energy occurs. It is more efficient to create electricity nearer to the point of use. Combined heat and power (CHP) plant, solar panels and photovoltaics are examples of locally produced electricity. Electricity is provided to buildings as either low-voltage supplies or high-voltage supplies. ‘Low voltage’ is a term used to describe the 400 V three-phase and 230 V single-phase supplies. These low-voltage supplies normally come directly from the electricity supplier via an underground cable. There is a fused unit to protect the consumer’s installation. Supplies are metered for billing purposes, and the meter normally belongs to the supplier of the electricity. The meter measures the kilowatt-hours (kWh) consumed. Electricity is typically supplied on a maximum demand basis, so that if an organisation goes over the agreed load, then penalties are charged. The mains switch is connected via the meter to the supplier’s ‘cut-out’. The mains switch is capable of handling the full load of the electrical installation. The Electricity at Work Regulations 1989 state the duties and responsibilities of the duty holder, who must ensure that all electrical installations and equipment are selected, installed and maintained in a safe condition to prevent danger. Only competent persons with technical and appropriate practical knowledge of electrical equipment can work on electrical equipment and installations.

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18.2  Single-phase supply Most domestic and small commercial buildings are supplied with single-phase 230 V, and this is suitable for all the electrical equipment in the building. Other properties in the locality are likely to be supplied by single-phase supplies but perhaps another phase to ensure that the three phases are evenly distributed to balance the overall load.

18.3  Three-phase low-voltage supply Larger buildings often receive their electrical power supplies in three-phase 400 V, as there is too much demand or load for a single phase. Typically, a building will be divided up into three zones which have approximately the same loads. Each zone can then be provided with one phase (red, yellow or blue) of 230 V. Heavy-duty equipment (e.g. compactors, air handling units, some catering equipment, air-conditioning plant and lift motors) will require a direct three-phase 400 V supply, which will be connected to the incoming mains distribution board. Safety issues and problems will arise if there are two phases on one floor and equipment is plugged into both phases at the same time, which could then allow 400 V to pass through a person or equipment. Sockets of different phases on the same floor must be marked to warn potential users of the danger of connecting their electrical equipment to such sockets. There may also be problems with over- or underloading the electrical supplies on any particular floor if the building is not evenly occupied or used. One phase may get overloaded and become hot, possibly resulting in arcing of electricity across the phases.

18.4  High-voltage three-phase supply Industrial sites and buildings with loads greater than 1000 kVA will usually require a highvoltage three-phase supply. The supply is typically 11 kV. Such supplies require specialist management and therefore incur higher capital and operating costs than low-voltage supplies. There are several reasons for this: ❑❑ The consumer has to purchase and maintain the high-voltage equipment. ❑❑ Space in the building must be dedicated to the high-voltage equipment, known as the

‘substation’.

❑❑ Transformers which step the supplies down to usable low-voltage loads will not be

100% efficient and these losses are borne by the consumer.

❑❑ Trained, competent electricians (an authorising person and an authorised engineer)

qualified in high-voltage switching are required to operate the high-voltage equipment. ❑❑ Access to the substation must be managed via a permit-to-work system.

18.5 Wiring In the UK, different-coloured wiring insulation is used to differentiate the phases of the three-phase supply. Old wiring was coloured red, yellow and blue to indicate the three phases, with black for neutral. In April 2004, there were changes in the identification of

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power cables to conform to European standards and this is now a safety issue for FMs (facilities managers, or facilities management) and others responsible for premises. Harmonisation of colour codes of three-phase cabling has resulted in the following changes to the wiring colours: ❑❑ ❑❑ ❑❑ ❑❑

Red to brown. Yellow to black. Blue to grey. Neutral (black) to blue.

As neutral is now a colour (blue) that previously applied to one of the phases, there is a potential danger. Some deaths have occurred as a result of the changes. It is permitted to use different colour schemes in the same building, but not in the same installation. Great care in refurbishment and labelling of electrical supplies is required. It is essential that suitable warning and safety notices are fixed in distribution boards.

18.6  Inspection and testing Every electrical installation must be inspected and tested to ensure safety and to prevent injury and fire. Inspection and testing of fixed wiring must occur regularly, typically every 5 years, or more frequently if high-risk activities and operations take place (e.g. in hospitals, factories and swimming pools). An inspection of joints, conductors, cables, cords, switchgear, labelling, protective devices and measures, enclosures, sockets, etc. is required. Qualified electrical engineers will conduct tests on continuity, resistance, polarity, impedance and earthing. A schedule of remedial work will then be created indicating the priorities for work to bring the power installation up to standard. The reliability and safety of electrical installations can be improved via more frequent inspections, using techniques such as thermal imaging. The Institution of Engineering and Technology (IET) has produced a Code of Practice for in-service inspection and testing of electrical equipment. It advises a proportionate risk-based approach – considering usage, type and environment of the equipment.

18.7  Standards – 18th Edition BS 7671:2018 (Requirements for Electrical Installations) was issued in July 2018 came into effect in 2019. This is the 18th edition of the Standard. Installations designed after 31 December 2018 will have to comply with BS 7671:2018. The Standard applies to the design, erection and verification of electrical installations, and also to additions and alterations to existing installations. Existing installations that were installed in accordance with earlier editions of the Standard may not comply with this edition in every respect. This does not necessarily mean that they are unsafe for continued use or need to be upgraded. The Standard was updated to reflect the latest advances in technology, including updates to technical data, and has a direct impact on making installations safer. In addition, there is a new appendix on energy efficiency and the need to reduce the overall consumption of energy. Compliance with the Standard demonstrates conformity with the Electricity at Work Regulations. The 18th edition contains several significant changes to the 17th edition,

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Table 18.1  Main changes in the 18th edition of BS 7671 Description

Impact

Arc fault detection devices (AFDDs)

Some circuits may now require the fitting of an AFDD to protect specifically against arc faults.

Metal cable supports

Wiring systems located in fire escape routes must be supported against premature collapse in the event of fire throughout the entire building’s electrical installation. Wiring systems in all locations will need to have metallic clip supports. Not all clips will need to be metal; however, there needs to be an adequate proportion of metal clips in place – around 25%.

Residual current device (RCD) protection

All AC sockets – except functional extra-low voltage (FELV) and reduced low voltage (RLV) sockets – that are rated up to 32 A will require RCD protection, as opposed to just 20 A. This is designed to prevent any electrical shocks to installers working with live AC socket outlets. It means that electrical contractors will need to pay increased attention to the type of RCD being used, to prevent RCDs being ‘blinded’ by the current waveform.

Protective equipotential bonding of metallic pipes

Electrical installers must identify whether or not an incoming metallic pipe has an insulating section, to allow them to determine whether they must add protective bonding to the pipe.

Energy efficiency

Appendix 17 provides new recommendations on the design and erection of electrical installations to optimise the overall efficient use of electricity.

New devices

New devices for isolation and switching, and onshore units of electrical shore connections for inland navigation vessels, have been introduced.

affecting fire safety, protection against voltage overloads and wiring systems. These changes will affect how electricians perform their daily work, such as the length of time spent at each installation and their expenditure on equipment. Electricians may have to purchase new equipment. They will also need to plan and prepare for a revised installation process including taking a more active role in the architectural design process of a building to ensure it will comply with the Regulations. Table  18.1 shows the main changes.

18.8  Portable electrical equipment Portable equipment is defined in the Electricity at Work Regulations 1989 and BS7671 as ‘equipment that is not part of a fixed installation but may be connected to a fixed installation by means of a flexible cable and either a socket and plug or a spur box or similar means’. This means that extension leads are included. The Electricity at Work Regulations 1989 require that portable electrical equipment is tested at appropriate regular intervals. The intervals are not prescribed, but they should be based on a risk assessment conducted by competent persons. The frequency of portable appliance testing (PAT) should reflect the usage of the equipment, the nature of the task and the environmental conditions. The users of the portable devices could carry out simple visual checks. Some equipment is disposed of before the need for a PAT check, while other equipment, if bought new from a reliable source, is covered by the manufacturer’s checks so does not need a PAT check immediately.

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18.9 Safety All electrical installations deteriorate over time. The factors affecting the rate of deterioration include the environment (dust, moisture, vibration and temperature); loading; ­utilisation of plant; mechanical damage; general wear and tear; and the level of maintenance. The harm from faulty electrical installations and equipment can vary – a personal injury or damage to property. The typical causes of electrical faults are: ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑

Damaged or weak insulation. Inadequate or inappropriate systems and standards of work. Overrated protection (fuses, circuit breakers). Poor earthing of appliances. Complacency of users. Overheating of apparatus. Earth leakage. Loose contacts and connectors. Inadequate ratings of circuit components. Unprotected connectors. Inadequate maintenance and testing.

18.10  Electric shock The danger of electricity is the potential electric shock from faulty installations, connections or misuse of equipment. It is important to protect people from shock. Shock can arise from either of the following: ❑❑ Direct contact with live components. ❑❑ Indirect contact if an object is live.

The body is a conduit or conductor of electricity, allowing electricity to flow either to earth or to another object. Depending on which part of the body comes into contact with the current and the overall health of the person, some people will survive an electric shock and others will be severely injured or die. The levels of danger from electricity depend on the magnitude of the current and the path through the body, as shown in Table 18.2. If electricity passes via vital organs, it is more dangerous. The impact to the human body also depends on the duration of contact, the Table 18.2  Dangers of electricity to people Current level

Human impact

1–5 mA

Discernible, but no danger

5–15 mA

Pain, muscular contraction, repulsion from equipment

15–20 mA

Person unlikely to release from power source

20–50 mA

Extreme pain, loss of consciousness, unable to release grip

50–75 mA

Paralysis, no pulse or respiration

Over 100 mA

Ventricular fibrillation, instant death

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frequency of the voltage (50–60 Hz is very dangerous), the resistance of body mass, and the percentage of water/moisture in the body.

18.11 Earthing Electricity will naturally follow a path to earth. To protect against the risk of indirect contact, all exposed conductive parts of an electrical installation must be earthed. This will include the metal casing, trunking and conduit. Earthing will ensure that if a fault occurs and an item of equipment becomes live, the current will flow directly to earth rather than via the person touching it. Earthing is intended to limit the duration of touch voltages. A protective earth conductor is an integral part of the electrical distribution system in all buildings. The conductor can be attached to various sources of earth, such as the metal sheath of the supply cable, an earth electrode inserted into the ground, or connections to incoming gas and water pipes that are in the ground.

18.12 Bonding Bonding is intended to limit the magnitude of touch voltages. In theory, all metal service pipes, such as gas and water, that enter a building should have the same earth potential. To ensure that there is no differential between them, all these pipes are bonded via connections to the mains earthing terminal. This is known as ‘mains bonding’. Metal frameworks and metal building structures may also have to be bonded. Extra or supplementary bonding in wet areas such as kitchens or bathrooms is required.

18.13  Circuit protection Circuit protection devices and systems are an essential part of the electrical installation in all buildings. They detect and isolate faults as soon as they occur. This reduces the risk of damage and electric shock to occupants. There are three basic types of electrical fault, as shown in Table 18.3. Circuit protection devices are used to detect and isolate these faults. There are several types: fuses, circuit breakers and residual current devices (RCDs).

18.14  Cable management The management of power cables in buildings is critical. Busbars are often used for power distribution  –  these give flexibility in the configuration. Power can be supplied into the Table 18.3  Electrical faults Overcurrent Short-circuit Earth fault

Current in circuit exceeds maximum safety level A phase conductor connects to another phase or neutral

Overheating of equipment, installation damage

Live conductor contacts metalwork

Electric shock

Overheating of cables, potential fire

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perimeter trunking, under raised floors to floor boxes or via a skirting trunking system. Cable trays, baskets, ladders, conduits or cable trenches, trunking and modular wiring are features of a power distribution system.

18.15  Power quality The quality of power supplies and energy consumption may be affected by a number of factors. These include the generation of power itself, the demand from the equipment, and the weather. A review of power usage in a building may identify problems with the equipment, the installation and the tariffs of supply. The efficiency of an electrical system is measured using a power-factor rating – a number between 0 and 1 representing the ratio of the real power flowing to the load compared with the apparent power. If the rating is lower than 1, then the building is losing power to absorption by cables and switchgear, and more energy is required to transfer the same amount of useful power. The supplying authorities will charge for the extra energy and will also levy a premium on that extra energy. Power-factor correction equipment can overcome this problem, reducing energy demand and lowering the electricity bill. Another problem that may result in higher energy consumption is due to harmonic distortion of the electricity supplies. Filters can be used to balance the loads and identify whether equipment needs to be replaced.

18.16  Voltage optimisers Voltage optimisation is a voltage-correction technology that reduces the AC voltage supplied to electrical equipment to reduce the equipment’s electrical power usage and allow it to operate at its optimal efficiency. Voltage optimisers systematically reduce the voltage of the mains power supply entering a building to reduce the level of energy use and reactive power. Some voltage optimisers have a fixed voltage adjustment, while others can automatically and electronically regulate their supply voltages. Commercial building and industrial voltage optimisers tend to be based around auto-tap-changing transformers, with advanced electronic control circuitry. The FM should carry out a site survey with a specialist contractor to assess whether a voltage optimiser would be beneficial. The UK government provides funding for voltage optimisers through the Carbon Trust. Loans are available with capital enhancement incentives for projects costing from £3,000 to £100,000, repayable within up to 4 years. The loan size is based on the amount of carbon dioxide that can be saved by the project.

18.17  Power failures Power interruptions can vary from a brief ‘flicker’ to more than 24 hours’ duration. The impact of such interruptions needs to be considered. For example, an operating theatre in a hospital cannot afford to have lights and power to critical equipment fail. Such life-critical systems would need to be supported by an uninterruptable power supply (UPS) and a standby generator. A business which relies on computers cannot suffer a prolonged power failure without serious impact, so consideration needs to be given to the impact of power interruptions to IT systems. Duration of support is ultimately decided by battery size or fuel

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shortage capacity. Businesses may require standby power for 10 minutes or 25 hours and longer. Actual or suspected power cuts can be reported to UK national power failure hotline on 105. The following options exist: ❑❑ A UPS consists mainly of a set of batteries and will give a constant (‘no-break’) supply

until the batteries run down. The support from a UPS depends on the number of batteries installed and this determines how much time is provided. A UPS provides an additional, continuous function of protecting the electrical supply from external disturbances such as harmonic distortion and transient voltages. UPS systems can, however, be very expensive, heavy and space consuming. Batteries need to be replaced roughly every 3–5 years, which is also expensive. ❑❑ Standby generators are comparatively cheaper, with fuel being replaced as it is used. The big drawback is that there is a break of up to 40 seconds between the mains supply failing and the generator coming online. ❑❑ Combination approach – It is usual to take a layered approach and support only critical equipment on a UPS (e.g. main computers and operating theatre equipment). Less important equipment can be supported by a generator, and some electrical loads can be ignored completely. This is generally referred to as ‘load shedding’.

18.18  Assessing the need The first stage is to list all the electrical loads in the building(s), which could include ventilation plant, lifts, lighting, general office power and special IT loads. The next step is to decide which loads cannot be interrupted (e.g. special IT loads such as servers). The loads that an organisation considers cannot be interrupted are the loads that should be supported by a UPS. Any of the remaining loads, which can be interrupted briefly but still need to run, will be generator loads (e.g. life safety systems such as fire alarms). The remaining loads can be load shed. Once priorities have been decided, a specialist should be consulted to manage the underlying levels of detail. All standby systems will require space. It may be possible to purchase systems in containers, which can be accommodated in car parks. Structural loads for systems within buildings should be considered and expert advice should be sought on system sizes and structural capacities. In addition to the UPS or generator, the additional costs of switchgear, fuel storage, running costs (such as fuel and competent personnel to operate the equipment) and maintenance need to be considered. Fuel systems have to be agreed with the local planning authority at design stage. Requirements will vary depending on the amount of fuel stored. Generally, it is unusual to have bulk fuel storage above basement level, because of the risk of leaks. There may also be requirements for bonding, leak detection and spill back lines.

18.19  Uninterruptable power supplies Uninterruptable power supplies (USPs) generally consist of banks of batteries supplied by an inverter or rectifier unit. The batteries store energy and allow an uninterrupted supply to be given to the load if the mains fails. The length of time the batteries can maintain a load is called ‘autonomy’. This will vary with the load. As the load increases, autonomy falls. The relationship is non-linear. Careful management of loads connected to a UPS is necessary to ensure that it will perform its desired function. Various types are shown in Table 18.4.

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Table 18.4  Uninterruptable power supply (UPS) examples Static UPS

This is the most widely used type of UPS. It uses solid-state electronics to convert mains power to DC for battery charging and then convert and condition DC back to AC for use by the load. It can impose harmonic distortion (power quality problems) on the supply network.

Rotary UPS

A rotary UPS consists of rectification equipment, which converts the normal AC mains to DC. This is then used to drive a motor mounted on a common shaft with a generator (AC generator). Mostly supplanted by static systems, the rotary UPS still has some uses where isolation of the load from the supply network for electrical reasons is a consideration.

Online/offline

Online systems operate constantly ‘in line’ between the supply and load, conditioning the voltage to the load. Offline systems ‘switch in’ to supply a load when the supply fails. They do this very quickly so the supply appears to be uninterrupted. There may be a brief ‘flicker’, which IT loads in particular can be sensitive to.

Gas turbines

Normally used to support very large loads. Where such installations exist, it is assumed specialist staff will be available.

Combined heat and power (CHP)

Some CHP systems may serve a dual function as a source of standby supply.

Fuel cells

This is an embryonic technology, which may become more prominent in the future.

Inline power supply (IPS) interface

A UPS can usually be regarded as an inline device where if the input supply fails, the integral battery maintains the output for a finite period, known as ‘autonomy. Depending on their size and sophistication, UPSs can provide a number of information outputs, including ‘mains-healthy’ or ‘mains-fail’, self-diagnostic reports, associated cooling equipment failure and so on. Where necessary these can be used to start generators if these are available. An adequate number of emergency stop buttons will be required in a standby generator house or UPS room; when operated, these must stop the machine(s). Releasing the buttons must not allow the machine(s) to restart; there must be a separate reset facility elsewhere. Provision of emergency stops should be decided by experts.

18.20 Generators Generators are generally equipped with diesel engines. The concept of adapting the standard road transport container system for use in housing noisy equipment such as diesel generator sets is quite common. This product can be applied to a variety of requirements where robustness, ease of transport as a one-piece system, good weather protection and a neat external appearance are required. Usually they are equipped with a daily service tank (typically with 8 hours’ capacity) and simple controls, and mounted in an acoustic container. One issue with generators is the noise level. A limit of 45 dBA at the boundary of the property for daytime (or 35 dBA for night-time operation) can be used as a guide where business or residential neighbours are likely to be affected. The main characteristics of generators are described below: ❑❑ Generating sets – The most common type of standby power supply is the diesel engine

standby generator. The diesel engine drives an alternator, which generates the power. They are simple, reliable devices which with proper maintenance and regular testing should last for very many years. ❑❑ High- or low-voltage generators – Standby generators most commonly operate at low voltage (230/400 V). For very large buildings and loads, it is often considered more

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advantageous to use high-voltage (3.3–11 kV) machines. These have the benefit of saving space, but they need to have a load supplied from the high-voltage side of the main transfers. The decision as to which is most appropriate is normally taken at design stage. It should be remembered that specially qualified (and thus more expensive) staff are required to maintain high-voltage machines. ❑❑ Diesel no-break set – The main supply drives a motor mounted on a common shaft with a generator, flywheel and diesel engine (via a clutch). When the mains fails, the flywheel keeps the shaft and alternator rotating, the clutch is engaged and the flywheel starts the diesel. The diesel then maintains the rotation of the generator. ❑❑ Diverse power supplies  –  Larger and more complex buildings and sites may enjoy electrically separate electrical supplies, each capable of supplying the total load. This type of supply would need to be negotiated with the local supplier and a significant premium paid for it. FMs would need to check regularly with their supplier to confirm the arrangement is still valid. ❑❑ Generator interface – All standby generator systems require interfacing with the normal mains supply. This means that when the normal supply fails, the generator automatically starts, the changeover switchgear operates and the generators are connected to the building load. In addition, the generator needs to provide an electrical supply to battery charges and any fuel transfer pumps. Air supply and exhaust fans may also require a supply. Alarms can include oil pressure, coolant temperature, voltage, frequency, ‘mains-healthy’ or ‘mains-fail’, starter battery condition, fuel level, etc. Generators can be ‘held off ’ by operation of emergency power-off push-buttons or fire alarms if required.

19

Accessibility and Inclusive Built Environments

19.1 Introduction The provision of inclusive services and buildings will help the FM (facilities manager, or facilities management) and their employing organisation to meet legal and moral duties in terms of accessibility and anti-discrimination. There is a broad range of legislation that needs to be consulted, including: ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑

Employment law. Human rights legislation. Equality Act 2010. Health and safety regulations. Planning and highways legislation. Landlord and tenant legislation. Listed buildings legislation. Building Regulations, in particular Parts M and K. Fire safety regulations. Licensing laws. Occupiers’ Liability Act 1957 and 1984 (see Chapter 8 for more on this Act).

19.2  Inclusive FM This is an approach that is more far reaching than simply compliance with legislation. Given the obligation to meet the needs of a wide range of customers, most organisations would ideally like to recruit employees from a similarly wide range of people. There are over 12 million disabled people in the UK, so this is a large pool of both customers and employees. Overall, in 2012, around a third of the EU’s 70 million people with disabilities who were aged 15 or over reported a need for assistance, according to Eurostat. One issue that has restricted the mindset of some building managers is the use of the wheelchair symbol for disabled facilities. In fact only 5% of disabled people use wheelchairs to assist with their mobility impairments. For FMs and others tasked with roles in the built environment, it is easy to become too concerned with the physicality of access and forget other issues such as management processes and hidden non-physical disabilities. Many disabilities arise due to age, injury, disease or accident  –  over 70% of disabled people have acquired their disability during their working life. As many as 50% of disabled people do not consider themselves disabled, perhaps because their disability is not apparent or they wish not to declare it to others. Facilities Manager’s Desk Reference, Third Edition. Jane M. Wiggins. © 2021 John Wiley & Sons Ltd. Published 2021 by John Wiley & Sons Ltd. 287

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Table 19.1  Principles of accessibility Inclusive principle

Areas of concern and attention

Flexibility in use, minimum physical effort, and sufficient space for approach and use

Physical environment – room sizes, space allocation, furniture, decoration, finishes, lighting, acoustics, surfaces, handrails, ramps, steps, doorways, door furniture, car parking, catering services, vending machines, lifts, reception, wash and shower facilities, security access, etc.

Perceptible information

Information – format, tactile, notices, signage.

Intuitive use

Communication modes – written, telephone, face to face, electronic, assistive technology.

Simplicity of use

Simple designs, intuitive to use, ergonomic, with limited need for training.

Use by all

Management practices – policy, rules, regulations, forms, processes.

Tolerance for error

Attitudes – prejudice, stereotypes, assumptions.

The adoption of a universally inclusive approach to both premises and workplace design and to services provision ensures that everyone benefits from great accessibility, as shown in Table 19.1.

19.3  Disability discrimination legislation The Disability Discrimination Act (DDA) 1995 was introduced to give improved access for disabled people to employment, services, goods and facilities. It applied to employees, applicants, job apprentices and people who contract personally to provide services. The DDA 1995 was extended by the Special Educational Needs and Disability Act (SENDA) 2001 and the DDA 2005, which extended the requirements to public bodies providing services to the public. In more recent times, the Equality Act 2010 has replaced all the previous anti-discrimination laws, including the DDA. General principles Protection under the disability legislation requires that a disabled person must satisfy the following criteria: ❑❑ There must be a physical or mental impairment. ❑❑ The impairment must adversely affect their ability to carry out normal day-to-day

activities.

❑❑ The adverse effect must be substantial (not minor or trivial, and the effects can be

cumulative).

❑❑ The adverse effect must be long term (likely to last at least 12 months, or recurring

qualifying impairments).

Discrimination occurs when a disabled person is treated less favourably for a reason that relates to their disability and the treatment cannot be justified on objective grounds. Normal day-to-day activities include mobility, manual dexterity and physical co-ordination; continence; ability to lift, carry and move everyday objects; speech, hearing and eyesight; memory and ability to concentrate, learn and understand; and perception of risk and physical danger.

Accessibility and Inclusive Built Environments  289

FMs’ responsibilities fall into two distinct areas: (i) Employment. (ii) Service provision. Duties of employers Employers are required to make reasonable adjustments to their premises, including appropriate management arrangements. This duty is often triggered when a disabled person applies for a job or is employed, or becomes disabled while employed. Disabled employees must be afforded equal opportunities to other staff in the working environment including training, safety and benefits. Some examples of adjustments that may be considered reasonable are as follows: ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑

Allowing flexibility in working style or hours. Making physical adjustments to the building. Assigning the person to a different workplace or location. Allowing absence for assessment, treatment or rehabilitation. Tailoring testing or assessment procedures. Acquiring or modifying equipment. Providing auxiliary aids and services (e.g. text phones, induction loops, accessible formats). Transferring the disabled person to fill an existing vacancy. Adjusting in-house health and safety policies and procedures. Providing a reader or interpreter. Training managers, co-workers and disabled workers. Modifying working manuals and instructions. Providing additional support or supervision to help with issues identified in risk assessments.

Employers may be held responsible for acts of discrimination by their employees, unless it can be demonstrated that the employer took reasonable steps to prevent this taking place. Evidence of the reasonable steps is required, such as an access assessment. Duties of service providers The prime duty for service providers is to offer an environment that allows independent access and use by disabled people. Most facilities departments and FM contractor organisations are ‘service providers’ (a term introduced in the DDA 1995). They have two principal duties: (i) Anticipatory duty – A proactive approach to making changes. (ii) Continuing duty – Once adjustments have been made, they must be reviewed often and further enhanced, if appropriate. Discrimination can arise if: ❑❑ A disabled person is treated less favourably, is provided with a lower standard of service

or is refused service.

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❑❑ Reasonable adjustments to the delivery of a service have not been made in order to

allow disabled people to use them.

Consideration should also be given to the time and effort a disabled person would need to spend in order to access a service, compared with a non-disabled user. These duties apply even where the service is provided without payment. Disability legislation overrides lease covenants that might state that the tenant must not make alterations. This means that landlords cannot stop tenants making changes to a property to help them comply with the disability and equalities legislation. In multi-occupancy buildings, the landlord may be responsible for making alterations, so FMs will need to check the lease to establish whether the landlord or the tenant is liable.

19.4  Special Educational Needs and Disability Act 2001 SENDA provisions affect all education and training provision, including admissions to courses and the provision of other ‘student services’ such as residential accommodation, leisure facilities, catering, library facilities and welfare services. SENDA places various duties on colleges and post-16 education establishments that are quite similar to those placed on service providers and employers: ❑❑ Not to treat disabled students less favourably, without justification, for a reason which

relates to their disability.

❑❑ To make reasonable adjustments to ensure that disabled people are not at a substantial

disadvantage in accessing education.

The duty is anticipatory and evolving – responsible bodies need to anticipate the kinds of adjustments that disabled students might need and not simply wait for disabled students to apply for a place. They continually need to review arrangements and have a rolling improvement plan. Some adjustments will be very specific to individuals. However, there are many adjustments that can be pre-empted as they apply to everyone, such as: ❑❑ Ensuring all buildings are generally accessible to people with mobility problems. ❑❑ Ensuring all handouts are accessible electronically in different formats (e.g. font size,

coloured backgrounds).

❑❑ Having additional support services in place. ❑❑ Having pre-vetted interpreters, sign language translators and other specialists

available.

19.5  Disability Discrimination Act 2005 The DDA 2005 introduced a duty on all public bodies to consider disability equality at the beginning of all activities and processes, rather than making adjustments at the end. It changed the emphasis from individuals having to make a complaint regarding accessibility to the public sector becoming a proactive agent of change. Public sector bodies, such as local authorities, universities, hospitals and regulatory bodies, applied the principles of equality of opportunity via these activities:

Accessibility and Inclusive Built Environments  291

❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑

Promote equality of opportunity between disabled people and other people. Eliminate discrimination. Eliminate harassment of disabled people that is related to their disabilities. Promote positive attitudes towards disabled people. Encourage participation by disabled people in public life. Take steps to account for disabled people’s disabilities, even where that involves treating disabled people more favourably than other people.

In addition, public bodies were expected to produce a disability equality scheme to show: ❑❑ Involvement of disabled people in producing the scheme and developing the action ❑❑ ❑❑ ❑❑ ❑❑

plan. Methods to gather and analyse evidence to inform their actions and track progress. Assessment of the impact of their existing and proposed activities on disabled people. 3-yearly action plan. Progress reports.

19.6  Equality Act 2010 This Act harmonised the range of pre-existing discrimination laws. It banned unfair treatment and helps organisations to achieve equal opportunities in the workplace and in wider society. In addition, the Equality Duty, the Socio-economic Duty and the Dual Discrimination Protection legislation affecting public sector organisations are likely to apply in the future. The Equality Act also provides information on how disability is defined. It covers nine protected characteristics, which cannot be used as reasons to treat people unfairly. Every person will have one or more of the protected characteristics, so the Act protects everyone against unfair treatment. The protected characteristics are: ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑

Age. Disability. Gender reassignment. Marriage and civil partnership. Pregnancy and maternity. Race. Religion or belief. Sex. Sexual orientation.

The Equality Act sets out the various forms of unlawful treatment, such as direct and indirect discrimination, harassment, victimisation and failing to make a reasonable adjustment for a disabled person. There are two main duties: (i) The Reactive Duty – The employer has a duty to meet the needs of disabled employees as and when they arise. (ii) The Anticipatory Duty – The service provider and employer have a duty to take measures to meet the reasonable needs of all potential building users.

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The Act prohibits unfair treatment in the workplace when providing goods, facilities and services; when holding public functions; in the disposal and management of premises; in education; and by associations (such as private clubs). A test of reasonableness can be applied to determine appropriate actions and adjustments. This can take into account a range of issues, such as: ❑❑ ❑❑ ❑❑ ❑❑

The organisation’s services. Type of building. Practicality of proposed works. Financial, people and other material resources.

19.7  Planning and Compulsory Purchase Act 2004 Access and design statements are now required in the standard planning application process for new buildings and major refurbishment works. Property developers now need to include accessibility and inclusive design from the concept stage of their project. Since 2006, planning applications have required a Design and Access Statement (DAS). Additionally, most FMs will be familiar with access statements or strategies as these are needed as part of compliance with Part M of the Building Regulations. Such documents may form part of the organisation’s overall access plan or access management plan.

19.8  Disability awareness Disability awareness training is essential in dealing with visitors with disabilities or special needs. Reception staff will benefit from disability awareness training, and learning some of the main signing phrases in an established sign language to communicate with deaf or hearing-impaired visitors and staff. Sign language is a visual means of communicating using gestures, facial expression and body language. The most useful languages include finger spelling and British Sign Language. The Business Disability Forum (formerly the Employers’ Forum on Disability) is a useful source of advice and booklets for greeting disabled visitors. The Disability Standard is a 10-criteria toolkit designed to help organisations improve their awareness and to measure and improve their progress towards becoming ‘disability smart’. In particular, this not-forprofit organisation has produced a range of publications such as Meetings Matter, which gives tips for making business meetings more inclusive.

19.9  Front-of-house services Providers of goods, services and facilities are required to take reasonable steps to remove, alter or provide reasonable means of avoiding physical features that make it impossible, or unreasonably difficult, for disabled people to access or use a service. Physical features include steps, stairways, kerbs, exterior services and paving, parking areas, building entrances and exits, toilets, seating in waiting areas, public facilities (including telephones, counters and reception desks) and so on. Access to reception and waiting areas will be of paramount importance to disabled people. The ease of approaching the reception desk, and the type of welcome received, will have a

Accessibility and Inclusive Built Environments  293

major impact on a disabled person’s initial perception of an organisation. Appropriate training for reception, security and helpdesk staff is essential to provide a non-discriminatory, inclusive welcome. The publication Welcoming Disabled Customers (by the Business Disability Forum) provides excellent guidance on best practice. Use of a management system that captures special needs and can check the correct use of designated car parking spaces and pre-book visitors will ensure a professional welcome is given to all disabled and able-bodied visitors. It is good practice to regularly check external areas and routes to ensure debris, overhanging foliage, damaged pavements, and other obstacles and hazards are promptly dealt with. Internal corridors must also be checked for obstacles, trip hazards and slip hazards. Much of this is just good-practice operational FM. Regular checks of accessible toilet and shower facilities are needed, especially if they are infrequently used, to include the alarms or call points and supplies of soap and tissue products. Such facilities often get used as temporary stores, so good housekeeping is essential.

19.10  Personal emergency evacuation plans (PEEPs) There is a duty of care on employers to have an emergency evacuation plan in place for each disabled person which takes account of their individual needs and circumstances. A PEEP will help the disabled person, their colleagues and the FM to know what is needed in the event of an evacuation. It is best to prepare a PEEP in a face-to- face meeting to encourage full involvement of disabled people in the planning of their evacuation strategy. A PEEP is similar to a risk assessment and should contain the following information: ❑❑ Details of the disabled person (name, job title, location, department, contact details,

manager details).

❑❑ The procedures to follow:

The alarm system – how to raise an alarm. Activation of alarm – how the disabled person is alerted. ○○ Egress procedure. The assistance to provide: ○○ Buddy. ○○ Equipment. ○○ Methods of assistance. Safe routes. The level of staff training required to provide appropriate assistance: ○○ Frequency. ○○ Testing and drills. ○○ Refreshers. Signatures (disabled person, buddy or carer, manager, safety adviser and FM). Review date (at least annual, or after an event). ○○ ○○

❑❑

❑❑ ❑❑

❑❑ ❑❑

A suitable alerting system needs to be provided to visually or hearing-impaired people. This could be a vibrating pager or a pager with flashing lights. Some people will have a guide dog that is trained to respond to the building alarm. A recording of the various alarms and sounds will be required to train the guide dog. For visitors, it is good practice to have a generic emergency plan – sometimes known as a GEEP. An emergency evacuation card can be useful and can be issued with a visitor pass.

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19.11 Communication Following are a few simple tips for effective communication: ❑❑ Smile, relax and ask how you can help. ❑❑ Be patient and give extra help and time if needed. ❑❑ If you do not understand a request or information given, then ask the visitor to ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑

repeat it. Do not interrupt if the person has a stammer or is slow with their speech. Continue to use everyday phrases such as ‘see you later’. Avoid using words and phrases such as ‘invalid’, ‘victim of ’ or ‘suffering from’. Speak clearly, facing the light, and keep your hands away from your mouth so that lip readers can understand you. Do not shout when someone has not heard. Offer pen and paper if communication is becoming difficult. Speak directly to someone in a wheelchair at their level. Move around the desk to a lower level or in front of the desk to assist the person.

19.12  Physical adjustments FMs will need to consult Approved Document Part M of the Building Regulations, and BS 8300 for the design of buildings. These provide standards that will help to meet the requirements of disabled users of buildings. There are no buildings that can be totally ‘DDA compliant’ nor are there any products or adjustments that make a building DDA compliant. This is because it is virtually impossible to demonstrate full compliance due to the individual adjustment needs of each person with a disability. Adjustments that could be made in a building or a workspace to allow better access and usability include: ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑

Widening of doorways and corridors. Provision or modification of lifts with audio guidance. Installation of ramps. Adaptable toilet, shower and changing facilities. Induction loops (either permanent installation or portable devices). Improved design of signs and directional signs. Designated car parking spaces of the correct size. Installation of non-slip floors in more premises and in more areas of a building. Handrails in rooms and corridors. Tactile surfaces when height changes. Visible and well-designed manifestations on all glazing. (A manifestation is the treatment of transparent glass to make it visible.) Contrasting colours in walkways and doorways, escape routes and changes of height. Good levels of lighting. Retention of heavy fire doors via magnetic devices until fire activation. Proximity of security access readers. Local designated refuge areas to give time for assistance in evacuation.

It is suggested that workplace adjustments can reduce absenteeism, sickness and associated costs by up to 76%.

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19.13 Claims Any disabled person may take civil action against an employer (usually in an employment tribunal) or service provider (in a county court) if they feel they have been discriminated against. Aside from the financial implications of any compensation awarded (the level of which is unlimited), there may also be the following hidden costs, which should also be borne in mind: ❑❑ ❑❑ ❑❑ ❑❑

Effect upon staff morale and increased stress levels. Damage to reputation and corporate image within the local community. Public relations and time lost to staff involved. Legal costs.

Employee claims If an employee who is disabled complains that an employer has breached a duty in the Equality Act, then a claim can be brought to an employment tribunal. Claims could arise from a failure to make changes in working practices to support a disabled person in respect of the provision of wheelchair access to the building, or from a deaf person not being provided with appropriate telephone handsets. There is a broad test of reasonableness within the Act, but the tribunal will decide whether an employer’s failure to act is unreasonable. The tribunal can either uphold or reject a complaint. It may recommend that an employer carry out works to a building to accommodate the needs of the disabled person. It cannot order that work, but if it is not carried out the level of compensation payable may increase. In addition, compensation may be payable to the person bringing the complaint. The tribunal may also order a dismissed person to be reinstated. Landlords can also be brought to account in claims. For example, if a landlord refuses consent for alterations on premises required under the Act, then the tribunal can make an order authorising the occupier to make the alterations and in some cases obtain an order for the landlord to pay compensation. Time limits are in force, and complaints should be instigated within 3 months of the actual cause of the complaint. Service claims Where a service provider has breached the Act, a claim can be made in the county court. An example of this could be when a disabled person visits a restaurant and is not given the same courtesy as a non-disabled person. The same could apply if a person could not enter a building due to a failure by the owner to provide disabled access.

20

First Aid at Work

20.1 Introduction People can suffer injury or sudden illness at any time, and this may be in the workplace. It is important for employers to make arrangements to ensure their employees receive immediate attention if they are injured or taken ill at work. People with first-aid training may have a positive influence on health and safety in the workplace. First-aiders may be in an advantageous position to help spread positive, basic health and safety messages throughout their organisation.

20.2  Definition of first aid When employees become ill or suffer injuries at work, it is important that immediate firstaid attention is obtainable and, if necessary, an ambulance called. First aid given promptly and effectively can save lives; often it can assist in the prevention of minor injuries deteriorating into serious injuries. In many incidents and accidents, it is the only treatment necessary. It is recommended that organisations develop a first-aid policy that covers the arrangements required to ensure that appropriate first-aid provision is situated in all places of work throughout the organisation. Depending on the size and structure of the organisation, this policy may be managed by the occupational health, human resources, or health and safety functions, or it may be one of the many aspects of the FM (facilities management, or facilities manager) function.

20.3  Health and Safety (First-Aid) Regulations 1981 The Health and Safety (First-Aid) Regulations 1981 require employers to provide adequate and appropriate equipment, facilities and personnel to enable first aid to be given to employees if they are injured or become ill at work. These Regulations apply to all workplaces including those with five or fewer employees and to the self-employed. These regulations were updated in 2013 to remove the approval of first-aid training companies by the Health and Safety Executive (HSE). The regulations outline a four-layered framework of first-aid provision: ❑❑ ❑❑ ❑❑ ❑❑

Appointed person (AP). Emergency first aid at work (EFAW). First aid at work (FAW). Additional training.

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Duty of employer to make first-aid provision The Regulations state that there is a duty on employers to make provision for first aid at work by: ❑❑ Ensuring there is adequate and appropriate equipment and facilities to provide first aid

to employees who become injured or ill at work.

❑❑ Ensuring that there are a sufficient number of ‘suitable persons’ able to administer first

aid if employees become injured or ill at work.

The Regulations are supported by a detailed Approved Code of Practice (ACoP) and Guidance L74 (First Aid at Work), and several leaflets, such as INDG347 (Basic Advice on First Aid at Work) and INDG214REV2 (First Aid at Work – Your Questions Answered). What is deemed ‘adequate’ will depend on the circumstances in the workplace. This includes whether trained first-aiders are needed, what should be included in a first-aid box and if a first-aid room is needed. Employers should carry out an assessment of first-aid needs to determine these points. The Regulations do not place a legal obligation on employers to make first-aid provision for non-employees such as the public. However, the HSE strongly recommends that nonemployees are included in a first-aid needs assessment and that provision is made for them. That being said, the organisation’s insurance may not cover the costs of claims or litigation as a result of first aid being given to non-employees.

