estate management in higher education - audit scotland · • further education colleges •...

Estate management in higher education

Prepared for the Auditor General for Scotland September 2007

Audit Scotland is a statutory body set up in April 2000 under the Public Finance and Accountability (Scotland) Act 2000. It provides services to the Auditor General for Scotland and the Accounts Commission. Together they ensure that the Scottish Executive and public sector bodies in Scotland are held to account for the proper, efficient and effective use of public funds.

Auditor General for ScotlandThe Auditor General for Scotland is the Parliament’s watchdog for ensuring propriety and value for money in the spending of public funds.

He is responsible for investigating whether public spending bodies achieve the best possible value for money and adhere to the highest standards of financial management.

He is independent and not subject to the control of any member of the Scottish Executive or the Parliament.

The Auditor General is responsible for securing the audit of the Scottish Executive and most other public sector bodies except local authorities and fire and police boards.

The following bodies fall within the remit of the Auditor General:

• directorates of the Scottish Executive, eg the Health Directorate• executive agencies, eg the Prison Service, Historic Scotland • NHS boards • further education colleges • Scottish Water • NDPBs and others, eg Scottish Enterprise.

ContentsContents

SummaryPage 2

Keymessages

RecommendationsPage 4

Part 1. Introduction Page 5

TheScottishhighereducationsectorislargeanddiverse

AboutthestudyPage 6

Part 2. The impact of capital funding on the higher education estate Page 7

Keymessages

CapitalinvestmentisfinancedfromarangeofsourcesPage 8

ThepatternofexpenditureontheScottishhighereducationestatehasfluctuatedsince2001/02

ThemaintenancebacklogfortheScottishhighereducationestateisalmost£0.7billionandcontinuestogrowPage 9

Theoverallconditionoftheestateisbeginningtoimprove

LevelsofinvestmentarebelowthosesuggestedtosustaintheestateinmanyinstitutionsPage 10

ItistooearlytoestablishtheimpactofinvestmentintheestateDuetoacombinationoffactors,theconditionoftheScottishestatecomparesunfavourablywiththeUKestate

AwiderangeofothermeasurescanbeusedtobenchmarkestatemanagementPage 14


Part 3. The role of the Scottish Funding Council Page 21

Keymessages

TheSFCsetstheoverallstrategyfortheHEsector

Mostofthefundsavailablefordevelopingestatesareallocatedonthebasisofaformula

Theformulaapproach,combinedwithbroadcriteriamakesitdifficulttoassesswhetherkeynationalprioritiesarebeingmetPage 22

SelectiveLTIFfundingmoreclearlydemonstratescollaboration,sustainabilityandimprovedcapitalefficiency

ThereisnopubliclyreportedcomprehensiveevaluationoftheimpactofcapitalfundingontheHEestatePage 25

TheSFChascommittedtoassessingtheimpactofcapitalinvestmentinitscorporateplan

TheSFCisprovidingmorestrategicsupportPage 26


Part 4. Estate management in higher education institutions Page 28

Keymessages

MostinstitutionsareintheprocessofrevisingtheirestatestrategiesPage 29

Capitaldevelopmentplanningismadedifficultbyuncertaintyoverlong-termpublicfunding

GoodestatemanagementrequiresdetailedinformationabouttheestatePage 30

Institutionscouldmakebetteruseofinformationabouttheconditionoftheestate

GoodpracticeisevidentinanumberofthesystemsandproceduresusedtodeliverestatemanagementPage 31


Appendix 1. Categories of Scottish HE institutions Page 34

Appendix 2. Profile of the Scottish HE sector on key dimensions Page 35

Appendix 3. Members of the study advisory group Page 40

Appendix 4. Public sector capital funding streams Page 41

Appendix 5. Extract from circulars on SRIF 2006/07 and 2007/08 (3rd round) and LTIF showing how the funding can be used Page 42

Appendix 6. Use of performance information Page 43

Estatemanagementinhighereducation1

Summary

TheoverallconditionoftheScottishestateisimprovingbutthemaintenancebacklogisalmost£0.7billionandcontinuestogrow.

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Key messages

1.Effectiveestatemanagementshouldresultinestateswhicharefinanciallyandenvironmentallysustainable,withbuildingsthatarefitforpurpose.Highereducation(HE)institutionsneedtoensurethattheirestatesareusedefficientlyandeffectivelytodelivertheirstrategicobjectives.

2.TheScottishHEestateislargeanddiversewithalmost1,000non-residentialbuildingsacross72sites.Itisvaluedatalmost£5billion.

