New Industry Standards Set to Transform Asset Management

Andy Green
In these austere times, estate holders want to significantly reduce their combined operating costs and capital asset investment costs. This means efficiently managing the total cost of ownership and maximising the utilisation and value of all their assets.

New industry standards

The UK construction industry has traditionally used the RICS standard methods of measurement for managing capital costs. However the maintenance industry has not had industry-accepted methodologies. This is now set to change with a formal set of practical guidelines and rules of measurement for maintenance works.

Faithful+Gould is already applying these new standards, ahead of publication

The new standards provide a consistent basis for targeting spend, cost control, transparency and informed decision-making. The new rules also support a standardised basis for future asset surveying and for condition, energy efficiency and functional usage assessments.

  • Our data collection technology enables us to carry out an asset condition/maintenance survey and a capital investment survey simultaneously.
  • This combined survey is aligned to the new UK standards.
  • From asset survey outputs we can generate integrated maintenance and life cycle replacement programmes.
  • We can also quantify maintenance liabilities and operational risks.
  • Clients can then set and defend their maintenance budgets.
  • They can also sustainably invest or de-invest in their assets, including instigating upgrade works to realise carbon reduction and energy efficiency targets.

All estate holders stand to benefit from the new maintenance costing methodologies.

The public sector has already made a start. The Government Property Unit (GPU), which currently leads property strategy across the public sector, is actively encouraging standardisation across the Facilities Management and maintenance industry.

The Ministry of Justice (MOJ) has championed the standardised methodologies and employed Faithful+Gould to help them roll out a national asset verification and condition survey across the MOJ custodial estate. This covers 134 establishments, totalling over 7000 buildings and some six million maintainable assets. Defence Estates are also showing keen interest.

Key benefits of adopting the new standards and costing methodologies:

Functional Minimum Maintenance Standards

  • Assurance of statutory/legal compliance – fit for function maintenance regime.
  • Robust base line for each functional type – e.g. prison, barrack, school etc.
  • Basis for setting appropriate funding for maintenance – e.g. cost/pupil etc.

Understanding the impact of funding or not funding maintenance

  • Targeted investment based on quantified risks and operational liabilities.
  • Informs decision-making – using facility condition indexing and risk techniques.

Control of the combined maintenance and capital replacement expenditure

  • Prioritise and optimise actual spend versus business needs/wants and liabilities.
  • Inform investment decision-making and wider estate rationalisation planning.

Sustainable and scalable model – customisable for any client organisation

  • Supports the use of leaner and greener best practices and targeted improvements.

Andy Green, Faithful+Gould’s director of Whole Life Costing, chairs the RICS technical working group producing the New Rules of Measurement (NRM 3) for maintenance works (PDF). Andy is the lead technical author for NRM 3 and also for the forthcoming BS 8544 Guide on Life Cycle Costing of Maintenance. Both standards are scheduled for publication in Q2 2012.