20.4  Assessment of first-aid needs Employers are required to carry out an assessment of first-aid needs. This involves consideration of workplace hazards and risks, the size of the organisation and other relevant factors to determine what first-aid equipment, facilities and personnel should be provided. The aspects to consider in the assessment include: ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑

Hazards and risks in the workplace and the nature of the work. Number of people located in the premises. Previous accident and incident history. Size of the organisation and work patterns. Nature and distribution of the workforce – shift workers, young employees, trainees. Remoteness of the workplace in relation to the emergency medical services, hospitals, GP surgeries and clinics. Needs of travelling, remote and lone workers. Employees working on shared or multi-occupancy sites. Annual leave and other absences of first-aiders and appointed persons. First-aid provision for non-employees.

Provision of first aid To ensure the availability of appropriate first-aid provision, those responsible in each workplace will have to assess their first-aid requirements, typically using a checklist. The assessment will ensure that appropriate first-aid personnel and equipment are available to: ❑❑ Give immediate attention to an employee suffering from common injuries and illness

and those likely to arise from specific hazards at work.

❑❑ Call an ambulance or other professional help.

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Table 20.1  Determination of first-aid requirements in the workplace Category of risk

Number of workers at any location

Suggested number of first-aid personnel

Low risk (e.g. offices, libraries) Fewer than 50 50–100 More than 100

At least one appointed person At least one first-aider One additional first-aider for every 100 employees

Medium risk (e.g. workshops, kitchens, grounds)

At least one appointed person At least one first-aider for every 50 employees One additional first-aider for every 100 employees

Fewer than 20 20–100 More than 100

High risk (e.g. chemical Fewer than 5 exposure, dangerous 5–80 machinery, sharp instruments) More than 80

At least one appointed person At least one first-aider One additional first-aider for every 80 employees

Where there are specific hazards for which additional first-aid skills are necessary

In addition at least one first-aider trained in the specific emergency Action

The amount of first-aid equipment and trained personnel necessary will depend on the circumstances of each workplace. No fixed level exists. Those responsible will estimate, using an assessment of first-aid needs checklist, the level of equipment and personnel necessary to their circumstances. An organisation’s health and safety policy and risk assessments will identify hazards in the workplace and will therefore be helpful to those assessing first-aid requirements. The information obtained from making an assessment will identify the most likely nature of an incident that may require first aid. Such assessments may also assist with estimating the most appropriate type, quantity and location of first-aid personnel and equipment. In workplaces assessed as low risk, provision of a suitably stocked first-aid box and designating an appointed person to take charge of first-aid arrangements may be all that is required. In the case of work activity with hazardous substances, dangerous machinery and so on, first-aid provision must be appropriate to the assessed risk. As work activities present a variety of risks throughout most organisations, separate first-aid needs assessments must be undertaken in each work area and reassessed when there is any change in the working practice. Table 20.1 gives suggestions as to the numbers of first-aid personnel required in different workplaces.

20.5  Suitable person A ‘suitable person’ is either: (i) A first-aider who has received training and a qualification in first aid at work from an organisation. Some first-aiders will require particular first-aid training if their workplace has specific hazards associated with the work activity. The selection of first-aiders ought to take into consideration the individuals’ ability to learn new skills and their

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capacity to cope with stressful and physically demanding emergency procedures. They should be able to go rapidly and immediately to an emergency. First-aiders will be qualified in first aid at work (FAW), in emergency first aid at work (EFAW) or in some other first-aid training appropriate to the particular circumstances of the workplace. The risk assessment will determine the type of training required. It is essential to check that a first-aider’s certificate is valid – they normally last 3 years. Recertification must occur before expiry. It is important to inform all first-aiders of any changes in first-aid practice and to organise supplementary training sessions if the need arises. The training will cover resuscitation, managing an unconscious casualty, bleeding control, various common medical conditions and legislation. Although a first-aider will be certified for 3 years, it is recommended that 1-day refresher training is offered every year to prevent skill fade and improve confidence levels. or (ii) An appointed person who has received training in the management of a first-aid situation and who would take charge until more expert assistance becomes available (e.g. first-aider, paramedic or ambulance personnel). The appointed person will have responsibility for the upkeep of first-aid equipment in workplaces, where the first-aid needs assessment indicates there is no need to provide a trained first-aider. FMs may have to identify, select and appoint a suitable training provider for their first-aid needs. There are many organisations to choose from. The HSE’s information sheet GEIS3(rev1) gives some guidance to help FMs check the standards of providers. Due diligence must be carried out to check the trainer’s competence, course content and quality assurance system.

20.6  First-aid equipment The assessment of first-aid needs, together with the health and safety risk assessment, will assist in the identification of the level of first-aid cover and first-aid equipment required. The following principles always apply: ❑❑ All first-aid equipment must be suitably marked, ideally a green box with a white cross,

and easily accessible and available in places where working conditions require it.

❑❑ First-aid containers should protect first-aid items from dust and damp. ❑❑ First-aid boxes ought to contain only items for administering first aid and nothing else. ❑❑ There is no mandatory list of first-aid materials to be included in the first-aid box. The

content selection of first-aid boxes will result from first-aid needs assessment.

❑❑ Medications, disinfectants, ointments, etc. are not to be held in a first-aid box under

any circumstances.

In workplaces where there is a comparatively low risk to health and safety, a minimum level of first-aid equipment is required. For example, office-type accommodation would normally only require: ❑❑ 1 advisory leaflet giving advice on the prevention of infection. ❑❑ 1 leaflet giving guidance on first aid.

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❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑

20 assorted adhesive plasters. 3 triangular bandages. 2 sterile eye pads. 6 safety pins. 2 small dressings. 2 medium dressings. 2 large dressings. 1 pair of disposable gloves. 6 non-alcohol cleansing wipes. 1 record sheet of any treatment given.

The assessment of first-aid needs may indicate that there ought to be additional requirements in certain workplaces (e.g. kitchens, workshops or laboratories). Consideration should be given to providing scissors, cold packs, cling film, adhesive tape, aprons and other specialist equipment, such as foil blankets, haemostatic dressings, tourniquets, disposable aprons, disposable face masks, disposable gloves and individually wrapped moist wipes. Other pieces of equipment may include adhesive hypoallergenic microporous tape, shears capable of cutting through clothing and sterile disposable tweezers. These can be stored in, or alongside, the first-aid container. Where mains water is not readily available for eye irrigation, a litre of sterile water or saline in sealed disposable containers should be provided. These containers must be replaced whenever the seal is broken or when past the expiry date.

20.7  Automated external defibrillators A defibrillator is a device that gives a high-energy electric shock to the heart of someone who is in cardiac arrest. This high-energy shock is called ‘defibrillation’, and it is an essential part of trying to save the life of someone who is in cardiac arrest. Many organisations wish to provide an automated external defibrillator (AED) in the workplace, sometimes as a result of a risk assessment. This equipment must comply with the Provision and Use of Workplace Equipment Regulations 1998 (PUWER). The FM should provide information and written instructions on its use and maintenance.

20.8  Travelling first-aid kits Mobile members of staff and those using company vehicles for business purposes are likely to need a travelling first-aid kit. These could be placed in the vehicle or issued on demand with keys and the vehicle logbook. Employees using other means of transport may also require a travelling first-aid kit, depending on the duration of journeys, destinations and risks identified in the assessment. The risk assessment would reveal if instruction or training in emergency first aid at work is also needed.

20.9  First-aid rooms These are only required where the risk assessment shows that the organisation is operating in a high-risk industry. Many large premises may also have a room designated for first aid. The location of the room needs to be considered to allow easy access by paramedics when moving patients to a nearby ambulance. Typically, the contents of a first-aid room would be:

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❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑

Bed or couch with waterproof covering. Clean pillows and blankets. Suitable heating, ventilation and lighting. A lockable storage area for first-aid supplies. Desk and chair. Telephone. Sink with hot and cold water, soap and towels. Drinking water and cups. Foot-operated waste bin for sharps and medical waste. A record book for treatments and incidents.

The facility must be regularly cleaned, and specifically after each use. The floor and wall surfaces need to be washable. The room needs to be available at all times that there are people at work and there needs to be sufficient space in the room to allow suitable access to the patient by the first-aider and paramedics. First-aid rooms must not be used as temporary stores or changing rooms, and they must be checked regularly to prevent this.

20.10  Inspection and communication There are a range of activities that the FM needs to consider to ensure the first-aid policy is effectively implemented. In order to ensure that adequate and appropriate first-aid equipment and trained first-aiders or appointed persons are located in all workplaces throughout an organisation, it is recommended that the following activities are carried out: ❑❑ Undertake an assessment of current first-aid provision. ❑❑ Identify requirements to comply with the Regulations. ❑❑ Ensure that all members of staff are familiar with the first-aid arrangements in their

area.

❑❑ Display first-aid notices. ❑❑ Review and update documents and notices as required.

First-aid stocks A designated staff member, either a first-aider or an appointed person, ought to inspect the first-aid stocks on a regular basis and replace any stocks as necessary. In some cases, this task could be part of the daily routine of checks conducted by the security teams during patrols. Record keeping Everyone using first-aid stocks should complete a first-aid record form held within the first-aid box and also complete an accident report form, a copy of which should be sent to the relevant person in the organisation. This reporting system will assist in the identification of any work activities which may be causing ill health or injury. Subsequent alterations to the work activity may then be required to prevent further ill health or injury. Notification of first-aid arrangements In order for first-aid arrangements to operate effectively, it is important that they are known, understood and accepted by everyone at the workplace. The FM should be aware

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of who and where the first-aiders are and the locations of all first-aid boxes. It is important to place first-aid notices in prominent positions and to ensure that there are sufficient notices displayed in each area. Staff who have reading or language difficulties may require the provision of a relevant first-aid notice. All new members of staff, as part of their induction training, will need to be made aware of the first-aid provision and procedures in their work area.

20.11  Reporting of Injuries, Diseases and Dangerous Occurrences Regulations 2013 FMs who are in control of premises, known as the responsible person, have a duty to report to the HSE (or appropriate enforcing authority) some accidents and incidents at work under RIDDOR (the Reporting of Injuries, Diseases and Dangerous Occurrences Regulations 2013). There are various categories and types of incident that have to be reported. These are: Deaths and injuries caused by workplace accidents. Occupational diseases. Incidents involving carcinogens, mutagens or biological agents. Specified injuries to workers. Dangerous occurrences, which could include viruses (such as COVID-19) in the workplace. ❑❑ Gas incidents. ❑❑ Death or major injury. ❑❑ ❑❑ ❑❑ ❑❑ ❑❑

All deaths to workers and non-workers must be reported immediately. Major injuries are likely to involve emergency services and hospital admissions. Injuries classified as major include fractures (except toes, fingers and thumbs); amputation; dislocation of shoulder, knee, hip or spine; loss of sight (temporary or permanent); chemical or hot burn to an eye or any penetrating injury to an eye; injury from electrical shock or electrical burn; unconsciousness caused by asphyxia, a harmful substance or a biological agent; scalping injuries; and major acute illness. Crush injuries and injuries arising from working in enclosed spaces that need hospital treatment are also included, as are injuries caused by acts of violence towards a worker. If a non-worker (e.g. member of the public) is taken to hospital from the scene of an accident for treatment, then this must also be reported. There are also the following specific requirements: ❑❑ Over-3-day and over-7-day injury – Accidents resulting in over 3 days’ incapacitation

must be recorded, in accordance with Social Security (Claims and Payments) Regulations 1979, but not reported. An injury resulting in over 7 days’ incapacitation must be reported within 15 days of the period of injury. The 7 days include weekends and holidays. ❑❑ Disease – There are several diseases that have to be reported via form F2508A. These include carpal tunnel syndrome; severe cramp of the hand or forearm; occupational dermatitis; hand-arm vibration syndrome; occupational asthma; tendonitis or tenosynovitis of the hand or forearm; any occupational cancer; any disease attributed to an occupational exposure to a biological agent; infections such as hepatitis, legionellosis and leptospirosis; and some poisonings from heavy metals. ❑❑ Dangerous occurrence  –  These are significant near-misses and must be reported immediately and then followed up with the completed form within 10 days. There are

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27 categories listed by the HSE. Examples of occurrences are collapse; overturning or failure of lifts and lifting equipment; collapse of building or structures under construction; explosion or fire; electrical short-circuit or overload causing fire or explosion; and accidental release of a substance that could cause death, major injury or damage to a person’s health. ❑❑ Gas incidents – Gas incidents when people could die, lose consciousness or require hospitalisation are reportable by registered gas engineers (under the Gas Safe Register) when they identify any gas appliances or fittings that they consider to be dangerous. Faulty design, construction, installation, modification or servicing of a gas appliance or fitting may cause: ○○ an accidental leakage of gas; ○○ incomplete combustion of gas; or ○○ inadequate removal of products of the combustion of gas. Information about any incident must be reported online – details can be found on the HSE website. Organisations can only use the HSE telephone service to report fatal and major injuries.

20.12  Fit note The fit note is a statement of fitness for work. The fit note has replaced the sick note. Doctors will issue fit notes to individuals to provide evidence of the advice the doctor has given about the individual’s fitness for work. The fit note allows doctors to advise that individuals ‘may be fit for work’ taking into account the doctor’s advice or are ‘not fit for work’. Doctors use fit notes to record details of the functional effects of their patient’s condition, so that individuals and employers can consider ways to help the individual return to work. Fit notes can be hand-written or computer-generated and printed out. Fit notes should be issued by hospital doctors if someone is receiving treatment in hospital, or otherwise by local doctors. The fit note offers the option ‘may be fit for work taking account of the following advice’. When identifying this option, the doctor should consider fitness for work in general, not fitness for a specific job that the employee is doing. A doctor could suggest ways of helping an employee get back to work. This could result in considering: ❑❑ ❑❑ ❑❑ ❑❑

A phased return to work. Flexible working. Amended duties. Workplace adaptations.

The doctor can also provide general details of the functional effect of the individual’s condition. For many employees, work represents more than just their salary. Studies show that work is good for health, and prolonged sickness absence can produce its own set of problems, such as isolation, loss of confidence, mental health issues, de-skilling and social exclusion. Many organisations recognise that reducing levels of long-term ill health among their staff is about developing a partnership between the line manager, the individual, the doctor, occupational health and the HR department.

21

Asbestos

21.1 Introduction Asbestos is a natural mineral used primarily for insulation and fireproofing. There are six main types of asbestos: ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑

Chrysotile (white). Asbestos grunerite (brown). Crocidolite (blue). Anthophyllite (grey, green or white). Tremolite (brown, white, green, grey or transparent). Actinolite (clear, grey, green or white).

Although the types of asbestos are listed by their colours, they cannot be identified purely by their colour. At one time, only blue asbestos was deemed to be dangerous, but today, all types are banned in the UK and about 50 other countries. Asbestos-containing materials (ACMs) may be found in buildings, machinery and equipment in many places and in many forms. It is now illegal in the UK to use asbestos in new buildings and refurbishment; however, it is still mined and used elsewhere in the world. The latest UK Regulations (see Section 21.2) also state that second-hand asbestos materials are banned. It will, however, be found in buildings that were built or refurbished between 1945 and 1985. Asbestos was used extensively in buildings due to its thermal insulation properties. It is estimated that it is present in 50% of residential buildings and a higher percentage of school buildings in the UK. Asbestos is a problem when it becomes friable or damaged, releasing fibres into the air. When breathed in by people, these fibres damage the lung tissue. The body’s natural immune system cannot deal with the fibres. Asbestos may be found in these materials: ❑❑ Sprayed asbestos and asbestos loose packing, often found in fire breaks in ceiling voids

❑❑ ❑❑ ❑❑ ❑❑

or fire protection in ducts, panels, partitions, soffit boards and ceiling panels, and around structural steel work. Moulded or preformed lagging, often found around pipes and boilers. Asbestos insulating boards (AIBs) used for fire protection, thermal insulation, partitioning and ducts. Ceiling tiles. Millboard, paper and paper products used for insulation of electrical equipment, or facing on wood fibreboard.

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❑❑ Asbestos cement products made into corrugated sheets or flat sheets used for roofing

and wall cladding. Also, these products can be used to make gutters, rainwater pipes, and water tanks or cisterns. ❑❑ Certain texture coatings (such as Artex). ❑❑ Bitumen roof material. ❑❑ Vinyl or thermoplastic floor tiles.

Due to the variety of products that asbestos has been incorporated into, it is best to presume that it may be present, unless there is strong evidence to the contrary. In addition, asbestos has been used in industrial manufacturing, such as aircraft and avionics, vehicles and car components, and shipbuilding. Disturbing asbestos can release small fibres into the air. Inhaling these fibres can cause fatal diseases. Tiny fibres can pass into the lower parts of the lung and may work their way through the lung lining, potentially causing asbestosis or fibrosis (scarring) of the lungs, lung cancer, or mesothelioma (a cancer of the inner lining of the chest wall or abdominal cavities). These diseases are characterised by long latency periods, i.e. 10–60 years from exposure to asbestos to the onset of disease. Asbestos-related diseases are currently responsible for over 5000 deaths per year in Britain, and this number is likely to increase each year due to the long latency period. Medical checks and surveillance of those likely to have been exposed to fibres is important. FMs (facilities managers, or facilities management) who own, occupy, manage or have responsibilities for premises which may contain asbestos will have to: ❑❑ Carry out the legal duty to manage the risk from this material. ❑❑ Co-operate with whoever manages that risk (such as a landlord).

21.2 Regulations The Regulations have been updated several times. The current Regulations – the Control of Asbestos at Work Regulations 2012 (CAWR) – include requirements relating to notification of works, medicals and record keeping. The Regulations concern prohibition, control and licensing. The main parts are: ❑❑ ❑❑ ❑❑ ❑❑

Risk assessments. Licensed works and medical surveillance. Awareness training. Use of appropriate personal protective equipment (PPE).

The main purpose of the Regulations is to prevent and reduce asbestos exposure to building occupants, visitors, and maintenance and construction workers. The single control limit is 0.1 fibres/cm3. The short-term maximum limit is set at 0.6 fibres/cm3 for 10 minutes. Licensed contractors may work for 1 hour at a time up to a maximum of 2 hours to undertake short, non-continuous maintenance. Air monitoring and controls systems are required in the designated work area, with specific emergency procedures and notification to the Health and Safety Executive (HSE) prior to the commencement of works. Licensed contractors must pay for medical surveillance of their employees.

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Approved Codes of Practice (ACoPs) and several guidance notes support these Regulations: ❑❑ ACoP L143 (Managing and Working with Asbestos) supports Regulation 4 of CAWR.

This gives advice on how to comply with the new requirements, replacing L127.

❑❑ A guidance booklet, A Comprehensive Guide to Managing Asbestos (HSG227), is aimed

at duty holders in more complex organisations.

❑❑ A free leaflet, A Short Guide to Managing Asbestos in Premises (INDG223), is aimed at

those with smaller, less complex premises.

Regulation 4 imposes various practical duties on those who have control of buildings. The duty to manage requires those in control of premises to: ❑❑ Take reasonable steps to find asbestos in the premises and assess the condition of these

materials.

❑❑ Presume that materials do contain asbestos, unless there is strong evidence that they do

not.

❑❑ Prepare a record of the location and condition of these materials and assess the risk

from them.

❑❑ Prepare and implement a plan to manage those risks. ❑❑ Provide information on the location and condition of the materials to anyone who is

liable to work on or disturb them.

21.3  Asbestos management plan The purpose of this plan is to aid the effective management of any known or presumed ACMs in order to minimise the risk of exposure to asbestos fibres. An asbestos management plan recommends management actions based on the survey findings. These management actions may range from regular re-inspections, labelling confirmed or suspected asbestos products, and training provision for building users to a complete asbestos removal programme. An asbestos management plan typically includes asbestos assessment records, action plans, responsibilities, a communication plan and emergency procedures. The asbestos register and survey documentation will form the basis of a good asbestos management plan; however, the information contained within the survey documentation must be kept up to date and be made available to building users and contractors. The plan should consist of: ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑

Details of each ACM and an explanation of the risk assessment. Tables of priorities and timescales. Details of personnel and responsibilities. Details of training for employees and contractors. Procedures for preventing uncontrolled maintenance and building work. Procedures for ensuring information on ACMs is made available to those who need it. Arrangements for monitoring ACMs. Arrangements for updating and reviewing the management plan.

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21.4  Management options In terms of management duties, the FM has three main options: (i) Undertake a comprehensive survey and removal programme. This is both expensive and disruptive. The HSE does not recommend this course of action. (ii) Carry out a survey before any new building or maintenance work is required. This may be an expensive option, and also difficult to manage. (iii) Review property and premises to identify where asbestos is most likely to be present. Surveys would be carried out on those buildings or areas identified, and risks would be assessed on a case-by-case basis. In all the options above, the FM needs to appoint a specialist to conduct the surveys. It is also normal practice to have a retained specialist to deal with any incidents that may arise if ACMs are disturbed or become damaged by activities in the workplace.

21.5  Asbestos survey types The key requirement of Regulation 4 is that duty holders must ensure that a suitable and sufficient assessment of whether asbestos is liable to be present is carried out. This will include the need for an inspection or survey of the premises. The HSE guide HSG264 (Asbestos: The Survey Guide) replaces MDHS 100 (Methods for the Determination of Hazardous Substances). This guide is available on the HSE website. It gives details about competence, quality assurance, survey planning, carrying out surveys, the survey report and the duty holder’s use of the survey information. There are two survey types. These are known as the ‘management survey’ and the ‘refurbishment and demolition survey’. The type of survey required will vary over the lifespan of the premises and several may be needed over time. A management survey will be required during the normal occupation and use of the building to ensure continued management of the ACMs in situ. A refurbishment and demolition survey will be necessary when the building (or part of it) is to be upgraded, refurbished or demolished. It is probable that at larger premises a combination of the survey types will be appropriate. Management survey A management survey is the standard survey and is used to locate, as far as is reasonably practicable, the presence and extent of any suspect ACMs in the building which could be damaged or disturbed during normal occupancy. Management surveys will involve minor intrusive work and some disturbance. A management survey should include an assessment of the condition of the various ACMs and their ability to release fibres into the air if they are disturbed in some way. Management surveys should cover routine and simple maintenance work. The survey will usually involve sampling and analysis to confirm the presence or absence of ACMs. A management survey can also involve presuming the presence or absence of asbestos. A management survey can be completed using a combination of sampling ACMs and presuming ACMs or, indeed, just presuming. Any materials presumed to contain asbestos must also have their condition assessed (i.e. a material assessment).

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By presuming the presence of asbestos, the need for sampling and analysis can be deferred until a later time (e.g. before any work is carried out). However, this approach has implications for the management arrangements and is likely to have extra costs. Any work carried out on ‘presumed’ materials must involve appropriate contractors and work methods in compliance with CAWR, irrespective of whether the material is actually found to be an ACM or not. Alternatively, before any work starts, sampling and analysis can be undertaken to confirm or refute the presence of asbestos. The results will determine the work methods and contractors to be used. The ‘presumption’ approach also has several disadvantages: it is less rigorous, it can lead to constant obstructions and delays before work can start, and it can be more difficult to control. Refurbishment and demolition survey A refurbishment and demolition survey is needed before any refurbishment or demolition work is carried out. This type of survey is used to locate and describe, as far as is reasonably practicable, all ACMs in the area where the refurbishment work will take place or in the whole building if demolition is planned. The survey will be fully intrusive and involve destructive inspection, as necessary, to gain access to all areas, including those that may be difficult to reach. A refurbishment and demolition survey may also be required in maintenance and repair work – such as plant removal or dismantling. There is a specific requirement in the Regulations for all ACMs to be removed as far as is reasonably practicable before major refurbishment or final demolition. Removing ACMs is also appropriate in other smaller refurbishment projects that involve structural or layout changes to buildings (e.g. removal of partitions, walls or units). Aggressive inspection techniques will be needed to lift carpets and tiles; break through walls, ceilings, cladding and partitions; and open up floors. In these situations, controls should be put in place to prevent the spread of debris, which may include asbestos. Refurbishment and demolition surveys should only be conducted in unoccupied areas to minimise risks to the public or employees on the premises. Ideally, the building should not be in use and all furnishings should be removed. For minor refurbishment projects, the survey may be applicable to a smaller area such as a single room or even a part of a room. In these situations, there should be effective isolation of the survey area (e.g. full floor-to-ceiling partition), and furnishings should be removed as far as possible or protected using sheeting. The area that has been surveyed must be safe for reoccupation before people move back in. This will require a thorough visual inspection and, if appropriate (e.g. where there has been significant destruction), reassurance air sampling. Under no circumstances should staff remain in rooms or areas of buildings when intrusive sampling is performed. Issues to consider ❑❑ Check the scope of the area to be surveyed. ❑❑ Materials may be obscured or hidden by other items or cover finishes (e.g. paint, over-

boarding and so on).

❑❑ Asbestos may be hidden as part of the structure of the building and may not be visible

until the structure is dismantled at a later date.

❑❑ Debris from previous asbestos removal projects may be present in some areas, as the

guidelines of former legislation were of a lower standard. The techniques for removal have improved over time.

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Table 21.1  Asbestos material assessment Score

Assessment

10 and above

High risk, with significant potential to release fibres

7–9

Medium risk

5–6

Low risk

4 and below

Very low risk

❑❑ Full accessibility to areas may be limited due to occupants, location sensitivity, lack of

access hatches, height or confined spaces.

❑❑ Air must be monitored during the survey.

A risk assessment will include both a material assessment and a priority assessment. The risk assessment is carried out in two parts: the first is a material assessment, which assesses the condition of the material and the likelihood of it releasing fibres if disturbed; the second part is a priority assessment, which takes into account maintenance activities, likelihood of disturbance, human exposure potential, occupant activity and visitors. Algorithms are used to score each item, which results in an overall risk assessment score.

21.6  Asbestos material assessment algorithm The material assessment looks at the type and condition of the ACM and the ease with which it will release fibres if disturbed. Asbestos surveys will present the results or data using an algorithm based on four parameters: (i) Product type. (ii) Extent of damage or deterioration. (iii) Surface treatment. (iv) Asbestos type. Each of the parameters is scored and given a total from 2 to 12, as shown in Table 21.1.

21.7  Asbestos priority assessment The management priority assessment looks at the likelihood of someone disturbing the ACM. The management priority must be determined by carrying out a risk assessment, which is able to take into account factors such as: ❑❑ ❑❑ ❑❑ ❑❑ ❑❑

The location of the material and its extent. The use to which the location is put. The occupancy of the area. The activities carried out in the area. Maintenance activities and frequency.

Again, scores are awarded in the same way as for the material assessment, as shown in Table 21.2.

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Table 21.2  Management assessment Score

Assessment

>15

Very high priority

11–15

High priority

6–10

Medium priority

12 years)

Window frames, electrical components, plumbing components, insulating board, wall panels, roof tiles, carpet, soffits

The functional benefits provided usually outweigh the negative impacts of their production and end-oflife disposal

Ensure there is data on reuse and recycling rates Improve site separation operations Use better sorting and separation systems Request product design to include improved durability, compatibility and modularity Improve product information

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The growth in the amount of plastics produced is now greater than society’s ability to manage their end of life effectively. In the UK, 45% of plastic packaging is recycled and nonpackaging is thought to be recycled at a much lower rate. The BBC series Blue Planet II (2017) gave evidence of plastic ocean pollution and began a reinvigorated interest in dealing with plastic waste. The issue of discarded plastics and marine pollution is high on the political agenda and there is increasing pressure on business and government to work together to solve the problem. The United Nations Environment Programme report Single-Use Plastics: A Roadmap for Sustainability (2018) is aimed at policy makers who want to reduce their waste and increase their recycling of single-use plastics. The UK government’s 25-year Environment Plan (published in January 2018) states its ambition to eliminate avoidable plastic waste by the end of 2042. In response, over 80% of supermarkets have signed up to the UK Plastics Pact. This voluntary agreement seeks to: ❑❑ ❑❑ ❑❑ ❑❑

Eliminate unnecessary single-use packaging by 2025. Make all plastic packaging recyclable, reusable or compostable. Ensure that 70% of plastic packaging is reused, recycled or composted. Use 30% recycled content across all packaging.

FMs will need to implement new ways of dealing with plastic waste in their premises, and in particular single-use plastics, as occupiers and clients demand more action. Single-use plastic is defined as a product that is made wholly or partly of plastic and is typically intended to be used just once and/or for a short period of time before being disposed of. Examples of single-use plastic waste include plastic bags, plastic bottles and caps, cigarette butts and food containers (Styrofoam products).

35.13  Anaerobic digestion Anaerobic digestion (AD) is a process where plant and animal materials (biomass) are broken down by micro-organisms in an anaerobic vessel that ensures the absence of air. The AD process begins when biomass is put inside a sealed tank or digester. AD vessels tend to be very large and need huge quantities of biomass to be efficient. With the need to find new ways of managing waste, new AD plants are being installed in various communities to process food waste from homes, supermarkets and businesses. The outcome of the process is low-carbon energy (typically a gas), fertiliser and no landfill waste.

35.14  Waste to energy Waste-to-energy (WTE), or energy-from-waste (EfW), installations burn household and similar waste that remains after waste prevention and recycling. The post-recycled municipal solid waste is burnt at a high temperature to reduce its weight and volume, and to produce steam, hot water, heat and/or electricity. The engineering facilities used for these processes are based on the technologies of gasification, plasma gasification and pyrolysis. The electricity is fed into the National Grid and distributed to end-users. Depending on the local infrastructure, hot water can be sent to a nearby district heating (or cooling) network to heat (or cool) homes, hospitals, offices and so on, and steam can be used by nearby industry in its production processes.

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WTE is a hygienic method of treating waste, reducing its volume by about 90%. In a WTE plant no additional fuel is needed to maintain the combustion process. Additional fuel is only used for the start-up and shut-down phases. Modern WTE plants are clean and safe, meeting strict emissions limits set out in the European Waste Incineration Directive 2000.

35.15  Waste product database A waste product database should be used to log and monitor the various waste streams, the disposal quantities and the locations of each waste product in an organisation. All waste can be registered on an organisation’s database using the following criteria: ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑

Date. Quantity – mass or volume. Location. Classification. Reason for waste. Waste minimisation assessment. Disposal details. Documentation number.

It may not be practical to classify each source of waste on an item-by-item basis . In such cases, a split apportionment is used, based upon an approximate percentage distribution of the various types of waste within the product being discarded. Where specific details are known, the information is included as appropriate. The database provides the following information: ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑

Quantities per classification. Source of waste. Waste minimisation assessment. Disposal route. Disposal costs. Type/classification of waste. Dates of disposal/collection. Reason for waste. Document number.

Management reports can then be created through searches for information on the database. ❑❑ ❑❑ ❑❑ ❑❑

Per waste classification. Per site area, function or department. Per disposal rate. Per building.

35.16  Waste classification The majority of an organisation’s waste is either commercial or industrial, as controlled by the Controlled Waste Regulations 2012. The waste duty of care requires an organisation to

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classify the waste it produces before it is collected, disposed of or recovered. This helps to identify the controls that apply to the movement of the waste, to accurately complete waste documents and records, to identify suitably authorised waste management options, and to prevent harm to people and the environment. Waste can be: ❑❑ Hazardous. ❑❑ Non-hazardous. ❑❑ A combination of hazardous and non-hazardous components.

The Classification, Labelling and Packaging Regulation 2008 (CLP) is based on the United Nations’ Globally Harmonised System and its purpose is to ensure a high level of protection of health and the environment, as well as the free movement of substances, mixtures and articles. Once the hazardous properties of a substance or mixture have been identified, they need to be classified accordingly. Manufacturers, importers, downstream users and distributors, and producers must communicate the identified hazards to the others in the supply chain, including to consumers. This is done by labelling the substance or mixture in accordance with the CLP. Waste is classified in accordance with the CLP, to make it easier for everyone to understand the nature of the substance they are managing, storing, transporting or disposing. Waste classification codes, also known as the LoW (List of Waste) or EWC (European Waste Catalogue) codes for hazardous and non-hazardous waste, can be found in Technical Guidance WM3: Waste Classification  –  Guidance on the Classification and Assessment of Waste (2018). The LoW is a catalogue of all wastes divided into 20 chapters. A waste classification and assessment procedure involves a number of steps, as shown in Table 35.3. This classification identifies what assessment is needed before a LoW code can be assigned to the waste. There are over 800 six-digit codes grouped into four types, as shown in Table 35.4. FMs are advised to appoint a specialist waste contractor to ensure their waste is correctly identified. Table 35.6 shows a list of the persistent and more dangerous organic pollutants of which FMs must also be mindful. Some of the main properties of waste are shown in Table 35.5. Waste can have one or more of these properties. When waste is transported around the UK and EU, compliance with the Carriage of Dangerous Goods and Use of Transportable Pressure Equipment Regulations 2009 is required. Table 35.7 shows the classification used. Hazard warning diamonds are also used for clear identification. Table 35.3  Waste assessment procedure 1

Does the waste need to be classified? It may be covered by other specific legislation.

2

Identify the code or codes that may apply to the waste.

3

Identify the assessment needed to select the correct code.

4

Determine the chemical composition of the waste.

5

Identify whether the substances in the waste are ‘hazardous substances’ or ‘persistent organic pollutants’.

6

Assess the hazardous properties of the waste.

7

Assign a classification code and describe the classification code.

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Table 35.4  General waste codes 1

Mirror hazardous

Wastes that may be hazardous

2

Mirror non-hazardous

Wastes that may be non-hazardous

3

Absolute hazardous

Wastes that are always hazardous

4

Absolute non-hazardous

Wastes that are always non-hazardous

Table 35.5  Properties of hazardous waste Hazardous property

Description

HP1

Explosive

HP2

Oxidising

HP3

Flammable

HP4

Irritant

HP5

Specific target organ toxicity (STOT)/aspiration toxicity

HP6

Acute toxicity

HP7

Carcinogenic

HP8

Corrosive

HP9

Infectious

HP10

Toxic for reproduction

HP11

Mutagenic

HP12

Produces toxic gases in contact with water, air or acid

HP13

Sensitising

HP14

Ecotoxic

HP15

Capable of exhibiting a hazardous property listed above not directly displayed by the original waste

Table 35.6  Persistent organic pollutants Aldrin Chlordane Chlordecone DDT (1,1,1-trichloro-2,2-bis(4-chlorophenyl)ethane) Dibenzofurans (PCDD/PCDF) Dieldrin Endrin Heptachlor Hexabromobiphenyl Hexachlorocyclohexanes (including lindane) Hexachlorobenzene Mirex Pentachlorobenzene Polychlorinated biphenyls Polychlorinated dibenzo-p-dioxins Toxaphene

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Table 35.7  Classification of waste substances during transport Class 1

Explosives subject to the Classification and Labelling of Explosives Regulations 1983

Class 2

Gases, subdivided as: 2.1 flammable 2.2 non-flammable, non-toxic and non-corrosive 2.3 toxic poisonous (including substances which are poisonous via their corrosive effect)

Class 3

Flammable liquids, liquids with a flashpoint under 61 °C. Between 35 and 61 °C, the substance must also be combustible in order to be classified as a flammable liquid under the Carriage of Dangerous Goods and Use of Transportable Pressure Equipment Regulations 2009 and the Classification, Labelling and Packaging of Substances and Mixtures Regulation 2008 (CLP)

Class 4

4.1 Flammable solids, readily combustible or self-reactive substances, certain desensitised explosives 4.2 Substances liable to spontaneous combustion 4.3 Substances which on contact with water or damp air give off flammable gas in dangerous quantities

Class 5

5.1 Oxidising substances 5.2 Organic peroxides

Class 6

6.1 Poisonous (toxic) substances that are liable to cause death or serious injury to human health if inhaled, ingested or absorbed through the skin 6.2 Infectious substances. Also subject to various official recommendations, e.g. Health Services Advisory Committee guidance

Class 7

Radioactive materials subject to the Radioactive Substances (Carriage by Road) Regulations 1974, as amended

Class 8

Corrosive substances which by chemical action will cause severe damage to living tissue or will materially damage or destroy the mode of transport in case of leakage

Class 9

Other dangerous substances, miscellaneous substances which have been found to present a danger not covered by other classes, e.g. asbestos

The Classification, Labelling and Packaging of Substances and Mixtures Regulation 2008 introduced a new classification and labelling system for hazardous chemicals. The pictograms now in use are aligned with the UN’s Globally Harmonized System. A hazard pictogram is shown on a label that includes a warning symbol to provide information about the damage a particular substance or mixture can cause: ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑

Oxidising. Health hazard/hazardous to the ozone layer. Flammable. Explosive. Corrosive. Acute toxic. Gas under pressure. Serious health hazard. Hazard to the environment.

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35.17  Waste management audits Objectives should be agreed before a waste management audit commences. An audit report should be produced to clearly and constructively benchmark current activities and make suitable environmental recommendations together with life-cycle costings where appropriate. A senior representative of the process or operation should be allocated to work with the audit team to ensure that all options are evaluated. Audits should review the following: ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑

Company and departmental policies. Communications and training. Raw materials procurement, types and alternatives. Energy efficiency, consumption and use. Specific processes, alternative technologies and effectiveness. Wastes and discharges. Transport and distribution systems. Accidents and emergencies. The output of the audit will: ○○ Demonstrate compliance with legislation. ○○ Demonstrate efficiency of business activities. ○○ Predict likely future controls. ○○ Benchmark achievements with good practice. ○○ Determine the means to maintain environmental and commercial competitiveness. ○○ Establish confidence among employees and customers, and enhance the public image of the organisation.

35.18 Targets Waste management targets are set either by legislation or by the practical limits established by enforcing agents. Compliance with these targets should mitigate against the chance of prosecution by the enforcement agencies. Various limits exist for the disposal of waste products, all of which are governed by legislation such as the Clean Air Act 1956, the Environmental Protection Act 1990, the Waste Management Licensing Regulations 1994, the Environment Act 1995, the Hazardous Waste Regulations 2005, trade effluent consents and various water industry regulations. The legislation is enforced by precedent law (i.e. previous case law) and does not simply list the contaminant limits which products must achieve. Legislation uses phrases such as: ‘release of any substance from prescribed processes into any environmental medium’ ‘capable (by reason of the quantity or concentrations involved) of causing harm to man or any other living organisms supported by the environment’ ‘take all reasonable precautions and exercise all due diligence to avoid’ It is therefore necessary to interpret safe limits which should hopefully avoid prosecution. Many limits are stipulated by specific consents agreed with local regulatory authorities but even these do not necessarily guarantee that future prosecutions will not arise. Waste

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disposal regulations are strengthening (driven mainly from Europe) and practical limits must be set which will minimise the risk of prosecution. Many limits are set for waste streams, including: ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑

NOx (nitrogen oxide and nitrogen dioxide) emission levels. CO2 (carbon dioxide) emission levels. CO (carbon monoxide) emission levels. Packaging recycling, recovery and construction. Reductions in how much controlled waste is sent to landfill sites and the amount they can take. Recycling strategies. Waste minimisation. Water quality. Foul waste. Water quality.

35.19 Landfill Landfill is the disposal of waste into or onto land. Today, landfill sites are constructed and operated to strict technical standards in order to reduce environmental effects. Most types of waste may be disposed of via landfill; however the EU Landfill Directive 1999 requires that landfill sites must now be classified as hazardous, non-hazardous or inert. The Landfill Directive is encouraging reduction of the amount of waste that goes to landfill in order to recover value from waste and develop more sustainable waste management. When waste is received at a landfill, it is weighed and checked to ensure it is compliant with its landfill operating permit. It is then tipped into the landfill, compacted and covered to prevent odour, litter and pest infestations. The waste is then gradually decomposed by microbes. This decomposition process creates leachates and gas, which are both taken out of the landfill through a system of pipes mixed with rainwater. The leachates are then usually taken for treatment, while the gas, mainly a mix of carbon dioxide and methane, may be burnt off or used in an on-site energy generation plant which contributes energy to the National Grid. When a landfill has reached its maximum capacity, it is completely covered with an engineered cap (e.g. using clay) and the area is restored using soils or other covering materials so that the site can be used in the future for agriculture, amenities or nature conservation. Landfill regulations have changed the way waste is managed. All waste must now be treated prior to landfill. Treatment is intended to encourage businesses and users to recycle more and reduce the impact of the waste that may be landfilled. There were targets to reduce the volume of biodegradable waste going to landfill by 2020 (35% of 1995 levels). Treatment must meet these three criteria: (i) It must be a physical, thermal, chemical or biological process including sorting. (ii) It must change the characteristics of the waste. (iii) It must do so in order to achieve one or more of the following: ⚬ reduce its volume; ⚬ reduce its hazardous nature; ⚬ facilitate its handling; ⚬ enhance its recovery.