3.JustunderhalfoftheScottishHEestateisconsideredtobeinpoorconditionanditisestimatedthatitwouldcostalmost£0.7billiontobringthewholeestateuptoagoodstandard.1Thisisreferredtoasthemaintenancebacklog.Almost70percentofthebacklogisconcentratedintheestatesoftheUniversitiesofStrathclyde,Edinburgh,Glasgow,Heriot-WattandDundee,reflectingthesizeoftheirestates.

4.In2001/02,theScottishFundingCouncil(SFC)begandistributingpublicsectorfundsaimedspecificallyatimprovingthenon-residentialestate.By2005/06,atotalof£236millionhadbeendistributedto20institutionsinScotland.Afurther£223millionwillbedistributedbyMarch2008.Aswellasdealingwiththeirmaintenancebacklog,institutionsusecapitalexpendituretochangetheirestatestomeetcorporateobjectives,delivernewcoursesandmethodsofteaching,andcomplywithnewlegislation.

5.SFCfundingaccountsforjustunderone-thirdofplannedtotalcapitalexpenditureontheHEestateovertheperiod2006/07and2007/08.Theremaindercomesfrominstitutions’internalsources(operatingsurpluses,

disposalofpropertyandfundraisingactivities);externalsources(includingtrusts,ResearchCouncilsandprivatesectorinvestors);andloans.In2005/06,Scottishinstitutionsspent£211millionontheirestates.Ofthistotal,£74millionwaspublicsectorfunding.

6.Sincepublicsectorcapitalfundingbegantherehasbeenanimprovementintheoverallconditionoftheestate.Around48percent(byarea)oftheScottishHEestatewasinsoundconditionorbetterin2001/02andthisincreasedto55percentby2005/06.Incontrast,estimatessuggestthatthemaintenancebacklogincreased,althoughcomparisonsovertheperiodarecomplicatedduetoincompletedata.

7.Atinstitutionallevel,differentpatternsemerge.Estateconditionimprovedovertheperiodatteninstitutionsbut,atothers,lessoftheestateisnowclassedasatleastsound.Ouranalysissuggeststhatsomeinstitutionsmayhavedifficultyinfinancinginvestmentintheirestates.

8.Thephaseddistributionoffundsandthelong-termnatureofcapitalinvestmentprogrammesmeanthatitistooearlytoestablishthefullimpactofthefunding.Institutionshavecapitalexpenditurecommitmentstotalling£589millionoverthetwo-yearperiodendingMarch2008.Giventhislevelofinvestment,weexpecttoseefurtherprogressbeingmadeonthequalityoftheestateinthenextfewyears.

9.TheSFChasadutytoensurethatpublicfundingsupportsScottishExecutiveandSFCpriorities.Capitalfundingisallocatedlargelythroughaformulawhichgivesasharetoeachinstitution.CombinedwiththeuseofbroadassessmentcriteriaforScience

ResearchInvestmentFunding(SRIF)andmostLearningandTeachingInfrastructureFunding(LTIF),thismakesitdifficulttoassesswhetherkeynationalprioritiesarebeingmet.

10.TheSFCdoesnotcurrentlypubliclyreportontheoutcomeofcapitalinvestmentactivityacrossthesectorortheimpactofthisexpenditure.Whilesomeplansareinplacetoevaluatefundingstreams,morefrequentandcomprehensivepublicreportingofprogressisneededsothattheSFCcandemonstratetheimpactofinvestmentsontheoverallqualityoftheestate.

11.Initscorporateplan,theSFCcommitstoannuallyassessingtheimpactofcapitalinvestmentintheHEsectorusingtwohigh-levelmeasures:thetotalvalueofthemaintenancebacklogandtheoverallconditionoftheestate.Butmorecanbedonetoassessestatemanagementperformanceinthesectorandallowbenchmarkingwithothersectors.TheEstateManagementStatistics(EMS)datasetprovidesthebasisforthistypeofanalysis.2TheSFCandinstitutionsshouldagreeanduseasmallercoresetofindicators,includingfinancialindicators,space-useindicators,fit-for-purposeindicatorsandenvironmentalindicators,togiveamoreregularandcomprehensivepictureofperformanceandpubliclyreportprogressonthesekeyindicators.

12.EstatestrategiesareimportantdocumentssettingoutdevelopmentplansandprovidingthebasisforSFCfunding.MostinstitutionsarecurrentlyrevisingtheirestatestrategiestoreflectrevisedSFCguidance.However,capitaldevelopmentplanningismadedifficultbyuncertaintyoverlong-termpublicfunding.

