Sharpen up with the right ratios

March 26, 1999

Higher education institutions could manage their physical assets more effectively with help from the results of a pilot study commissioned by the funding councils.

As the higher education sector commits almost 20 per cent of total expenditure to estates, any way of improving the management of this asset will be of wide benefit to institutions.

The project's findings provide guidance for the sector on how performance statistics can be used to improve estate management. The report also raises a number of interesting questions and issues that will require more work by the sector.

The study by property consultant GVA Grimley and Occupation Property Databank was conducted in collaboration with 39 higher education institutions across the UK, ranging from tiny specialists to multi-site red-bricks. Other partners included the Higher Education Statistics Agency,the Association of University Directors of Estates, the Committee of Vice-Chancellors and Principals and the Standing Conference of Principals.

One of the main results of the project was a set of key estate ratios (KERs). These are based on 14 priority areas that institutions wish to focus on from an estates perspective. The KERs should help institutions better to assess their operational performance and allow consistent comparisons between institutions. Among the 14 KERs are the cost of legislative compliance, total property costs, gross residential income, energy costs and consumption, teaching space used and estate management costs.

To be developed, these ratios need accurate and reliable data: it is vital that institutions can produce the data identified. The ability to do so was tested in the project, and the availability of data was generally good. Most collaborating institutions were able to return at least 60 per cent of all data requested. This is a significant achievement given the amount of data that was requested, some for the first time, and the relatively short timescale for data collection.

The preliminary results for the KERs produced are interesting, but they are best viewed as interim numbers from an unrepresentative sample. They cannot be used to assess performance at present. The table above summarises some of the results.

Participants on the project believe it has been extremely valuable. Vic Slater, chair of AUDE and a member of the project steering group, says:

"The project has tackled some quite fundamental issues that have been challenging directors of estates for many years. It has been demanding on participants, but the results really are very encouraging."

John Rushforth, head of estates at the Higher Education Funding Council for England, said he is "really pleased" about how the 39 collaborating institutions have been able to respond to requests for better information about their estates. While Derry Caleb, director of estates and buildings at Surrey University, says: "We have learned a lot as a result of the exercise, and we can see clear ways in which the outputs of the study will assist us in refocusing our data management. I can't pretend the collection of data has been painless, but the end result has been of real benefit."

The project director, Christopher Hedley of OPD, comments: "We believe we have produced an approach and a set of tools that really will help improve the performance of institutions' estates from a business perspective."

A key proposal to emerge from the study is that the approach and framework developed should form the basis of data returns to the various funding councils from 1999. In addition, a programme of refinement and improvement in data definitions and in developing new KERs has been recommended. It is clear, however, that if the recommendations are adopted there will be big implications for how institutions manage their information, as well as how they assess their performance.

At GVA Grimley, we believe that KERs and other benchmarking data produced by the study will be a major asset to institutions' estate management. Consultations just launched with the rest of the sector about the findings will help take the project forward.

Jim Whelan, property consultants GVA Grimley.

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