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35.20 Legislation Organisations operating in the UK are required to meet certain legislative requirements with respect to waste issues. From 1 April 1996, the Environment Agency became responsible for regulation. The Agency combines the activities previously carried out by the National Rivers Authority, Her Majesty’s Inspectorate of Pollution and local waste authorities. This ensures an integrated and consistent approach to water, air and land pollution. The Scottish Environment Protection Agency is responsible for regulation in Scotland. The Integrated Pollution Prevention Control European Directive 2008 encourages business and industry to reduce the impact of their activities on the environment. Major industries such as cement manufacturing, chemical plants, and food and drink manufacturers are covered by this legislation. Hazardous Waste Regulations 2005 The Hazardous Waste Regulations 2005 cover any waste that is harmful to human life, harmful to the environment or difficult to handle. Such waste includes: ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑

Paints, inks and resins. Oil filters. Fluorescent tubes. Contaminated packaging residues. Detergents containing hazardous substances. Batteries and discarded electrical equipment, such as TVs, computer monitors, fridges and freezers.

An additional 200 types of waste have been added to the listings, including sodium lights, oils, chemical waste and solvents. The Regulations require a process based on the principle of ‘cradle to grave’ with a full audit document trail of transfer and consignment notes. There is a requirement to ensure greater segregation, pre-treatment and categorisation of waste by the producer. All hazardous waste must be pre-treated before it can be sent to landfill. Standards known as the Waste Acceptance Criteria control the type of waste that can be sent to landfill. Premises that produce more than 200 kg per year of hazardous waste must be registered with the Environment Agency, and this registration must be renewed on an annual basis. Registration, Evaluation, Authorisation and Restriction of Chemicals (REACH) Enforcement Regulations 2008 The Registration, Evaluation, Authorisation and Restriction of Chemicals (REACH) Enforcement Regulations 2008 are concerned with the safety of chemicals and are aimed at protecting human health and the environment. They require appropriate safety information to be available throughout the supply chain, starting with chemical manufacturers. All substances that are either manufactured or imported must be registered with the European Chemicals Agency. Evaluation is carried out on the testing and the properties of the substance, which may lead to restrictions in manufacture, supply or use, or changes in classification or labelling. Carcinogenic, mutagenic and toxic substances require risk management and control procedures.

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Waste Batteries and Accumulators Regulations 2009 The Waste Batteries and Accumulators Regulations 2009 require that these products are to be recycled. These products are banned from landfill and incineration. The FM must arrange a suitable waste management system to comply. The legislation requires outlets to offer a recycling point for used batteries. All batteries contain harmful chemicals and metals, such as lead, mercury and lithium, which should be disposed of carefully. Targets to collect all portable batteries as a percentage of the volume in use were set at 45% by 2016, but the UK struggled to meet this level until 2018, when the target was achieved. Plans to create specialist plant in the UK to handle this waste are in hand, to prevent the shipping of battery waste overseas. End-of-Life Vehicles Regulations 2010 The End-of-Life Vehicles Regulations 2010 amend earlier regulations from 2005; they affect the storage and treatment of waste motor vehicles. The storage site must have impermeable surfaces for the appropriate areas and provide spillage-collection facilities, decanters and cleanser-degreasers. There must also be provision for the treatment of water (including rainwater). This requires producers, manufacturers and importers of vehicles (up to 3.75 tonnes of unladen weight) to provide free take-back of vehicles for safe and appropriate waste treatment. Waste motor vehicles must be depolluted  –  this may involve stripping components and materials to reduce any adverse impact on the environment; having hazardous components and materials removed and segregated to avoid contaminating any part of the vehicle that is subsequently to be shredded; and storing the components in a suitable way for reuse, recovery or recycling. Environmental Civil Sanctions Order 2010 The Environmental Civil Sanctions Order 2010 permits local enforcement agents to levy fines and penalties for minor lapses or breaches of waste management legislation. Notices of enforcement with appropriate compliance measures and restoration of waste can be issued to the offending party. Producer Responsibility Obligations (Packaging Waste) Regulations 2010 The Producer Responsibility Obligations (Packaging Waste) Regulations 2010 amend the earlier 2007 regulations. They place a legal obligation on businesses which make or use packaging to ensure that their packaging is recovered and recycled. Businesses with an annual turnover of more than £2 million and that handle more than 50 tonnes of packaging a year are required to meet the producer obligations under the packaging regulations. Organisations also have recycling obligations arising from the packaging used in an activity or supplied to others and if packaging is imported. Each year, more than 10 million tonnes of packaging waste arises in the UK from industry, commerce and households, with more than 6 million tonnes of packing waste being recovered. UK estimates of recovery and recycling rates for packaging materials are calculated for reporting against material-specific targets set by EC Directive 94/62/EC on packaging and packaging waste. The Packaging and Packaging Waste Directive (as amended) set minimum recovery targets (60%) and recycling targets (55%) for packaging waste, to be met by 31 December 2008, as well as material-specific recycling targets. These were 60% for glass, 60% for paper and cardboard, 50% for metals, 22.5% for plastics and 15% for wood. Since

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2008, member states have been obliged to continue to meet these minimum targets, but they have the freedom to set higher domestic targets if they so choose. Landfill Tax Regulations and Landfill Regulations 2012 The Landfill Tax Regulations and Landfill Regulations 2012 impose restrictions on the waste that can go to landfill and determine the levy to be charged per tonne (see Section 6.32). Waste Regulations 2012 The Waste Regulations 2012 relate to the separate collection of waste. They imposed a duty on establishments to separately collect waste paper, metal, plastic and glass from 1 January 2015. They also imposed a duty on waste collection authorities to arrange separate waste collections. This is intended to ensure that waste undergoes recovery operations to facilitate or improve recovery. Waste Electrical and Electronic Equipment Regulations 2013 The Waste Electrical and Electronic Equipment Regulations 2016 concern the safe and controlled disposal of electrical and electronic components that run on less than 1000 V AC (or 1500 V DC) electrical supplies. This includes: ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑

Large and small household appliances. IT and telecommunications equipment. TVs and other entertainment systems, such as games consoles. Lighting, electrical components and electronic tools. Toys, leisure and sports equipment. Automatic dispensers. Medical devices. Monitoring and control equipment.

Single Use Carrier Bags Charges Order 2015 Several measures have been put in place to encourage the general public to consider waste as a resource and adopt a recycle-and-reuse culture. For example, the Welsh government introduced a 5p charge for single-use carrier bags in 2011. In October 2015, the UK government introduced a 5p charge for plastic bags handed out by large retailers in England; most now sell ‘bag-for-life’ stronger plastic bags. These policies have succeeded in encouraging many people to reuse their use of shopping bags or use paper or canvas instead, and so reduce waste and littering. There are some concerns that plastic bags for life contain more plastic, are heavier and so may have a greater negative environmental impact that single-use plastic bags. More data is needed to track changes in behaviour and environmental benefits. Some organisations have increased their charges for shopping bags in advance of mandatory change in April 2021, when the rate will be 10p in all UK shops.

36

Catering and Hospitality Services

36.1 Introduction The UK contract catering industry is a typical oligopoly. That is to say, it is dominated by a small number of very large organisations (five) – Compass Group, Sodexo, Aramark, Elior (Avenance) and Westbury Street Holdings – with a very large number (over 3600) of significantly smaller companies. These large catering companies operate thousands of contracts, whereas a medium-sized contractor operates up to 300 contracts. The majority of contractors operate under 50 sites each. Given this large number of catering contractors, it is inevitable that the market is well served by national, regional and local operators, as well as specialist operators working in a particular niche, such as directors’ dining or schools. The FM (facilities manager, or facilities management) therefore has to select the most appropriate contractor that suits the organisation’s catering strategy, remembering that ‘big is not necessarily best’. The large and diverse catering marketplace gives the purchaser a huge choice. However, it is important to carry out some pre-qualification checks to ensure that only companies that are experienced in catering for the specific needs of the client organisation, whether this is a café, vending or client dining rooms, are invited to tender. Additionally, each contractor must be able to support the geographical location of the client site satisfactorily. Typical catering services required by an organisation include: ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑

Vending. Staff restaurant. Fine dining. Staff café. Mobile catering services. Hospitality. Retail. Barbecues. Events. Restaurants and cafés open to the public – such as in shopping centres, retail organisations and multi-tenanted premises.

36.2  Catering trends It is important to monitor trends in the catering industry. The catering offer must be ­attractive – ethically, aesthetically and financially. This is the service managed by FMs that Facilities Manager’s Desk Reference, Third Edition. Jane M. Wiggins. © 2021 John Wiley & Sons Ltd. Published 2021 by John Wiley & Sons Ltd. 556

Catering and Hospitality Services  557

Eating out

• More eating out than cooking at home • No longer a special treat

Age Profile

• Age trends; spend per person/day • Demographics of locality

Generation trends

Cuisine types

Food to go

People power

Competition

Ethics

• Most vegans under 40 years of age • Food and health awareness; smaller portions; anti-oxidants; natural foods; less additives • BBQ / Mexican/Brazilian/Vietnam/Thai/vegan/vegetarian • What next for world food themes? Traditional restaurants under pressure to modernise • Street food; pop-up; food courts re-invented • Fresher, hotter, faster • Staff needs; management calibre; living wage; social enterprise partnerships • Training; food knowledge; hygiene; energy use; zero waste; zero plastic • Casual dining is tough market; threats from Uber/Deliveroo/AmazonFresh • Decline of pubs versus rise of coffee shops – demand for better coffee and better spaces • Wow or worthy; root to flowers – whole plant use; keep-cup initiatives; zero food waste • Rising number of vetegarian and vegan consumers; one-planet plate; meat-free days

Figure 36.1  Trends in catering

involves the most financial and commercial skill. In most organisations, staff and visitors will personally be paying for the food and drinks, and so they will go elsewhere if the offer is not to their liking. In contrast, an occupant will rarely put their hand in their own pocket for cleaning, maintenance and security services in their workplace. Trends in catering are monitored yearly – a good caterer will adapt and change their offer to suit changing demands (see Figure 36.1). As a result, some business and industry contract caterers have adopted a range of new services, such as providing nutrition advice and guidance on meal preparation for employees, pre-order take-outs at the end of the day, and free leftover food at end of the day. FM also needs to consider supporting subsidised healthy options, meat-free days, zero food waste, zero-plastic consumables, energy-efficient cooking equipment, tracking and reduction of the food miles of all produce used on site, and the use of social enterprises. These could be new objectives in an updated catering strategy.

36.3  Catering strategy The most crucial question the organisation must ask itself is why provide catering for staff at all? In order to get the best value from the catering service and therefore catering contractor, the organisation must be clear why it is providing catering to its staff. As with nearly all aspects of running a business, if there is a clear policy, the subsequent decisions further on in the process are made a lot easier. The reasons for providing catering are many and varied. For instance, some companies provide a main meal at no cost to their employees as part of their remuneration package. In this case, it may be that the provision of a catering service is seen as a greater value than the

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cash alternative of a higher salary. Another company might provide a service because it is located in an isolated area and does not wish staff to leave the premises. Some companies use dining and hospitality services as a business development and customer relationship tool and maintain very high-standard dining rooms for client entertaining.

36.4  Catering objectives Once there is a clear picture of why the company is providing a catering service, a more detailed scenario of exactly how it is to be operated can be formed. For example, the following questions can be used to build up a picture of the service a company wishes to provide. Range and style of services ❑❑ Is there to be a full-service restaurant or a pre-prepared and made-to-order sandwich ❑❑ ❑❑ ❑❑ ❑❑ ❑❑

service? What is the range of food to be provided – hot or cold or both? Is there a comprehensive range of hospitality services required? How are beverages to be supplied (vended, over the counter or by trolley service)? What dietary needs are likely (vegan, gluten free, dairy intolerant and so on)? What information, education and guidance is needed to help customers make good food and drink choices?

Tariff policies ❑❑ Is the tariff designed to return a gross profit or to recover just the cost of the food and

VAT, or will the food be free issue?

❑❑ If a gross profit is to be generated, what level is appropriate or achievable? ❑❑ What effect would different gross profit targets have on the tariff across a range of

items?

❑❑ If the service is free issue, what is the daily allowance per person? ❑❑ Are the hospitality service costs absorbed centrally or recharged to individual cost cen-

tres? If they are recharged, which costs does this apply to?

Financial objectives The financial outcome of the catering service, be it a subsidy or a profit, will be driven by the range of services and the tariff policy adopted. For example, if a policy of free-issue meals is adopted, the cost to the organisation will be considerably higher. Conversely, a gross profit will reduce the subsidy. If there has not previously been a catering service on the site, the specification can be formed from scratch. If it is an existing service, each area can be reviewed in light of new business objectives.

36.5  In-house catering operation While the majority of ‘food at work’ operations in the UK are operated by business and industry catering contractor specialists, there are some organisations that still directly

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employ their own catering staff. These organisations may choose this option for financial or other strategic reasons. The greater proportion of self-operation is within the education and leisure sector. To manage and operate a catering operation directly, the client will require the following: ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑

A suitably qualified and experienced catering manager with a team of qualified staff. A reporting structure and accountability for operations to the FM. Supplier accreditation and purchasing systems. Accounts and auditing systems. Payroll administration (increased headcount). Knowledge of the extensive food safety legislation, including registration of premises and services with the local Environmental Health Office.

Setting up these systems to suit the unique needs of a catering operation can be time- and resource-consuming. The main advantage of an in-house operation is that the client retains direct control over the image and style of catering provided. Any profit made from catering outlets is also retained by the client organisation. The main disadvantage of an in-house operation is that the client is directly responsible for all capital investment and any operational losses incurred. The risks of the operation remain with the client. Additionally, the catering department can be relatively isolated from other catering operations and management, which can lead to a lack of the creative and qualitative input necessary to keep the food offers up to date and maintain customer interest.

36.6  Contracted-out catering services When selecting a catering contractor, it is necessary to carry out some background investigations relating to potential caterers. Typical questions include: Whom do they currently cater for? What is the headquarters support like? Is the business growing or in decline? Is it growing so fast that it would affect their support for their new customers or for their existing customers? ❑❑ Have there been any significant developments or reorganisations in the company recently? ❑❑ What is the extent of the catering expertise, and how does the company keep its staff up to date in terms of their qualifications and skills? ❑❑ Is the company privately owned or part of a bigger conglomerate? ❑❑ ❑❑ ❑❑ ❑❑

Networking among fellow FMs can give a useful insight into the nature of the contractors and a list of those that will suit a company’s catering profile. Another valuable source of information is a catering consultant. A list of reputable consultancies can be obtained from the Institute of Hospitality or Foodservice Consultants Society International. The main advantages of contracting out a catering service are as follows: ❑❑ Financial risk can be the responsibility of the caterer. (It must be noted that where a

caterer does take full financial responsibility, if the operation is not profitable, the caterer will withdraw from the contract, thus reverting the ultimate risk to the client.)

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❑❑ The contractor can be a source of capital investment, which is generally amortised

❑❑ ❑❑ ❑❑ ❑❑ ❑❑

through the profit and loss account over a number of mutually agreed years. (It should be noted that this finance is provided in the form of a loan and its size will have a direct effect on the subsidy.) The food offer and service are kept up to date (depending on the supplier chosen). The contractor provides employee training, motivation, promotion and crosspollination of ideas from other operations. The responsibility of administering the accounts (including recruitment, payroll and financial accounting) is removed from the client. The client’s headcount is reduced. Specialist catering sector control systems, account packages and reports will be made available.

The main disadvantages of outsourcing are as follows: ❑❑ Control, in the form of food style, service opening times, staffing levels and tariffs, may

have to be compromised depending upon the level of financial responsibility the client wishes the contractor to take. ❑❑ The contractor will require income from the operation either in the form of net profit or a management fee, thus increasing the cost to the client. ❑❑ Where it takes complete financial responsibility, a contractor will withdraw from a contract if losses are incurred, thus leaving an impaired operating infrastructure.

36.7  Contract types A basic knowledge of how catering contractors generate income helps in the understanding of the usual catering contracts in operation. Catering contracts are legal agreements between the client and the caterer to supply food and refreshments in the workplace for a specified period. There are many types of contract, each with advantages and disadvantages. These are: ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑

Cost plus. Cost plus guarantee. Fixed price/cost/subsidy. Fixed cost per head/user/employee. Nil subsidy or cost. Concession. Royalty.

The contract should be fair to both parties and capable of providing a realistic incentive to both parties. The type of contract chosen will reflect the requirements of the organisation, such as catering policy, location, employee expectations and working environment. Generally, contractors earn income in two primary ways: via a management fee and/or retained supplier discounts. Typically, their earnings from these two sources will range from 2.5% to 10% of contract turnover, depending on the size of the contract. (Contract turnover in this case is calculated as subsidy less management fee plus cash sales.) A management fee is the most common way for a contractor to earn income. Usually, a sum is agreed annually between the client and contractor and is charged on the monthly catering trading account.

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Contractors can also earn revenue from supplier discounts. Catering contractors negotiate with suppliers to deliver goods to their contract sites. The price will be based on the cost of the goods to the supplier plus the cost of delivery, associated administration and profit. In addition, there will be a mark-up to cover ‘discounts’ returned to the catering contractor. They are variously known as drop discounts, volume-related discounts, royalties, loyalty bonus, overriding discounts and retained rebates. The earnings from supplier discounts can be considerable – up to 50% of the volume of some types of produce. However, as client companies have become more aware of this practice, there has been a trend towards sharing some, if not all, of the income with clients or moving to ‘net into unit’ purchasing. As the name suggests, net into unit purchasing is when produce is invoiced at catering-site level at the lowest price without any margin for return to the catering contractor. This transparency improves the trust and relationship between catering contractor and client. It is important to be aware that contractors need to earn a minimum amount from a contract, so if their income from supplier discounts is diminished it will generally necessitate an increase in their management fee. However, the advantage of having income shown as management fee is that it is transparent and comparable between contractors, unlike that earned from discounts. This is useful for comparison when in a tender situation. Cost-plus contracts Under this arrangement, the client pays all the operating costs, such as food, labour and sundries, plus, as the name suggests, a management fee to the contractor to supply and process these materials and skills, as shown in Table 36.1. Any cash received is processed by the contractor and credited against the costs. The subsidy in the example case is £280,000 per annum. However, the total of the subsidy depends on the tariff charged for the food. Indeed, some companies issue the food for free to their staff. If this were the case in Table 36.1, the subsidy would be £780,000 per annum. The catering budget is estimated by the caterer, and it will provide the service according to the budget. If the budget is exceeded, then the client pays the difference; however, if savings are made, then these are passed on to the client. The subsidy can vary on a month-tomonth basis. It can be seen that the element of risk in terms of cost rests firmly with the client. As a consequence of paying the costs and shouldering the risk, the client also retains control over elements such as service levels and menu tariff. Cost plus guarantee contracts In this type of contract, certain budget lines are guaranteed – typically labour costs, gross profit percentage or sundries. The advantage of the contract is that increased sales will Table 36.1  Costs of catering in a cost-plus contract (in £s) Cost of food

400,000

Cost of labour

300,000

Cost of sundry items

30,000

Cost of fee

50,000

Total

780,000

Less sales of food

500,000

Difference = subsidy

280,000

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decrease the subsidy from the client. However, the client does not usually benefit from any savings in the catering budget. A service level agreement (SLA) will be required so that the caterer’s performance can be measured. An incentivised management fee paid on performance targets can be included; this may also require the caterer to put their management fee at risk for non-performance. Fixed-price contracts A fixed-price contract is at the other end of the spectrum to a ‘cost-plus’ contract. Its most basic form is where an annual cost of catering is agreed between parties at the commencement of the contract. The client pays equal monthly instalments to the contractor for the term of the contract. It is then up to the contractor to provide the service and generate an element of profit within the total cost agreed. The client does not pay for overspends and knows the exact subsidy each month. An example of this is given in Table 36.2. In this case, the client pays the catering contractor £52,500 per month (£630,000 divided by 12 months). Any profit generated would be retained by the contractor. The element of risk rests with the contractor and as such it may retain a high degree of control over the menu range, tariff, service levels and opening times after it has been awarded the contract. It is likely that the management fee will be higher to compensate for the higher risks. Hybrid contracts The structure of this contract is based on the ‘cost-plus’ model. The earning potential of the contractor can increase or decrease based on its performance in both financial elements and qualitative elements. Financial elements include: ❑❑ Sales volumes. ❑❑ Gross profit targets. ❑❑ Labour and sundry costs.

And qualitative elements include: ❑❑ ❑❑ ❑❑ ❑❑

Menu range. Service levels. Staff appearance. Health and safety standards.

An agreed percentage of the base management fee is ‘put at risk’. This is usually between 25% and 50%. Each of the elements listed earlier is weighted according to the importance Table 36.2  Costs of catering in a fixed-price contract (in £s) Cost of food

400,000

Cost of labour

200,000

Cost of sundry items

30,000

Total fixed cost

630,000

Less sales of food

670,000

Difference = profit to contractor

40,000

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attached to that element. Each is scored and the result is then reconciled, usually once a quarter, and the fee adjusted upwards or downwards accordingly. Nil subsidy contracts The method of calculating a subsidy is illustrated earlier. ‘Nil subsidy’ is where all overhead costs – such as food, labour, sundries and contractor earnings – are recovered by the gross profit earned from sales. On occasion the caterer is also required to recover the rent, rates and energy costs. With no cost to the client, the caterer takes all the risk. This sounds like the perfect solution for many client organisations. However, before committing to this route for a catering strategy, it is worth understanding that there are certain prerequisites for this type of operation to be successful. Specifically: ❑❑ A high volume of customers is needed to generate a high volume of sales. ❑❑ A tariff which achieves a high gross profit, usually controlled by the caterer, is required.

This has to be of sufficient mark-up to cover all the raw material, labour and sundry costs.

❑❑ A style of catering service which minimises the labour costs will be chosen by the

contractor.

❑❑ Opening hours, service levels and type of food offer will be determined by the caterer. ❑❑ The profit and loss account is not submitted to the client.

Often a nil subsidy contract operates on the fixed-price model, where the fixed price is based on the client not incurring any subsidy. Concession contracts Similar to the nil subsidy, this type of contract gives a percentage return (sales) to the client each month. The caterer provides monthly sales data to the client. These contracts are more typical in high-footfall premises and in retail and campus environments. Royalty contracts This type of catering contract may be suitable for large-turnover operations as part of a long-term catering strategy. It will provide the client with a guaranteed percentage return on sales each month. The risks of food costs and stock are transferred to the caterer. Both parties in the contract are incentivised.

36.8  Catering specification An example of a specification is given in Figure 36.2. It is recommended that the document be in the form of an output rather than an input specification. The reason for this is twofold, namely: ❑❑ It specifies each service required without pre-empting the actual food or service offer. ❑❑ It elicits bespoke responses from the contractors which identify how they would

approach the contract.

Ultimately, this arrangement will help to differentiate between the contractors and facilitate a decision as to which should be awarded the contract. Figure 36.3 shows a lunch service specification in a simple output format.

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The detail of each service should include information such as: ❑❑ Name of service.

Management of agreed on site catering and associated facilities in accordance with relevant legislation and the Food and Hygiene Act. Contractor is responsible for: • The provision and maintenance of all catering service vehicles. • The provision of uniforms for staff. • Obtaining all necessary licences and certificates for the operation of catering services. • Marketing all catering services to the staff. • Initiatives, for example themed restaurant events, to increase and maintain the customer base. • Cleaning all catering facilities including, but not limited to, restaurants, kitchens, retail outlets and vehicles. • The management of the maintenance and the provision of scheduled maintenance of the equipment. Client is responsible for the provision and maintenance of: • Premises. • Restaurant furniture. • Restaurant serving counters. • Kitchen furniture including equipment excluding light equipment. • Relevant utilities to the premises. • The provision of light equipment (including, but not limited to, crockery, cutlery, serving trays, etc.). Prices charged for all food and drink are to be agreed with the client representative, except for hospitality meals, beverages and snacks, which shall be billed as tariff services in accordance with the tariff price list agreed between client and contractor. The typical range of food provided by each catering service is illustrated in the attached schedule. The contractor will maintain equivalence with this range. Management of on-site restaurant facilities dispensing a choice of hot and cold meals, snacks and drinks, in accordance with restaurant opening hours. Provision of mobile catering facilities in accordance with hours of operation stated. Provision of hospitality services providing hot and cold buffet meals, beverages and snacks. Provision of retail outlets, dispensing confectionery, newspapers, hot and cold beverages and other miscellaneous items, in accordance with normal working opening hours. Management of vending. Subject to the prior agreement of the client representative, the contractor may provide vending machines at locations on sites as per schedule. Management of bottled water. The provision of bottled water and cups, dispensers and their maintenance will be billed as a demand service to the customer department. The range of food and drink offered by the hospitality service and the restaurant service at each site are shown in the attached schedule. The range must remain comparable with that shown at all times and may only be reduced with the prior permission of the client representative. Special event catering, outside the scope of the hospitality service, is a demand service.

Figure 36.2  Example catering specification

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Monday to Friday Shift A Shift B Shift C

12 noon to 1.30 p.m.

12 noon to 12.30 p.m. 12.30 p.m. to 1 p.m. 1 p.m. to 1.30 p.m.

50 employees 60 employees 70 employees

Menu to include the following as a minimum: 2 hot main courses 2 vegetables 1 potato dish A selection of four salad entrees A daily selection of four plain and two composite salads A aelection of six pre-prepared sandwiches and filled rolls 1 hot sweet 1 cold sweet Soft drinks, confectionery and proprietary snacks Please propose a tariff that will recover the cost of food, VAT and 30% gross profit

Figure 36.3  Lunch service

❑❑ ❑❑ ❑❑ ❑❑ ❑❑

Times required. Potential customer numbers. Menu range. Service standard required. Tariff policy.

The specification process will need to be repeated for all the services. This could include services for the breakfast, lunch, supper and night restaurant; meeting rooms; vending (beverage, snack, food and soft drinks); and client, directors’ and managers’ dining rooms. The drafting of the current service specification is usually a good time to review whether the organisation wishes to continue a service at all or in a different format. Two examples could be as follows: ❑❑ A dining room where meals have been silver-served and the wish is to move to the

more in-vogue plated service.

❑❑ The introduction of a made-to-order sandwich bar instead of pre-prepared bought-in

sandwiches.

36.9  Catering costs The lowest cost does not always represent the best value for money. In evaluating the ­written and financial responses, some means must be devised to identify which is the optimum bid. The simplest way is to break down the elements of the document into component parts (see Table 36.3) as follows:

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❑❑ ❑❑ ❑❑ ❑❑

Food. Labour. Miscellaneous. Management fee.

Each bid should be interrogated systematically for service and product quality versus cost in each category relevant to the specific site. The criteria used will vary from site to site and will depend on the service level specified. A range of questions need to be asked: ❑❑ Are the proposed sales volumes, gross profit or cost per head achievable? ❑❑ Was this demonstrated on the site(s) visited? ❑❑ Does the tender response match the tender specification?

Negotiations Once a preferred contractor has been selected for the catering services, the final details of the contract must be negotiated. The points to discuss and agree at this stage could include: ❑❑ Final operating budget. (Service requirements or volumes can change during a catering

tender exercise.)

❑❑ Contractor earnings and any appropriate incentive schemes. ❑❑ Details relating to the Transfer of Undertakings (Protection of Employment)

Regulations 2006 (TUPE) and their implications for the budget and contract.

Table 36.3  General catering cost elements Category

Area

Element

Food

Staff restaurant

Proposed menus Sales volumes Food cost Gross profit

Hospitality

Proposed menus Food cost

Vending

Cup cost

Labour

Management staff Chefs Other kitchen staff Service staff

Each area can be evaluated as follows: •• Number •• Weekly hours •• Hourly rates •• Total cost

Miscellaneous

Disposables Cleaning materials Uniforms Laundry Stationery Merchandising materials

Each area should be scrutinised for appropriate volume and unit cost

Management fee

Fee at risk Benefit of a longer contract Area support Head office resource Training support

Fee proposals should be weighed against which is the most appropriate response in these criteria.

Catering and Hospitality Services  567

❑❑ Payment terms. ❑❑ Invoice layout and supporting documentation requirements.

If applicable, the FM will also need to express any requirements concerning the lead-in time and handover details between contractors. Additionally, it is good practice to debrief the unsuccessful contractors.

36.10  Catering services review Once the contract is in place, it is important to ensure that the contractor is providing the service as promised. It is usual to conduct reviews of two areas of the operation: ❑❑ Financial performance. ❑❑ Operational performance.

Financial key performance indicators Most catering operations have a limited number of key performance indicators (KPIs). They can be summarised as follows: ❑❑ ❑❑ ❑❑ ❑❑

Sales. Gross profit. Labour costs. Miscellaneous costs.

Sales Sales are an effective measure of the effectiveness of the service. Typically, the higher the sales volume, the more popular the service. Sales levels are influenced by many factors, such as: ❑❑ ❑❑ ❑❑ ❑❑

The catering services required in the specification. The tariffs agreed and set with the catering contractor. The location of the catering outlets and facilities. The effectiveness of the catering operation.

Typical measures could be: ❑❑ ❑❑ ❑❑ ❑❑ ❑❑

Effectiveness of the marketing and merchandising. Food quality. Selection of the food provided. Effectiveness of the service. Image of the facility.

Gross profit Gross profit can be defined as the difference between sales and the cost of food only. It is a measurement of the efficiency of the caterer in food production. It is typically best expressed as a percentage, as the percentage should remain broadly constant regardless of the sales volumes. It can be affected by the following:

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❑❑ The tariff policy as set by the client. ❑❑ The effectiveness of the caterer’s purchasing. ❑❑ The effectiveness of the caterer’s on-site control systems.

The last two areas are therefore those on which the client should focus when managing its caterer. Labour costs This cost is often similar to the cost of food, so it is important that it is carefully managed. Once it is established through a competitive process what the optimum staffing levels and rates of pay should be for a given operation, there should be minimal changes to the cost of staffing a catering operation. Typical reasons for variations arising once a contract has been set up include: ❑❑ Unexpected or unbudgeted high sickness levels requiring expensive replacement staff. ❑❑ Problems with staff retention resulting in excessive use of expensive agency staff to

cover the vacancies while recruiting for new staff.

❑❑ Poor original forecasting of staffing requirement. ❑❑ Additional services required by the client.

Miscellaneous costs This is a series of low-cost categories that can sensibly be grouped together for easy monitoring. Typical headings in the catering budget include: ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑

Cleaning materials. Disposables. Uniform and laundry. Secure cash collection. Contractor charges for computer systems and software licences. Deep and specialist hygienic cleaning.

Once budgets have been set for these areas, there should be minimal changes. All are largely dependent on effective contractor control, although the cost of disposables can be affected by the client’s employees’ and customers’ behaviour, especially on sites where there is a high proportion of takeaway food. Miscellaneous costs can also be measured as a percentage of sales, because they may vary with sales volumes. Operational key performance indicators The greatest problem associated with measuring performance is that it is an inexact science and will always be subjective. The client has to set up an effective means of communicating its qualitative expectations with the caterer so that they can be properly aligned. An SLA may be used. The most practical means of doing this is to split the SLA into a number of sections that can be separately measured, as follows: ❑❑ Food quality: ○○ ○○

Freshly prepared (i.e. not convenience). Batch cooking (i.e. cooking small batches immediately prior to service).

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Fat content of meat. Proportion of main ingredient to supplementary ingredients in made-up dishes. ○○ Appropriate portion sizes. ○○ Use of seasonal ingredients and dishes. Food presentation: ○○ How carefully is the food arranged on the serving dish? ○○ Has the most appropriate serving dish been used to enhance the appearance of the food? ○○ Is the dish garnished where necessary? ○○ Is the garnishing relevant to the dish and does it continue to look attractive throughout service? ○○ Are appropriate accompaniments for each menu dish available? ○○ Is sufficient (i.e. neither too much nor too little) food displayed throughout service? Menu variety and content: ○○ Is the menu structure appropriate to the demands of the personnel on site? ○○ Is the menu well balanced in terms of colour, texture, cooking methods, taste, ingredients and countries of origin? ○○ Is there always a healthy choice available? ○○ Is there a good choice of imaginative vegetarian and vegan food available? ○○ Are there regularly new dishes featured on the menu? ○○ Are all items clearly and accurately described on the menu? ○○ Is the spelling correct? ○○ Is the menu clearly displayed as appropriate throughout the building, in the restaurant and at the point of sale? Standard of service: ○○ Are all catering personnel briefed prior to service as to the content of all menu dishes? ○○ Are staff correctly and smartly attired? ○○ Are staff helpful, friendly and smiling? ○○ Are responses to questions swift and efficient? Marketing and merchandising: ○○ How effectively is the food displayed to maximise sales and gross profitability? ○○ Is every item available for sale clearly priced and described at the point of sale? ○○ How well is professionally produced point-of-sale material used to maximise sales? ○○ Are there regular, changing special promotions? ○○ What is the caterer doing to maintain interest in the catering facilities? ○○ Are catering staff effective in maximising sales through customer liaison? Customer response: ○○ Are customer surveys regularly completed and are they acted on? ○○ Are customer comment books or cards always available and are comments acted on? ○○ Are there any repeated complaints that do not appear to have been acted on? Cleaning standards: ○○ Do both front- and back-of-house areas appear clean? ○○ Are all items of equipment being properly cleaned? ○○ Is a cleaning schedule clearly displayed and is it completed and signed by a member of the catering management team? ○○ Has the caterer completed a formal hygiene audit within the past 3 months? ○○ Are staff being trained in key health, safety and hygiene practices? ○○ ○○

❑❑

❑❑

❑❑

❑❑

❑❑

❑❑

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Incentives The financial and operational KPIs described earlier can easily be linked to an incentive scheme to allow the catering contractor to earn more in return for excellent performance (which could be self-funding when linked to financial KPIs) and to be penalised financially for poor performance.

36.11  Food hygiene and safety All operations that are classed as food businesses in the UK are governed by food safety legislation. The regulations concerning food hygiene affect food handlers, premises, labelling and storage of food and temperature control of food. Food premises must be registered. FMs who manage catering in-house or contract caterers need to be aware of the issues involved, shown in Table 36.4. Food poisoning and food-related illnesses arise from poor food-handling practices. The pathogens that may cause bacterial infection are: ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑

Campylobacter. Salmonella. Escherichia coli (E. coli). Clostridium perfringens. Listeria monocytogenes. Bacillus cereus. Staphylococcus aureus.

Common causes of food poisoning and illnesses are: ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑

Not cooking food adequately. Preparing food earlier than required and keeping it at room temperature. Cross-contamination. Not thoroughly thawing frozen raw foods, such as meat and poultry. Inadequate temperature-controlled storage space. Infected food handlers. Infected raw food from unsafe suppliers.

Bacteria is destroyed by heating food to above 63 °C. Chilling and freezing slows the growth of bacteria. Refrigerators need to operate below 8 °C to keep the food between 5 and 8 °C. Table 36.4  Duties in food hygiene and food safety Employer duties

Employee duties

Train all staff to a level consistent with their responsibilities Keep records of training Monitor suppliers Implement a form of HACCP (Hazard Analysis of Critical Control Point) or food safety programme (see Section 36.12) Ensure compliance with all food safety legislation

Comply with all food safety legislation Maintain a high standard of personal hygiene Wear protective clothing Wash hands correctly and frequently Report to line manager if they know or suspect they are suffering from or carrying a disease that may contaminate food Undertake food safety training

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Freezers operate at –18 °C. Temperature probes are used to check food temperatures both in fridges and freezers and at counters during service. Records must be kept of the temperatures. Sample portions of all food may also be kept for up to 24 hours after service, as part of food safety procedures. Operatives working in catering units will need to observe high standards of personal hygiene to meet the standards of ‘clean person’ strategies. This will include wearing suitable clothing, reporting medical conditions and regular training. Catering units must establish critical points for food safety, with appropriate corrective actions and records of all procedures and processes. The most importance critical points in catering are temperatures of hot and cold food, and prevention of cross-contamination in food-handling procedures. The application of a Hazard Analysis of Critical Control Points (HACCP) system will demonstrate best practice to meet legislative requirements of food safety management. The World Health Organization’s simple steps to prevent foodborne disease could be adopted: (i) Keep equipment and food handlers clean (at all times). (ii) Separate raw and cooked foodstuffs. (iii) Cook food thoroughly. (iv) Keep food at safe temperatures. (v) Use safe water and raw materials. The UK Food Standards Agency recommend the 4Cs approach – a focus on cleaning, cooking, cross-contamination and chilling. A standard developed to help smaller catering businesses or in-house teams to comply is ‘Safer Food, Better Business’. This is an illustrated guide with measures to help operatives comply with a range of food safety legislation and good practice.

36.12  Hazard Analysis of Critical Control Points Hazard Analysis of Critical Control Points (HACCP) is an internationally recognised system for reducing the risk of safety hazards in food. A HACCP system requires that potential hazards are identified and controlled at specific points in the process. This includes biological, chemical and physical hazards. Use of HACCP will minimise or eliminate food safety hazards. There are seven principles, as shown in Table 36.5.

36.13 Allergens In addition to describing the food correctly, the caterer must by law provide information about allergens in the food products. The main 14 allergens are as follows: ❑❑ Celery. ❑❑ Cereals containing gluten – including wheat (such as spelt and Khorasan), rye, barley ❑❑ ❑❑ ❑❑ ❑❑ ❑❑

and oats. Crustaceans – such as prawns, crabs and lobsters. Eggs. Fish. Lupin. Milk.

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Table 36.5  The seven principles of HACCP Principle

Description

1 Conduct a hazard analysis

Identify hazards that can be introduced in food processes; evaluate issues that may arise.

2 Identify the critical Review the processes to establish a maximum or minimum limit of a CCP. control points Parameters such as temperature, time, pH, salt level, chlorine level or other (CCsP) processing characteristic that will control the hazard are the critical points that must be controlled. 3 Establish critical limits

Establish criteria for each critical control point. What criteria must be met to control the hazard at that point? Is it a minimum temperature? Are there regulatory limits that must be met for this control point?

4 Establish monitoring procedures

Keep records to show that the critical limits have been met. Consider continuous monitoring of the control point if possible. Ensure monitoring takes place at the agreed CCPs to test the effectiveness of the HACCP programme.

5 Establish corrective actions

Establish what actions need to be taken if a critical limit is not met. These will be identified in advance for each CCP. The actions must make sure that no unsafe product is released. There must also be an evaluation of the process to determine the cause of the problem and eliminate the cause.

6 Establish record-keeping procedures

Records are needed (for inspection by external agents) to show that the critical limits have been met and that the system is under control.

7 Establish verification procedures

The whole HACCP plan must be validated. Once the plan is in place, the catering team must make sure it is effective in preventing the hazards identified. The end product must be tested to verify that the controls are working as planned. Finally ongoing verification of the system must be carried out.

Molluscs – such as mussels and oysters. Mustard. Peanuts. Sesame seeds. Soybeans. Sulphur dioxide and sulphites (if they are at a concentration of more than 10 parts per million). ❑❑ Tree nuts – including almonds, hazelnuts, walnuts, Brazil nuts, cashews, pecans, pistachios and macadamia nuts. ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑

36.14 Legislation FMs need to be familiar with the legislation that applies to catering and food services, including: ❑❑ Food safety and hygiene legislation. ❑❑ Food premises and licensing legislation. ❑❑ Food labelling regulations – especially for foodstuffs such as: ○○ ○○ ○○ ○○

Bottled water. Dairy. Fats and oils. Bread

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Jams. Chocolate. Genetically modified food regulations. Food information legislation – especially allergens. Food product withdraws and recall legislation. Workplace regulations – especially ventilation levels. COSHH regulations – especially control of levels of carbon monoxide in kitchens. Gas Safety (Installation and Use) Regulations 1998. ○○ ○○

❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑

36.15 Well-being The increased focus by many employers on well-being and productivity of employees has resulted in an overhaul of catering services. Food service can provide a social interlude in the working day – taking a break and eating with work colleagues can stimulate a sense of belonging and improve post-lunch performance. While many cultures in Europe still nurture the lunchtime break in a designated space, this behaviour has steadily disappeared in many UK organisations – consuming unhealthy sandwiches and snacks at the desk while working is still commonplace. However, some organisations with an invigorated focus on the welfare of their staff are no longer permitting the habit of eating food at the desktop. Food service can provide balanced nutrition and energy to re-fuel employees and occupants. Many caterers now provide a range of healthy options to suit most diets and food preferences. Some particular foodstuffs can have a positive impact on general health and cognitive functioning. Linking catering strategy to occupational health and well-being policies is now more commonplace.