Summary3

1 EMSdata2005/06.ThefigurequotedisthecosttobringalltheestateuptoatleastagoodstandardasdenotedbytheRoyalInstitutionofCharteredSurveyors(RICS)conditionB.Underthissystem,RICSconditionAis‘asnew’;RICSconditionBis‘sound,operationallysafe,exhibitingonlyminordeterioration’;RICSconditionCis‘operational,butmajorrepairorreplacementneededsoon’;RICSconditionDis‘inoperableorseriousriskoffailureorbreakdown’.

2 TheEMSdatasetcomprisesover200performanceratioscoveringvariousaspectsoftheestatefortheUKHEsector.SeparateanalysisisavailablefortheScottishsector.Thedatasetcontainsdatafrom2001/02onwards.Guidanceisissuedonhowthesedatashouldbegathered,butsomevariationinapproachmayoccuracrossinstitutionsandthiscanaffectcomparability.

13.Institutionsgenerallyhavegoodsystemsinplacetosupporteffectiveestatemanagement,butperformanceinformationcouldbeusedmoreeffectivelytosupportmanagementreporting.

Recommendations

14.TheSFCshould:

considerwiththeScottishExecutivewhetheraclearerindicationofthefuturepublicfundingforcapitalprogrammescouldbeprovided,tohelpinstitutionsintheirstrategicplanning

reportpubliclyoncapitalfundingfortheHEestate,demonstratingthelinkbetweenfundingandnationalpriorities

withinstitutions,agreeasmallcoresetofindicatorsthatwillbereviewedregularlyataninstitutionalandsectorlevel

encourageinstitutionstoimprovetheirscrutinyandreportingofestate-relatedperformance.

15.TheSFCshouldcontinueto:

workwithinstitutionstomakegreateruseofEMSandotherdatatomeasuretheimpactofpublicsectorcapitalfundingontheHEestateandtofocusattentiononareasforimprovement

promotegoodpracticeandprovideguidance,andensurethatthisisfollowed

undertakefurtherresearchtobetterunderstandtheroleoftheestateininfluencingoutcomessuchasstudentexperienceortheattractionofinternationalstudentsandresearchfunding

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ensurethatSRIFandLTIFprogrammesworktogethertomaximisetheimpactofthefundingontheestate.

16.Highereducationinstitutionsshould:

developrealisticfinancialplanstosupporttheirestatestrategies

makeuseofperformanceinformationontheestateandensurethatitisreportedto,andscrutinisedby,management

continuetoworktogethertoensurethatbenchmarkingdataarerelevant,consistent,comprehensiveandreliable

complywithSFCguidanceandensurethisisreflectedinreviseddocumentsandapproaches.

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Part 1. Introduction

TheScottishhighereducationestateislargeanddiversewithalmost1,000non-residentialbuildingsspreadacross72sites.Itisvaluedatalmost£5billion.

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The Scottish higher education sector is large and diverse

17. In2005/06,therewere285,180studentsinhighereducationinScotlandincluding65,000postgraduatestudents.3HEqualificationsrangefromHigherNationalCertificates(HNC)tohonoursandpost-graduatedegrees.Themajority(82percent)ofqualificationsaregainedinHEinstitutions.4

18. Therearecurrently21HEinstitutionsinScotland,including14universities,twocollegesofhighereducation,twoartschools,TheOpenUniversityinScotland,aconservatoireandtheScottishAgriculturalCollege(SAC).5Theseareclassifiedintofourgroups:ancientinstitutions;pre-1992institutions;post-1992institutions;andsmallspecialistinstitutions(SSIs)(Appendix1).Theyareindependent,autonomousbodies,answerabletotheirgoverningbodies(oftenreferredtoasthecourtorcouncil).

19. InstitutionsrangeinsizefromtheRoyalScottishAcademyofMusicandDrama(RSAMD)with580studentsand209stafftotheUniversityofEdinburgh,withalmost20,150studentsand6,500staff(Appendix2).6

20. ThepercentageofincomegeneratedbyresearchactivitiesinScottishinstitutionsrangesfromonepercentatBellCollegeandtheRSAMDto43percentattheUniversityofStAndrews.Acrossthesectorasawhole,Scottishinstitutionsgenerate30percentoftheirincomefromresearchactivitiescomparedwithaUKaverageof26percent.ThishasimportantimplicationsforthetypeofestaterequiredandcontributestohigherestatemaintenancecostsinScotland.