36.16  Standards and accreditations Many organisations will expect their contract caterer to have or be working towards external accreditation. Some schemes are mandatory, whereas others are voluntary. The Food Hygiene Rating Scheme is mandatory in the UK. The scheme helps consumers to choose where to eat by giving simple, clear information about a business’ hygiene standards. The UK Food Standards Agency runs the scheme in partnership with local authorities. The scheme gives businesses a rating from 5 to 0 (see Table 36.6), which is displayed at their premises and online to inform customers. Ratings are a snapshot of the standards of food hygiene found at the time of inspection. It is the responsibility of the business to comply with food hygiene law at all times. This includes: ❑❑ ❑❑ ❑❑ ❑❑ ❑❑

Handling of food. How food is stored. How food is prepared. Cleanliness of facilities. How food safety is managed. The inspection will assess:

❑❑ How hygienically the food is handled – how it is prepared, cooked, reheated, cooled

and stored.

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❑❑ The physical condition of the business –including cleanliness, layout, lighting, ventila-

tion, pest control and other facilities.

❑❑ How the business manages ways of keeping food safe, looking at processes, training

and systems to ensure good hygiene is maintained.

The Sustainable Restaurant Association has created a range of awards and a framework to raise the profile of restaurants that are addressing the three pillars of sourcing, society and environment. The standard focuses on local and seasonal produce, treating staff fairly and valuing natural resources. Table 36.6  Food Hygiene Rating Scheme ratings 5

Hygiene standards are very good

4

Hygiene standards are good

3

Hygiene standards are generally satisfactory

2

Some improvement is necessary

1

Major improvement is necessary

0

Urgent improvement is required

37

Quality Management

37.1 Origins Quality management (QM) has developed over the past 60 years as countries and organisations have endeavoured to remain competitive in a global economy. The father of quality, W. Deming, encouraged the Japanese to adopt a systematic statistical approach to problem solving in the post-war rebuilding of Japan. This approach later became known as the Deming or PDCA (Plan, Do, Check, Action) cycle. He encouraged senior managers to become actively involved in their company’s quality improvement programmes. His theories place great importance and responsibility on management, at the individual, company and society levels. Other quality concepts were introduced by others such as Juran, Shingo, Crosby, Feigenbaum and Ishikawa  –  these concepts include quality spirals, zero defects, poka-yoke, the fishbone diagram and quality circles.

37.2 Quality The noun ‘quality’ means basic nature or character. In recent years, its adjectival form has been used incorrectly to indicate a degree of excellence or superiority, such as in ‘quality managed facilities’. Here, the word ‘quality’ really needs an additional qualifying adjective such as ‘high’ or ‘low’ to indicate benchmarks of achievement. However, the noun phrases ‘quality management’, ‘quality control’ and ‘quality assurance’ are now fully established in business management jargon. It is, however, still important in FM (facilities management, or facilities manager) contexts to ensure that quality is a relative concept rather than absolute.

37.3  Quality management QM is a business management programme that connects separate components of a business into an integrated whole. There are many examples of QM programmes, but essentially they are all concerned with rethinking how things are done so that quality is inherent in the products and services. There are several fundamental inputs, as shown in Table 37.1. QM can be defined as the culture of an organisation committed to customer satisfaction through continuous improvement. It is an ongoing, continuous process involving: ❑❑ ❑❑ ❑❑ ❑❑

Focus on the customer. Focus on process. Measurement of process. Commitment by top management.

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Table 37.1  Fundamental inputs to a quality management (QM) system Leadership

Quality must start at the top of an organisation. Leadership is the most important driving force behind a successful quality programme.

Education

The team involved will need to understand the principles of QM. This may involve participation in a workshop, looking at the effectiveness of customer interactions and customer service.

Communication

The successful deployment of QM will rely on good communications. A variety of tools can be used including posters, internal publications and media, bulletin boards, videos, visual media, events with guest speakers, handbooks and so on. Success stories with individual staff are particularly useful to communicate the commitment of management.

Participation

Good management skills in training, nurturing and knowing when to stand back are required to empower the team in a QM programme. The FM front-line team must be empowered to make quality improvements as they know how to improve their services more than anyone else. Good staff working in front-line roles will naturally want to please, and want to provide a high-quality service or product to their customer.

Assessment

To understand how the QM process is going, a comprehensive set of measurements is required, together with periodic reviews.

The customer in a QM context is the customer of each step in the production chain of an organisation’s services or products. Suppliers in the chain are also customers, so every part of the organisation needs to recognise its internal and external customers. QM is about doing the right things right, first time and every time. If an organisation can reduce errors by improving the way things are done, there are many benefits, such as: ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑

A clear business focus. Improved efficiency and reduced costs. Increased customer satisfaction. Improved communications. Increased cash flow and the potential for profit. Less waste. Better use of resources. Improved staff morale. Enhanced reputation.

37.4  Continuous improvement Most quality systems are built on the concept of continuous improvement or ‘kaizen’. The following steps are required to achieve ongoing continuous improvement: ❑❑ ❑❑ ❑❑ ❑❑ ❑❑

Eliminate needless process steps. Continually seek and implement refinements. Eliminate defects. Reduce the process cycle, such as the speed of response. Design a systematic quality programme.

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37.5 Lean The idea of ‘lean’ is to maximise customer value while minimising waste. If organisations apply lean thinking to their organisational processes, they will be creating more value for customers with fewer resources. The lean concept can be applied in every business and every process, especially FM. A lean organisation understands customer value and will strive to increase this value in everything it does. The ideal will be zero waste – similar to QM theories of zero defects. The process of lean thinking changes the focus of management from looking at perfecting the separate parts of a business to considering the flow of products and services throughout the entire business, looking at whole value streams that flow horizontally across technologies, assets and departments to customers.

37.6  Quality systems and procedures It is necessary to analyse business requirements to ensure that both products and services are designed consistently to achieve excellent quality. Using a systematic process and application of quality control measures, further improvements will achieve the desired quality. Quality control is defined by Feigenbaum in Total Quality Control (1951) as ‘an effective system for co-ordinating the quality maintenance and quality improvement efforts of the various groups in an organisation so as to enable production at the most economical levels which allow for full customer satisfaction’. Various QM schemes have been developed, such as: ❑❑ Total quality management (TQM). ❑❑ European Foundation of Quality Management (EFQM) (also known as the Business

Excellence Model).

❑❑ Six Sigma.

It is suggested that the following principles are necessary to implement QM: Commit long term to continuous improvement. Adopt a ‘right first time’ culture. Help staff to understand customer/supplier relationships. Do not judge suppliers on price alone – look at the total cost. Adopt modern management methods and empower staff  –  eliminate fear in the workplace. ❑❑ Break down barriers between departments by improving communications and teamwork. ❑❑ ❑❑ ❑❑ ❑❑ ❑❑

37.7  Total quality management TQM is a business philosophy that focuses on quality throughout an organisation. It aims to deliver complete customer satisfaction, benefits to all staff and benefits to society as a whole.

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The focus TQM focuses on getting things right first time, and frequently involves an overhaul of the way an organisation manages staff, suppliers and processes. It also influences the way they interact with customers. A company needs to go back to basics and ask the following questions: ❑❑ ❑❑ ❑❑ ❑❑

What is our purpose as a business? What are our values? What are our mission and vision? What are the factors that affect whether the mission is achieved?

The building blocks of TQM TQM is a way of thinking about business processes, people and systems to ensure things are done right first time. Processes Each business process is made up of a series of actions that satisfy the customer’s needs and expectations. Each area of an organisation has many processes. It is important to look at each action – and its result – to assess what is needed to improve quality. People While a TQM strategy comes from senior management, it is the staff who carry out the business activities day to day who have true responsibility for performance and quality. Their buy-in is critical, so managers need to make sure staff understand the long-term goal of total quality and the reasons for any new ways of working. It is also important to keep staff informed of any improvements they have achieved, to provide impetus for further improvements. Staff need to see commitment from the top down – managers leading by example – and need to feel the whole company is embracing TQM. Managers need to promote the right climate for business improvement, encouraging staff to come up with ideas for innovation and problem solving. Management systems TQM often entails a change in company culture and working practices. It is essential to have a system in place to manage and sustain these changes. Performance measurement An effective review of how the organisation currently works is needed as the baseline for future measurement. This will highlight bottlenecks, bad service and other quality issues. Data is collected regularly to measure and check whether the new desired level of performance is being achieved. Techniques such as brainstorming and tools such as cause-andeffect graphs can identify which areas are priorities for improvement. Commitment TQM must start at the top with commitment from the executive or board. Senior managers must consistently demonstrate their commitment to quality. Companies need a sound quality policy, supported by plans and resources to implement it. Leaders must take responsibility for preparing, reviewing and monitoring the policy – and this is an ongoing responsibility. Managers must ensure everyone understands  –  and signs up to  –  the quality policy.

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Leadership Effective leadership starts with the development of a mission statement, followed by a strategy, which is translated into action plans throughout the organisation. Key requirements for effective leadership include: ❑❑ Developing and promoting corporate beliefs and objectives, often in the form of a mis❑❑ ❑❑ ❑❑ ❑❑

sion statement or company vision. Acting as role models for a culture of total quality. Developing effective strategies and plans for achieving total quality. Reviewing the QM system. Communicating the quality message and motivating staff to sign up for total quality.

Culture The culture in any organisation is made up of prevailing beliefs, norms and rules. New corporate strategy will take into account the company culture. Most companies recognise that they need co-operation at all levels, and a culture of good teamwork, to drive through major change such as a new QM system.

37.8  Business Excellence Model – European Foundation of Quality Management This model is based on principles known as the ‘Fundamental Concepts’, as shown in Table 37.2. The model has a checklist to compare the way an organisation performs against best-practice guidelines. It looks at leadership, business strategy, people management, partnerships, resources and business processes. It also covers relationships with customers, staff, and the wider community and society. Organisations are expected to use the checklist for self-assessment of performance against the standards of the EFQM. The framework and model were refined in 2010 and a new version was launched in 2013. Table 37.2  Fundamental concepts in the EFQM Results orientation

Excellence is achieving results that delight all the organisation’s stakeholders.

Customer focus

Excellence is creating sustainable customer value.

Leadership and constancy Excellence is visionary and inspirational leadership, coupled with of purpose constancy of purpose. Management by processes and facts

Excellence is managing the organisation through a set of interdependent and interrelated systems, processes and facts.

People development and involvement

Excellence is maximising the contribution of employees through their development and involvement.

Continuous learning, innovation and improvement

Excellence is challenging the status quo and effecting change by utilising learning to create innovation and improvement opportunities.

Partnership development

Excellence is developing and maintaining value-adding partnerships.

Corporate social responsibility

Excellence is exceeding the minimum regulatory framework in which the organisation operates and striving to understand and respond to the expectations of its stakeholders in society.

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Table 37.3  The five steps in Six Sigma 1 Define

A serious problem is identified and a project team is formed and given the responsibility and resources to solve the problem.

2 Measure Data that accurately describes how the process is working currently is gathered and analysed in order to produce some preliminary ideas about what might be causing the problem. 3 Analyse

Based upon these preliminary ideas, theories are generated as to what might be causing the problem and, by testing these theories, root causes are identified.

4 Improve

Root causes are removed by means of designing and implementing changes to the offending process.

5 Control

New controls are designed and implemented to prevent the original problem from returning and to retain the gains made by the improvement.

37.9  Six Sigma Six Sigma aims to maximise customer satisfaction and minimise defects. In statistical terms, the purpose of Six Sigma is to reduce process variation so that virtually all the products or services provided meet or exceed customer expectations. This is defined as being only 3.4 defects per million occurrences. Six Sigma was developed by Motorola in the 1980s but has its roots in statistical process control, which first appeared in the 1920s. There are three basic elements to Six Sigma: (i) Process improvement. (ii) Process design/redesign. (iii) Process management. A five-step approach is used in each stage, as shown in Table 37.3.

37.10  Quality standards and accreditation schemes FMs should be familiar with the quality standards and accreditation schemes that apply to the built environment. These include British Standards (BS 5750), International Standards (ISO 9000), Investors in People (IiP) and Building Research Establishment Environmental Assessment Method (BREEAM). Most of these standards are awarded to organisations via self-certification or an external assessor. Quality assurance is a systematic method of organising activities: ❑❑ Plan what you do. ❑❑ Do what you plan. ❑❑ Record what you have done.

It does not necessarily imply quality, just having management processes and systems in place. Once a standard and a system have been defined, measurements will be required on a regular basis. Typical measurements include: ❑❑ Availability. ❑❑ Capacity.

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❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑

Reliability. Flexibility. Timeliness. Usability. Accuracy. Satisfaction. Responsiveness. Completeness.

The most common measurement tool is benchmarking. Benchmarking can be internal, competitive, functional or generic. However, it is important to consider that benchmarking in itself can be a time-consuming and labour-intensive process that does not provide solutions, just ideas. Benchmarking is a continuous activity and offers a process of learning from both the organisation and others.

37.11 Standards There are a number of standards and accreditation schemes that are directly related to FM, as shown in Table  37.4. There are also ones associated with the wider remit of FM, as follows: ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑

BS 25999 / ISO 22301 – business continuity. BS/ISO 50001 – energy management. BS 8903 – sustainable procurement. BS 8900 – sustainable development. BS 8901 – sustainable event management. BS 8477 – customer service. BS 8895 – waste management in construction. BS ISO 26000 – corporate social responsibility. ISO 31000 – risk management. ISO 45001 – health and safety. BS 8599 – workplace first-aid kits. BS EN 15643 – sustainability of construction works. BS ISO 15686 – service life planning for buildings and constructed assets.

37.12  ISO 9000 ISO 9000 is an internationally accepted programme for certifying quality management systems (QMSs). Launched in 1987, ISO 9000 is a group of QM standards laid down by the International Organization for Standardization. Originally, it grew out of the British Standards Institute’s BS 5750 system. The ISO 9000 standards are built around business processes, with a strong emphasis on improvement and a focus on meeting the needs of customers. The ISO 9000 model contains eight QM principles on which to base an efficient, effective and adaptable QMS, as shown in Table 37.5. The principles reflect best practice and are designed to enable continual improvement of the business, its efficiency, and its ability to respond to customers’ needs and expectations.

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Table 37.4  Standards and accreditation schemes related to FM British Standards BS 8572 – Procurement of Facility Related Services: Code of Practice BS 8210 – Guide to Facilities Maintenance Management BS 8544 – Guide for Life Cycle Costing of Maintenance During the In Use Phases of Buildings BS 8892 – Transition Management of FacilityRelated Services: Code of Practice BS 8587 – Guide to Facility Information Management PAS 1192-3 – Specification for Information Management for the Operational Phase of Assets Using Building Information Modelling PAS 1192-5 – Specification for Security-Minded Building Information Modelling, Digital Built Environments and Smart Asset Management BS 1192-4 Collaborative Production of Information: Fulfilling Employers Information Exchange Requirements Using COBie: Code of Practice BS 8536-1 – Briefing for Design and Construction: Code of Practice for Facilities Management (Buildings) BS 8536-2 – Briefing for Design and Construction: Code of Practice for Asset Management

European Standards BS EN 15221-3 – Facility Management: Guidance on Quality in Facility Management BS EN 15221-4 –Facility Management: Taxonomy, Classification and Structures in Facility Management BS EN 15221-5 – Facility Management: Guidance on Facility Management Processes BS EN 15221-6 – Facility Management: Area and Space Measurement in Facility Management BS EN 15221-7 – Facility Management: Guidelines for Performance Benchmarking

International Standards BS EN ISO 41001 – Facility Management: Management Systems and Vocabulary BS EN ISO 41012 – Facility Management: Guidance on Strategic Sourcing and the Development of Agreements BS ISO 55000 – Asset Management: Overview, Principles and Terminology BS ISO 55001-1/2 – Asset Management: Management Systems: Requirements/Guidelines for the Application of ISO55001 BS ISO 37500 – Guidance on Outsourcing BS ISO 44001 – Collaborative Business Relationship Management Systems: Requirements and Framework BS EN ISO 41014 – Facility Management: Development of FM Strategy BS EN ISO 41015 – Facility Management Influencing Behaviours for Improved Facility Outcomes and User Experience BS EN ISO 19650-1/2 – Organization and Digitization of Information about Buildings and Civil Engineering Works: Information Management Using Building Information Modelling: Concepts and Principles and Delivery Phase of the Assets

The family of ISO 9000 standards comprises: ❑❑ ISO 9000:2015 – QMSs: Fundamentals and Vocabulary. This is an introduction to the

ISO 9000 family.

❑❑ ISO 9001:2015 – QMSs: Requirements. This is the core component of the ISO 9000 fam-

ily, as it specifies the key requirements of an efficient, effective and adaptable QMS.

❑❑ ISO 9004:2018  –  Guidelines for Performance Improvement. This standard focuses on

performance improvement.

❑❑ ISO 19011:2018 – Guidelines for Auditing Management Systems. This standard facili-

tates the integration of quality and environmental standards, allowing an organisation to conduct a single audit to save both time and cost during audits.

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ISO standards are reviewed every 5 years to ensure validity in a changing business setting and are intended to be generic and adaptable to all kinds of organisations. They are also now more closely aligned with the requirements of the EFQM Business Excellence Model. Ideally, ISO 9001:2015 and ISO 9004:2018 should be together, but, if required, they can be used independently. Table 37.5  The eight ISO standard quality principles 1  Customer focus

Organisations depend on their customers and therefore should understand current and future customer needs, should meet customer requirements and should strive to exceed customer expectations. Customer needs and expectations must be determined and converted into product requirements.

2 Leadership

Good leaders establish unity of purpose, direction and the internal environment for their organisation. They formulate an appropriate quality policy and ensure that measurable objectives are established for the organisation. They create an environment in which people can become fully involved in achieving these objectives. They also demonstrate that they are committed to developing, sustaining and improving the quality management system (QMS).

3  Involvement of people People at all levels are the essence of an organisation and their full involvement enables their abilities to be used for the organisation’s benefit. Managers must ensure that there is involvement of the people at all levels in the organisation. They must make the people aware of the importance of meeting customer requirements, and their responsibilities, as individuals, for doing this. They must also ensure that the people are competent on the basis of appropriate training and experience. 4  Process approach

A desired result is achieved more efficiently when related resources and activities are managed as a process. Consequently, an effective QMS must have, at its core, a process approach, with each process transforming one or more inputs to create an output of value to the customer. Successful, quality organisations will have identified a set of core business processes that define those activities that directly add value to the product or service for the external customer, and a set of supporting processes that are required to maintain the effectiveness of those core processes.

5 Systems approach to management

Identifying, understanding and managing a system of interrelated processes for a given objective contribute to the effectiveness and efficiency of the organisation. These processes must be thoroughly understood and managed so that the most efficient use is made of available resources. This in turn will ensure that the needs of all the stakeholders – customers, employees, shareholders and the community – are met.

6 Continual improvement

This is a permanent objective of any organisation. Customer satisfaction is a constantly moving entity, so an effective QMS must take this into account. For this to be achieved, attention needs to be given to the voices of both the customer and the employee – through complaint analysis, opinion surveys and regular contacts and through measurement, monitoring and analysis of both process and product data.

7 Factual approach to decision making

Effective decisions are based upon the logical, intuitive analysis of data and information (i.e. they are based upon the facts).

8 Mutually beneficial Relationships between an organisation and its suppliers enhance the supplier relationships ability of both organisations to create value. Each organisation is just one of the links in a much larger supply chain. Consequently, in order to serve the long-term needs of the community and the organisation itself, mutually beneficial relationships need to exist at all points in the supply chain.

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Table 37.6  Advantages and disadvantages of ISO 9000 Advantages

Disadvantages

A document system Clear roles and responsibilities Expectations known Pride from accreditation Instructions are in writing Product quality more consistent, avoiding rejects Production efficiencies, cost savings Improves supply quality Enhances customer loyalty Export marketing easier

More records to keep More work, less discretion, policing of activities Emphasis on regulation Another award for the boss Procedures, procedures and yet more procedures The same product Cost of training and trained staff and the system itself The demands from customers may increase, as they may want even more from their suppliers Suppliers forced to comply may resent the bureaucracy

ISO 9001:2015 ISO 9001:2015 specifies the requirements for a QMS that can be used by organisations for internal application, contractual purposes or certification. The approach is made up of four processes: (i) Management responsibility. (ii) Resource management. (iii) Product realisation. (iv) Measurement, analysis and improvement. The Standard recognises that customer requirements are the main input of the QM process and that customer satisfaction is the main output of the QM process. Consequently, it is vital to any organisation that the level of customer satisfaction is continually evaluated and fed back into the QM process so that it can be used to assess whether customer requirements have been met. If not, then an improvement process can be initiated. Accreditation Most organisations that develop and implement QMSs based on ISO 9001:2015 will have their systems approved by an independent certification body to reinforce in-house disciplines and to demonstrate compliance to customers and purchasers. There are a number of pros and cons of implementing the ISO 9000 QMS, as shown in Table 37.6.

37.13  ISO 41001 ISO 41001 (Facility Management) is about FM activities and processes, and provides the requirements and guidance for their use. It is the global standard for FM. It clarifies what FM is and provides help with implementing a high-quality FM that is fit for purpose. It can be used by any organisation, regardless of sector, size, nature or location. It can help to establish, implement, maintain and improve an integrated FM system. The Standard shows that an organisation is conforming with a stated FM policy. It can be applied to both insourced and outsourced service provision of FM, and so it helps to clarify the purpose and benefit of FM so that both providers and clients have the same understanding.

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There are several associated standards, as follows: ❑❑ ISO 41011 – Facility Management: Vocabulary. ❑❑ ISO 41012 – Facility Management: Guidance on Strategic Sourcing and the Development

of Agreements.

❑❑ ISO 41013 – Facility Management: Scope, Key Concepts and Benefits. ❑❑ ISO 41014 – Facility Management: Development of a Facility Management Strategy. ❑❑ ISO 41015 – Facility Management: Influencing Behaviours for Improved Facility Outcomes

and User Experience.

37.14  ISO 14001 ISO 14001 (Environmental Management Systems: Requirements with Guidance for Use) provides a framework for environmental management. The main driver for the development of this environmental management system was the Rio Summit in 1992. The Standard can help an organisation to achieve continuous improvement in regard to its environmental impacts. ISO 14001 requires an organisation to implement a series of practices and procedures that result in an effective environmental management system. ISO 14001 is not a technical standard and it does not replace the requirements specified by laws or regulations. There are 17 aspects to ISO 140001. The benefits of ISO 14001 are reported as: ❑❑ ❑❑ ❑❑ ❑❑ ❑❑

Reduced cost of waste management. Savings in consumption of energy and materials. Lower distribution costs. Improved corporate image among regulators, customers and the public. A framework for continual improvement of environmental performance.

37.15  Investors in People The Investors in People (IiP) standard is a framework for delivering business improvement through people. It is available for all sizes and types of organisation. The aim of the IiP standard is to help organisations improve the way they work and how they value their employees. Organisations have to meet the same criteria – or ‘indicators’ – as other organisations, but the standard recognises that each business will meet them in its own way. IiP recognises that organisations use different means to achieve success through their people. It does not prescribe any one method but provides a framework to find the most suitable means for achieving success through people. The IiP standard uses the principles of PDCA, in keeping with most ISO and QM standards. The principles that make up the standard are: ❑❑ A strategy for improving the performance of the organisation is clearly defined and

understood.

❑❑ Learning and development are planned to achieve the organisation’s objectives. ❑❑ Strategies for managing people are designed to promote equality of opportunity in the

development of the organisation’s people.

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❑❑ The capabilities managers need to lead, manage and develop people effectively are

clearly defined and understood.

The above principles are supported by the following actions to ensure the performance of the organisation: ❑❑ Managers are effective in leading, managing and developing people. ❑❑ People’s contribution to the organisation is recognised and valued. ❑❑ People are encouraged to take ownership and responsibility by being involved in deci-

sion making.

❑❑ People learn and develop effectively.

The impact of an IiP investment in an organisation can be demonstrated in that: ❑❑ Investment in people improves the performance of an organisation. ❑❑ Improvements are continually made to the way people are managed and developed.

37.16 Benchmarking The dictionary definition of a benchmark is ‘something that serves as a standard by which others may be measured or judged’ (Merriam-Webster). Other definitions of benchmarking include: ‘Benchmarking is the process of comparing a product, service, process – indeed any activity or object – with other samples from a peer group, with a view to identifying “best buy” or “best practice” and targeting oneself to emulate it.’ (Facilities Economics by Bernard Williams Associates, 2002) ‘Benchmarking is the process of continuously measuring and comparing one’s business processes against comparable processes in leading organisations to obtain information that will help the organisation identify and implement improvements.’ (The Benchmarking Handbook by B. Andersen and P.-G. Petersen, 1995) ‘A continuous, systematic process for evaluating the products, services and work processes of organisations that are recognised as representing best practice for the purpose of organisational improvement.’ (The Benchmarking Book by Michael J. Spendolini, 1994) Companies embarking on QM need to measure their current performance as a standard against which to compare their future performance. Benchmarking is the ideal way of doing this. Types of benchmarking are shown in Table 37.7. Benchmarking involves collecting and analysing data from within and across the organisation – it could be financial data, such as annual pre-tax profit, or non-financial data, such as the level of customer complaints. The main issues to be considered in benchmarking are: ❑❑ It is a time-consuming and labour-intensive process. It does not provide solutions but

is a focused search for ideas.

❑❑ The focus of benchmarking is continual improvement. It is not a once-only event.

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Table 37.7  Types of benchmarking Type

Description

Advantages

Disadvantages

Internal

Assess the company’s operations, comparing activities across the business. Compare the same or similar activities in different departments, operating units, locations or even countries if the organisation is a multinational.

Data in a standardised format is easy to collect, facilitating good intra-organisational results.

Has a limited focus; may not reflect good practice in a wider sense.

Competitive

Compare the organisation’s product or business activity to a competitor’s. Look at product quality, value for money, market share, etc. This compares direct competitors selling to the same customer base. It focuses on the best competitors, not the average or below.

The information is relevant to the business operations; comparable practices can be compared.

Data collection difficulties; genuine co-operation may not be easy to achieve; business ethics may also be a problem.

Functional

Compare core business activities within the same industry, for example ‘selling insurance’, or compare performance with industry leaders.

Sector issues become known; best practice is established.

Identification of leaders; confidentiality; competitive issues.

Generic

Compare general business activities that are not related to a specific industry, for example purchasing or outsourcing a catering service.

Establishes comparators Inability to know whether in general services. comparisons are relevant.

❑❑ It is a process of investigation and learning from others that provides valuable data to

translate into information for decision making.

Benchmarking partnerships can also be formed between non-competitive customers, suppliers and other organisations. Advantages of external benchmarking are numerous  – including the potential of discovering useful and transferable innovative practices and the development of professional networks and access to relevant databases. Disadvantages are that it may be difficult, or even impossible, to successfully transfer practices appropriate for one business environment into another business environment. It is a time-consuming process that may not reward the organisation with commensurate benefits. The four-step action plan shown in Table 37.8 will help the FM to set up a benchmarking activity. Some key measurements for benchmarking are: ❑❑ Not right first time – Measures the number of defective products. ❑❑ Value of supplies delivered on time against value of bought-in materials – Indicates the

ability of suppliers to deliver on time. A higher figure indicates the use of reliable suppliers.

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Table 37.8  The four steps in the implementation of a benchmarking exercise Plan

Collect

Analyse

Improve

Agree roles and responsibilities Decide which business activity to benchmark Document how the activity is currently carried out Decide what data to collect and how to collect it

Ensure everyone understands the need for data collection Ensure everyone is recording data in a standard way

Make sure the data is meaningful Decide how to produce regular reports Develop a comparison matrix to compare the current performance with future performance

Set targets that are realistic but stretching Devise an alternative way of doing things Look at factors that may prevent change Draw up a plan to implement changes

Table 37.9  Soft data questions Customers

Suppliers

Staff

What do we need to do better to give you the best service? What skills and technology do you feel we need if we are to work together for future success?

What skills do you feel we need to invest in if we are to work together for future success? What do we need to do better to help us get the best service from you as a supplier?

What training do you need to improve your service to customers and colleagues? What do you want the business to provide you with to help you do your job more efficiently?

❑❑ Research and development spend against turnover – Shows the company’s level of

investment in future products and services.

❑❑ Total training days per total number of employees – Shows how much the company

is investing in training.

Soft data To back up the hard data collected about performance, ‘soft’ data is also needed to show whether the organisation is satisfying stakeholders’ needs and expectations. Soft data tends to consist of opinions, views and expressed feelings. Stakeholders are staff, customers, suppliers and investors. Questionnaires and one-to-one interviews can be useful tools for gathering this kind of information. Questions need to be open to gather qualitative data. Table 37.9 shows typical questions that can be asked. Techniques that can be used in the review of data gathered in benchmarking include: ❑❑ Brainstorming. ❑❑ Cause-and-effect diagrams.

37.17  FM benchmarking An FM policy should indicate output and input performance levels, with benchmark cost and service delivery targets. Performance can be described as the capability of the FM team, together with agreed objectives and standards, plus the behaviour of all parties.

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FMs need credible performance tools to gain visibility in their organisations. The outputs of their endeavours should be published. Most FMs have plenty of information about their activities; however, the key issue is turning this information into knowledge and ultimately intelligence. It requires creativity and the right ingredients to get the best out of raw data. FMs should identify the reasons for benchmarking  –  the goals must be set so that the benchmarking information can inform decisions about improvements. A client’s focus may be on the contractor’s performance, whereas an FM contractor’s focus should be on the client’s premises and how to improve their efficiency. FMs need to establish the critical ingredients or data fields and reporting system to be used. A robust benchmarking process will have rules for data entry, methods to be used, and confidentiality and security of information. It should be designed to allow for comparisons, be accessible and be easy to use. Most FM benchmarking uses cost per space per person; however, other parameters, such as age of building and hours of occupation, will impact the measurement of FM. Therefore, for many FMs, the use of service level agreements (SLAs) and key performance indicators (KPIs) is part of the benchmarking toolkit used to demonstrate added value to the core business. Table 37.10 shows some examples. Some of the pitfalls of benchmarking arise from invalid data, sample sizes being too small, wrong conclusions, or issues relating to mixed-space areas (there are many ways to measure space) and mixed employee/ occupant numbers (these could use full-time equivalents, a simple headcount, or also include interims and contractors). Performance can be measured using one or more of the metrics shown in Table 37.11. Table 37.10  Benchmarking examples in FM Financial

Product

Service

Capital and revenue costs Cost per metre squared Cost per person Cost per workspace Depreciation rates Expenditure as a percentage of depreciation Direct and indirect labour costs Leasing costs Repair costs

Availability of spares Warranties Guarantees Optional extras/features Mean time to failure Spares availability and cost Specification Location of equipment Age of the component, element or system being benchmarked

Customer complaints – volume and frequency Mean time to respond Mean time to repair or fix Mean time to contact the customer Number of suggestions Image considerations, e.g. user perception of contact personnel Quality of the original workmanship Maintenance policy of the benchmarking comparator or partner Hours in use

Table 37.11  FM benchmarking metrics Quantity

How many?

Quality

How good?

Duration/timescale

How long?

Frequency

How often?

Financial

How much does it cost or earn?

Perception

What are people saying?

Actions

What are people doing?

Process

How are people doing it?

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Office cost benchmarks There are several benchmark schemes used in FM, including: ❑❑ The Building Cost Information Service (BCIS) from the Royal Institution of Chartered

Surveyors (RICS).

❑❑ The Investment Property Databank (IPD) Index. ❑❑ OSCAR 2018, an office service charge analysis report developed by JLL. ❑❑ Compliance reports, RIDDOR (Reporting of Injuries, Diseases and Dangerous

Occurrences Regulations 2013) statistics and accident rates.

❑❑ Annual reports – financial, corporate social responsibility and operating review. ❑❑ The Leesman Index.

37.18  Key performance indicators A KPI is a measurable value that demonstrates how effectively a company is achieving key business objectives. Organisations use KPIs at multiple levels to evaluate their success at reaching targets. They are very common in FM and are often linked to SLAs and contracts of service. Some organisations have created a range of other performance measures, such as general performance indicators (GPIs) and critical performance indicators (CPIs). One challenge in the FM department is the creation of too many KPIs and loss of focus on what is really important. The first step is to find out what are the important KPIs in the client organisation. Ideally KPIs should be aligned to the critical success factors (CSFs) of a business and give insights into overall performance. Many companies now report annually on a range of nonfinancial activities – such as energy consumption, recycling initiatives, carbon emissions, biodiversity projects, risk management, business continuity, use of SME (small and medium-sized enterprise) suppliers, staff development, staff well-being and community projects. These are all areas in which the FM team can provide data and information. The FM team needs to identify all of the business KPIs that it can directly impact, and give priority to these. The next step in setting up a benchmarking programme is to determine who should be involved in the process. The team may comprise finance, helpdesk and operational staff members. There is no single solution to this process, as there is no universal approach to managing facilities. Every organisation has differing needs, and understanding these needs is critical to getting the best fit between the facilities and the organisation, and to selecting the most appropriate KPIs for the business. Typical KPIs in most organisations include: ❑❑ ❑❑ ❑❑ ❑❑ ❑❑

Turnover. Profit. Operating expenditure. Customer satisfaction. Output volume.

The FM needs to determine what metrics in their sphere of influence have a direct impact on or relationship to the top organisational KPIs. They need to understand the measurement philosophy and requirements of the organisational KPIs so that the FM measurements are feeding into these, and are compatible. The FM must find out what, who and

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whose behaviours are being measured. They need to know what processes are used in providing key KPI data and, most importantly, who owns the data and the KPI. It is vital that the performance measurement system has clarity of purpose. FMs need to ask themselves: ❑❑ What is the purpose of the measurement and KPIs? (What will happen to the informa-

tion and what decisions or actions could arise?)

❑❑ Who needs to receive the information obtained from the KPI or benchmarking sys-

tem? (Who will read the information, and what format is required?)

❑❑ Who has responsibility for collection of the data? (Do the suppliers and contractors buy

into the system and provide information in the right format?)

Without this information, it is impossible to define how the performance measurement system will operate. The best performance measurement or benchmarking processes are simple and enable sharing for easy comparison and analysis. Remember that good measurement systems, with considered and accurate reports, will influence how the FM is perceived in the organisation, so don’t waste the opportunity to impress others. Consider who is the audience, and ensure that the results are published in a format to suit the readers. Benchmarking data must be accurate, with assumptions clearly stated. Year-on-year trend information is significant as this gives a direction in the value of the FM services. It is important to be consistent with the metrics, so use one protocol or standard. For example, it is common to find that space data varies depending on the measurement protocol, so just stick to one protocol throughout the benchmarking system. It is sometimes easier to just focus on the language of accountants and finance for benchmarking, but remember that many behavioural drivers are not measured in monetary values. Metrics which measure quality and delivery are just as important to FMs. These will measure the contribution of FM, rather than just what it does. However, the advantage of KPIs and benchmarks produced in ‘accounting language’ is that they are easier to compare with external organisations. In an ideal organisation, everybody’s objectives should be linked, which makes the establishment of performance measurement systems easier. This should include the FM service partners, especially if they are needed to provide credible data for the performance measurement system. There is a danger in measuring only what can be measured and ignoring the rest. This can result in only doing what can be measured. For some FMs, the only aspect of their service that is measured is that which is needed for contract compliance. Adopting a focus on SLAs and KPIs may lead to a very narrow view of what FM is about, and restricts the potential of FMs to progress from being the problem fixers to the value adders. There is a risk that creativity and innovation will be stifled if too much time is focused on benchmarking. A final note of caution – the difficulty with all measurement is that it is only at the time of measurement that the data is accurate.

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38.1  Corporate information Information is everywhere – every word on every page, and in every file on every computer in every language on every desk, in every office, business, building, street, city, country and continent. Information lies at the heart of every organisation. Some have information that is very sensitive; for others, information is time sensitive and critical. Some retain too little information; some have so much that they can’t hope to use a fraction of it. Some don’t know what information they have, while others can’t access or share theirs. Most don’t manage information well; others don’t even realise it needs to be managed. A rigorous corporate information strategy enables organisations to be more successful by: ❑❑ Improving profitability, because it helps to win new business and retain existing

customers.

❑❑ Enhancing the customer experience, because information can be exchanged with

customers.

❑❑ Reducing risk by protecting the integrity of the brand, and ensuring compliance with

legalisation and governance regulations.

38.2  Document management Document management is concerned with the distribution, storage and retrieval of documents. There will usually be many different types of document. Some may exist on paper only and others may be stored in an electronically readable format. Definition Document management can be defined as the ability to efficiently access documents. Document management is the management of information: the information found in letters, faxes, invoices, orders and computer listings – in fact, all documents. This process is vital to all companies. The efficient control of paperwork is the key to success in today’s increasingly competitive business markets. It is also necessary in today’s more litigious society to provide due diligence and evidence in defence of an organisation’s or employee’s actions.

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Purpose The purpose of document management is to make available any document required by the people who need it, when they need it. A document is an important asset, yet many of these valuable assets are stored unsecured and inaccessible. Origination of documents There is a wide range of word-processing, graphical and desktop publishing software which users can employ to produce in-house documents and visual aids. For more prestigious documents, such as brochures and external reports, dedicated graphic designers may be required to use their professional design skills. The document trail Document management begins with the originator creating a document. Soft copies can be sent and received electronically. However, many external documents still continue their journey via the postal system. The document trail ends in the off-site archive store or confidential waste contractor’s premises. Document sharing Document- or file-sharing software is now commonplace in organisations, speeding up the time needed to create reports, increasing collaboration and reducing the need for printed copies. File sharing allows distribution of or access to digital media, such as computer programs, multimedia, documents or electronic books, using cloud-based products. File sharing may be achieved in a number of ways. Common programs are Dropbox, Google Drive, Microsoft OneDrive, ShareFile and SharePoint. Compatibility with business technology systems is essential, and decisions about which programme is used in a business are likely to be in the domain of the IT department.

38.3 Mail The mailroom is responsible for the mail operation in an organisation. Any organisation needs a process of mail distribution. Normally this involves letters and other packages being distributed internally and externally. Despite new technologies, the processes are simple routines in many organisations, and larger organisations often use QR (quick response) codes and RFID (radio frequency ID) technology to track the larger items. Table 38.1 shows the procedures typically in place. The mailroom is one of the main points for incoming and outgoing information. The Internet and email are the other main point of information exchange and have replaced traditional postal services for many documents. Some mailrooms now scan the majority of incoming documents (with special arrangements for confidential papers), providing an additional service to occupants. The increasing use of online shopping has created a challenge for many mailrooms, as staff use their work addresses for deliveries. A clear policy must be agreed, to avoid business time spend on non-business mail operations. For many staff in an organisation, the mailroom is a hidden service. Safety and security considerations for employees, customers and suppliers are now increasingly important.

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Table 38.1  Mailroom procedures Incoming mail

Outgoing mail

Only accept packages for listed employees Only accept packages from authorised postal delivery personnel with identification Create an audit trail for each piece of mail Make provisions for valuable incoming items Train staff to identify the characteristics of suspect packages, such as grease marks, smells, unexpected destinations, style of writing, mismatched names and addresses, and specific sizes and shapes of package Keep outgoing mail in a separate secure area until collected Make provisions and have a recording system for undeliverable packages

Use an identifiable return address Use the opportunity to promote your organisation, products and services or company logo on the outgoing mail Consider using window envelopes, postcards and pre-printed tape to seal packages Use tamper-evident seals to improve the security of outgoing valuable mail Samples and other products need to be in a sealed poly-bag, and contents identified on the envelope

UK postal market This market is now deregulated to allow licensed postal businesses to provide an alternative to the Royal Mail. Royal Mail provides one collection and delivery of first- and second-class mail each day at a standard price. FMs (facilities managers, or facilities management) can now choose from a wide variety of service providers. There are many businesses working in the postal market. ‘Pricing in proportion’ is the pricing strategy generally used by mail services. It takes into account the size and weight of the item. Functions of mailroom staff Mailroom staff often have many roles depending on the size of the organisation. These roles can be performed by one or more dedicated people or they may be combined with other functions in the organisation. Their ability to deliver a successful service to building occupants will depend greatly on their local knowledge and on them building effective internal customer relationships. The functions of mailroom staff can be summarised as follows: ❑❑ Opening, collating, referencing and distributing internal mail. In some organisations,

this may include scanning or digitising incoming mail, and then distributing it via email, the intranet or the company system. ❑❑ Collating, packaging, stamping, recording, and posting or dispatching outgoing mail. Workload

On average, one mailroom operative is able to service the mail of around 250–400 employees. Obviously this does depend on the level of sorting, the locations, the horizontal and vertical access of the building(s), and the frequency of distribution rounds within the organisation. Other general duties may also be added, such as: ❑❑ Supplying stationery. ❑❑ Supplying general consumables. ❑❑ Building safety checks.

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❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑

General porterage. Meeting room management. Small office moves. Reprographics. Top-up of local copier centres. Notice board management.

Mailroom design The design of the mailroom is fundamental to its efficiency. Racking systems are often used, and there are many proprietary mailroom equipment suppliers specialising in this market. Many of these suppliers will provide a layout and design service. Criteria to be considered in the design include: ❑❑ ❑❑ ❑❑ ❑❑

Space between aisles. Space for sorting operations. Space for packaging operations. Location for specialised equipment, such as: ○○ ○○ ○○ ○○ ○○ ○○ ○○ ○○

Space for parking trolleys (lightweight and designed for mail/goods handling). X-ray equipment. Franking machined. Intelligent weighing equipment. Electronic letter openers. Direct envelope printers. Access control. Security controls (such as CCTV).

Audit In assessing the mail needs of an organisation, an audit may be undertaken, asking questions such as: ❑❑ What is the level of risk posed to the business in terms of the volume of sent and

received mail and the potential cost of a security incident?

❑❑ What standards and service level agreements are required to ensure good mail service ❑❑ ❑❑ ❑❑ ❑❑ ❑❑

❑❑ ❑❑ ❑❑

performance? Do important items get to the right person at the specified time? Do the services include courier booking, item tracking or secure delivery? What are the costs of the service, and is the service considered value for money? Can the costs be analysed by distribution category (e.g. post, courier, overnight services)? Are there opportunities to combine the service with other parts of the organisation, such as goods-in deliveries, consumables (e.g. stationery) purchase and issue, or printing and reprographics? Does the service need to be in a particular building or location? How secure is the service? Can the service be outsourced to a specialist operator?

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Security of mail Guidelines to improve the security of mail include: ❑❑ Ensure that there is a designated supervisor or manager in charge. ❑❑ All staff should have training and refresher training in security procedures. ❑❑ The location of the mailroom is critical to its effectiveness and efficiency. Most mail-

rooms are located on the ground floor of a building. It must be accessible to all users, including external couriers and postal delivery organisations. ❑❑ Employ a range of security measures, such as: ○○ Access control. ○○ Intrusion alarms. ○○ Surveillance cameras. ○○ X-ray screening. ❑❑ Have a robust disaster recovery plan and ensure that there are clear responsibilities for

the mailroom team. Actions required of the staff must be understood. Training and refresher training of the staff should include actions to take with both hoax and real breaches of security. ❑❑ Conduct full employee security checks to check their past employment and criminal records. Outgoing mail It is common practice for outgoing mail to be stamped using a metered franking machine. This will allow all outgoing mail to be identified with the organisation, and makes tracing easier. Pre-printed envelopes can also be used. Access to the franking machine may need to be controlled so that only authorised items can be sent. Organisations may have strict policies on personal post and cross-charging of services back to each department or user. Departments can be allocated a unique code to track their mail, and this can be written in pencil on the envelope. Some organisations may advise staff that all post will be sent second class unless marked otherwise. A simple ‘1’ or ‘2’ in the top-right area in pencil may be sufficient to implement this simple procedure. Franking Franking is an easy, flexible way to pay for any amount of UK or overseas postage. However, the payment is made in advance of actually consuming the service. An organisation can either hire or buy a franking machine, and Royal Mail will issue a franking machine licence, which states the terms and conditions of using that equipment. All franking machine customers are required to adhere to these terms and conditions, and Royal Mail has the right to withdraw a licence if they are not met. It gives the outgoing mail a more professional look. Costs are reduced for franking customers when compared to normal stamps. Organisations can make significant savings with discounts on first- and second-class mail. The credit limit on the machine can be topped up electronically. Franked mail must be posted on the date shown and before the last collection time (local opening times and latest acceptance times will apply). Franked letters must be segregated by class or service in bundles facing and oriented the same way using designated pouches.

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Pouches, trays and containers are provided to customers free of charge. Specialist suppliers will provide late-posting envelopes and low-volume envelopes. Outsourcing mail services Reasons to outsource mail services to a specialist supplier may include operational efficiency, cost savings and security. Outsourcing may be done on the client premises or at a remote location. A range of services can be provided via external specialist organisations, such as: ❑❑ Mailroom management services – Customised on- or off-site mailroom solutions to

save business time and money.

❑❑ Mailroom consultancy services – Experts to advise how mailroom operations can be

improved.

❑❑ Pre-sorted delivery – The external contractor will pre-sort the mail so it can be pro-

cessed faster when it arrives.

❑❑ Security screening  –  Expert mail screening to minimise the risk of in-house staff

receiving threatening or potentially harmful items in the mail.

❑❑ Secure mail opening services  –  Post can be opened and any potentially dangerous

mail processed in a safe, off-site environment to prevent the risk of harmful substances being received. ❑❑ Mail opening services – Mail can be opened and sorted to meet an organisation’s exact requirements so it arrives ready to be processed.

38.4 Reprographics Different organisations will have different printing and document-copying requirements. If a central reprographics service is provided to all occupants, then it may come under the FM’s remit or alternatively it may be part of the IT or information management department. In educational establishments, it often comes under the library or learning resources team. Services can include: ❑❑ ❑❑ ❑❑ ❑❑ ❑❑

Self-service printing and photocopying. Printing and copying. Sending or receiving faxes. Book binding (thermal, comb, Planax, etc.). Laminating.

Finishing Finishing services are those aspects of document reproduction that complete the final product. Most reprographics functions in large organisations and outsourced contractors will provide a full finishing service. The options may include: ❑❑ ❑❑ ❑❑ ❑❑ ❑❑

Folding. Collating/stapling. Booklet making. Binding. Padding.

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❑❑ ❑❑ ❑❑ ❑❑

Numbering. Perforating. Two- or four-hole drilling. Guillotine work.

38.5 Photocopiers A copier works because of one basic principle of physics: opposite charges attract. Inside a copier there is a special drum which is charged with a form of static electricity. Inside the copier there is also a very fine black powder known as toner. The drum, charged with static electricity, can attract the toner particles. There are three things about the drum and the toner that make a copier work: ❑❑ The drum can be selectively charged, so that only parts of it attract toner. In a copier, an

‘image’ in static electricity is made on the surface of the drum. The white or blank parts of the document to be copied will not attract the toner, as these will not create static electricity, whereas the dark or printed areas will create a charge and attract the toner. The way this selectivity is accomplished in a copier is with light – this is why it is called a photocopier! ❑❑ Somehow the toner has to get onto the drum and then onto a sheet of paper. The drum selectively attracts toner. The sheet of paper is then charged with static electricity and it pulls the toner off the drum. ❑❑ The toner is heat sensitive, so the loose toner particles are attached (fused) to the paper with heat as soon as they come off the drum. The end result is a photocopy of the original document. Photocopiers can come in many different sizes and functionalities, from high-volume photocopiers that are capable of more than 30,000 photocopies per month right down to personal photocopiers with capacities of less than 2000 photocopies per month. Most photocopiers are equipped with an impressive range of options and facilities. Copiers may be selected based on these criteria: ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑

Quality. Productivity. Creativity (the features and functions). Reliability. Size. Price.

Built-in electronic controls will automatically adjust the settings for aspects such as toner, temperature, humidity and exposure. Remote diagnostics offer effective maintenance by the supplier. Many organisations now set the default to two-sided copying to reduce the amount of paper used. Purchase options Issues that are important to consider in the procurement of a copier include: ❑❑ Monthly volume.

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❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑

Expected growth of the business. Need for colour. Space available. Quality of copies required. Extent of collating. Speed of output. Sizes of output – A4 or others such as A3. Use of features – enlarge, reduce, margins, etc.

Leasing Leasing is a well-established, tax-efficient method of financing a wide variety of capital equipment. Values can range from one to many thousands of pounds. Practically every sector of the British economy takes advantage of leasing, from small- and medium-sized enterprises through to large multinational organisations. Many organisations will have leasing arrangements for their photocopying and multi-function device (MFD) equipment. Leasing is a contract between a finance company and a customer, giving the customer use of the equipment on payments of rentals over a period. The advantage of leasing equipment is that the organisation can make a series of regular (usually 3-monthly) payments, instead of a large capital outlay to buy the equipment. The cash flow and tax relief benefits of leasing provide a very strong case against cash purchase. When an organisation buys equipment outright, the capital invested becomes, in effect, tied up in a depreciating asset that loses its value. Copiers and cars are both examples of equipment that has a rapid depreciation rate. Leasing, on the other hand, allows the organisation to use resources for other business-related purposes or opportunities. The rental fee remains the same for the term of the agreement. The rental amounts may change during the leasing term if the taxation regime changes, if the finance department begins to treat leases differently, or the organisation negotiates an upgrade or downgrade of equipment with the supplier. Title to the goods remains with the finance provider, which means the equipment does not show on the company’s balance sheet as an asset and therefore does not need to be depreciated over a fixed period. However, provisions do need to be made for the liabilities of the rental charges. A leasing facility allows businesses to keep up with changes in technology as the original installation can be altered either during or at the end of the lease period. The normal reason for this is due to a customer’s expansion of business and their changing needs. The majority of copiers are leased, although low-volume personal copiers may be purchased outright. The types of lease or rental plan are: ❑❑ Copy plan  –  The machine is rented, with an additional charge made for the actual

number of copies made.

❑❑ Service plan – The machine is rented based on an agreed number of copies per month

or quarter, with a quarterly service charge on top.

❑❑ Rental only – The machine is rented, with additional call-out fees to fix the machine

being charged at cost.

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Photocopier leasing versus buying a copier Every organisation is different but photocopier leasing is very popular with many organisations. Advantages include: ❑❑ The cost of the copier is certain and known in advance. ❑❑ The copier cannot be withdrawn once the contract is signed and its conditions com-

plied with.

❑❑ There is no need to tie up capital in fixed assets. ❑❑ Allowances, depreciation and other calculations are not needed, since leasing is con-

cerned only with rentals.

❑❑ Leasing provides a medium-term source of capital which may not be available

elsewhere.

❑❑ Leasing provides a hedge against inflation as the use of the asset is obtained

immediately – payments are made out of future funds and are made in fixed money terms, with real costs falling as inflation increases. ❑❑ It is possible to immediately acquire cost-saving equipment. Disadvantages include: It is generally not possible to dispose of the photocopier before the end of the lease. The copier is not owned. Funds must be found to pay the lease throughout its duration. Overall, the lease costs over the full term are greater than the original purchase price. ❑❑ The interest rate charged on the funds in the lease may be greater than loans or overdrafts for funds obtained elsewhere. ❑❑ ❑❑ ❑❑ ❑❑

High-volume photocopiers High-volume digital photocopiers are designed for high-speed, high-volume usage. These photocopiers are designed for busy reprographic departments, professional printers and large corporate organisations where quality cannot be compromised by speed or quantity  –  the last copy out is as good as the first copy out and the original document. Features will typically include: ❑❑ ❑❑ ❑❑ ❑❑

Up to A3 format. Photocopy/print speed of over 40 pages per minute. Average monthly volume of 30,000 photocopies/prints or more. Faxing, network printing, scanning, iFax and Internet access facilities.

Medium-volume photocopiers Medium-volume digital photocopiers are designed for medium speed and volume usage. Features typically include: ❑❑ Up to A3 format.

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❑❑ ❑❑ ❑❑ ❑❑

Automatic double siding (Duplex). Photocopy/print speed of between 20 and 40 photocopies/prints per minute. Average monthly volume of between 10,000 and 30,000 photocopies/prints or more. Faxing, network printing, scanning and iFax.

Low-volume photocopiers Low-volume digital photocopiers are designed for the small office where the need for speed and/or volume is not a major consideration. Durability and quality of output are paramount. Features typically include: ❑❑ ❑❑ ❑❑ ❑❑ ❑❑

A4-only and up to A3 paper formats. Single-sided photocopying/printing (Simplex). Photocopy speed up to 20 prints per minute. Average monthly volume up to 10,000 photocopies. Electronic sorting and staple finishing, and fax options.

Personal photocopiers Personal photocopiers are designed for individual professionals and small businesses with occasional photocopying requirements. Features typically include: ❑❑ A4 photocopies. ❑❑ Maximum monthly volume of less than 2000 photocopies/prints. ❑❑ Facilities and options include an automatic document feeder, printing, scanning and

faxing.

38.6 Printers There are several types of printer available to suit budget and quality of print output required. These include: ❑❑ Inkjet. ❑❑ Laserjet.

Inkjet Inkjet printers are the most common type of computer printer for the general consumer. Inkjets are usually inexpensive, quiet and reasonably fast, and many models can produce a high-quality output. Laserjet A laser printer is a common type of printer that produces high-quality prints and is able to produce both text and graphics. The three major advantages of laser printers over inkjets are sharper text, lower cost per page and much faster print speed, since the entire page is imaged at one time.

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38.7  Multi-function devices An MFD combines the convenience and quality of a laser printer with the advanced paper handling and finishing features of a photocopier. These devices are found in most larger offices and have reduced the need for separate fax, scanning and copy machines as well as individual desktop printers. The advantages of an MFD are numerous and include: ❑❑ Optimises equipment use. ❑❑ Has a central paper store for one piece of equipment. ❑❑ Because there is likely to be one central device per area or floor, it encourages users to ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑

move, get up and walk around to release the tension of working at computer screens. Incorporates greater functionality – fax, multiple copies, double sided, etc. Means fewer assets need a PAT (portable appliance test). Saves space at the workstation. Can be programmable to ensure only authorised users are allowed access. Can provide records for cross-charging copying to users/departments Can be programmed to print only when the user is present (known as ‘follow-me’ copying).

Although outwardly they look like photocopiers, MFDs are fast network laser printers with scanner attachments to provide the copying function and hard disks to store print jobs. The ability to print to the MFD from a PC means that many of the features associated with photocopying – duplexing, collating, stapling – are now available through a software application running on the internal computer network. Printing on an MFD is as simple as printing to any of the laser printers on the network. The MFD will be given a unique name and be visible in the available printer list. Features These include: ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑

❑❑ ❑❑ ❑❑ ❑❑

Multiple-page to single-sheet printing, e.g. up to 16 pages on a single side of A4. Duplex printing – printing to both sides of a single sheet. Stapling. Punching. A4–A3 enlargement, A3–A4 reduction. Multiple paper sources (e.g. print first page on different-coloured paper, slip sleets). Watermarking – print background text onto every page. Locked printing – allows a print job to be sent to the copier with a unique copier ID number. The job is not printed until the correct ID number is entered at the copier control panel. Sample printing – allows the user to print only the first copy of a multiple-set print job for proofing purposes. Ability to handle copy and print jobs simultaneously. Scanning – allows the creation of PDF copies of documents to be made, saved and sent to email accounts. Faxing – allows a document to be faxed to another facsimile destination.

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38.8  Facsimile (fax) machines Fax machines use telecommunications technology to transfer copies of documents, using affordable devices, over the telephone network. A fax machine is essentially an image ­scanner, a modem and a computer printer combined into a highly specialised package. The scanner converts the content of a physical document into a digital image, the modem sends the image data over a phone line and the printer at the other end makes a duplicate of the original document. The use of fax machines has declined as the technology has increasingly been replaced with the Internet and MFDs.

38.9  Electronic document management system Electronic document management systems (EDMSs) allow a document to be filed under multiple references and therefore be retrievable under various search criteria. A global library can list all relevant documents on an individual’s computer screen. Hard copy documents can safely and inexpensively be stored off site, allowing the business to access and recover these original documents in the event that there is corruption or a systems failure. The benefits of EDMS are many and include: ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑

Saving time finding documents. Saving space on bulky storage facilities. Reduced risk from fire or flood. Reduced risk from business interruption while documents are retrieved. Facilitation of sharing of information across an organisation. Reduced overall costs of document management. Improved business processing time and service to customers.

Software There is a range of document management software packages to suit a wide range of users. These provide the ability to capture, index, store, retrieve, distribute and otherwise manage documents. To choose the most appropriate one, the FM needs to determine: ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑

Size of documents. Methods of origination. Number of documents produced per month. Number of users of documents. Location of users. Flow of documents within the organisation. Current storage software or manual system. Current formats of documents. Required storage and retention times for documents.

Scanners There is a broad range of high-speed, high-performance document scanners that combine reliable high-quality image input with easy operation and maintenance. To benefit from an

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EDMS, the organisation will need to convert its paper-based information from hard copies via scanning technology to soft digital files. This can be costly and time consuming. Organisations will need to determine how much of the archive and current documents are to be scanned into the EDMS. This process makes information management more efficient and less time consuming.

38.10  Audiovisual equipment The proliferation of remote working in many organisations has necessitated better video conferencing and audiovisual technology solutions. The range of equipment available to satisfy audiovisual requirements in a business includes: ❑❑ Plasma screens – Ideal for multimedia applications, these can be vertically or horizon-

tally mounted and can be used as updateable digital signage or for an endless array of multimedia applications. The ultra-thin display offers a wide viewing angle of more than 160° and has a system that senses ambient lighting conditions and adjusts brightness and gradation accordingly. ❑❑ LCD TVs. ❑❑ Projectors – Features to be considered include contrast ratio, resolution, lamplife, warranty for both the unit and the lamps, lumens, and weight of unit. ❑❑ Interactive whiteboards – These products are ideal for meetings, brainstorming, scheduling, training, real-time communication and creative presentations. Products range from simple boards to ones with more complex functionality. They may connect to: ○○ A computer so that users can write or draw on the board’s surface and electronically capture their notes in full colour. ○○ Any data projector, which means the whiteboard instantly becomes a touchscreen board. ○○ Both computer and projector for a complete interactive system which responds to touch for annotation and application navigation. The projected images, complete with user notes and annotations, can then be captured and stored for electronic hard copy distribution. ❑❑ Fully integrated top-of-the-range products – These can be connected to a computer

and LCD projector, allowing users to control applications directly from the supplied utility software and electronic pens. This additional functionality eliminates notetaking during meetings; information can be uploaded and emailed as an attached file. Most built-in printer versions allow for immediate distribution of notes to the audience. With appropriate additional software, these products may also provide a cost-effective realtime teleconferencing solution. ❑❑ Portable interactive devices – There is a range of devices available. The Mimio range of products uses ultrasound to convert whiteboards and flipcharts into interactive devices. The positions of the marker stylus and eraser are tracked. Another product, the CleverPad, is a wireless tablet fitted with Bluetooth technology that allows many surfaces to be made interactive. These interactive Bluetooth pads will enable any meeting participant to contribute to a presentation from anywhere in the room. ❑❑ Screens – These can be either free standing or fitted in a variety of ways in a room. For example, they can be mounted on tripods, wall mounted, ceiling mounted, in a table top version or pulled up from a base unit. There is a variety of sizes available. Screens

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❑❑ ❑❑

❑❑ ❑❑ ❑❑

can be manual or electrically operated. The surface needs to be matte white. It is usually advisable to fix clear notices that the screens must not be written on. Accessories – These may include stands, trolleys, security boxes for projectors, overhead projectors, flipchart stands, whiteboards and ceiling mounting kits. Wireless presentation devices – These are becoming more commonplace, reducing the need for cables and complex set-ups. ClickShare has been adopted by many organisations, as it is compatible with many different devices. LED walls. Flat-panel displays. Meeting room audio systems  –  These can support video and teleconferencing sessions.

38.11 Archives All organisations will have materials, documents and other materials that will require storage. An organisation needs to identify the various types of document used in its business, and provide guidelines on the storage time, reminders for destruction, procedures for retrieval and storage formats. BS ISO 15489 gives information on document management and archiving. An archive can be set up on site or externally in cheaper premises, and an archiving service can be provided by specialist contractors. This will include a destruction and retrieval service. Some organisations will identify different levels of storage – such as short, medium and long term, or shallow (for documents that may be accessed once or twice a year) and deep (for documents that have not been accessed for 2 years). A proactive archive service will monitor retrieval rates to determine whether documents could be moved to cheaper (deeper) storage, and also when documents are nearing their predicted destruction time in order to progressively reduce the cost of short-term shortage of documents that are too old and have no value to the organisation. An archive policy will help employees to appreciate what they need to do and the procedures that they need to follow. The policy may also be linked to a central filing scheme. Most company documents need to be kept for a period of 7 years from their year of origination. This is because it can take up to 6 years for a legal claim to be made for breach of contract. In addition, the Companies Act 2006 and the Value Added Tax Act 1994 require organisations to keep documents for prescriptive periods of time. Documents that require particular attention include insurance policies, contracts, employee records, leases and purchase orders. If an organisation is operating in the public sector, then there is likely to be a records manager appointed, who will have a responsibility under the Freedom of Information Act 2000 to respond to requests for documents and information from the public. All organisations must comply with the Data Protection Act 1998 and the General Data Protection Regulation 2018, and this will influence how documents are retained in a safe and secure storage medium.

39

Sustainability and Environmental Issues

39.1 Introduction Sustainability and environmental issues are a major concern for all organisations. Sustainability is a wider concept than just environmental management – it includes social and economic factors too. Sustainability is closed linked to corporate social responsibility (CSR), as organisations are striving to demonstrate good performance against sustainability benchmarks. The challenge is how to increase the standards of living of the world’s population without depleting the earth’s finite resources and damaging planetary ecosystems. FMs (facilities managers, or facilities management) often manage fuel and power, the safe use of hazardous substances or chemicals, and the safe disposal of waste. Commercial buildings often incorporate potentially dangerous substances such as lead pipes, asbestos, silica insulation and lead-based paints. The built environment has a major impact on the planet. Facilities services, such as cleaning and catering, also present potential environmental hazards to staff, customers and the general public if not managed and maintained appropriately. Facilities departments often employ large numbers of staff either directly or indirectly in low-skilled or manual activities, with low wages. Most FM departments will procure many different resources and materials, either directly or indirectly via their specialist providers. FMs’ influence on CSR and sustainability is therefore quite significant. Many FMs will have specific roles and responsibilities to support their client’s and employer’s CSR policy.

39.2  Historical overview There have been several key milestones in the development of environmental and sustainable awareness. 1960s: early awareness of environmental issues Up to 4000 deaths prompted legislation in the UK to reduce the levels of pollutants in the atmosphere from coal burning, heating and manufacturing. The Clean Air Act came into force in 1956. The World Wildlife Fund (WWF) was formed in 1961. Rachel Carson’s book Silent Spring, published in 1962, was critical of technology and raised global awareness of environmental problems.

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1970s: early energy management Greenpeace was formed in 1971, beginning a movement of active campaigning on environmental issues. Limits to Growth, published in 1972, was the first major commentary on the continuing population increase and economic growth. The United Nations Conference on the Human Environment was held in Stockholm the same year. During the early 1970s, the first energy crisis occurred. The oil crisis of 1973 and coal strikes in the UK focused attention on improved energy management and the use of fossil fuels. There were shortages of petrol for cars and periods without electricity in homes and commercial buildings. 1980s: early climate awareness The United Nations set up the World Commission on Environment and Development (WCED) in 1983. In 1987, the report Our Common Future was published by the WCED. This became known as the Brundtland Report, after Gro Harlem Brundtland, the WCED’s chairman. This report links sustainability and development in an effort to integrate environmental thinking in economic decisions. The Brundtland Report implies that it should be possible to balance economic and social forces with the needs of the environment. Following the recognition of the problem of global warming, the Intergovernmental Panel on Climate Change (IPCC) was established by the World Meteorological Organization and the United Nations Environment Programme. The purpose of the IPCC was to enable climate experts to analyse the most recent scientific findings on a regular basis and report them to the world’s political leaders. 1990s: early environmental management The IPCC issued its first Assessment Report in 1990, which led to the adoption of an Intergovernmental Negotiating Committee for a UN Framework Convention on Climate Change by the UN General Assembly. In 1992, the Earth Summit in Rio de Janeiro took place. The Rio Declaration introduced the ‘polluter pays’ concept and the ‘precautionary principle’. The Earth Summit identified that sustainability was best achieved at local levels – a bottom-up approach. Agenda 21 (which arose out of the Earth Summit) set out participation and open government principles, which were adopted by all UK local authorities, to address the three themes or conventions of biodiversity, climate change and desertification. In 1994, the UN Framework Convention on Climate Change was adopted, providing an overall framework for addressing climate change. From the early 1990s, the consumption of resources and disposal of waste began to cause concern. It was considered unacceptable to continue to simply dump waste in landfill and the sea. Recycling waste was encouraged, aiming to extend the life of raw materials. In 1995, the IPCC issued its second Assessment Report on climate change. In 1997, the Kyoto Protocol was agreed, which put limits on discharging certain greenhouse gases (GHG) into the atmosphere. The World Conservation Union report Caring for the Earth (1991) defined sustainability as ‘improving the quality of life within the carrying capacity of supporting ecosystems’. In 1999 the UK’s Department of the Environment, Transport and the Regions produced a report, A Better Quality of Life, outlining the government’s Sustainable Development Strategy. In this report, sustainability was defined as: ‘A better quality of life for everyone, now and for generations to come, to be achieved through:

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❑❑ ❑❑ ❑❑ ❑❑

social progress which recognises the needs of everyone; effective protection of the environment; prudent use of natural resources; and maintenance of high and stable levels of economic growth and employment.’

2000s and 2010s: increasing environmental and climate change awareness The concept of ‘green issues’ has steadily developed over the past two decades into highprofile environmental awareness and sustainability programmes. In 2001, the IPCC issued its third Assessment Report on climate change, in which it gave severe warnings. The film An Inconvenient Truth  –  an influential documentary about the impacts of climate change – was released in 2006. The importance of environmental protection on a broader scale was beginning to be recognised although there remained fundamental contradictions. There was growing concern about climate change but no real or genuine efforts to tackle the problem. In 2005, global warming and associated aspects of the world’s environment were major points of discussion at the G8 Summit in the UK. The 2005 Stern Report commented on economic impacts of climate change against a range of emission scenarios. The IPCC’s fourth Assessment Report (2007) again gave severe warnings and indicated that humans were the primary cause of climate change. In the same year, GEO-4 stated that ‘environmental degradation is undermining development and threatens future progress and human wellbeing’. The IPCC’s fifth Assessment Report (2014) stated that: ‘Human influence on the climate system is clear. . . emissions of greenhouse gases are the highest in history. Recent climate changes have had widespread impacts on human and natural systems. Continued emission of greenhouse gases will cause further warming and long-lasting changes in all components of the climate system, increasing the likelihood of severe, pervasive and irreversible impacts for people and ecosystems. Limiting climate change would require substantial and sustained reductions in greenhouse gas emissions.’ This report called for adaptation and mitigation strategies to support sustainable development, citing substantial scientific evidence on all aspects of earth’s natural systems. Even with the suggested efforts to reduce GHGs, irreversible negative impacts are highly likely. The focus is to reduce the increase in global surface temperatures to 1 to 2 °C above preindustrial levels. As a result the UK, the EU and other governments have modified their laws and regulations to deal with pending climate change challenges, setting new targets and quotas for GHGs. Following reports that the tipping point of a 1.5 °C change is nearer than predicted, many countries are now revising their targets to zero carbon emissions by 2050. Speculation that a 45% cut in carbon dioxide (CO2) emissions is needed by 2030 if the global temperature rise is to kept at the threshold of 1.5 °C is stirring up action by governments and climate activists alike. The sixth IPCC Assessment Report is due in 2021 or 2022. Numerous ‘convention of parties’ meetings held in different locations around the world since the Earth Summit continue to set new targets and limits, and agree policies to address issues relating to biodiversity and climate change. With the major focus on climate, it is easy to overlook the other emerging challenge of the loss of species. Global Assessment Report on Biodiversity and Ecosystem Services, a report

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by the Intergovernmental Science-Policy Platform on Biodiversity and Ecosystem Services published in 2019, showed that one in four (about 1 million) species are at risk of extinction, so plans for a new strategy for nature protection and an oceans treaty are now underway. As nearly 50% of carbon emissions result from the built environment, which also consumes 50% of fresh water, and as the built environment can cause harm to local indigenous species, FMs are in an important position to influence environmental practice within their organisations and the built environments they control. FMs must set exemplary models of environmental best practice and behaviour.

39.3 Definitions ‘The environment’ can mean many things. It is the surroundings in which we all live and work, and there are also a number of legal definitions. The Environmental Protection Act 1990 regards the environment as ‘all, or any of the following media, namely air, water and land’. Sustainability is about living and working in ways that meet and integrate existing environmental, economic and social needs without compromising the well-being of future generations. One of the most popular definitions of ‘sustainable development’ is from the Brundtland Report (1987): ‘Development that meets the needs of the present without compromising the ability of future generations to meet their own needs.’ This could be put more simply as: ‘Please leave this planet as you would wish to find it.’ At present, we are not achieving sustainable development because: ❑❑ Humans are using up natural resources and energy faster than the earth can replenish

them.

❑❑ Humans are producing waste and pollution faster than the earth can accommodate them.

Humans are, through the economic, social and environmental decisions being taken (both lawful anunlawful), living way beyond the environmental capacity of the earth itself. The symptoms of this are extreme poverty, starvation and death in many developing countries; increasing obesity in many developed countries; aggravated respiratory problems and premature death due to air pollution; and more extreme, more frequent and more devastating weather patterns due to climate change. ‘Corporate social responsibility’ refers to corporate behaviour that demonstrates open and transparent business practices based on ethical values and respect for employees, communities and the environment. It is about being ‘green and good’. CSR is the business response to sustainability. It is about going beyond legislative requirements. ‘Environmental impact’ is defined as any change to the environment, whether adverse or beneficial, that wholly or partially arises from the organisation’s activities, products or services. ‘Environmental aspects’ are defined as elements of an organisation’s activities, products or services that can interact with the environment.

39.4  Earth’s resources The regenerative capacity of the Earth is affected by human activity – by society, the environment and the economy. This is the theory that underpins the sustainability agenda. It is

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also referred to as ‘Planet, People and Profit’ or the ‘triple bottom line’. The Brundtland Report suggested that sustainability can be achieved if the three forces are balanced, as shown in Figure 39.1. By working within the earth’s environmental framework, sustainability may be achieved. A similar concept defines five types of earth’s capital that must work together. These are shown in Table 39.1. Currently our rate of consumption of resources exceeds the rate at which they are produced. This means that our way of living cannot be sustained in the long term. Various statistics illustrate this unbalanced consumption.

Climate change Water management Energy consumption Resource management Biodiversity Waste management Emissions control Compliance Travel plans Land use

Eco-champions

Fair trade

Environmental impact assessment

Environment (Planet) Socioenvironmental

Community projects Social (People)

Ecoefficiency

Socioeconomic

Health and safety Employee satisfaction Welfare and wellbeing Apprenticeships Training and development Ethics Code of conduct Neighbours

Economic (Profit)

Sponsorship and donations

Employee share options

Figure 39.1  The trilogy of sustainable FM

Sustainable FM

Life cycle analysis Tender process Terms and conditions Payment terms Selection criteria for suppliers Fair wages FTSE4Good

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Table 39.1  Earth’s capital 1 Financial capital

Shares, bonds, banknotes, money

2 Manufacturing capital

Tools, materials, buildings

3 Human capital

Health, knowledge, skills, motivation

4 Natural capital

Renewable and non-renewable resources, climate regulation (water and carbon cycles), sinks that absorb, neutralise or recycle wastes

5 Social capital

Families, communities, businesses, trade unions, schools, voluntary organisations

For example, 20% of the global population lives in developed countries. This population consumes 60% of the world’s energy, owns 90% of the world’s vehicles, consumes 75% of the world’s fresh water and consumes 45% of the world’s fish and meat. Elsewhere one person in five does not have access to drinking water and two billion people do not have access to electricity. The world’s forest area decreased from 31.6% of the global land area to 30.6% between 1990 and 2015. Deforestation is the second-leading cause of climate change after burning fossil fuels and accounts for nearly 20% of all GHG emissions – more than the world’s entire transport sector. Yet forests and trees play a crucial role in determining the accumulation of GHGs, as they act as carbon sinks, absorbing about 2 billion tonnes of CO2 each year. In 2000, 27% of the world’s coral reefs were severely damaged. Wetlands have been reduced by more than 50% over the past century. More than 1.2 billion people survive on less than a $1 per day. The world’s richest own 45% of all wealth. The number of billionaires is rising, especially in China and the rest of Asia. The world’s richest people now have more wealth than ever before while almost half of humanity barely escapes extreme poverty, living on less than $5.50 a day. Around 5 million of the 22.4 million households in the UK are living in fuel poverty, and 20% of children in the UK live in poverty. Life expectancy for those living in poverty is 6% less. It is estimated that a 10% increase in exercise could save 6000 lives and £500 million annually in the UK. In an ideal world, everyone should have sufficient resources for their needs.

39.5  Ecological footprint To gauge the impact of human activities, the concept of ecological footprint was developed by Wackernagle and Rees in Our Ecological Footprint: Reducing Human Impact on the Earth (1994). Ecological footprint analysis compares human demands on nature with the biosphere’s ability to accommodate those demands and regenerate resources. The analysis is carried out by assessing how much biologically productive land and marine area is required to produce the resources a population consumes and to absorb the corresponding waste. This methodology can be applied to either a product or an activity. Also known as ‘resource accounting’, it involves calculating the consumption of energy, biomass, building material, water and other resources and converting this informaion to a measure of land known as the ‘global hectare’. The ecological footprint shows the link between local activities and global effects; it gives a snapshot view of environmental impact. The average footprint is 1.8 hectares per person, with scores of 9.0 in the USA, 5.5 in the UK and 0.9 in India. This supports the hypothesis that if we were to continue using resources in the same manner as we do today, then we would need 10 earths to satisfy our needs.

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39.6  The One Planet Living principles One Planet Living is a vision of a sustainable world in which people everywhere can enjoy a high quality of life within the productive capacity of the planet, with space left for wildlife and wilderness. Some organisations around the world are using the One Planet Living approach to take measurable steps towards genuine sustainability. One Planet Living solutions are cost-effective, creative, inspirational and replicable, and are based on the 10 principles shown in Table  39.2. One Planet Living is a global initiative developed jointly by Bioregional and the WWF using the principles of ecological footprinting (see Section 39.15).

39.7  FM’s role The importance of sustainability and environmental issues in today’s FM’s role is wide ranging. These issues may include: ❑❑ The relationship between people and their surroundings in terms of their comfort, ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑

safety and productivity. The protection of the environment based on ethical and moral principles. Legislative compliance. The financial benefits arising from reducing resource use and waste production. Corporate reputation and competitiveness. Supporting the overall CSR policy. Setting good-practice standards, and acting as a role model or exemplar for others to emulate.

Table 39.2  One Planet Living   1  Zero carbon

Making buildings more energy efficient and delivering all energy with renewable technologies

  2  Zero waste

Reducing waste, reusing where possible and ultimately sending zero waste to landfill

  3  Sustainable transport

Encouraging low-carbon modes of transport to reduce emissions, reducing the need to travel

  4  Sustainable materials

Using sustainable and healthy products, such as those with low embodied energy, sourced locally, made from renewable or waste resources

  5  Local and sustainable food

Choosing low-impact, local, seasonal and organic diets and reducing food waste

  6  Sustainable water

Using water more efficiently in buildings and in the products we buy, and tackling local flooding and watercourse pollution

  7  Land and wildlife

Protecting and restoring existing biodiversity and natural habitats through appropriate land use and integration into the built environment

  8  Culture and heritage

Reviving local identity and wisdom, and supporting and participating in the arts

  9  Equity and local economy

Creating bioregional economies that support fair employment, inclusive communities and international fair trade

10  Health and happiness

Encouraging active, sociable, meaningful lives to promote good health and well-being

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The relationship between people and their surroundings is vital. People spend up to 90% of their time indoors and so ensuring a clean and healthy indoor built environment is as important as protecting the external natural environment. FM will have a significant impact on the local (as well as the global) environment and in turn how people work, how they feel and their general well-being. This affects FMs working in all types of estates – residential, industrial, leisure, manufacturing, retail and offices. The role of FM in an organisation’s sustainability agenda derives from the impact of the built environment which the FM manages. Buildings have high energy consumption demands and produce high volumes of waste, and yet they are frequently empty. Property managers will employ some of the lowest-paid staff in an organisation. The location of the premises will necessitate commuting and business travel. Other impacts that FMs must minimise include parking and noise in the community, workplace conditions affecting the health and well-being of occupants, and employment conditions. Figure  39.1 shows the various facets of sustainable FM. In Sustainable Practice for the Facilities Manager, Shah (2009) proposed 14 themes or categories that the FM can use in a briefing matrix to develop more sustainable FM practices. These are ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑

Management. Emissions to air. Land contamination. Workforce occupants. Local environment and community. Life cycle of building/products. Energy management. Water management. Use of resources. Waste management. Marketplace. Human rights. Biodiversity. Transport.

Each of these categories can be investigated from an environmental, social, economic or governance viewpoint. Each of the FM service lines or operational activities can also be examined against each of the 14 sustainability categories. This will provide a complex matrix of priorities and identify improvement opportunities or actions that can reduce negative impacts and enhance positive impacts.

39.8  Environmental impacts FM activities and operations – such as procurement, building management, utilities management, transport, waste management, recycling, soft services, preventative maintenance, planned maintenance and capital projects – will have varying impacts on the environment. Some of these impacts are detrimental or negative, while others may be beneficial or positive. Table 39.3 shows the range of impacts of FM activities. FMs need to control and minimise the adverse environmental impacts arising in air, in water and on land from the built environment and the way that buildings are used. Ideally, FMs should promote activities and practices that enhance the positive impacts.

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Table 39.3  Environment impacts of FM activities Service area

Example of FM activity

Environmental impact

Reprographics

Procurement and disposal of consumables including paper and toner cartridges

Resource depletion; landfill pollution

Procurement of IT equipment; energy consumption

Resource depletion; fossil fuels

Legal compliance with the EU Waste Electrical and Electronic Equipment Directive 2002; waste disposal

Reuse of equipment components; responsible disposal

Procurement of cleaning chemicals, materials, equipment and uniforms

Resource depletion; water and air pollution

Collection and disposal of office wastes to increase recycling

Reduce landfill

Disposal of clinical and feminine hygiene wastes

Incineration or landfill

Procurement of reusable and biodegradable consumables

Reduce landfill

Legal compliance with solid and liquid wastes

Pollution

Use of video and teleconferencing for meetings

Reduce travel miles

Environmentally friendly choice of vehicles for company cars, with a limit on carbon dioxide emissions

Reduce emissions

Appointment of local partners to reduce the distance travelled by suppliers and contractors to provide services

Reduce emissions

Management of mechanical and electrical plant and building management systems to optimise energy consumption

Reduce energy consumption; emissions control

Disposal of hazardous wastes, such as batteries for an uninterruptable power supply, oils and coolants

Landfill pollution

Storage of chemicals and fuel oils

Leachates into watercourses

Storage, supply and disposal of water

Resource depletion

Management of chiller units and air-conditioning equipment, particularly the replenishment and disposal of system gases

Greenhouse gas control

Use of green or grey water for non-potable water requirements

Reduce potable water use

Review of service charge payments for fuel and life-cycle plant replacement

Fossil fuels

Meeting planning and local authority requirements in planning applications

Land use

Land contamination, either recent or historical

Land pollution

Management of packaging wastes and consumables

Prevention of waste

Procurement of locally sourced and/or ethically farmed foods and purchase of organic products

Reduce food miles

Disposal of hazardous wastes such as cooking oils and food wastes

Landfill pollution

Cleaning

Transport

Technical services

Real estate

Catering

(Continued)

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Table 39.3 (Continued) Service area

Example of FM activity

Environmental impact

Hospitality

Disposal of over-ordered food and consumables

Methane in landfill

Security

Control of lighting at night-time

Light pollution

Project management

Inclusion of environmental issues throughout the life cycle of a project

Carbon footprint

Reuse of materials

Conserve embodied energy

Management of dust and noise during demolition Air/water pollution and construction phases of a project Management of wastes produced during a project

Landfill

Air quality There is a wide range of air pollutants. There are eight key pollutants: benzene (from transport fuel), carbon monoxide, lead, nitrogen dioxide, ozone, particulate matter, sulphur dioxide, and 1, 3 butadiene. The main sources of pollution come from burning fossil fuels for energy and from vehicles. Air pollution can arise from buildings in either of the following ways: ❑❑ Directly from any processes being carried out in the building (e.g. a furnace, heating

systems, or even open coal or wood-burning fires). There will also be emissions from cooling towers, chimneys, incinerators and air-conditioning units. ❑❑ Indirectly from the use of electricity where this is generated from fossil fuels (coal, gas, oil, etc.). The use and operation of the building will also determine the level of indirect pollution from vehicle use and transport links to the building. These may be from car fleets, company vehicles, lorries or vans. Buildings contribute between 40% and 50% of total GHG emissions. The primary contributions are: ❑❑ Fuel used for heating, cooling, power and lighting. ❑❑ Transport and energy requirements for materials and equipment delivery and vertical

transport (i.e. lifts and escalators).