21. TheScottishHEestateislargeanddiversewithalmost1,000non-residentialbuildingsspreadacross72sites.Itisvaluedatalmost£5billion.Between2001/02and2005/06,thenumberofnon-residentialbuildingsincreasedslightlyto973butthenumberofsitesreducedfrom82.Withinthis,thenumberofnon-residentialbuildingsincreasedatsomeinstitutions(forexample,theUniversitiesofEdinburghandStAndrews)butthereisconsolidationatothers,mostnotablyattheUniversityofGlasgowandatQueenMargaretandRobertGordonUniversities(Appendix2).

22. Effectiveestatemanagementisimportanttoensuretheestateisfinanciallyandenvironmentallysustainable,withbuildingsthatarefitforpurpose.HEinstitutionsneedtoensurethattheirestatesareusedefficientlyandeffectivelytodelivertheirstrategicobjectives.

About the study

23. ThisreportexaminestheimpactofpublicsectorcapitalfundingontheHEestateovertheperiod2001/02to2005/06(Part2),considerstheroleoftheSFC(Part3)andlooksathowindividualinstitutionsmanagetheirestates(Part4).

24. Thestudycoversthe19institutionswithsignificantestateresponsibilitiesandfocusesonthenon-residentialestateaspublicsectorfundingisnotavailablefortheresidentialestate.7Incarryingoutthisstudywe:

analysedEstateManagementStatistics(EMS)dataandotherdataonthequalityoftheestate,includingcomparativedatafor

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otherpartsoftheUK.8ThemostrecentyearforwhichEMSdataareavailableis2005/06.Anyreferencesinthisreporttothecurrentqualityoftheestaterelatetothisyear.Bythistime,institutionshadreceived£236millionoffundingmostofwhichwasthroughSRIFwith£25millionfromLTIF9

examinedestatemanagementateightinstitutionsinScotland,selectedtorepresentamixofdifferenttypesofinstitution10

surveyed19institutions(includingtheSAC)toobtaindataonspendingplans,estatemanagementarrangementsandperformancereporting

interviewedstafffromthethenScottishExecutiveEnterprise,TransportandLifelongLearningDepartment,theSFC,theHigherEducationFundingCouncilforEngland(HEFCE),UniversitiesScotlandandtheOfficeofScienceandInnovation(OSI)

helddiscussionswithastudyadvisorygroup.Membersincludedrepresentativesfromfourinstitutions,theSFCandUniversitiesScotland(Appendix3).

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3 Students in Higher Education at Scottish Institutions 2005-06,ScottishExecutive,May2007.4 Students in Higher Education at Scottish Institutions 2005-06,ScottishExecutive,May2007.Around18percentofHEqualificationsinScotlandaregained

inFurtherEducationColleges(FECs),almostentirelyatthelevelofHNC/Diplomas(HND).5 TheScottishAgriculturalCollegeistheresponsibilityof,andfundedby,theScottishExecutiveRuralAffairsandtheEnvironmentDirectorate(SERAED).6 Full-timeequivalentbasis.7 ThestudyexcludestheUniversityoftheHighlandsandIslandsMillenniumInstitute(UHI)andTheOpenUniversityinScotland(OUS).8 Institutionshavesubmitteddataontheirestateonanannualbasissince2001/02.Thecollectionofthesedataispart-fundedbytheSFC.Estate

ManagementStatistics(EMS)areusedbytheUKsectortohelpestatemanagersunderstandcurrentperformance,sharebestpracticeanddriveimprovements.InScotland,dataarecollectedfor18institutions(SAC,UHIandTheOpenUniversityinScotlandareexcluded).

9 ScienceResearchInvestmentFund(SRIF)andLearningandTeachingInfrastructureFund(LTIF).10 UniversitiesofDundee,Edinburgh,StrathclydeandStirling,RobertGordonUniversity,GlasgowCaledonianUniversity,EdinburghCollegeofArtandQueen

MargaretUniversity.

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Part 2. The impact of capital funding on the higher education estate

ItistooearlytoestablishthefullimpactofrecentinvestmentintheScottishHEestate.Withtheadditionalinvestmentplanned,theeffectshouldbeevidentinthenextfewyears.

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Key messages

Highereducationinstitutionsspent£211milliononcapitalandmaintenanceprogrammesin2005/06.Slightlymorewasspentonmaintenanceworkthaninthepreviousyear,butlesswasspentonnewbuildingsandmajorrefurbishment.

Thephaseddistributionofpublicfundsandthelong-termnatureofcapitalinvestmentprogrammesmeansitistooearlytoestablishthefullimpactofthefunding.