❑❑ Energy requirements for construction and demolition. ❑❑ Direct GHG release due to refrigerant leaks. ❑❑ Disposal of emissions due to incineration and landfill.

Water Most concerns about water pollution relate to the contamination of inland and coastal waters. Pollutants include toxic materials such as pesticides and nitrates; solid wastes and sewage, which cause de-oxygenation (arising from farm waste and sewage); tipping of rubbish and other materials that prevent water flow; and nutrient enrichment, such as fertilisers, which encourage algae and plant growth. Water pollution from buildings generally arises directly, through the discharge of effluent into the sewage system and surface water drains. There is also concern about the increasing water use in the UK (see Chapter 22).

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Noise The number of complaints about unwanted sound or noise has increased dramatically over the past 30 years. Noise is very subjective and something that is acceptable to one person may not be so to another. It is a pollutant because it can seriously affect quality of life and have physical, psychological and social effects on those exposed to it. Noise complaints from buildings will generally arise when unreasonable use is made of the building. FMs must also consider noise generated by building sites, demolition projects, generators, engine test areas, wind tunnel test areas, car race tracks, airports, warehouse operations, manufacturing operations, transport operations, noisy leisure activities and venues, noisy residential areas (e.g. student or hostel accommodation), nightclubs and pubs, and shopping and entertainment centres. Land use Land use planning has a highly significant impact on the environment. It affects visual amenities and generates a range of other pollutants such as air pollution and noise. It uses high levels of natural resources and energy, both in development and in use. Building developments can change local ecosystems, reduce natural flood plains, change rivers courses, change microclimates, and affect biodiversity and habitats. Land use impacts from buildings also arise when the immediate surroundings are subject to significant changes to the exterior of a building, such as erecting prominent display signs, extending buildings, landscaping or changing land adjacent to buildings, or developing an area into a car park. Environmental impacts when developing land can be minimised by carrying out an environmental impact assessment (EIA) on land use proposals. In the UK, all planning applications must be accompanied by an EIA. Waste It is estimated that around 230 million tonnes of waste are generated in the UK each year, with over 40 million tonnes (about 19%) coming from business and industry activities and over 22 million tonnes coming from domestic waste. The remaining waste comes from a variety of sources, including agriculture, mining, quarrying, sewage sludge and dredged spoils, with the construction, demolition and evacuation category of waste contributing over 60% of the total. Waste disposal is a serious environmental problem. The cost of waste disposal is rising and so the minimisation of waste must be a priority. Cutting down on the level of waste is the most effective way to reduce waste disposal costs. Priorities for the recovery of energy from waste, recycling of packaging and other recovery initiatives are set by national and local authorities. Electronic waste is estimated to be growing at a rate three times faster than that of municipal waste. The Waste Electrical and Electronic Equipment Directive 2002 (WEEE) and the Reduction of Harmful Substances Directive 2011 (RoHS) have reduced the impact of the electrical and electronic equipment waste stream, reducing water toxicity and diverting waste from landfill sites for recycling. The process of waste management in itself creates many hazards for the environment. More details on waste are given in Chapter 35.

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Materials used in the built environment The selection and use of any material in the built environment has environmental implications, including: ❑❑ Energy is consumed in the manufacture of materials, such as glass, concrete and brick. ❑❑ Different materials have different amounts of embodied energy (i.e. energy that is used

to create the material).

❑❑ Materials have a limited useful life expectancy, after which replacement or alternatives

may be required.

❑❑ Landfill disposal may contaminate waterways and contribute to the degradation of the

countryside.

❑❑ Uncontrolled waste incineration creates pollution with global consequences. ❑❑ Recycling often requires additional energy.

Consideration must be given to reducing the demand for materials and reusing materials wherever practical. New material selection must include an EIA. Any material or product with a long life expectancy should be given priority. Metals are easily recyclable and the process is commercially cost-effective, which means that approximately 40% of steel (70% of aluminium) is already derived from recycled sources. The use of metal guttering, aluminium window frames, steel ductwork and steel structures in the built environment means that metal recycling is very likely to occur in the future. Plastics are derived from oil resources. The manufacturing process requires high levels of energy and releases chemical air contamination. The use of plastics should be minimised and preference given to certain types (i.e. HDPE [high-density polyethylene] pipework not PVC [polyvinyl chloride], LSF [low smoke and fume] cabling not PVC, etc.) Insulation has considerable lifetime environmental benefits, although some manufacturing processes create land deformation and require high energy input. Natural insulation materials, such as wool, can also be used. Brickwork and blockwork are the essence of the building industry, with long life expectancies and recycling potential. Cement mortars are necessary in certain applications where strength is required although lime mortar should be considered internally; being less adhesive, it increases the potential for reuse and recycling. Concrete needs to be used where strength is required (i.e. large spans, beams, etc.). Concrete should be avoided where other options exist (i.e. steel framework, timber flooring or framing, etc.). The use of timber should be encouraged, but only from sustainable and managed sources. Trees consume considerable quantities of CO2, a significant GHG, during their growth period. Trees absorb CO2 during the day and emit oxygen at night, thus converting this GHG to oxygen, which is essential to human life. A single tree absorbs approximately 35 kg of CO2 per year, which equates to the CO2 emissions of a modern car travelling about 100 miles. Worldwide deforestation is currently depleting tree stocks at concerning levels. Careful selection of timber products is essential to ensure that sustainable growth is achieved. Care must be exercised to avoid unsustainable timber sources, although fast-growing softwoods and controlled hardwoods are ideal products.

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Reputable organisations should aim to ensure that their timber and timber products are derived from sustainably harvested and well-managed forest sources. Independent verification of these conditions is required in accordance with the rules of the Forest Stewardship Council (FSC) or an equivalent internationally recognised certification system. The FSC is an international non-governmental organisation dedicated to promoting responsible management of the world’s forests. The trademark of the FSC is a label on timber and wood products which indicates that the wood comes from a well-managed forest. It gives assurance that the forest of origin has been independently inspected and evaluated to comply with an internationally agreed set of strict environmental, social and economic standards. The FSC trademark enables FMs to choose timber with the confidence that they are not contributing to the destruction of the world’s forests. Softwood trees such as pines and spruce are fast growing and absorb considerable quantities of CO2. Hardwood trees are far slower growing and their large global numbers make them the largest source of global CO2 absorption. Commercial demand for certain types of hardwood (e.g. mahogany, ebony and rosewood) has created vast areas of hardwood deforestation, which has seriously affected the world’s global potential to absorb GHGs. Timber as a building media has far superior environmental properties compared to metals, plastics, bricks and most commercial alternatives, provided it has been sourced from sustainable forests. English oak and pine forest plantations, for example, provide very acceptable timber sources provided a regime of reforestation is constantly implemented. The use of other hardwood types should be encouraged to reduce the demand on conventional hardwoods and many alternatives offer perfectly acceptable solutions. CITES (see below) provides a list of tree types which should be avoided. The use of paints and coatings can create potential risks to health, particularly if applied on site. Oil-based products have greater environmental impact due to their manufacturing and clean-up processes. Water-based decorative paints should be used internally whenever possible as an alternative to solvent-based systems. Note that they are not suitable for hot surfaces such as radiators. Water-based decorative paints should also be used externally as an alternative to solvent-based products provided that the paint manufacturer can provide equivalent durability. Water-based gloss paints do not generally have the same gloss appearance of gloss solvent-based paints early on, but after a time they appear similar. When solventbased paints are used, those with high solid contents should be given primary consideration. Where relevant, factory-finished coatings should be used in preference to those requiring a site-made finish. Factory-applied coatings should be applied under carefully controlled conditions to reduce or eliminate adverse health and environmental impacts. Where protective coatings based on, for example, epoxy or polyurethane resins are to be siteapplied, solvent-free or low-solvent products are recommended. Epoxy and polyurethane resins and their curing agents are reactive materials and can cause damage to human tissue by contact and/or inhalation of vapours. Precautions must be taken, in accordance with the product manufacturer’s instructions, to protect personnel applying the product and those in the immediate vicinity. When polyurethane coatings are to be site-applied, the objective should be to use a product containing a low isocyanate monomer content. Acrylated rubber coatings are preferred to chlorinated rubber products because the manufacturing of the latter involves the potential release of chlorine into the atmosphere.

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Nature conservation and biodiversity Nature conservation includes the preservation of flora and fauna, i.e. all members of the plant kingdom including mosses, phytoplankton, lichen and fungi as well as all birds, mammals, fish and insects. It also considers the habitats of these various species. The Oxford English Dictionary defines nature as ‘the phenomena of the physical world collectively, [especially] plants, animals, and other features and products of the earth itself, as opposed to humans or human creations’. We have, through change of land use, caused significant losses of semi-natural habitats in the modern age. There has been a 97% loss in species-rich meadows and pasture and a 60% loss of lowland heathland in the UK since World War II. This has, indirectly, caused a significant loss of species, particularly birds. More recently, there have been measures to protect certain areas of nature conservation with designated Sites of Special Scientific Interest (SSSIs) and nature reserves. However, overwhelming damage has been caused by intensive agriculture and a loss of diversity in farming. As a result of over-fishing, a total ban on fishing for cod, haddock and whiting in UK coastal waters was instituted in January 2020. Fishing fleets can now only fish to strict limits. The financial pressure to fish beyond lawful limits is immense. Land can be protected as sites of natural conservation interest, such as SSSIs. These sites may be Special Areas of Conservation (SACs), Special Protection Areas (SPAs), Ramsar sites (wetland areas), National Nature Reserves (NNRs) or Local Nature Reserves (LNRs). There is also protection for many species of wildlife under legislation, such as the Conservation of Habitats and Species Regulations 2010. Importantly, the Wildlife and Countryside Act 1981 prohibits taking or killing certain wild birds, animals and plants. In particular, bats and badgers are protected, even if they are causing a nuisance to the users of a building or estate. CITES (the Convention on International Trade in Endangered Species of Wild Fauna and Flora) is an international agreement between governments. Its aim is to ensure that international trade in specimens of wild animals and plants does not threaten their survival. It achieves this by regulating and monitoring international trade to prevent it reaching unsustainable levels. CITES was drafted as a result of a resolution adopted in 1963 at a meeting of members of the World Conservation Union. Approximately 5800 animal species and 30,000 plant species are protected by CITES against over-exploitation through international trade. Human health All of the environmental impacts described above can affect human health in some way. Air pollution can cause breathing difficulties and may be carcinogenic. Noise has been identified as having psychological and social behaviour impacts on both humans and animals. Water pollution and waste can encourage disease and illness. Land use has social and economic impacts on humans and can influence housing needs and the ability to secure access to basic services such as schools, hospitals and recreation facilities. Nature conservation and biodiversity affect human well-being and can have aesthetic, educational and leisure benefits. More direct environmental problems can cause human health issues. For example, inadequate disposal of waste can attract vermin, such as rats. Rats are known to carry Weil’s disease and other diseases related to the environment. There are further problems relating to the disposal of hazardous substances, such as poisons used to control vermin.

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Climate change Climate change is a serious global issue. The average surface temperature of the earth increased by 0.5 °C last century while UK sea levels are rising at an average rate of 1 cm every 10 years. We are experiencing more unstable and extreme weather conditions, which are devastating large areas of the world. In 2019 the IPCC confirmed that that human-induced climate change is causing these extreme weather patterns, and this is now accepted by many throughout the world, including the UK government. Although it is unlikely that any direct legal proceedings can be taken to tackle the causes of climate change, many of the actions and decisions taken at a local level (e.g. development that minimises energy use and the release of air pollutants) could, indirectly, result in a reduction of GHG emissions. It is vital that decision makers are alerted to the wider impacts of their decisions. Buildings are responsible for about 50% of the UK’s annual emissions of CO2. While it does not appear immediately relevant, the climate change now occurring may well become relevant to building design and management. In the future, cooling requirements caused by equipment and people, and higher summer temperatures, may be issues. Buildings will have to cope more effectively with heat dissipation and have better thermal properties to accommodate solar gain.

39.9  History of CSR CSR is said to have its origins in the early 20th century amid growing concerns about large corporations and their power. Initially, concerns arose over the commercial power of such organisations; this extended during the 20th century to an awareness of the impact of these companies on all stakeholder groups. However, it could be argued that the work by some industrialists during the second half of the 19th century to improve the working and living conditions of their employees showed an awareness of their social responsibility. For example, a number of these factory and mill owners provided housing for their employees, as well as pension schemes and medical services. Housing was provided in model villages – the best known is Bournville, near Birmingham, which was built by the Cadbury family for its factory workers. Other examples of model villages from that time include Ackroydon, near Halifax in West Yorkshire, which was built for mill workers, and Port Sunlight, on the Wirral, built for employees of Lever Brothers. Many of these organisations can trace their origins and philanthropic traits to Quaker founders. In the 1970s and 1980s, a legislative approach to the environmental aspects of CSR began, with a focus on pollution of the environment. A number of laws were introduced to ‘clean up’ air and water. A more philanthropic approach was adopted in the 1980s and relevant organisations were formed, such as Business in the Community (BITC) in 1982. In the 1990s, with growing pressure relating to environmental and social issues, compliance with legislation was no longer enough for stakeholders. Greenpeace’s campaign to prevent Shell sinking the redundant Brent Spar oil platform in 1995 is one example of CSR going beyond legislative requirements. The 1990s also witnessed several governance issues which led to the business integrity of many firms (e.g. Enron and WorldCom) being questioned. The impact of these governance failures was to increase the accountability of the boards of directors of organisations. In the global businesses of the 21st century, the focus has extended from the organisation itself to its supply chain and the relationship between the organisation and its suppliers.

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Many of the recent perceived failures in CSR have resulted from the activities of suppliers, often in less developed countries, rather than the organisations themselves. With this focus on CSR, increasing numbers of organisations are now publishing corporate responsibility reports. The number of companies that issue dedicated reports on their CSR activities has grown over the past few years. Many large organisations have created CSR departments, with managers dedicated to the CSR role. The United Nations’ 2030 Agenda for Sustainable Development set a new benchmark for global sustainable transformation. It comprises 17 Sustainable Development Goals (SDGs) and 169 targets, which can be used to review or develop an organisational CSR policy (see Box 39.1).

39.10  CSR responsibilities In order to act in a way which would be considered to be ‘socially responsible’, organisations need to think beyond their statutory obligations. Organisations need to voluntarily take steps to improve the quality of life of employees, their families, local communities and society in the widest sense. The FM and their team have many opportunities to demonstrate a socially responsible approach to the way the premises are managed and the services within are provided. Social responsibilities The FM has a range of social responsibilities including: ❑❑ Managing the direct workforce. ❑❑ Understanding the needs of building occupants.

Box 39.1  The UN’s Sustainable Development Goals • Goal 1: No Poverty • Goal 2: Zero Hunger • Goal 3: Good Health and Well-being • Goal 4: Quality Education • Goal 5: Gender Equality • Goal 6: Clean Water and Sanitation • Goal 7: Affordable and Clean Energy • Goal 8: Decent Work and Economic Growth • Goal 9: Industry, Innovation and Infrastructure • Goal 10: Reduced Inequalities • Goal 11: Sustainable Cities and Communities • Goal 12: Responsible Consumption and Production • Goal 13: Climate Action • Goal 14: Life below Water • Goal 15: Life on Land • Goal 16: Peace, Justice and Strong Institutions • Goal 17: Partnerships for the Goals

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❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑

Providing appropriate staff training. Ensuring appropriate work conditions. Providing a suitable working environment for supply-chain and subcontractor staff. Paying a living wage. Providing equal opportunities. Respecting human rights. Offering scope for flexible working. Promoting the use of fair-trade suppliers. Promoting community engagement. Offering work placements and apprenticeships in FM.

Establishing links between the public sector, charity organisations and commercial organisations in a community project is a method of engaging in the social aspect of CSR for the FM department. Ideally, the best community initiatives have: ❑❑ Direct contact with other people, animals, plants and building materials (e.g. mud, paint). ❑❑ Work outside so the team can experience external weather – some fresh air in the local ❑❑ ❑❑ ❑❑ ❑❑ ❑❑

community, away from their normal built environment. An experience of ‘how I made a difference’. An element of team challenge. The chance to try something new. The opportunity to have a go at something different. The chance to do something in a different working, living or leisure environment.

The benefits for the team participants and the organisation from the project can be: ❑❑ Make them feel loyal again. ❑❑ Make them proud to work for the organisation. ❑❑ Make them feel like they can achieve anything.

Examples of social initiatives that an FM team could organise include: ❑❑ Working with a local community to renovate its public garden, paint its nursery school

or build a playground.

❑❑ Working with a youth centre to fit out a theatre for amateur productions, teach children

a new language or build a computer room.

❑❑ Working with a community in a developing country to set up an Internet café, build an

irrigation system, set up an education programme or organise a party.

❑❑ Working with an animal protection or conservation organisation to repair trails, clean

up habitats, or monitor and care for wildlife.

Using a whole team, perhaps comprising suppliers, contractors and in-house FM personnel, the outcomes of team building can be: ❑❑ A team that has achieved great things and therefore has a reason to believe that they can

achieve great things in other contexts.

❑❑ A team that has broken down professional boundaries and just got down to work with

each other.

❑❑ A group of individuals who feel a renewed sense of purpose in working for the

organisation.

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❑❑ Positive energy and stories that last for years and become part of the culture. ❑❑ A happy charity or community that has made several meaningful relationships as a

result of the project.

Economic responsibilities The FM has a range of economic responsibilities, including: ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑

Knowing the current FM marketplace. Promoting the use of small, medium-sized and social enterprises. Upholding good contract ethics. Using a full life-cycle costing approach in business cases. Promoting the concept of affordability. Promoting sustainable sourcing in procurement decisions. Promoting fair payment terms. Paying suppliers’ invoices promptly. Promoting financial governance protocols.

The Organisation for Economic Co-operation and Development (OECD) has published Guidelines for Multinational Enterprises (2011). A number of focus areas for CSR are identified in these guidelines. The guidelines are voluntary and the aim is to achieve a balance between economic progress and socially responsible behaviour. The guidelines give suggested standards of behaviour in eight areas beyond adherence to applicable laws (see Table 39.4). Table 39.4  Behaviour guidelines according to the OECD Focus area

Behaviour expected

Disclosure

The guidelines suggest disclosure of a wide range of information about organisations in a timely, relevant and reliable manner. It is suggested that the information provided should extend beyond that which is communicated for statutory reporting and should include, for example, statements regarding the organisation’s policy with regard to its employees, other stakeholders and how it conducts business.

Employment and industrial relations

The guidelines cover all areas of employment and industrial relations, from the extremes of child labour and enforced or compulsory labour through discriminatory practices to health and safety in the workplace, training and development, and the impact of operational changes on local communities.

Environment

The guidelines suggest that organisations should aim to protect the environment and conduct activities with the aim of sustainable development. Organisations should also monitor, report and seek to improve their environmental performance.

Combating bribery

The guidelines are clear that undue payments should not be made in any form, and suggest transparency in all activities.

Consumer interests

Business practices should be fair and all reasonable steps taken to ensure the safety and quality of goods and services provided.

Science and technology

The guidelines suggest that the use of science and technology should be compatible with local economies and should contribute to local development.

Competition

Enterprises should carry out their activities in a competitive manner and avoid anti-competitive practices such as price fixing.

Taxation

Enterprises should contribute to the finances of their host countries by the timely payment of their tax liabilities

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The focus areas are: (1) disclosure. (2) employment and industrial relations. (3) environment. (4) combating bribery. (5) consumer interests. (6) science and technology. (7) competition. (8) taxation. Environmental responsibilities FMs have a range of environmental issues to deal with, including energy management, renewable energy sources, waste, land contamination, emissions to air, emissions to water, carbon, greening of the supply chain, CO2 reduction, recycling, use of resources management, transport, biodiversity in the local landscape, catering food miles and source of food products, chemicals and building interior conditions, and life cycle of building products. The built environment has a key role in CSR because of: ❑❑ The huge environmental impacts arising from buildings including emission of GHGs,

pollution and waste generation.

❑❑ The social impacts of the built environment, such as occupant health, satisfaction and

productivity.

FMs and those working in the operation and management of the built environment have an opportunity to be exemplars and role models in the delivery of CSR. Issues that often come within the remit of FM include: ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑

Waste minimisation. Energy consumption. Recycling. Travel plans. Emissions and pollution control. Utilities procurement and provision.

FMs must consider the whole life cycle of a building from conception and design through construction to operation. They can also provide a unique bridge between the end-users of a building and the construction and design professionals in refurbishment and new-build projects. The management of the existing built environment is a priority. Three-quarters of the current building stock has existed since before 1980. In 50 years’ time, approximately half of the stock will be ‘new’ and the other half will have been through several refurbishment cycles. The focus on sustainable design and construction is therefore only one aspect of the challenge for property professionals. The current legacy building stock underlines the importance of building management, maintenance, refurbishment and regeneration, and the key role of FMs in the sustainable management of existing buildings and estates.

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FMs and their teams will deliver a range of support services to their colleagues and occupants of premises. The following list identifies those that have a link to the CSR agenda: ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑

Landscaping biodiversity and ecology. Renewable energy technologies. Life-cycle assessment. Natural ventilation. Green procurement. Cleaning and catering. Contamination and pollution. Supplier and contractor management. Ethical procurement. Green procurement materials. Equality and diversity. Green transport. Monitoring customer satisfaction. Community involvement. Energy and water conservation. Staff development. Waste management and recycling. Monitoring energy and water use. Workstation assessments. Workplace risk assessments.

Challenges for FMs are many and include: ❑❑ Getting involved in building projects early in the design stage to ensure that a sustain-

ability framework is used.

❑❑ Creating opportunities for community interaction via employment, volunteering, pro-

curement and partnering.

❑❑ Ensuring that the buildings are fit for the future, and creating a good place for people,

business and the planet.

❑❑ Keeping abreast of developments in the CSR agenda. ❑❑ Raising the profile of FM as a key advocate of CSR.

Ethical responsibilities FMs may have to consider a range of ethical issues, including: ❑❑ Bribery. ❑❑ Corruption. ❑❑ Honesty with customers, suppliers, employees, shareholders, auditors and governmen❑❑ ❑❑ ❑❑ ❑❑ ❑❑

tal authorities. Fair trading. Integrity. Codes of conduct. Whistleblowing. Harassment policies.

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The principles that are typically found in most codes of ethics include: ❑❑ Integrity  –  Being straightforward and honest in all professional and business

relationships.

❑❑ Objectivity  –  Not allowing bias, conflict of interest or undue influence of others to

override professional or business judgements.

❑❑ Professional competence and duty of care –Maintaining professional knowledge and

skill at the level required to ensure that a client or employer receives competent professional services based on current developments in practice, legislation and techniques. Acting diligently and in accordance with applicable technical and professional standards. ❑❑ Confidentiality – Respecting the confidentiality of information acquired as a result of professional and business relationships. Not disclosing any such information to third parties without proper and specific authority. ❑❑ Professional behaviour – Complying with relevant laws and regulations. Avoiding any action that discredits the profession.

39.11  CSR standards The increased focus on CSR has led to the development of a number of ideas, codes, standards and guidelines. Some of these are considered below. Global Reporting Initiative The Global Reporting Initiative (GRI) is a not-for-profit organisation which pioneered a sustainability reporting framework. The framework provides advice on how organisations can disclose their sustainability performance and includes performance indicators. Around 93% of the world’s largest 250 corporations report on their sustainability performance, so using a common reporting system allows comparisons. The framework is based a series of standards, as shown in Table 39.5. AA1000 The AccountAbility 1000 (AA1000) process standards provide organisations with a practical set of guiding principles with which they can assess, manage, improve and communicate their sustainability performance. They were developed by the Institute of Social and Ethical AccountAbility. AA1000 is intended to encourage sustainable performance improvements. The framework is based on four principles: ❑❑ Inclusivity – People should have a say in the decisions that impact them. ❑❑ Materiality  –  Decision makers should identify and be clear about the sustainability

topics that matter.

❑❑ Responsiveness  –  Organisations should act transparently on material sustainability

topics and their related impacts.

❑❑ Impact  –  Organisations should monitor, measure and be accountable for how their

actions affect their broader ecosystems and for sustainability management; they should also provide a basis for external assurance on sustainability reports.

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Table 39.5  Global Reporting Initiative standards Universal standards

Economic standards

Environmental standards

Social standards

Foundation General Disclosures Management Approach

Economic Performance Market Presence Indirect Economic Impacts Procurement Practices Anti-corruption Anti-competitive Behaviour

Materials Energy Water and Effluents Biodiversity Emissions Effluents and Waste Environmental Compliance Supplier Environmental Assessment

Employment Labor/Management Relations Occupational Health and Safety Training and Education Diversity and Equal Opportunity Non-discrimination Freedom of Association and Collective Bargaining Child Labor Forced or Compulsory Labor Security Practices Rights of Indigenous Peoples Human Rights Assessment Local Communities Supplier Social Assessment Public Policy Customer Health and Safety Marketing and Labelling Customer Privacy Socioeconomic Compliance

SA8000 SA8000 (updated in 2014), developed by Social Accountability International (SAI), an organisation dedicated to promoting human rights for workers around the world, is a global social accountability standard relating to decent working conditions. It is based on work from a number of other organisations covering human rights, rights of children and workplace practices. Since its development in 1997, it has been refreshed and updated and continues to be the widest recognised standard globally. The British Standards Institution is accredited by SAI to deliver assessments of SA8000 and, as the leading global management systems provider, can assess organisations from a wide range of sectors and countries. The elements of the standard are shown in Table 39.6. ISO 26000 ISO 26000, launched in 2010, is a voluntary standard that clarifies what social responsibility is, and helps businesses and organisations to translate principles into effective actions. It is aimed at all types of organisation regardless of their activity, size or location. The standard promotes respect and responsibility. It gives common guidance on concepts, definitions and methods of evaluation, including alignment with OECD guidelines and UN SDG goals.

39.12  Measuring CSR Many companies are now making statements about their achievements and progress with respect to CSR. Such statements are either included in annual reports or documented in separate reports on CSR.

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Table 39.6  Elements of SA8000 Child Labour

No workers under the age of 15; minimum lowered to 14 for countries operating under the International Labour Organization’s Convention 138 developing-country exception; remediation of any child found to be working

Forced Labour

No forced labour, including prison or debt bondage labour; no lodging of deposits or identity papers by employers or outside recruiters

Health and Safety

A safe and healthy work environment; steps to prevent injuries; regular health and safety worker training; system to detect threats to health and safety; access to bathrooms and potable water

Freedom of Association and Right to Collective Bargaining

Respect the right to form and join trade unions and bargain collectively; where law prohibits these freedoms, facilitate parallel means of association and bargaining

Discrimination

No discrimination based on race, caste, origin, religion, disability, gender, sexual orientation, union or political affiliation, or age; no sexual harassment

Discipline

No corporal punishment, mental or physical coercion, or verbal abuse

Working Hours

Comply with the applicable law but, in any event, working hours should be no more than 48 hours per week with at least one day off for every seven-day period; voluntary overtime to be paid at a premium rate and not to exceed 12 hours per week on a regular basis; overtime may be mandatory if part of a collective bargaining agreement

Compensation

Wages paid for a standard work week must meet the legal and industry standards and be sufficient to meet the basic needs of workers and their families; no disciplinary deductions

Management Systems

Facilities seeking to gain and maintain certification must go beyond simple compliance to integrate the standard into their management systems and practices

Many organisations make use of key performance indicators (KPIs) to measure performance in selected areas and to show where improvements have been made over the previous year. Companies also make use of targets for future years to demonstrate a commitment to continuous improvement. The following framework could be used to measure various activities and achievements to demonstrate CSR is in place. Responsible employer An organisation wishing to focus on being a responsible employer and wishing to measure performance could consider using metrics in some or all of the following areas: ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑

Training – Days per employee per year. Flexible working – Proportion of employees with flexible working contracts. Accidents and injuries – Days per year per employee lost to accident or injury. Diversity – Mix of workforce compared with local population. Employee turnover – Percentage of employees leaving per year. Investor in People accreditation – Achieved or not. Top 100 employer league tables – Position in Sunday Times league in particular.

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Community An organisation wishing to show consideration for the local community could measure performance in some of the following areas: ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑

Proportion of purchases made from local suppliers. Proportion of services provided by local suppliers. Proportion of jobs fulfilled with local employees. Initiatives or projects undertaken with local organisations. Participation in Open City events (see https://open-city.org.uk). Open days for the local community to visit and use the facilities. Pollution resulting from the organisation’s operations – pollution could be considered as air, noise, water, soil and light pollution.

An organisation wishing to show consideration for a national or global community could also consider: ❑❑ Policies for the selection of suppliers. ❑❑ Work secondments to other localities or across borders.

Other areas for consideration would be the impact on the community of any planned plant or office closures, relocations or redundancy programmes. Environment Consideration of the environment provides a wide range of subject areas for measuring performance and setting targets for improvement. These could include: ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑

Carbon emissions. Water consumption – water usage per employee. Waste recycled – proportion of waste recycled. Materials – Source of materials used in construction or fit-out. Materials – Reused or recycled. Commuter travel – Method of travel (split by car, car share, public transport, etc.). Commuter travel – Commuter miles per employee per year. Business travel – Method of travel (car, public transport, etc.). Business travel – Business miles per employee per year. Business travel – Use of video conferencing to offset business travel. Food miles – In catering outlets. Fuel type – In company vehicles. Biodiversity projects – Endangered species, tree management, beehives, composting, land management initiatives, etc.

Business integrity An organisation wishing to show high standards of business integrity could consider the following as areas to measure performance and target improvements: ❑❑ Selection of suppliers – Proportion of suppliers (number or value) with a commitment

to CSR.

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Table 39.7  Business in the Community’s Responsible Business Tracker components Healthy environment

Healthy communities

Resource Productivity and Circular Economy Net Zero Carbon Healthy Ecosystems

Health and Wellbeing Diversity and Inclusion Education Good Work and Inclusive Growth

❑❑ Payment of suppliers – Proportion of suppliers paid within the target time frame (pay-

ment terms of 30 days or less).

❑❑ Company reporting  –  Amount and type of information provided freely to the

public.

39.13  Benchmarking CSR A comparison of CSR approaches by organisations can be achieved via the BITC Responsible Business Tracker, which has replaced the former Corporate Responsibility Index and uses the Responsible Business Map to help companies align their efforts to meet the 17 UN SDGs, enabling both society and the planet to thrive. The tracker allows organisations to compare their management processes and performance with others in their sector. The tracker is based on seven key areas intended to support healthy communities and environment, as shown in Table 39.7.

39.14  Sustainability Index in FM The Sustainability Index in FM (SFMI), launched in 2012, provides an annual barometer of the FM sector’s environmental, social and governance performance by scoring major FM industry businesses against three sustainability performance criteria  –  environmental, social and governance. The outcome is one of five grades from ‘assessed’ (with a score of 35%) to platinum (with a score of 85%). The components of the balanced scorecard approach are shown in Table 39.8.

Table 39.8  SFMI Balanced Scorecard components Environmental

Social

Governance

Management Systems Ecology Energy Water Circular Economy Transport Project

Health and Safety Employment Sustainable Communities Stakeholder Engagement Supply-Chain Management Employee Wellbeing Employee Development

Risk Management Board Commitment Sustainability Frameworks Disclosure Financial Compliance Contracts Diversity Collaborations

Sustainability and Environmental Issues  631

39.15  CSR and Environmental Policy The FM needs to consider how their department and role can support the CSR policy in their organisation or client. Organisations may have an overarching CSR policy, which may include a number of other policies, such as HR, environment, finance and ethics. FMs are likely to be involved in the creation and/or implementation of their employer’s or client’s environmental policy. An environmental policy is a statement of commitment to improving the environment and supporting sustainable development. It should be a clear statement of an organisation’s vision, aims, and approach to environmental protection and improvement. The policy should be seen as a working document that has been approved at the appropriate level within the organisation. It should reflect the organisation and its culture and have a balanced approach. It will include guidance and instruction so that decisions can be made strategically for the good of the company and the community. The policy is likely to include reference to the following issues: ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑

Continual improvement. Reduction of pollution. Emissions and waste. Reduction of raw materials, energy and supplies. Training of employees. Encouragement of suppliers and customers to uphold environmental standards. Communication of policy aims to all stakeholders. Environmental standards and accreditation.

The policy can be implemented in various ways: ❑❑ ISO14001 – By using ISO14001, the policy will identify the various aspects and impacts

of environmental effects, which in turn will be linked to the organisation’s objectives and targets (cost parameters, risk to business, liability, impact on local community/ biodiversity, etc.). ❑❑ The Eco-Management and Audit Scheme (EMAS)  –  This scheme allows organisations to evaluate, manage and improve their environmental and economic performance based on the ISO14001 requirements. The EMAS system requires the inclusion and review of stakeholders and community activities where these are influenced by the organisation. This necessitates active employee involvement. The development of a report specific to the stakeholder will also focus an organisation on the activities it must progress to maintain community acceptance. ❑❑ Ecological footprinting – This is a method of measuring the impact that an organisation has upon the environment and community, and through the supply chain. It calculates the influences and impacts an organisation has, based on day-to-day practices to do with the use of utilities and resources, procurement of goods and services, and waste generated and disposed of. The effects on the locality are also measured from both positive and negative perspectives.

40

Management of the Facilities Management Function

40.1  The facilities management team The structure of the FM (facilities management, or facilities manager) team or department will depend on the services offered, the number of sites and their locations. The team should be aligned with the client or employing organisation, with a manager to represent the department or function on all aspects of FM. The team may be structured functionally, with separate teams for soft services and hard services with individual team leaders. Sometimes the whole department is given a matrix of responsibilities covering a range of services provided, with team leaders focusing on locations or core business departments. In this scenario the team leaders act like account managers or customer supervisors. FM develops in an organisation in four distinct phases: (i) Awareness of FM as a cost-effective management role for the premises and non-core supporting services. (ii) Establishment of a separate FM function or department delivering services, with it own staff, budgets and reporting procedures. (iii) Maturity of a proactive FM team which generates management information, demonstrates achievements via key performance indicators (KPIs), and leads initiatives and projects to support the client business. (iv) Spin-out as the function downsizes to become the FM intelligent client function (ICF), with management of outsourced service providers. At this stage, the FM function may become more strategically focused.

40.2  Setting up the department A resource audit will identify the premises and assets, the requirements of occupiers and their priorities (see Section 4.8). For a new building, the prediction of needs will be based on construction information, past experience and advice of consultants. Participation in the commissioning phase will enable the FM to verify the potential needs and start planning the resources required. The challenge for most FM functions is the balance between operational, tactical and strategic activities. In a small organisation, the manager will have to work at all levels. With increasing size of the business together with the size and complexity of the built environments, the size of the FM team will grow. This leads to separation of roles and responsibilities as the workload is distributed across the department. For some organisations, FM Facilities Manager’s Desk Reference, Third Edition. Jane M. Wiggins. © 2021 John Wiley & Sons Ltd. Published 2021 by John Wiley & Sons Ltd. 632

Management of the Facilities Management Function  633

activities are dispersed across HR, IT, procurement, finance and other areas. Centralisation of the myriad activities to create one FM department is the logical way forward.

40.3  Workload planning and allocation FMs need to plan and manage both their own and their teams’ workload. This will ensure that work is allocated appropriately and that adequate resources are available. A workload can be described as comprising: ❑❑ Routine tasks  –  Typically planned work, such as planned preventative maintenance

(PPM) tasks, security patrols, food preparation, cleaning and meeting room set-up.

❑❑ Non-routine or unexpected tasks – Typically (but not exclusively) reactive jobs, tasks,

events and churn.

Managers will have to identify which tasks are routine and how these can be scheduled. If the team can only achieve the routine planned tasks, then there will be no capacity to do the non-routine unexpected tasks. For FM teams that are staffed at the minimum level, the routine jobs get sacrificed or delayed to deal with the unexpected requests and emergencies. This mode of work can be stressful and counterproductive in the long term. A manager must therefore manage the workload using a framework of planning, decision making, prioritisation, delegation and problem-solving tools. This will enable the manager to prioritise workloads, establish deadlines and make efficient use of time. Resource planning is about staff planning, by assessing the future demand for people and skills so that the organisation can meet its strategic aims and goals. An organisation’s biggest expense is its people and payroll cost. Poor planning can become an operational and financial challenge if the FM department has insufficient people, too many people or people with the wrong skills. Workload is commonly expressed as: ❑❑ The number of ‘person hours’ a job will take. ❑❑ The number of ‘people days’ a project will take.

Methods used in FM to manage and allocate workload include: ❑❑ Helpdesk. ❑❑ Computerised maintenance management systems (CMMSs) or computer-aided facili❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑

ties management (CAFM) systems. PPM schedules (e.g. SFG20 task standards; see Section 26.28). Delegation of work to approved contractors and suppliers Specialists, consultants and advisers. Temporary, casual or interim staff to cover peaks and projects. Zero-hours contracts to flex the workforce to meet demand. Call-off contracts. Rosters or shift work patterns to cover longer periods. Duty managers for out of hours. Overtime or call-out arrangements for emergencies and overrunning work. Job descriptions and job design. Service level agreements (SLAs).

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Some organisations will plan their staffing resources around three groups: core (in-house), secondary (contract) and tertiary (casual) groups of people. The variety of workload dictates the approach taken – using an in-house team is typical of constant routine work, and peaks and unexpected workload can be carried out via contract and casual staff. In the FM context, many tasks and jobs are done by the secondary and tertiary groups, and so the FM needs to consider not just the direct employment issues but also all the peripheral teams that make up the total FM people resource. FM’s workload is frequently reactive, with issues arising on the premises that require attention that may push planned activities to the back of the queue. FMs will need to determine the right level of staffing – to the peak workload, to the minimum workload or somewhere in between. There are significant cost issues with either end of this spectrum – either too many staff when the workload is low or not enough staff when there is too much work. Objectives of resource planning include ❑❑ To ensure the right number of people with the right skills are employed at the right time. ❑❑ To be aware of how people are used now and how they may be used in the future, iden-

tifying ways to improve the use of people.

❑❑ To motivate people (providing satisfying work) and to improve both the nature of the

work and ways to motivate people carrying out this work.

❑❑ To ensure organisational development, contributing to the growth of the organisation.

Effective planning should result in the right people doing the right things in the right place at the right time. Box  40.1 shows a checklist that can be used to support this planning. Managers need to consider these questions: ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑

What tasks will be required in the future? Who is likely to do them? Will these people be available at the right time? Do these people need to be trained or reskilled? How long will this situation last? What might cause unwanted or sudden changes?

The actual workload must obviously also be taken into account, both in the short term and in the long term. This process will need to consider daily routines, compliance checks, reactive maintenance jobs, projects, seasonal demands and churn. Many factors have to be taken into account: ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑

Task or job function. Number of employees per job function. Location(s) of the work. SLA performance criteria. Timescales for work to be completed. Likely source of staff (internal or external).

The resource plan needs to indicate the ongoing operational issues, such as: ❑❑ ❑❑ ❑❑ ❑❑

Training. Possible redeployment linked to business plan enhancements or changes. Further recruitment. Likely action in the event of undesirable or enforced changes.

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Box 40.1  Assessing the FM workload 1. What are the future requirements of the FM department in relation to the business in personnel terms (staff, skills)? 2. What are the likely changes in technology and job design that may affect staffing requirements? 3. What are the likely changes in FM services and FM strategy that may affect staffing requirements? 4. Will more, fewer or the same number of staff be required in the future? 5. Can the future staffing requirements be satisfied from existing staff resources? 6. If a smaller workforce is required in the future, could this be achieved through natural wastage? 7. Can staff be redeployed within the business to satisfy current and future requirements? 8. What training and development is needed to meet new requirements? 9. What are the most effective learning and development interventions: external training, internal training, coaching, supervision, mentoring, etc.? 10. What is the demographic structure of the workforce, and how will this have a bearing on staff members’ ability to manage the expected workload? 11. When are staff likely to retire or leave the team? 12. Are good staff rewarded or incentivised to stay and is this working? 13. Is there a higher-than-average staff turnover? If so, why? 14. Is the right calibre of staff attracted by the current pay and benefit packages? 15. What is the average workload demand in FM? How is this measured? 16. When are the peaks and troughs in the workload demand? How are resources provided to match the workloads? 17. What tools are used in the FM department to collect work requests and to allocate jobs to the right team member, contractor or supplier?

40.4 Delegation Delegation involves sharing the workload with others. As soon as a person finds that they cannot perform all of their work activities, delegation takes place. In a large organisation, there are delegations from the senior executive and onwards to managers, supervisors and down the organisational pyramid. Delegation occurs by assigning part of the doing and planning to subordinates. The manager must decide how the work is to be apportioned. To delegate effectively, an FM needs an appreciation of the authorities, responsibilities and accountabilities in their organisation. The definitions in Table 40.1 are useful.

Table 40.1  Definitions relating to delegation Description

Explanation

Delegation

Assigning to others certain duties together with the requisite authority and responsibility for the performance of those duties

Authority

The right to require action of others

Responsibility

The liability for the performance of both personal actions and the actions delegated to others

Accountability

The residual liability in one person (the more senior) relative to another person for actions performed, whether directly or through delegation

Power

The ability to make things happen, or strength of action

Leadership

The combination of qualities by which a person is able to get something done by others, because through the leader’s influence they become willing to do it

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40.5 Recruitment People are an organisation’s greatest resource and usually its largest expense. The FM should therefore make significant efforts to employ the right people. All organisations rely on their workforce to operate effectively and efficiently. To ensure that the right people are employed in FM, a robust recruitment and selection process is needed. Recruitment is a process which aims to attract appropriately qualified candidates for a particular position so that the organisation can select and appoint a competent person for the role. There are several reasons for recruiting people with the right skills, experience and approach for the role in question: ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑

Enhanced productivity. Cost saving. Time saving. Early return on investment. Enhanced motivation. Minimisation of health and safety risks. Reduced staff turnover.

FMs may have to handle the whole process directly or perhaps just some of the stages, if they are working with HR department colleagues. The recruitment process from the initial stages through to the appointment of an individual will include: A job requisition for the vacancy. Job analysis and perhaps job redesign. A job description and person specification. Confirmation of employment terms and conditions. Review of the market (internal or external). Advertisement. Establishment of selection methods and selection criteria. Screening of applications, interviews and tests; a provisional offer; take-up of references. ❑❑ Offer confirmation, contract issue and appointment. ❑❑ Induction and probation. ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑

This process is then completed with an induction period on commencement of employment. The factors that FMs must take into account when considering making a new appointment may include matching a specification, experience and achievements, qualifications, results of tests, references, aptitudes and abilities, and compatibility with the organisational culture. Selection criteria often include a mixture of qualifications, attributes, skills and knowledge. These will depend on the role and the organisation. Qualifications that may be relevant for working in an FM team include: ❑❑ National Examination Board in Occupational Safety and Health (NEBOSH) General

Certificate or Institution of Occupational Safety and Health (IOSH) Managing Safely.

❑❑ British Institute of Facilities Management (BIFM) Part 1 or Part 2. ❑❑ Institute of Workplace and Facilities Management (IWFM) Levels 3 to 7. ❑❑ International Facility Management Association (IFMA) credentials: Certified Facility

Manager (CFM), Facility Management Professional (FMP) and Sustainability Facility Professional (SFP).

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❑❑ Vocational or engineering qualifications and accreditations. ❑❑ Completion of BTEC (Business and Technology Education Council) qualifications in a

range of appropriate disciplines such as surveying, building services, the built environment, customer service, catering, security, cleaning, the environment or another relevant operational discipline with relevant work experience. ❑❑ Completion of a degree-level qualification in relevant disciplines such as FM, surveying, building services, business or event management.

Attributes of the person can be described as their personal and behavioural qualities – these are important in the establishment of the team. These qualities are often broken down into specific behaviours that are expected and relevant to the level and type of job role. Some examples are shown in Table 40.2. Examples of appropriate skills and abilities in FM are shown in Table 40.3.

40.6  FM competencies There are several competency frameworks to be considered; these are created and promoted by various organisations. In the UK, there is a national occupational standard for FM, and there are competencies promoted by several professional bodies: the Institute of Workplace and Facilities Management (IWFM), the International Facility Management Association (IFMA) and the Royal Institution of Chartered Surveyors (RICS).

Table 40.2  Attributes and behaviours Attribute

Description/example

Flexibility

Demonstrates an ability to be adaptive and accepting of new ideas, and a willingness to approach new challenges and adjust plans to meet new priorities.

Achievement oriented

Demonstrates willingness and determination to set clear goals, strives to attain them and is not deterred by challenges.

Initiative

Demonstrates the tendency to contribute ideas and initiate new ways of working; shows enthusiasm for project work and special assignments.

Professionalism

Regulates own behaviour, comprehends organisational structure and culture, and acts appropriately in the execution of duties.

Decisiveness

Has proven consistency in making sound decisions; is able to act given reasonable access to information and time; uses information, knowledge, and experience to analyse and form judgements.

Strategic approach

Comprehends the wider contexts of developments and long-term goals, and determines strategies and actions required to achieve such goals.

Integrity

Behaves in an honest and trustworthy manner, treats others fairly, and is open about their own misjudgements and any conflicts of interest which may be present.

Attention to detail

Able to maintain a sustained level of concentration in a volume-processing activity to ensure accuracy and identify errors to be addressed.

Service orientation

Displays a commitment to quality client service, values the supply of accurate and timely information, and relates to people from diverse backgrounds.

Independence

Understands the appropriate boundaries and context of the position in the execution of the responsibilities of the position.

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Table 40.3  Skills and abilities Skill

Description

Negotiation skills

Capable of listening and assimilating information from others, identifying various potential outcomes and consequences, presenting persuasive arguments and winning concessions while maintaining relationships.

Writing skills

Proven ability to use clear, concise language in correspondence as well as to include content fitting for the purpose and audience when preparing written briefs, specifications, service level agreements, risk assessments, reports, leaflets, newsletters, posters and online content.

Leadership skills

Clearly and influentially articulates a vision, and encourages and supports others while building valued and trusting relationships with others. Practices open communication, leads by example, and effectively provides honest and constructive feedback.

Team Building skills

Promotes collective achievement, contributes to the development and achievement of group objectives, is respectful, and actively listens to and seeks out opinions and ideas from others.

Project management skills

Demonstrates the ability to develop clear project plans and timelines, regularly communicate with stakeholders (including project team members), and monitor project progress, staying within budget and required standards.

Management skills

Possesses the ability to plan and organise self and others to ensure the completion of tasks and to manage and support others to succeed in their roles. Can apply processes and procedures, achieve compliance, and comprehend issues surrounding sustainability in resource use.

Time management/ organisational skills

Possesses the ability to plan and organise self and others to ensure the timely completion of tasks.

Presentation skills

Ability to structure, engage and present information clearly and interestingly to various audiences.

Analytical thinking skills

Proven ability to work in complex frameworks, analyse and prioritise complex information, and convert ideas and objectives into actions.

Problem-solving skills

Ability to appropriately prioritise problems, gather and analyse the right information to identify symptoms and causes, and identify the right people to involve to reach better conclusions.

Computer skills

Demonstrated ability with regard to computer skills, including excellent wordprocessing capabilities; proficiency with email, Internet and database applications; and experience using programs such as Microsoft Word, Access and Excel.

Teaching skills

Fosters staff development by encouraging curiosity and independence in learning, contributes to the team’s critical-thinking ability, and adapts assessment methods to different contexts and diverse student needs.

Institute of Workplace and Facilities Management The IWFM (formerly the British Institute of Facilities Management [BIFM]) has 10 functional areas and 30 components in its professional standards framework. Four new components were added to the former BIFM framework and these form the basis of IWFM membership, continuing professional development and qualifications. The 10 functional areas are: ❑❑ Role of FM. ❑❑ Strategy and policy development.

Management of the Facilities Management Function  639

❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑

Leadership and management. Business continuity and compliance. Business support services. Property portfolio. Quality management and customer service. Finance and IT. Procurement and contract management. Sustainability.

Comprehensive details of each functional area can be found on the IWFM website. The 30 components are: ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑

Sector knowledge. Organisational behaviour. Information and knowledge management. FM strategy. Organisational performance. Corporate social responsibility. FM policy. Project management. People management. Culture and values. A healthy and productive workplace. Change management. Risk management. Compliance. Service innovation. Managing service delivery. Building maintenance. Property and asset management. Space management. Building information modelling. Accessibility and inclusion. Customer service. Stakeholder relationships. Quality management. Financial management. Information technology. Procurement. Contract management. Energy management. Environmental management.

International Facility Management Association The IFMA has 11 competency areas: ❑❑ Communication. ❑❑ Quality. ❑❑ Technology.

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Table 40.4  RICS FM Qualification Pathway Mandatory

Core technical

Optional technical

Accounting principles and procedures Business planning Client care Communication and negotiation Conflict avoidance, management and dispute resolution procedures Data management Diversity, inclusion and team working Ethics, rules of conduct and professionalism Health and safety Inclusive environments Sustainability

Asset management Business alignment Legal and regulatory compliance Maintenance management Performance management Procurement and tendering Project finance Supplier management Workspace strategy

Big data Building information modelling management Business case Change management Commercial management Construction technology and environmental services Consultancy services Contract administration Contract practice Design and specification Environmental management Landlord and tenant Managing projects Measurement Risk management Smart cities and intelligent buildings Stakeholder management Strategic real estate consultancy Waste management Works progress and quality management

❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑

Operations and maintenance. Human factors. Finance and business. Emergency preparedness and business continuity. Leadership and strategy. Environmental stewardship and sustainability. Real estate and property management. Project management.

Royal Institution of Chartered Surveyors The RICS competency framework comprises mandatory and technical components, as shown in Table 40.4.

40.7  Training and development Learning is the process of acquiring knowledge or skill through a variety of methods. Training comprises a range of activities or methods intended to achieve learning. Effective training is systematic and planned; it is targeted to modify or change attitudes, knowledge or skills and is linked to improving performance. A skill is the ability to do what needs to be done. Knowledge is information on how a task is done, why it needs to be done and what needs to be done. Attitude is the will or motivation to do what needs to be done. Development

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is a longer-term ongoing process of improving capabilities and the capacity of individuals and groups to learn. A person is said to have been ‘developed’ when there has been an identifiable change in their knowledge, skill or attitude. A training intervention is a specific training activity designed to meet a specific need. At the organisational level, training can play a vital role in encouraging a learning organisation. At departmental and operational levels, training can improve efficiency, effectiveness, quality, team cohesion and team performance. At the individual level, training can increase job satisfaction, employability, loyalty to the organisation and self-worth. Training and development interventions enable staff to learn new process and methods, or catch up on trends. Development widens employees’ skill base and understanding of their functions within the organisation. There are many ways to develop staff, either on the job or off the job. A range of off-the-job methods is as follows: ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑

Formal training courses and instruction. Education and qualification programmes. Attending conferences. Attending local regional and national FM industry events. Attending short courses on specific skills and competence. Case studies. Role play. Simulation and in-tray exercises. Volunteering in community.

On-the-job development helps to establish work relationships and suits those with active or pragmatic learning styles (typical of FMs). This kind of development enables employees to acquire work skills and knowledge through conscious practice, but it relies on tolerance of errors and learning from the skills of others. There is minimum disruption of the employee’s job duties. This is often the preferred method in FM departments with time or budget constraints. Examples of on-the-job development include coaching or mentoring by superiors, understudy of higher management, job rotation, apprenticeships, special assignments and projects. Training and development needs can be identified via a training needs analysis. This will involve looking at job requirements, conducting an audit of the current staff, and reviewing staff skills and abilities against the organisation’s objectives and the external factors that affect the performance of the organisation. From this analysis, the learning or training gap can be identified. This in turn will inform both individual and organisational development plans. It is important for FMs to recognise that development is more than just training  –  skills and competencies may be enhanced, and careers and succession plans ­formulated. Individuals should be encouraged to take ownership of their personal development. The establishment of a learning culture in the FM function will help to encourage the acquisition and sharing of knowledge for all of the team in a continuous way, so that the FM team can keep up to date in the constantly changing business environment.

40.8  Career planning FMs need to manage their own career development. This can be achieved in many ways, including by gaining experience in a variety of FM roles in different organisations. FMs tend to move from in-house to outsource roles; from one specialism (such as soft FM) to a general role or vice versa; from regional to national; from small companies to larger; and from pure FM to wider real estate and managing agent roles.

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Succession planning is a process for identifying and developing potential future leaders or senior managers, as well as individuals to fill other business-critical positions, either in the short or long term. Succession planning programmes typically include the provision of practical, tailored work experience and development activities that will be relevant for future senior roles. Traditionally, people would tend to gain experience through upward moves, with accompanying increases in status and salary. This is less likely today as many organisations are less hierarchical, with fewer management layers, resulting in fewer opportunities for vertical moves. A sideways move into a different job, perhaps without any additional compensation, is an alternative way of gaining additional experience. Some organisations use secondment opportunities as a way of providing wider development opportunities to potential leaders. Organisations need to ensure that they continually review and develop their succession plans to meet current and future skills, capability and behavioural needs, and to ensure that succession planning is closely aligned with evolving business priorities.

40.9 Motivation The dynamics of motivation, recognition and reward can be applied to enhance team and individual performance and retain staff. An awareness of the theories of Maslow’s Hierarchy of Needs, McGregor’s Theory X and Theory Y, and Vroom’s Expectancy Theory helps us to understand the concept of motivation. Motivation is both a decision-making process and a social behavioural process. Motivation is about encouraging team members to do what is expected and offering them satisfying rewards. These rewards can be extrinsic, such as pay or benefits, or intrinsic, such as responsibility. The basic assumptions of motivation are that: ❑❑ People behave in a way that satisfies their needs and fulfils their goals. ❑❑ An organisation can offer opportunities to meet people’s needs and goals (such as

r­elationships and belonging, challenge and achievement, progress towards selfactualisation, and security). ❑❑ An organisation can influence the way people behave – it can push or pull people to behave in certain ways. ❑❑ A positive attitude and job satisfaction may arise from someone whose needs and goals are being met. Theories of motivation are based on two principles: (i) The things that motivate people  –  the content (e.g. as theorised by Maslow and by Herzberg). (ii) How can people be motivated – the process (e.g. as theorised by Vroom). Maslow’s Hierarchy of Needs Maslow’s Hierarchy of Needs (Figure 40.1) suggests that an individual will be motivated to satisfy their needs and goals in increasing priority from physiological to self-actualisation, via a hierarchy of stages. It assumes that: ❑❑ A person starts at the bottom of the hierarchy (pyramid) and will initially seek to satisfy

physiological needs (e.g. food, shelter). Once these basic needs have been satisfied, they are no longer motivators. The individual moves up to the next level.

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❑❑ Safety needs at work could include physical safety (e.g. protective clothing) as well as

protection against unemployment (e.g. loss of income through sickness).

❑❑ Social needs recognise that most people want to belong to a group. These would

include the need for love and belonging (e.g. working with supportive colleagues, teamwork). ❑❑ Esteem needs are about being given recognition for a job well done. They reflect the fact that many people seek the esteem and respect of others. A promotion might achieve this. ❑❑ Self-actualisation is about how people think about themselves. This is often measured by the extent of their success and/or challenge at work. However, there are several problems with Maslow’s Hierarchy when it is applied to real work situations: ❑❑ Individual behaviour seems to respond to several needs, not just one. ❑❑ The same need (e.g. the need to interact socially at work) may cause quite different

behaviour in different individuals.

❑❑ It is difficult to decide when a level has been ‘satisfied’. ❑❑ The model ignores the often-observed behaviour of individuals who tolerate low pay

for the promise of future benefits.

❑❑ There is little empirical evidence to support the model. ❑❑ It is based on Western management cultures.

Herzberg’s Two-Factor Theory Herzberg’s Two-Factor Theory is based on two human needs: to avoid unpleasant situations (hygiene factors or dissatisfiers) and to personally grow (motivators or satisfiers) (see Table 40.5).

Selfactualisation Esteem needs Self-esteem Recognition Status Social needs Sense of belonging Love Safety needs Security Protection Physiological needs Hunger Thirst

Figure 40.1  Maslow’s Hierarchy of Needs

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Table 40.5  Factors in Herzberg Two-Factor Model Hygiene factors

Motivator factors

Company policy and administration Wages, salaries and other financial remuneration Quality of supervision Quality of interpersonal relations Working conditions Feelings of job security

Status Opportunity for advancement Gaining recognition Responsibility Challenging and stimulating work Sense of personal achievement and personal growth in a job

Motivator factors are based on an individual’s need for personal growth. When they exist, motivator factors actively create job satisfaction. If they are effective, then they can motivate an individual to achieve above-average performance and effort. Vroom’s Expectancy Theory Vroom’s Expectancy Theory examines motivation from the perspective of why people choose to follow a particular course of action. Vroom introduced three variables: valence (V), expectancy (E) and instrumentality (I), expressed as E × V × I = F, where F is force of motivation. In this theory: ❑❑ Valence is the importance that the individual places upon the expected outcome of a

situation.

❑❑ Expectancy is the belief that output from the individual and the success of the situation

are linked (e.g. working harder gives better results).

❑❑ Instrumentality is the belief that the success of a situation is linked to the expected

outcome of the situation (e.g. praise is expected when work is done really well).

In this model, employees in an organisation will be motivated when they believe that: ❑❑ Putting in more effort will yield better job performance. ❑❑ Better job performance will lead to organisational rewards, such as an increase in salary

or benefits. The predicted organisational rewards must be valued by the employee in question.

McGregor’s Theory X and Theory Y McGregor’s Theory X and Theory Y describe two extreme traits of human behaviour, with a whole spectrum of possible behaviours in between, as shown in Table 40.6. Table 40.6  Behaviour traits in McGregor’s Theory X and Theory Y Theory X workers

Theory Y workers

Dislike work and avoid it where possible Lack ambition, dislike responsibility and prefer to be led Desire security

Consider effort at work to be just like rest or play – work may be considered a source of satisfaction or punishment Seek responsibility (if they are motivated)

Management of the Facilities Management Function  645

Table 40.7  Motivation methods Method

Issue

Potential outcome

Coercion

Fear

Short term; risk of long-term resentment

Calculative

Greed

Need to give rewards; can create in-fighting

Co-operative

Shared responsibility, ‘ownership’

Initiative and loyalty

The management implication for Theory X workers is that an organisation would need to impose a system of coercion, control and punishment to achieve organisational objectives. This contrasts with the management implication for Theory Y workers, which is that rewards of varying kinds are likely to be the most popular motivator to achieve organisational objectives. FM team leaders and managers need to identify the type of their workers (X or Y) so that they can use the appropriate motivator for others and not impose their own motivating behaviour onto others. Leaders of FM departments can motivate their direct and indirect employed team by sharing the overall vision, being a role model and setting a good example, using these methods, as shown in Table 40.7.

40.10  Culture and values The culture of any organisation has a huge impact on how managers behave, on working practices and on whether objectives are achieved. Culture can also be described as the ‘personality’ of the organisation, comprising: ❑❑ Norms. ❑❑ Values. ❑❑ Attitudes.

Culture is often defined as ‘the way we do things around here’ and is a collection of the norms, values, and attitudes or personality of the organisation. Culture can exist at various levels: ❑❑ Individual culture – How you behave, what you believe in, and what your standards

and ethics are.

❑❑ Organisational culture – ‘The way we do things around here’, or an organisation’s per-

sonality. It is difficult to measure as it is intangible. Tangible evidence is required to describe it. ❑❑ National culture – In particular the differences between Western (e.g. Australia, UK, USA) and Eastern (e.g. China, Japan) nations.

40.11  Team building Work tends to be carried out in formal groups, bound together by their joint accountability and their common skills or tasks. The word ‘team’ conveys something more than ‘group’ in that it implies members working harmoniously and effectively towards achieving their shared objectives. It is the level of interaction and the sense of cohesiveness which turns a group into a team.

646  Facilities Manager’s Desk Reference

Team building happens when the team leader is able to develop the right level of interaction and cohesiveness to achieve team objectives effectively. Teams cannot be created. They are dynamic – they grow from the interaction of a number of people. Teams are also powerful. They can use their cohesiveness for or against an organisation. A team leader can help a work group to develop so that it acquires that dynamic dimension and uses its strength in a positive way. Team building requires a good, open style of leadership and excellent communication. Good teams will have these attributes: ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑

No blame culture, open to continuous improvement and learning. Open, honest discussion forums. Clear direction and sense of purpose. Clear responsibilities and duties. Agreed goals, objectives and targets. Mutual respect and support for each other.

Selection of the right combination of staff, specialists and suppliers to make up the FM team is critical to delivering an excellent FM service. Selecting and gaining commitment from all team members  –  whether directly employed, freelance, contractors, suppliers, consultants or other partners – is crucial to the quality of the FM output and to the ease with which the FM is able to achieve great places for occupants to work, live, study, rest or play. There are a number of factors which work for or against groups developing as teams. These are: ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑ ❑❑

Maturity (how long it has been in existence). Size (if too big, then subgroups or teams will develop). Characteristics of members (a blend of complementary traits). Objectives (are they SMART-ER – i.e. are they specific, measurable, achievable, ­relevant and timely, and are they environmentally responsible?). Roles performed by individuals within the group. Cultural expectations (individual, organisational, national). Communication patterns and methods. Leadership style.

Any group goes through a life cycle in its development. It is only if and when it reaches maturity (performing stage) that it can act as a team. There is no fixed timescale for reaching this stage. The behaviour of people in groups will affect the effectiveness of communication. There are a number of models and theories that are used to describe group dynamics. The time taken to establish a team depends on the group situation — it may be a few hours for a discussion group or many weeks for a new team in the workplace. The classic model of the group life cycle is attributed to Tuckman in the 1960s and comprises four stages: forming, storming, norming and performing; two more were added later: (i) Forming – When the group first comes together and people behave as a number of individuals, each with their own idea of what the group should be trying to achieve. (ii) Storming  –  When the members begin to interact and find that they have different objectives; there is conflict over roles and methods of operating. (iii) Norming – When the members begin to resolve conflicts and work co-operatively.

Management of the Facilities Management Function  647

Table 40.8  Belbin’s Team Roles Action-oriented roles

Shapers, implementers and completer-finishers

People-oriented roles

Co-ordinators, team workers and resource investigators

Cerebral roles

Plant, monitor-evaluators and specialists

Table 40.9  Practical suggestions for rewarding others Use praise as frequently as criticism. At the end of a particularly difficult week or month, thank the staff collectively. Allocate a section of the notice board for public thanks to individuals and groups. Make a point of greeting staff when meeting them and have coffee or lunch with them from time to time. Show an ongoing interest in each individual’s work and career, not just at job appraisals. Support requests for further training or more advanced education. When discussing an idea with management or others, always give credit by name to the individual or group.

(iv) Performing – When the members work at their maximum potential, co-operating and helping one another to achieve more than they could as individuals. (v) Adjourning – When the project is stopped or paused, or when there is a change in the organisation. (vi) Mourning – When the members do not accept the break-up, grieve and wait for the group to reform. Another classic model is Belbin’s Team Roles, which identifies a range of roles in a team (see Table 40.8). Once a group has developed into a close-knit team, it will need motivation and good leadership to allow it to continue to enjoy it status. A team will need regular feedback on its performance. Regular team sessions and team meetings can reinforce a collective identity. Motivation and team spirit will thrive in a positive work environment where success is emphasised rather than failure, where work is made as easy as possible and where recognition is given for work well done. Table 40.9 provides a list of practical suggestions relating to motivation. Table 40.10 lists some guidelines for team working.

40.12  Multi-team (cross-functional) working A multi-function or multi-specialist team will provide a wider and more open approach to solving problems and executing a project. These are common in FM projects and activities. Cross-functional teams can bring many benefits, such as: ❑❑ ❑❑ ❑❑ ❑❑ ❑❑

Diversity of ideas with a large pool of knowledge and experience. Ability to challenge and suggest ideas and options for projects and problems. Synergy of ‘two heads are better than one’. Differing professional backgrounds have differing approaches to problems. Differing organisations and companies have differing approaches, concepts and experiences.

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Table 40.10  Teamworking tips Use a teamwork approach only where it is appropriate, for example where: •• Group support and commitment are essential. •• One person’s effort, skills or knowledge are insufficient for the task in hand. •• One person’s experiences, view and opinions are too limited. Specify the objectives of the task in specific and measurable terms. Generally this means that groups will be more concerned with how things are done rather than with what is done. Distinguish between those aspects which are fixed and those which can be varied. The best person to lead a particular task is not necessarily the appointed leader; let the best person lead and give them support. Let the task leadership move about as appropriate. Judge the group’s effectiveness across a wide front but never forget that it exists to get a job done. A group exists to get a job done but it will be unable to do that efficiently and effectively and into the future if it ignores the effects that group members’ attitudes, feelings and behaviours have upon it. These need to be recognised and responded to. Group members need to be committed to the group and to the task; insist on at least an acceptable minimum; counsel those who find this difficult. Recognise those who are having problems with the group, with other group members or with the task; listen to them and counsel them; give them support. Recognise those who are causing difficulties for the group; prevent the group isolating them; counsel them; insist on certain minimum standards of acceptable behaviour. Group members need to understand group behaviour, team roles, leadership, etc.; help them to understand not only the task but also what is happening within the group and how to deal with it. Allow time and encourage the group to discuss how it does things, how effective and efficient it is, and what it could do to improve.

❑❑ ‘Sanity checks’ and reviews. ❑❑ Peer reviews. ❑❑ Sharing information (such as activities in each other’s home departments), supplying

ideas, values and a co-ordinated approach.

Cross-functional teams can, however, bring additional challenges, such as: ❑❑ The team takes longer to gel and needs more intensive team building. ❑❑ Different styles of working and professional ways of working. ❑❑ Potential for ‘my way is best’ attitude.

40.13  Discipline, grievances and staff exit When staff leave an organisation, the process must be actively managed to minimise the negative impact on both the organisation and individuals within it. Staff leave because of a ‘pull’ or a ‘push’ from internal or external forces (see Table 40.11). The impacts can be positive or negative. Fresh ideas, new approaches and new relationships can develop when people leave a team; however there can be also significant disruption due to loss of knowledge, increase in workload and sense of loss. Disciplinary and grievance procedures are frameworks which provide clear and transparent structures for dealing with difficulties which may arise in the working relationship from either the employer’s or the employee’s perspective. They are necessary to ensure that

Management of the Facilities Management Function  649

Table 40.11  Factors that may cause staff to leave Push

Pull

Restructuring Redundancy Demotion Grievance Dismissal Relocation New manager Boredom Stress Excessive workload

Promotion Career prospects Salary and benefits Lottery win Inheritance Carer responsibilities Location Family relocation Lifestyle choices Former work colleagues

everybody is treated in the same way in similar circumstances, to ensure issues are dealt with fairly and reasonably. Employers must comply with current legislation and follow the ACAS (Advisory, Conciliation and Arbitration Service) Code of Practice for handling disciplinary and grievance issues. Both processes (disciplinary and grievance) should be fair and transparent, written down, specific and clear (with examples of misconduct). Issues should be raised promptly and there should be no unreasonable delay to meetings, decisions or confirmation of decisions. If action is necessary it should be justified and reasonable. Employers and employees should act consistently. Employers should allow employees to appeal against any formal decision. The grievance and disciplinary procedures may overlap.

40.14 Management Managers are crucial to the success of organisations. They provide the purpose and direction for the organisation, they determine its form, and they integrate and co-ordinate its activities to produce the final product or service. The main activities of management are planning, organising, motivating and controlling, shown in Figure 40.2. Managers have many roles, as shown in Table 40.12. These arise from the formal authority and status of management.

40.15 Leadership Leadership is about influencing and inspiring others to exceed objectives by acting as a role model of personal integrity and persistently working towards goals with enthusiasm. There are many models and theories on leadership; these provide frameworks and guidance on how to be a leader. Most models are based on the level of support, participation and direction given by the leader to their colleagues or followers. The traits of leadership include enthusiasm, integrity, great communication skills, loyalty, decisiveness, managerial competence, empowerment and charisma. Leaders are not necessarily managers; likewise, managers may not have the potential to become leaders. FMs will need to develop leadership skills to progress their careers and to help others in their teams to achieve the right things. Leadership is about setting direction and inspiring the team to improve. Qualities of a leader include being approachable and open with information, providing regular guidance and

650  Facilities Manager’s Desk Reference

Objective setting

Evaluating

C

Gathering information

O M

Analysing

M

Forecasting

U N I C

Planning A T I

Monitoring

N

Implementing

G Controlling

Figure 40.2  Management activities

Table 40.12  Management roles Figurehead

Representing their unit or organisation by, for example, making formal presentations

Leader

Providing direction, motivating others

Liaison

Establishing relationships outside their area of direct responsibility

Monitor

Making sure everything proceeds as planned

Disseminator

Passing on information needed by members of their team

Spokesperson

Passing on information to the outside world

Entrepreneur

Looking for new opportunities and changes

Disturbance handler

Responding to pressures and unexpected events

Resource allocator

Deciding how resources of people and materials will be allocated

Negotiator

Negotiating with their bosses as well as people they are responsible for

providing constructive feedback on colleagues’ performance. Leaders will challenge accepted wisdom to seek better ways of delivering FM services; they will encourage others to offer suggestions; and they will fulfil their responsibilities to the highest professional and ethical standards. It is said that successful FMs must have both leadership and management qualities.

Management of the Facilities Management Function  651

40.16  Raising the profile of workplace and FM professionals There are many ways to raise the profile of FM in the client organisation and beyond: ❑❑ Tell people what you do and how good you are! – Too many people do a good job but

❑❑

❑❑

❑❑

❑❑

❑❑

❑❑

❑❑

don’t let people know about it. When some positive written feedback from others is received, be sure to keep it and circulate the feedback to more senior people. For verbal feedback, ask for it to be put in writing. Let people know what a great job the FM and the wider team have done. Encourage the FM team to seek out praise (when justified); create a sense of competition or a series of articles on the good messages about what FM does. Be customer focused – FMs may be doing a good job, but is this really what matters to the customer, the client, the occupier, the boss or the employer? Talk to those who receive the FM services and find out what is important to them, then make sure these services can be delivered. It is important to meet (and preferably exceed) their expectations. Find out about a topic or project that will really make a difference. Instil a customer-focused approach in all team activities  –  the ways the phone is answered, people are greeted and information is relayed (e.g. email etiquette, document style, use of social media). See the big picture – Look beyond the role of FM – what else is going on in the client and employing organisation? Find out more about the other departments and business units. Avoid a silo mentality, look around and understand the bigger picture. Keep listening to background chat, gossip and other discussions. Take note of upcoming changes in the organisation, the hidden agenda of what is really going on and the personal thoughts of the individual at the top. Get business focused – Read the FM press, financial press and other current affairs media to keep up to date in general business matters. Be aware of potential acquisitions and mergers. This sort of information can help FMs to sound more knowledgeable and to make suggestions that tie in with the company direction. Show to others that the FM team can not only do a great job now but also adapt to potential new and broader challenges. Keep senior management informed – Senior management is not always aware of what FM has done, so keep evidence of achievements and positive feedback received. Make it easy for senior management to commend FM work and promote the team by giving them evidence and summaries of the achievements, with examples. First impressions count – Consider the overall impression or image of the FM team. Look and sound like the FM team is in charge of the premises. Be tidy and smart. FM’s role is looking after the image of the premises, but also consider the image of the vehicles, the uniform, the office, the website, the notice boards and email signatures. All of these images portray the organisation’s style and approach. Consider the quality of workwear – is it appropriate? Consider name badges, stationery, office layout and location in the premises. Do a SWOT (strengths, weaknesses, opportunities and threats) analysis for the FM team – What are its strengths and weaknesses? Understand what the FM team does really well and look for ways to use its strengths. Be aware of areas which are less well developed and work on ways to overcome these. Engage and talk to senior management across the business – Offer to give seminars on the FM department to other groups in the business. Speak up at cross-function

652  Facilities Manager’s Desk Reference

❑❑

❑❑

❑❑ ❑❑

❑❑

❑❑ ❑❑

❑❑

events. Offer to joint cross-function working parties or projects to ensure the voice of FM is heard. Engagement – Find ways to engage with various stakeholders – internal and external. Consider community projects and team-building days that involve everyone. Organise a roadshow or campaign to promote the FM team and the work done across the business. Awards – Get external recognition of the FM team’s work. Enter national and international annual industry awards. Find sector-specific awards that the client and employer would be keen to enter and see how FM’s achievements could help in these award entries. Standards – Seek to gain ISO and BS accreditation for the FM team’s processes and ways of working (see Chapter 37). Site tours – Offer to take customers around the FM areas: plant room, catering and loading bay. This will enable them to see the FM team and the work done in a different way. This is particularly useful for regular callers to the helpdesk. Adopt a charity – Find a local community-based organisation with which to partner and to share resources, knowledge and support. This will give a focus to the FM team in terms of corporate social responsibility and enable new skills to be developed by all parties in the relationship. Get qualified  –  Encourage the FM and supplier teams to become certified and qualified – celebrate their endeavours and success. Produce a newsletter – This can be online or hard copy and can be given to the building’s occupants. Also regularly contribute to the organisation’s overall communication team. Write case studies – Use projects and activities to create articles or case studies to demonstrate the value of FM work to others.

Index

Absorption costing,  60, 65, 67 Access control,  16, 19, 134, 401, 425–427, 478, 510–516, 519–523, 595, 596 Accessibility,  81, 139, 287–295, 309, 364, 437, 470, 639 Accommodation management,  192–197 AccountAbility 1000 (AA1000),  626–627 Acoustics,  25, 135, 140–142, 172, 195, 285, 288, 372, 380 Active water,  494 Adjacency matrix,  166–168 Air conditioning (AC),  136, 180, 185, 249, 264, 275, 278, 311, 329, 330, 370, 372, 377–384, 400, 463, 464, 532, 614, 615 Air quality,  375, 400, 410, 435, 615 Air supply rates,  250, 375 Alienation,  108–109, 113 Allergens, 571–573 Anaerobic digestion (AD),  452, 465, 546 Annual inspections,  362, 366–367, 378 Annual report of accounts,  50, 59 Appointed person (AP),  296–299, 301, 475 Approved Documents,  145–146, 191, 249, 256, 258–262, 388, 389 Arbitration,  113–114, 219 Architects,  70, 89–91, 103, 113, 120, 335, 398, 413–415, 434 Archives,  174, 593, 604, 605 Artificial intelligence (AI),  3, 16, 32, 360, 411, 447, 483 Artificial plants,  419–420 Asbestos checklist,  195, 312, 342 incident, 311–312 Regulations,  32, 231, 247 survey types,  307–309 As built records,  365, 366 Asset registers,  92–94, 326, 328, 361 Asset tagging,  515 Assignment Instructions (AIs),  511 Association of Chief Police Officers (ACPO),  426, 427, 433

Association of Facilities Managers (AFM),  3, 4, 6 Audio visual equipment,  26, 482, 604–605 Audit,  15, 21, 34–37, 92, 104, 176, 178, 179, 274, 346, 352, 356, 409, 414, 446, 460, 461, 466, 481, 506, 542, 551, 582, 594, 595, 632, 641 Automatic meter reading (AMR),  455, 456 Background Objectives Scope Constraints Assumptions Management (BOSCAM),  150 Balance sheet,  9, 17, 35, 43, 48–50, 53, 55, 58, 59, 69, 164, 459, 599 Barbour Index,  9 Bathtub curve,  368, 369 BCIS,  221, 368, 590 Benchmarking,  20–21, 34, 38, 92, 94, 158, 222, 240, 367, 528, 581, 586–591, 630 Best practice,  5, 35, 101, 151, 161, 162, 178, 243, 247, 265, 293, 353, 399, 429, 446, 470–471, 476, 507, 518, 571, 579, 581, 586, 587, 609 Best value (BV),  10, 44, 200, 429, 482, 557, 565 Bicycle parking,  430–432 Bike share,  436 Biomass,  25, 26, 32, 374, 451, 452, 465, 546, 611 Biometrics,  250, 401, 428, 483, 513, 520, 521, 523 Bituminous surface,  423 Boilers,  25, 77, 117, 249, 267, 304, 317, 358, 362, 372–374, 379, 440, 447, 453, 462, 463 Bonding,  280, 282, 284 Bottled water,  316, 317, 320, 572 Boundaries,  21, 36, 37, 105, 124, 172, 207, 253, 285, 341, 366, 415, 416, 422, 426–428, 442, 525, 622, 637 Bribery Act,  212–213, 232, 235 Brickwork walls,  422 British Association of Landscape Industries (BALI),  412, 413 British Institute of Cleaning Science (BICSc),  484, 486, 491 British Institute of Facilities Management (BIFM),  3–7, 636, 638 British Standards,  146, 362, 413, 446, 521, 580–582, 627

Facilities Manager’s Desk Reference, Third Edition. Jane M. Wiggins. © 2021 John Wiley & Sons Ltd. Published 2021 by John Wiley & Sons Ltd.