Upto2005/06,therehasbeenmixedprogress.TheoverallconditionoftheScottishestateisimprovingbutthemaintenancebacklogisalmost£0.7billionandcontinuestogrow.

Institutionshavecapitalexpenditurecommitmentstotalling£589millionovertheperiod2006/07and2007/08.Giventhislevelofinvestment,theeffectshouldbeevidentinthenextfewyears.

Asmallcoresetofmeasuresshouldbedevelopedforpublicreportingontheperformanceoftheestateandtoallowbenchmarking.

25.Thispartofthereportlooksat:

investmentintheScottishHEestate

theimpactoffundingonthequalityoftheestate

othermeasuresofperformance.

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26.ArangeofperformancemeasuresfortheHEestateareidentifiedintheSFC’scorporateplanandotherSFC-fundedreports.Thispartofthereportusesthesemeasurestoreviewtheimpactofthefundingupto2005/06,althoughitistooearlytoassessfullytheimpactofthefunding.Itisimportantthatnosingleindicatorisusedinisolation,butisconsideredinthelightofotherinformationaboutaparticularinstitution’scircumstances.

Capital investment is financed from a range of sources

27.In2005/06,institutionsspentatotalof£211millionontheirestates.Ofthistotal,£145.6million(69percent)wasspentonmajorcapitalworks,includingnewbuildingsandrefurbishment,and£65.6million(31percent)wasspentonplannedandreactivemaintenance.11Maintenanceexpenditureincludesworktocomplywithnewlegislationonthequalityoftheestate(forexample,healthandsafetylegislationanddisabledaccess).Almost£17millionwasspentoncomplyingwithlegislationin2005/06.12

28.Plannedcapitalexpenditurebyinstitutionstotalled£314.9millionin2006/07butfallstoanestimated£274.5millionin2007/08.13Plannedcapitalexpenditurein2006/07variesamonginstitutions–itishighestfortheancientuniversities(at£142perm2)andlowestforSSIs(at£60perm2).

29.PublicsectorfundingdistributedbytheSFCaccountsforjustunderathirdofplannedtotalcapitalexpenditureontheHEestatein2006/07and2007/08.PublicfundingisdistributedbytheSFCthroughtwomainfundingstreams:ScienceResearchInvestmentFunding(SRIF)–introducedin2002/03andaimedspecificallyatrefurbishingtheHEresearchestateinscience,engineeringandtechnology;andLearningandTeachingInfrastructureFunding(LTIF)whichwasintroducedin2005/06tosupportprojectsintheteachingestate(Appendix4).

Inadditiontothetwomainfundingstreams,theScottishExecutivehasmadesmalloccasionalallocationsoffundingspecificallyforcapitalpurposes.Thismoneyhassometimesbeentargetedforspecificuses,forexample,tohelpinstitutionsmeetdisabilitylegislationrequirements.

30.Theremainingtwo-thirdsofplannedcapitalinvestmentcomesfrominstitutions’internalsources(operatingsurpluses,disposalofpropertyandfundraisingactivities);externalsources(includingtrusts,ResearchCouncilsandprivatesectorinvestors);andloans(Exhibit1).

31.Theextenttowhichdifferentsourcesoffundingareusedvariesconsiderablyamonginstitutions.Basedoncapitalexpenditureplansfor2006/07and2007/08,wefound:

SSIsarerelyingheavilyonSFCcontributionstofundcapitalprogrammes,withtheseaccountingfor91percentoftheplannedspend.However,forsomeSSIstheseplansmaybeunrealisticastheyassumehighercontributionsfromtheSFCthanhavebeenannouncedtodate.

Ancientinstitutionsexpecttoobtain18percentofthefundingfortheircapitalprogrammesfromexternalsourcessuchasresearchfundingfromtrustsandResearchCouncils.Thisisnotlikelytobeasignificantsourceoffundsforotherinstitutions.

Loanswillprovideasubstantialamountoffundingforcapitalprogrammesinpreandpost-1992institutions.

Institutionswhereresearchincomeaccountsforahighproportionofallincomeanticipatemakingmoreuseofexternalsourcesoffunding.14Externalsourcesaccountfor15percentoftheirplannedexpenditurecomparedwithlessthantwopercentforothertypesofinstitution.

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11 EMSdata2005/06.12 ExcludesdataonlegislativespendbytheUniversitiesofAberdeen,AbertayandGlasgowandQueenMargaretUniversity.13 AuditScotlandsurvey.Thesearepredictionsbasedoncapitalplansinplaceattheendof2006.Actualexpendituremaydiffer.14 IncludestheUniversitiesofAberdeen,Dundee,Edinburgh,StAndrewsandGlasgowwhoseresearchincomeaccountsformorethan33percentoftotalincome.

The pattern of expenditure on the Scottish higher education estate has fluctuated since 2001/02

32.Totallevelsofexpenditureonmaintenanceandmajorcapitalworksfluctuatefromyeartoyear,reflectingthephasingofprojects.Forexample,capitalexpenditureatGlasgowCaledonianUniversitywasalmost£18millionin2004/05whentheSaltireCentrewascompleted,butdecreasedto£3millionthefollowingyear.Acrossthesectorasawhole,totalexpenditurein2005/06waslowerthanin2004/05.Withinthistotal,the2005/06datashowincreasedexpenditureonmaintenanceactivitywithlowerspendonmajorrefurbishmentandnewbuildprojects(Exhibit2).

33.TheSFChasbecomeasignificantsourceofcapitalfundingforinstitutionssincededicatedpublicsectorfundingforcapitalprojectsbeganin2001/02.PublicsectorfundsdistributedbytheSFCrepresentoverathirdofcapitalspendingin2005/06.Publicsectorfundingtotalling£459millionhasbeenannouncedfortheperiod2001/02to2007/08(Exhibit3,overleaf).Thesumscommittedhavebeensteadilyincreasing,with£236milliondistributedbyMarch2006andafurther£223milliontobedistributedbyMarch2008.

The maintenance backlog for the Scottish higher education estate is almost £0.7 billion and continues to grow

34.Justoverhalf(55percent)oftheScottishestateisinasoundornewcondition(Exhibit4,page11).15Forty-fivepercentoftheScottishestateisclassedasRoyalInstutionofCharteredSurveyors(RICS)conditionCorDandtheestimatedcostofimprovingittoatleastasoundstandard(conditionB)in18institutionsis£690million.16Thisfigureisreferredtoasthe‘maintenancebacklog’oftheestate

andincludesexpendituretoensurethatestatescomplywithhealthandsafetyandotherlegislationaswellasdealingwithgeneralmaintenancerequirements.

35.Almost70percentofthebacklogisconcentratedintheestatesoftheUniversitiesofStrathclyde,Edinburgh,Glasgow,Heriot-WattandDundee,reflectingthesizeoftheirestates(Exhibit5,page11).

36.Incompletedataoverthetimeperiodmakeitdifficulttodeterminehowthelevelofthebackloghaschangedsince2001/02.Datafor2001/02showthatthemaintenancebacklogfor14institutionswas£394millionat2006prices.Theestimatedmaintenancebacklogforthesame14institutionsincreasedto£453millionin2005/06,anincreaseof£59million(15percent).17

Exhibit 1Planned funding sources for higher education institutions, 2006/07 and 2007/08

Note: Total – includes data for SFC-funded institutions plus data for Scottish Agricultural College. Although SAC is funded by SERAED, this funding is included in SFC funding in the graph.Loans are shown separately to illustrate the use of this as a method of finance. They will be repaid by institutions from their own resources.

Source: Audit Scotland

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80

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SSIs Pre-1992 Post-1992 Ancients Total

HEI category

External sources

Loans

SFC

Internal sources

Exhibit 2Capital and maintenance expenditure in Scotland, 1997/98 to 2005/06

Source: EMAP reports, SFC HE/59/99, HE/45/00, HE/04/02; EMS 2001/02 to 2005/06

Total expenditure

Maintenance expenditure

Capital expenditure

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ion) 200

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250

150

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97/98 98/99 99/00 00/01 01/02 02/03 03/04 04/05 05/06

Year

15 BuildingconditionisdefinedbytheRoyalInstitutionofCharteredSurveyors(RICS)buildingmaintenancecategories.RICSconditionA–‘asnew’;RICSconditionB–‘sound,operationallysafe,exhibitingonlyminordeterioration’;RICSconditionC–‘operational,butmajorrepairorreplacementneededsoon’;RICSconditionD–‘inoperableorseriousriskoffailureorbreakdown’.

16 EMSdata2005/06andestimatesfromtwoinstitutions(RICSconditionfiguresareweightedtotakeaccountofgrossinternalareaofeachHEinstitution).17 Excludesdatafromfourinstitutionstoensurecomparability;Dundee,Abertay,StrathclydeandStAndrewsUniversities.