654 Index

Brundtland Report,  607, 609, 610 BS EN 15221,  6, 582 BSRIA Soft Landings,  223–225 Bubble diagrams,  166, 168, 169 Budgets,  13, 20, 33, 48, 49, 52, 53, 60–62, 67, 69, 73, 78, 122, 149, 156, 157, 202, 334, 358, 364, 420, 437, 456, 458, 482, 487, 489, 491, 561, 566, 568, 601, 632, 638, 641 Budget variance,  63–64 Building classifications,  261 Building design,  16, 130–133, 170, 255–259, 266, 372, 417, 444–446, 542, 620 Building efficiency,  35, 137–139, 171, 179–181 Building Energy Performance Directive (EPBD), 463 Building Engineering Services Association (BESA), 384 Building envelope,  376, 377, 441–442, 445 Building information modelling (BIM),  134–135, 256, 371, 384, 391, 409, 639, 640 Building layout,  378 Building life cycle cost,  80–81 Building management system (BMS),  19, 25, 101, 139, 323, 361, 390, 391, 405, 408, 411, 445, 519, 614 Building operating costs,  181–183 Building performance,  17, 20, 81, 101, 139–143, 224 Building records,  138, 331, 365–366 Building Regulations,  32, 99, 108, 121, 123, 144–146, 190, 191, 231, 249–250, 256, 258, 260, 262, 287, 292, 294, 319, 375, 384, 388, 389, 445, 446, 463, 467 Building Research Establishment Environmental Assessment Method (BREEAM),  132, 542, 580 Building Services Research and Information Association (BSRIA),  224, 362, 378, 384 Building Surveyors,  89, 90 Building types and uses,  130 Bundled services,  39–40 Business Continuity,  2, 7, 26, 344–356, 371, 581, 590, 639, 640 Business continuity planning (BCP) documents, 350–352 implementation, 346 policy,  97, 346, 347, 355 Business Excellence Model,  577, 579–580, 583 Business impact analysis (BIA),  347–348, 350 Business in the Community (BITC),  620, 630 Business rates,  70, 73, 108, 196 Cabling distribution,  397–398 Cabling standards,  398–399 Call points,  265, 267, 293, 479 Capital allowances,  75, 196, 457

Capital budget,  56, 60 Capital gains tax,  70, 74 Car park design,  426–430 Car parking standards,  433–434 Car sharing,  26, 32, 434–436 Carbon footprint,  16, 32, 188, 357, 401, 447–448, 461, 493, 542 Carbon Trust,  283, 457, 460 Carbon Trust Standard,  132, 460 Carpet,  136, 137, 164, 273, 308, 438, 440–441, 502, 544 Career planning,  641–642 Cash budget,  68 Cash flow,  48, 52, 53, 55, 56, 58, 60, 67–69, 71, 79, 150, 156, 157, 210, 350, 576, 599 Category A fit-out,  136–137 Category B fit-out,  136, 137 Catering and hospitality services,  556–574 Catering contracts,  560, 563 Catering costs,  565–567 Catering specification,  563–565 Catering strategy,  556–558, 563, 573 Cellular networks,  404–405 Centre for Facilities Management (CFM),  6 Certified Facility Manager (CFM),  3, 636 Chartered Institute of Building Facilities Management (CIOB),  222, 223 Chartered Institute of Procurement and Supply (CIPS), 201 Chilled beam,  379, 382 Chillers,  77, 362, 379, 383, 451 Churn,  160, 165, 183, 188, 193, 633, 634 Circuit protection,  282 Circulation routes,  168 Civil law,  228 Claims,  95–96, 103, 188, 227, 228, 234, 237, 295, 297, 344, 348, 357, 371, 476, 491, 512 Classification, Labelling and Packaging Regulations (CLP), 548 Cleaning chemicals,  494 Cleaning costs,  489 Cleaning methods,  486 Cleaning services,  484–505 Cleaning services checklist,  504–505 Cleaning specification,  487–489, 491, 504 Cleaning standards,  486–487, 569 Client organisation,  2, 10, 19, 21, 23, 29, 39, 40, 42, 45, 47, 54, 148, 163, 165, 198–199, 202, 217, 222, 467, 556, 559, 563, 590, 651 Climate change,  72, 253, 313, 344, 436, 444, 447, 451, 461, 607–609, 611, 620 Climate Change Levy (CCL),  70, 72–73, 463 Closed circuit television (CCTV),  16, 427, 429 Cloud computing,  406–407

Index  655

Coax cable,  396 Coliform bacteria,  331 Combined heat and power (CHP) systems,  25, 26, 250, 277, 372, 450–451 Comfort control,  25, 377–378, 390 Communication,  7, 12, 38, 43, 60, 61, 64, 89, 91, 94, 138, 150, 151, 153, 158, 170, 176, 186, 189, 194, 196, 213, 215, 235, 249, 266, 271, 275, 276, 294, 301–302, 306, 326, 327, 345, 348, 458, 476, 520, 527, 551, 639, 646 Companies Act,  92, 235, 345, 459, 477, 605 Company signage,  477–478 Competence,  3, 4, 148, 233, 237, 246, 274, 299, 307, 325–327, 334–336, 338–339, 390, 509, 532, 641, 649 Compliance,  40, 44, 92, 98, 129, 158, 164, 165, 172–175, 188, 190–191, 194, 196, 198, 203, 234, 235, 237, 244, 249, 251–253, 258, 279, 287, 292, 294, 308, 312, 551, 639 Component life cycles,  81, 368–369 Computer-aided design (CAD),  134, 161, 193, 407–408 Computer-aided facilities management (CAFM),  27, 134, 161, 178, 361, 384, 408, 633 Computerised maintenance management systems (CMMS),  83, 93, 361, 384, 391, 633 Condition based maintenance (CBM),  360, 390 Condition surveys,  36, 92, 312, 362, 367 Confined Spaces Regulations,  249 Conservation areas,  123, 125, 129–130, 418, 433 Conservation of Habitats and Species Regulations, 619 Construction Industry Scheme (CIS),  75, 76 Consideration,  35, 47, 71, 81, 82, 85, 89, 90, 93, 111, 130, 131, 139, 143, 153, 160, 162, 164, 189, 212, 215, 243, 283, 290, 300, 371, 418, 425, 431, 433, 441, 444–446, 486, 499, 504, 523, 542, 543, 601, 617, 629 Construction Design and Management (CDM) Regulations client duties,  336 documents, 340–343 H&S plan,  340, 342 information pack,  335–337, 340, 341 Construction workers tax status,  75–76 Consumer protection regulations,  103 Consumer Rights Act,  211 Continuous improvement,  20, 44, 575–577, 585, 628, 646 Contract cleaning,  485, 489–491 Contract cleaning specification,  501–504 Contract contents,  219 Contract extensions,  222 Contract methods,  130, 217–218

Contractor selection,  508–509 Contract relationships,  221 Contracts and Contract Management,  214–226 Contract types,  216–218, 560–563 Control of Asbestos Regulations,  247 Control of Noise at Work Regulations,  142, 172, 247, 248 Control of Substances Hazardous to Health (COSHH),  245–247, 315, 327, 380, 381, 422, 440, 487, 494, 504, 573 Control panels,  265–266, 602 Convection heaters,  374 Convention on International Trade in Endangered Species of Wild Fauna and Flora (CITES),  618, 619 Cooling systems,  314, 323, 329, 330, 383, 402 Cooling towers and evaporative condenser regulations, 329 Corporate duty of care,  474–476 Corporate information,  592 Corporate manslaughter,  235 Corporate PFI,  42 Corporate strategy,  348, 579 Corporation Tax,  70, 74–75 Cost accounting,  65–66 Cost benefit analysis (CBA),  37, 77–78, 81, 151, 156, 187, 232, 392, 399, 511–512 Cost centre,  62, 66–67, 192, 197 Cost data,  64–65, 83 Cost models,  198, 206 Covenants,  84, 100, 107–109, 111, 112, 115, 290 COVID-19,  185, 248, 302, 346, 505 Co-working,  14, 15, 21, 190 CRC Energy Efficiency Scheme,  446, 458, 459 Creditor days,  58 Criminal law,  229 Crisis management team,  353, 355 Critical assets,  199, 217, 348–349 Critical path analysis (CPA),  154, 155 Critical service features,  529 CSR and environmental policy,  631 CSR history,  620–621 CSR responsibilities,  621–626 CSR standards,  626–627 Culture,  15, 161, 189, 199, 206, 468, 573, 575, 578, 579, 623, 631, 636, 639, 641, 645, 646 Current ratio,  57, 58, 69 Customer care,  194, 472–474, 524–525, 529, 532 Customer effort score (CES),  536 Customer relations,  526, 532, 558 Customer satisfaction,  17, 471, 525, 528–531, 575–577, 580, 584, 590, 625 Customer service,  315, 395, 470, 471, 507, 524–526, 529, 531, 535–536, 581, 637, 639

656 Index

Damper,  380, 381, 390 Dangerous trees,  412, 417–418 Data Protection Act,  250–251, 605 Data rooms/data centres,  400–402 Daytime cleaning,  485, 492, 504 Debtor days,  58 Defective Premises Act,  99, 103, 104 Defects period,  158 Delegation,  633, 635 Demand and supply model,  11, 12 Demand management,  202 Demise,  22, 107, 116, 327 Demolition,  73, 80, 81, 91, 117, 119, 129, 130, 134, 307, 308, 336, 340, 342, 355, 538, 542, 615, 616 Depreciation,  48, 69, 75, 76, 82, 143, 361, 393, 467, 599, 600 Designer duties,  337 Design Quality Indicator (DQI),  143 Detergents,  322, 492, 494–498, 500, 501, 553 Developers’ fit-out,  136–137 Developing New Buildings,  119–146 Development process,  119–122, 143 Diffusers, 382 Dilapidation,  94–96, 362 Diminution,  95, 96, 109 Direct costs,  65, 67 Direct heating systems,  373 Directors Report,  253, 458–460 Disability awareness,  292 Disability Discrimination Act (DDA),  191, 288–291, 294, 385 Disaster recovery plan,  312, 350, 352, 356 Discounted cash flow (DCF),  77, 79 Discrimination claims,  491 Displacement ventilation systems,  381 Display Energy Certificates (DEC),  101, 104, 464–465 Display Screen Equipment Regulations,  164, 191 Document Management Services,  592–605 Door furniture,  516–518 Door locks,  511, 517 Door security,  515, 516 Drainage,  25, 120, 124, 145, 318, 319, 363, 420, 437, 442, 443 Drinking water,  25, 301, 313, 314, 316–318, 320, 322, 331, 332, 611 Drones,  409–410, 492 Dry risers,  270 Dual duct system,  380 Due diligence,  213, 229, 234, 235, 299, 539, 551, 592 Duty holder,  230, 244, 254, 277, 306, 307, 312, 325, 326, 328, 334–337, 339 Duty of care,  175, 293, 417, 428, 474–476, 478, 539–541, 547–548, 626

Earth’s resources,  609–611 Earthing,  279, 281, 282 Easement, 118 Ecological footprint,  611, 612, 631 Electric shock,  281–282, 300 Electrical cables,  282–283 Electrical circuit protection,  282 Electrical faults,  274, 281, 282 Electrical inspection and testing,  279 Electrical power,  278, 283, 349 Electrical safety,  277–286 Electrical supplies,  277–286, 452, 555 Electricity at Work Regulations,  277, 279, 280, 462, 492 Electricity load factor,  460 Electricity procurement,  450 Electricity tariffs,  449–450 Electronic access control systems,  515, 519, 522 Electronic document management system (EDMS), 603–604 Electronic security systems,  506, 521 Element and component life expectancies, 369–370 Embodied energy,  317, 445, 542, 617 Emergency plan,  239, 271, 345, 350–352 Employers Forum,  292 Employers Liability Regulations,  231, 478 End-of-Life Vehicles Regulations,  554 Energy Audit Standard,  461 Energy consumption,  101, 131, 158, 183, 253, 283, 372, 374, 378, 401, 402, 410, 411, 444–446, 448, 456–458, 460, 461, 466, 467, 492, 543, 590, 613, 614, 624 Energy efficient building designs,  445–446 Energy legislation,  462–463 Energy management,  253, 391, 444–467, 522, 581, 607, 613, 624, 639 Energy monitoring,  26, 390, 455 Energy Saving Opportunity Scheme (ESOS),  459, 460, 463, 466–467 Energy Performance Certificates (EPC),  101, 104, 132, 463, 464, 467 Energy policy,  250, 457–458 Energy Standard,  279–280, 458–462 Enforcing authorities,  238–239, 248, 302, 475, 479 Engineers,  89–90, 95, 188, 189, 273, 279, 303, 371, 375, 380, 390, 404, 423, 533 English Heritage,  91, 129 Environment definitions,  609 Environment Protection Act,  315 Environmental Civil Sanctions Order,  554 Environmental impacts,  81, 91, 121, 124, 253, 433, 542, 543, 555, 585, 609, 611, 613–620, 624 E-purchasing, 209

Index  657

Equality Act,  108, 191, 196, 230, 287, 288, 291–292, 295, 385, 509 Equipment leases,  69, 599 Equivalency assessment,  272, 273 Escherichia coli (E. coli),  331, 332, 570 Estate Agents Act,  102–103 Ethics,  3, 47, 623, 626, 631, 640, 645 EuroFM, 5–7 European Foundation of Quality Management (EFQM),  577, 579–580, 583 European procurement legislation,  211–212 Exempt supplies,  70–72 External areas,  24, 107, 293, 412–436, 486, 502 External walls,  138, 144, 145, 258, 263, 368, 441–442 F10 form,  336 F2508A form,  302 F-gas,  378, 379 Fabric maintenance,  24, 94, 412, 437–443 Facilities management (FM) history, 1–10 drivers, 11–22 profile,  16, 130, 526, 625, 651–652 roles, 12–13 standard,  16, 217 strategy, 29–42 strategy models,  38–42 trends, 21–22 Facsimile (fax) machines,  603 FADE project methodology,  151–152 Fan coil units,  380, 382 Fan heater,  380, 382 Fans,  286, 372, 377, 378, 381, 383 Feed in Tariff (FIT),  463, 465, 467 Fencing,  415, 422, 428 Fibre optics,  16, 25, 395–397, 402 Filters,  283, 316, 323, 377, 381, 382, 553 Final schedule,  95 Finance standards,  59–60 Financial accounting,  59–60, 560 Financial business case,  76–77, 158 Financial control,  52, 63 Financial management,  43, 48–83, 91, 148, 232, 457, 639 Financial performance,  16–17, 63, 131, 143, 162, 181, 368, 567 Financial proposal,  80 Financial statement,  48, 49, 51–53, 59 Financial systems and process,  48–51 Finishes,  108, 120, 136, 137, 141, 164, 298, 308, 438–441 Fire alarms,  16, 19, 77, 97, 259, 264–267, 284, 286, 352, 379, 479, 511 Fire blankets,  269

Fire components,  255 Fire detection systems,  261, 265 Fire doors,  168, 256, 261, 274, 294, 343, 362, 442, 479 Fire drill,  274–275 Fire emergency plan,  271 Fire evacuation strategy,  275 Fire extinguishers,  256, 268–269, 272, 391, 478, 479 Fire hydrants,  270 Fire precautions for visitors,  271, 479 Fire ratings,  260 Fire resistance,  143, 260–261, 311 Fire risk assessment,  98, 104, 231, 271, 272, 479 Fire safety,  104, 134, 135, 145, 164, 170, 190, 191, 231, 254–276, 280, 287, 384, 410, 479, 517 Fire separation,  258, 259 Fire signage,  262, 264 Fire spread,  143, 258, 260 Fire training,  273–274 Fireman’s lift,  386 Firewalls,  403, 406 First Aid at Work,  296–303 First aid equipment,  296–300 First aid room,  300–301 First aider,  296–299, 301, 302, 478 Fit factor,  185, 194 Fit note,  303 Fit-outs,  132, 136–137, 160, 196, 629 Fixed asset,  49–51, 54, 56, 60, 62, 68, 76, 361, 392, 393, 399, 600 Fixed costs,  49, 50, 64–65, 359, 560 Fixed price contract,  220, 454, 562 Facilities Management Association (FMA),  4, 5 Facility Management Institute (FMI),  2 Food hygiene,  364, 570–571, 573, 574 Food preparation,  196, 314, 318, 364, 375, 439, 633 Food standards,  571, 573 Forest Stewardship Council (FSC),  618 Franking machine,  595, 596 Freehold,  71, 95, 99, 100, 106, 181, 416 Front of house,  238, 468–483 Front of house services,  292–293 Fuel choice,  448 Furnishings,  136, 262, 267, 308, 484, 487, 502 Gantt charts,  147, 154–155 Gap analysis,  529–530 Gas procurement, 454 safety,  104, 453–454 tariffs, 455 Gas Safe Register,  303, 454 General Contract Works (GCW) 10 facilities management, 224

658 Index

Generators,  268, 277, 283–286, 386, 401, 449, 451, 452, 467, 616 Global FM,  2, 5, 9 Global Reporting Initiative (GRI),  626, 627 Global warming potential (GWP),  379, 448 Grass cutting,  362, 363, 413, 421 Gravel paths,  420, 423 Green Deal,  101, 457 Greenhouse Gas Emissions (Directors’ Reports) Regulations,  253, 460 Green lease,  101 Grey water systems,  321, 324 Gross external area (GEA),  93, 137, 183 Gross internal area (GIA),  20, 93, 137, 138, 166, 183–185 Gross profit margin (GP),  57, 567–568 Grounds and external areas,  412–436 Grounds maintenance checklist,  414 Grounds maintenance contract,  422–423 Guttering,  363, 437, 442–443, 617 Hackitt Review,  145 Hard FM,  23, 24, 43 Hazard Analysis of Critical Control Points (HACCP), 570–572 Hazard identification,  241–242 Hard landscape maintenance,  412 Hardstandings and external areas,  420 Hazardous Waste Regulations,  231, 551, 553 Hazards,  131, 239–242, 267, 272–274, 293, 297, 298, 329, 334, 337, 339, 341, 342, 349–350, 362, 400, 420, 433, 437, 478, 486, 501, 506, 548, 571, 572, 606, 616 Health and Safety (First-Aid) Regulations,  296–297 Heat detectors,  266, 267, 479 Heat pumps,  249, 250, 382, 451–453 Heating systems,  136, 174, 372–374, 445, 452, 453, 533, 615 Heating, ventilation and air conditioning (HVAC),  24, 25, 168, 170, 179, 370, 372, 390, 401, 410 Helpdesk,  25, 36, 188, 293, 361, 391, 524, 532–534, 590, 633, 652 Hierarchy of control measures,  240, 241 High voltage three-phase supply,  278 Hoggin, 420 Hose reels,  268, 269 Hot water systems,  25, 373, 445, 452 Hot water supplies,  329 Housekeeping and cleaning services,  484–505 Housing Grants, Construction and Regeneration Act,  210, 232 HSE five-step approach,  239 Human Rights Act,  231, 251 Humidification,  383, 401

Hydroelectric power,  451 IEE 18th Edition,  364, 365, 398 Ignition sources,  254 Inclusive FM,  287–288 Income tax,  70, 74, 75 Indirect heating systems,  373–374 Inflation,  80–83, 85, 348, 393, 600 Information and communications technology (ICT), 392–411 In-house FM,  38, 45, 622 Institute of Facilities Management (IFM),  3–4, 40 Institution of Occupational Safety and Health (IOSH),  237, 636 Institute of Workplace and Facilities Management (IWFM),  4, 7, 636–639 Integrated facilities management (IFM),  40 Integrated whiteboards,  604 Intelligent buildings,  133–134, 390–391, 640 Intelligent client function (ICF),  41, 45, 632 Intergovernmental Panel on Climate Change (IPCC),  607, 608, 620 Interim schedule,  94 Internal customer service,  531–532 Internal planting,  27, 418–419 Internal rate of return (IRR),  50, 77, 79 International Accounting Standard (IAS),  60 International Facility Management Association (IFMA),  2–6, 636, 637, 639 International Financial Reporting Standards (IFRS),  59–60, 69, 163 Internet of things (IoT),  410, 493 Invasive species,  417 Investment,  13, 17, 33, 42, 44, 48, 49, 54–57, 76, 82–86, 100, 111, 147, 159, 189, 424, 453, 456, 457, 465, 467, 532, 586 Investment appraisal method,  77–80 Investors in People (IiP),  580, 585–586 Invitation to tender (ITT),  205–206 Ionators,  492, 494 ISO 9000,  34, 47, 148, 580–584 ISO 14001,  585 ISO 19011,  582 ISO 26000,  581, 627 ISO 41001,  582, 584–585 ISO 50001,  460–461, 581 Japanese knotweed,  416, 417 Joint Contracts Tribunal (JCT) forms of contract, 223 Justice system,  227, 228 Kaizen, 576 Keys,  97, 300, 320, 432, 470, 511, 516–518, 522, 523

Index  659

Key performance indicators (KPIs),  11, 13, 30, 44, 253, 364, 399, 527, 535, 567–570, 589– 591, 628, 632 Kyoto Protocol,  72, 253, 447, 460, 607 L74 ACoP,  297 L8 ACoP,  32, 325, 383 Landfill gas, 453 tax,  69, 72 Landlord and tenant legislation,  105, 287 Landlord’s covenants,  110 Landscape architects,  91, 413–415 Landscaping maintenance,  412 Landscaping standards,  413 Laserjet printer,  601 Late payment,  58, 210–211 Lean management,  577 Lease of equipment,  104 Lease contents,  105–107 Leasehold Property Repairs Act,  95, 109, 231 Lease renewal,  111, 112, 114, 117 Lease schedules,  110–111 Lease termination,  115 Leasehold,  95, 99–101, 106, 108, 109, 164, 437 Leadership in Energy and Environmental Design (LEED),  132, 299, 542 Legal duties,  248, 305, 477 Legionnaires’ disease,  328–330 Legislation,  11, 99–118, 122–123, 125, 164, 190–191, 209–211, 227–276, 332, 345, 378, 417, 424, 434, 444, 462–464, 480, 507, 538, 539, 543, 551, 553–555, 572–573, 620, 649 Licence to occupy,  14 Licence to plant,  418 Licensed security roles,  508 Life cycle costing methodology,  81 Lifting Operations and Lifting Equipment Regulations (LOLER),  247, 248, 492 Lifts,  23, 43, 77, 170, 171, 183, 185, 248, 264, 274–276, 284, 385–386, 390, 532 Light emitting diode (LED),  388, 605 Light fittings,  382, 389 Lighting controls,  173, 389–390 efficiency, 389 requirements,  174, 388 Lightning conduction,  142 Liquidity, 57–58 Listed buildings,  73, 93, 119, 121, 123, 129, 287, 433 Logistics,  232, 355 Long-term maintenance plan (LTM),  358, 362 Lump sum contract,  219–220 Lux levels,  170, 174

Mail, 593–597 Mailroom, 593–597 Maintenance definitions and strategies,  357–370 Maintenance activities,  272, 309, 319, 335, 358, 361–363 Maintenance classifications,  358–360 Maintenance implications of building structures, 437 Maintenance policy,  360, 366 Maintenance priorities,  358 Maintenance programmes,  330, 360–362, 419, 437–438 Maintenance routines and operating procedures, 330–331 Maintenance schedules,  363–364, 412, 413, 421 Management of FM function,  632–652 Management of health and safety regulations,  239 Managing agent,  41, 453, 532, 641 Manholes, 423 Manned access control,  513–514 Manual Handling Regulations 1992,  247 Marginal costing,  65 Means of escape,  258, 259, 261–264, 270–272, 517 Measured term contract (MTC),  220 Measuring building efficiency,  137–138 Measuring terminology,  183–185 Methane,  253, 447, 452, 453, 552, 615 Mechanical and Electrical Systems (M&E),  371–391 Mechanical ventilation,  25, 133, 372, 376–378, 384, 463 Meet and greet service,  196, 472–473 Meeting rooms,  137, 176, 177, 187, 378, 383, 409–411, 481, 483, 565, 595, 605, 633 Metering,  101, 314, 315, 321, 450, 453, 455– 457, 463, 543 Microfibre materials,  493–494 Milestones,  150, 606 Minimum Energy Efficiency Standard (MEES),  104, 463, 467 Mission statement,  33, 579 Modern Slavery Act,  203, 232, 235–236 Monte Carlo simulation,  273 Motorcycle parking,  432–433 Move requests,  192–193 Moves planning,  194–196 Motivation,  61, 424, 457, 487, 560, 636, 640, 642–645, 647 Multi-function devices (MFDs),  599, 602, 603 Multi-service contract,  43 Mystery shopping,  529 National Living Wage,  252, 491 Natural ventilation,  25, 376, 625 National Examination Board in Occupational Safety and Health (NEBOSH),  237, 636

660 Index

NEC Contract,  224 Negligence,  114, 209, 233, 348, 413, 415, 508 Net Internal Area (NIA),  20, 93, 137, 138, 166, 179–185, 190 Net present value (NPV),  50, 51, 77, 79, 82 Net profit margin,  57 Net promoter score (NPS),  536–537 Net usable area (NUA),  93, 137, 138, 166, 179–185, 194 Networks,  1, 4, 5, 25, 146, 391, 393, 396–398, 402–407, 449, 453, 587 Noise,  81, 126, 141, 142, 171, 172, 248, 266, 285, 360, 371, 372, 374, 376, 380, 394, 518, 613, 616, 619, 629 Noise at Work Regulations,  231 Noise control,  172 Notifiable works,  335–336 Obsolescence,  69, 131, 171, 196, 368 Obsolete,  85, 368, 400 Occupiers Liability Act,  99, 104, 231, 287, 434, 475 Offer,  2, 14–16, 40, 41, 58, 114, 215, 289, 382, 383, 402, 404, 425, 429, 431, 436, 469, 533, 556, 557, 598, 618, 636, 642, 651, 652 Official Journal of the European Union (OJEU),  212 Office moves,  193, 194, 196, 533, 595 One Planet Living Principles,  612 Opposing a new tenancy,  115–116 Organisation for Economic Co-operation and Development (OECD),  623, 627 Outsourcing,  2, 21, 31, 40, 43–47, 399–400, 560, 597 Overhead costs,  17, 48, 65, 66, 563 Ownership,  17, 36, 42, 60, 61, 74, 87, 92, 99–102, 119, 135, 157, 164, 206, 207, 225, 392–393, 416, 442, 464, 513, 641 Packaged air conditioning units,  382–383 Parapets,  441, 443 Parking policy,  424–425 Part B Building Regulations,  146 Part F Building Regulations,  146, 375 Part L Building Regulations,  32, 146, 249– 250, 445, 483 Part M Building Regulations,  146, 196, 287, 292, 294 Partnership,  12, 20, 42, 46, 47, 74, 90, 158, 218, 221, 303, 429, 573, 579, 587 Party wall,  105 PAS 2060,  461, 462 PAS 2080,  461–462 Passivhaus, 133 Paving stones,  420 Payback period,  77–79 Performance measurement,  19–20, 38, 44, 47, 56–57, 143, 222, 529, 578, 591 Personal area networks (PAN),  405–406

Personal Emergency Evacuation Plans (PEEP),  275, 293 Personal Protective Equipment at Work Regulations 1992 (PPE),  247–248, 492 Program Evaluation and Review Technique (PERT), 154 Political, economic, social and technological (PEST) analysis,  31, 34, Political, economic, social, technological, legislative and environmental analysis (PESTLE),  13, 31–32 Photocopiers, 598–602 Physical adjustments,  289, 294 Plan, Do, Check, Action (PDCA),  575, 585 Planned preventative maintenance (PPM),  20, 36, 358, 360, 363, 364, 384, 633 Planning agreements,  121, 127–128 Planning and Compulsory Purchase Act,  292 Planning appeals,  125 Planning authority,  91, 121 Planning consent,  119, 121, 122 Planning control,  128 Planning grids,  135–136, 168–171, 179 Planning legislation,  32, 99, 122–123, 125, 418 Planning permission,  89, 91, 119, 120, 123– 129, 194, 231 Planning policy guidance notes,  125, 127 Planning techniques,  154 Plasma screens,  32, 196, 473, 604 Plaster,  129, 300, 438, 439 Plastic waste,  317–318, 544–546 Portable electrical equipment,  280 Portable appliance testing (PAT),  280, 317, 602 Postal services,  71, 593 Post Implementation Analysis (PIA),  158 Post Occupation Evaluation (POE),  158, 159 Power factor rating,  283 Power failures,  283–284, 344, 345, 411 Power quality,  283 Power usage effectiveness (PUE),  400–402 Predictive maintenance,  360 Premises policy,  34–35, 178 PRINCE2,  152, 154 Principal contractor (PC) duties,  337–338 Principal designer (PD) duties,  334, 337 Printers,  26, 172, 192, 402, 405, 601, 602 Private Finance 2 (PF2),  41, 88, 225 Private Finance Initiatives (PFI),  2, 10, 17, 19, 22, 41–42, 44, 45, 87, 88, 90, 120, 122, 130, 200, 201, 225–226 Private Security Industry Act,  229, 232, 434, 507, 508 Procurement, 198–213 legislation,  198, 211–212 stages, 201

Index  661

Producer Responsibility Obligations Regulations,  231, 543, 554–555 Product labelling,  543–544 Profit and loss account,  48–51, 53, 55–57, 560, 563 Project briefs,  149–150, 156, 157 Project budget,  48, 147, 156–157, 193, 194 Project control,  155, 156 Project handover,  158–159 Project management,  27, 28, 42, 89, 147–159, 224, 408, 639, 640 Project manager (PM) role,  148 Project planning,  153–154 Project programmes,  150, 151, 208 Projects In Controlled Environments (PRINCE), 152 Project teams,  147–150, 152, 155, 157–159, 193, 580, 638 Property and asset register,  92–94 Property and estates management,  84–98 Property asset register,  92–94 Property cost,  17, 20, 62–63 Property guardian,  98 Property industry,  84, 88, 90 Property investment market,  86 Property investors,  85, 87–88 Property Litigation Association,  129 Property legislation and leases,  99–118 Property management,  24, 28, 41, 43, 88, 90, 91, 95, 112, 229, 409, 640 Property ownership,  367 Property portfolio,  33, 35, 41, 42, 45, 84, 85, 87, 88, 160, 455, 456, 639 Property specialists,  91 Provision and Use of Workplace Equipment Regulations (PUWER),  164, 246–247, 300, 492 Pseudomonas aeruginosa, 331–332 Purchase criteria,  198 QR codes,  32, 361, 409 Quality accreditation schemes,  580–581 Quality management,  152, 575–591, 639, 640 Quality plan,  151–153 Quality standards,  35, 47, 148, 151, 155, 535, 580–581 Quality systems and procedures,  577 Quantity surveyors (QS),  90, 120, 138, 147, 335 Questionnaires,  158, 470, 528–530, 588 Quick ratio,  57, 58 Quiet enjoyment,  110 Radiant heating,  373 Radiators,  170, 372–374, 382, 488, 618 Radio frequency identification (RFID),  177, 361, 425, 428, 521, 593

Rain downpipes,  442–443 Rainwater recovery systems,  322 Reception service standards,  474 Reception services,  468, 470, 471, 473, 474, 483 Recruitment,  14–15, 165, 180, 188, 230, 460, 480, 491, 634, 636–637 Recycling,  32, 72, 162, 195, 314, 315, 485, 503, 504, 539, 543–546, 554, 590, 607, 613, 616, 617, 624, 625 Reedbeds, 322–323 Refrigeration,  370, 383 Refuges,  185, 276, 294 Registration, Evaluation, Authorisation and Restriction of Chemicals (REACH),  231, 553 Regulation of Investigatory Powers Act (RIPA),  231, 251 Regulatory Reform (Fire Safety) Order,  104, 191, 231, 255, 270–272, 479 Reimbursable and fixed fee contract,  218, 221 Reimbursable contract,  220, 221 Relative humidity (RH),  175, 371, 375–376, 419, 456 Remote entry points,  473–474 Renders, 438 Renewable energy sources,  451–453, 624 Renewable Heat Incentive (RHI),  463, 465–466 Rent review,  13, 86, 92–94, 105, 106, 110–114, 117 Repairs,  64, 75, 81, 86, 89, 94–96, 107, 109, 111, 117–118, 129, 147, 196, 308, 357, 358, 362, 420, 423, 453 Reporting of Injuries, Diseases and Dangerous Occurrences Regulations (RIDDOR),  232, 248, 302–303, 311, 342, 590 Reprographics,  26, 27, 63, 64, 171, 232, 595, 597–598, 614 Residual current device (RCD),  280, 282 Resins,  438, 440, 499–501, 553, 618 Responsible person,  104, 271, 274, 275, 302, 325, 326, 464 Restricted areas,  195, 410, 475, 514, 515 Return on capital employed (ROCE),  57, 77, 78 Revenue budget,  60 Risk assessment records, 243–244 standards, 239–240 Risk control,  240–241, 246, 248 Risk register,  241, 348 Room booking services,  481–483 Royal Institute of British Architects (RIBA),  89 Royal Institution of Chartered Surveyors (RICS),  4–6, 89, 90, 96, 112, 114, 132, 164, 185, 362, 590, 637, 640 SA8000,  627, 628 Safety policy,  237–238, 241, 298, 339, 340 Sale of Goods Act,  209, 232

662 Index

Scanner,  523, 534, 602–604 Schedule of rates,  218, 220, 221 Scope of service,  11, 15, 217 Scott Schedule,  95 Sealants,  311, 439, 498–500 Section 18,  95, 96 Section 25 and 26,  115 Section 30, 115–117 Section 32 Rule,  116–117 Section 106,  121, 124, 434 Security Industry Authority (SIA),  506, 507 Security management,  506–523 Security training,  523 Self-perform FM,  10, 38–39 Service contracts,  41, 56, 62, 63, 93, 199, 214, 216, 217, 221, 234, 364, 393, 412, 489 Service delivery requirements,  527 Service level agreements (SLA),  11, 19, 30, 37, 44, 219, 222, 226, 364, 384, 399, 474, 489, 524, 527, 532, 534–535, 562, 568, 589–591, 595, 633, 634, 636 Service profit chain,  17–19 Service quality (SERVQUAL),  471, 530–531 Service standards,  40, 470, 509–510, 529, 533, 535, 565 SFG20 standard,  384 Shell and core,  136, 137 Sign language,  290, 292 Signage,  26, 104, 196, 199, 262, 288, 353, 386, 409, 426, 427, 477–478, 482, 516, 604 Simple aggregation,  81–82 Single duct system,  380 Single or packaged service,  39 Single-phase supply,  278 Single use plastic,  318, 493, 538, 542, 546, 555 Sinking fund,  82 Site footpaths and roads,  423–424 Site security survey,  158, 434 Six Sigma,  577, 580 SMART-ER, 646 Smart export guarantee (SEG),  465, 467 Smart meter,  314, 455, 456 Smartphones,  16, 32, 392, 394, 403–408, 411 Smoke detector,  266, 267, 366 Snagging,  158, 493 Soft FM,  23, 24, 26, 40, 41, 43, 225, 641 Solar power,  451–452 Solvents,  496, 497, 500–501, 553 Sounders, 265–267 Sources of fire,  254 Sources of funding,  54, 430 Space allocation,  135, 165, 175–176, 193, 288 Space audits,  36, 178–179, 187, 189 Space guidelines,  162–163, 175, 181, 187, 192

Space management,  7, 27, 43, 63, 134, 160–191, 223, 378, 410, 639 Space management policy,  161–163 Space planning,  2, 7, 36, 161, 162, 166–170, 175, 179, 188, 190, 194, 254 Space use,  20, 35, 88, 160, 162, 163, 170–175, 177, 181, 185–190 Space utilisation,  16, 17, 33, 66, 161, 163, 176–178, 180, 186, 482 Special Educational Needs and Disabilities Act (SENDA),  288, 290 Special purpose vehicles (SPVs),  42 Specifications,  42, 91, 103, 120, 122, 141, 148, 149, 151, 201–205, 223, 262, 384, 400, 403, 411, 422, 427, 486–489, 491, 501–504, 510, 517, 558, 563–565, 567, 636 Specific, measurable, achievable, realistic and timely (SMART),  150, 646 Spend analysis,  201–202 Split systems,  383, 453 Sprinklers,  97, 269–270, 272, 314, 324, 366, 479 Stacking plans,  168, 242 Stakeholder,  29, 37, 38, 91, 150, 157, 192, 196, 204, 209, 344–346, 348, 350, 524–537, 588, 620, 631, 639, 652 Stakeholder analysis,  37, 525–526 Stamp Duty,  31, 70, 73, Standard contract forms,  222–223 Standards,  4, 16, 35, 44, 123, 129, 132, 134, 145, 146, 160, 162, 163, 175, 190, 192, 201, 222, 255, 256, 259, 279–280, 294, 299, 345–346, 375, 384, 385, 398, 413, 445, 461, 463, 470, 489, 501, 507, 510, 524, 529, 553, 571, 573–574, 579, 581–583, 585, 596, 623, 626–627, 629, 633, 645, 652 Standby site,  353 Stern Report,  608 Strategic sourcing,  201, 202 Streamlined Energy and Carbon Reporting Scheme (SECR),  101, 253, 458–459 Strengths, weaknesses, opportunities and threats (SWOT),  29, 34, 651 Strict liability,  229 Structure of buildings,  512 Structured cabling systems,  398–400 Supplier selection,  203 Supply matrix,  200 Supply of Goods and Services Act,  210, 232 Suppression systems,  268, 351, 400 Sustainability and environmental issues,  606–631 Sustainability Index,  630 Sustainable construction,  131–133 Sustainable Urban Drainage Scheme (SUDS),  319 Swing space,  162, 194

Index  663

Swimming pool,  279, 333 Switchboard services,  26, 480–481 Tax,  49, 52, 57, 68–76, 81, 455, 599 Team building,  91, 158, 527, 622, 638, 645–647, 652 Technology systems integration,  16 Telecommunication wiring,  392, 395–396 Telecommunications,  16, 69, 118, 251, 389, 392, 395, 398, 400, 401, 407, 555, 603 Telephony and data communications,  355, 394, 395 Telephony services,  394–395 Tele-presence, 407 Tenancy, 115–117 Tenant’s covenant,  107–110, 114 Tender document,  205, 206, 336 Tendering process,  120, 204, 205 Tenure,  99–102, 114–116 Term contract,  220 Terminal schedule,  95 Termination of lease,  117 Terms and conditions,  198, 218, 222, 223, 226, 251, 596 Terms of reference (TOR),  148–151, 153, 155, 157 Thermal comfort,  174, 372 Three-phase low voltage supply,  278 Tidal power,  452 Tiling,  117, 438–440 Time limits,  112–113, 193, 295 Total facilities management (TFM),  40, 42, 45, 532 Total quality management (TQM),  577–579 Town and Country Planning Act,  91, 99, 107, 108, 122–124, 127, 128, 191, 231 Training and development,  38, 40, 623, 635, 640–641 Training records,  273–274, 326, 491 Transfer of Undertakings (Protection of Employment) Regulations (TUPE),  30, 205, 223, 230, 251–252, 566 Travel planning,  232, 424, 425, 434–436, 624 Tree decay,  415 Tree management,  629 Tree preservation orders (TPOs),  418 Trespassers, 104 Trigger notices,  112 Turnbull Report,  345 Turnover lease,  100–101 Uniform business rate (UBR),  73 UK legal system,  227–229 Unavailability impact table,  350 Underfloor heating,  374 Unfair Terms Act,  211 Uninterruptable power supply (UPS),  170, 283–285, 400, 401, 614

United Nations Sustainable Development Goals, 621 Urinal controls,  323 Use Classes Order,  113, 126, 127, 191 User clause,  113 User groups,  527, 528 U value,  141 Vacant property,  97–98 Value add,  17, 18 Value added tax (VAT),  34, 39, 69–72, 90, 206, 226, 449, 455, 489, 558 Value chain,  17 Value engineering (VE),  147, 206–209 Variable air volume (VAV) systems,  379, 380 Variable costs,  51, 64, 65, 67 Vegetation maintenance,  421 Vehicle control,  514–515 Ventilation,  75, 244, 264, 374–375, 401, 419, 445, 499, 518 Vested sourcing,  46 Vicarious liability,  229, 233 Video conferencing,  32, 134, 189, 407, 604, 629 Virtual office,  15–16 Virtual private networks (VPNs),  406 Virtual reception (VR),  483 Vision,  5, 8, 12, 29, 31, 174, 407, 515, 578, 579, 612, 631, 638, 645 Visitor expectations,  470, 471 Visitor information,  476–477 Visitor management,  470 Visitor risk assessments,  478 Voice over Internet Protocol (VoIP),  407 Voice activated services,  411 Wall cracks,  441 Warm air unit,  372–374 Waste Batteries and Accumulators Regulations,  231, 554 Waste classification,  547–550 Waste electrical and electronic equipment (WEEE),  32, 542, 616 Waste management,  538–555, 613, 616, 625 audits, 551 policy, 540 procedures, 540 Waste minimisation,  539–543, 547, 552, 624 Waste product database,  547 Waste Regulations,  555 Waste targets,  551–552 Waste to energy (WTE),  452, 546–547 Water conservation,  132, 313–315, 625 Water consumption,  132, 313, 314, 321–323, 629

664 Index

Water design capacity,  319 Water industry,  315, 551 Water leak detection,  324 Water management policy,  320–321 Water Management Society (WMS) Code of Conduct, 325 Water pollution,  228, 316, 319, 615, 619 Water pressure,  270, 318, 321, 323 Water quality legislation,  332 Water quality testing,  332–333 Water recycling systems,  321–323 Water safety,  313–333 Water supplies,  270, 313–333 Water-saving technology,  321 Wayleaves,  118, 415 Welcome boards,  473 Welcome formalities,  469–470 Well-being,  3, 21, 132, 162, 172, 176, 186, 192, 227, 372, 388, 484, 573, 590, 609, 612, 613, 621 WELL standard,  542

Wet risers,  270 Whole life costing,  80, 82, 206–207, 212 Wildlife and Countryside Act,  619 Wind farm,  451 Windows,  125, 129, 135, 136, 142, 169, 170, 273, 376, 380, 382, 390, 442, 496, 503, 518–519, 617 Wireless networks (WLANs),  402–405 Wiring,  117, 278–280, 283, 392, 393, 395–399, 402 Working at Height Regulations,  231, 246, 492 Working capital,  51, 54, 55 Working Time Regulations,  230, 252 Workload planning,  633–635 Workplace (Health, Safety and Welfare) Regulations,  162, 173, 175, 191, 234, 244–245, 315, 316, 332, 341, 375, 484 Workplace parking,  424 Zero-based budget,  62 Zero-rated supplies,  70–71 Zoning,  168, 266, 379–380, 479