Part2.Theimpactofcapitalfundingonthehighereducationestate9

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37.Aswellasdealingwiththemaintenancebacklog,institutionsusecapitalexpendituretochangetheirestatestomeettheircorporateobjectives,delivernewcoursesandmethodsofteachingandcomplywithnewlegislation.Forexample,since2001/02,Scottishinstitutionsspentinexcessof£65milliontocomplywithlegislationsuchastheDisabilityDiscriminationAct.ArecentstudycommissionedbytheSFCsuggestedthat,bytheendof2007,Scottishinstitutionswillneedaround£1billiontoallowthemtodealwithbothmaintenancebacklogsandchangingneeds.18Thisfigureisbasedonassessmentsoftheinvestmentneededto:

reshapetheestate

addressmaintenancebacklogsincludinglegislativecompliance

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repayoutstandingloansonthenon-residentialestate.

38.The£1billionestimateisinadditiontoexpenditurealreadyplannedbyinstitutionsandprovidesanassessmentofthetotalexpenditureneededforScottishinstitutionstodevelopestatesthatarefitforpurpose.

The overall condition of the estate is beginning to improve

39.Around48percent(byarea)oftheScottishnon-residentialestatewasclassedasneworsound(RICSconditionAorB)in2001/02,andthisincreasedto55percentby2005/06.19Thisimprovedsituationmasksavarietyofchanges:

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Overall,thepercentageclassed‘asnew’hasincreasedoverthefour-yearperiod(fromninepercentto16percent)andlessisnowclassedas,‘operationalbutinneedofmajorrepairsoon’,(42percentcomparedwith49percentpreviously).Therehasbeennooverallchangeinthepercentageclassedas‘sound’(39percent)or‘inoperable’(3percent).

Differentpatternsemergeacrossinstitutionsbetween2001/02and2005/06.Estateconditionhasimprovedinteninstitutions.AttheUniversityofAberdeentheimprovementisduetotherefurbishmentofanumberofbuildingsto‘asnew’conditionwhileattheUniversityofEdinburghandRobertGordonUniversity(RGU)theimprovementisduetotheconstructionofnewbuildings.RGUwastheonlyinstitutiontoassessallofitsestateasneworsoundin2005/06.Incontrast,fourinstitutionshaveproportionatelylessoftheirestateclassedasneworsound,althoughthechangesattheUniversitiesofGlasgowandStirlingpartlyreflecttheuseofmoreaccuratedataontheirestatecondition(Exhibit6,page12).

Levels of investment are below those suggested to sustain the estate in many institutions

40.Arecentreportsuggestedthatinordertosustaintheestate(allowingforongoingdevelopmentoftheestateandpreventingincreasinglevelsofmaintenancebacklog),institutionsshouldbeinvestinganannualamountequivalentto4.5percentoftheirinsurancereplacement

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Exhibit 3Public sector capital funding for the higher education estate, 2001/02 to 2007/08

Funding type

SRIF LTIF Non-recurring

Total Cumulative total

2001/02 £15m(Seenote1)

- - £15m £15m

2002/03 £32.3m - £17.5m £49.8m £64.8m

2003/04 £32.3m - - £32.3m £97.1m

2004/05 £49.1m - £15.5m £64.6m £161.7m

2005/06 £49m £25m - £74.0m £235.7m

2006/07 £51.5m £45m Seenote2 £96.5m £332.2m

2007/08 £51.5m £75m Notknown £126.5m £458.7m

Total £280.7m £145m £33.0m £458.7m £458.7m

Notes: 1 The 2001/02 SRIF funding was a £10 million payment made by the SFC in advance of SRIF under

the funding stream ‘Scottish Higher Education Funding Council Research Investment Fund’ (SHEFC RIF), and £5 million paid out by SFC as ‘additional SRIF’.

2 Additional funding of £6 million was allocated for a range of purposes, one of which was the development of high-quality buildings, facilities and equipment. Institutions will report to the SFC on how these funds were used by October 2007.

Sources: SRIF Funding – SHEFC circulars HE/05/01; HE/12/02; HE/05/03 and HE/02/05; LTIF Funding – SHEFC circular HE/07/05; SFC circular SFC/21/06; Non-recurrent funding – SHEFC circulars HE/37/02; HE/01/03; HE/36/04, HE/06/05 and SFC/08/2007

18 Future needs for capital funding in higher education,JMConsulting,September2006.19 Weightedtotakeaccountofgrossinternalarea;excludesdataforAbertay,StAndrewsandQueenMargaretUniversities.

value(IRV).20Analysisofexpenditurefrom2002/03to2005/06showsthattheseratesofinvestmenthavenotbeenachievedconsistentlyovertheperiod(Exhibit7,overleaf).

41.The4.5percent‘required’levelofinvestmentisanaveragefigureandneedstovarytotakeaccountofeachinstitution’ssituation.Itisaffectedbythewayinstitutionsvaluetheirestatesforinsurancepurposes,thenatureofthefacilitiestheyhaveandbyregionalvariationsinproperty

pricesandreplacementbuildingcosts,forexample.Assuch,itneedstobeconsideredwithotherindicatorstoprovideacomprehensivepictureofperformance.

42.Forthetwoyears2004/05and2005/06,theaverageamountinvestedacrossthesectorasawholewas4.7percentofIRV.Butthesituationvariedamonginstitutionswithseveralinvestingmuchlessthantherecommendedfigurefortheseyears(Exhibit8,page13):

Expenditureexceededthelevelrequiredforsustainablepurposesinsixinstitutions.Thisincludestwoinstitutions(RobertGordonandGlasgowCaledonianUniversities)withlowlevelsofmaintenancebacklogandone(QueenMargaretUniversity)whereitsnewcampusdevelopmentwilladdressitsbacklog.Fortheotherthreeinstitutions(UniversitiesofAberdeen,GlasgowandDundee),investmentplansfor2006/07and2007/08suggesttheyshouldmakeprogressindevelopingtheestateandreducingbacklogsiftheseplansarerealised.

Twoinstitutionsinvested in linewiththeestimatedlevelrequiredforsustainablepurposes.AttheUniversityofEdinburghinvestmentplansfor2006/07and2007/08suggestthatfurtherprogresswillbemade,withplannedinvestmentexceeding£70millionineachyear.AlthoughinvestmentlevelsareexpectedtoriseattheUniversityofPaisleyintheshortterm,itwillbe2008/09beforesignificantlevelsofinvestmentaremadeintheestate,withthisdependentonsubstantialfinancialsupportfromtheSFC.

Expenditurewaslowerthanthatrequiredforsustainablepurposesinteninstitutionsoverthetwo-yearperiod.Furtheranalysisneedstotakeaccountof

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•

•

Exhibit 4Condition of the higher education estate, 2005/06

Source: EMS data 2005/06, calculated using weighted data for gross internal area (GIA)

RICS condition B ‘sound’

RICS condition A ‘as new’

RICS condition D ‘inoperable’

RICS condition C ‘operationalbut in need of major repair soon’

39%

42%

3%

16%

Exhibit 5Distribution of maintenance backlog across higher education institutions, 2005/06

Source: EMS data 2005/06. Data for Dundee are provisional

Mai

nten

ance

bac

klog

(£m

illio

n)

120

100

80

60

40

20

0

Institution

Str

athc

lyde

Edin

burg

h

Gla

sgow

Abe

rdee

n

Dun

dee

Gla

sgow

Sch

ool o

f Art

St A

ndre

ws

Pais

ley

Abe

rtay

Her

iot-

Wat

t

Bel

l Col

lege

Stir

ling

Que

en M

arga

ret

Nap

ier

Edin

burg

h C

olle

ge o

f Art

Gla

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Cal

edon

ian

RS

AM

D

20 Future needs for capital funding in higher education,JMConsultingReport,September2006.TheIRVisthecurrentcostofrebuildingtheestatetoasimilarstandard.


Note: Robert Gordon University has no maintenance backlog.

12

thecircumstancesofindividualinstitutionsandtheirfutureinvestmentplans.Oftheteninstitutionswheretheaverageexpenditurein2004/05and2005/06islessthan4.5percentofIRV:

RSAMD’ssuggested‘required’investmentof£3millionishighrelativetoitsmaintenancebacklogof£400,000.

Twoinstitutions(theUniversitiesofStirlingandStAndrews)areplanningcapitalexpenditure

•

•

wellinexcessoftherecommendedamountwhichshouldsupportcontinueddevelopmentoftheirestates.

Capitalexpenditure(for2006/07–2007/08)atHeriot-WattUniversityandBellCollegewillcontinueatlevelsbelowtheannual‘required’levelsshowninExhibit8.Investmentatthecurrentplannedlevelisunlikelytoaffecttheaccumulatedbacklogsof£96.5millionatHeriot-Wattand£19.2millionatBellCollegeorallowsignificantestatedevelopment.Heriot-Watthasplanstodealwiththebacklog(Exhibit16,page25)andwillusetheresultsfroma2006conditionandcompliancesurveytoidentifypriorities,butfundingalloftheimprovementsrequiredisachallenge.

Threeinstitutions(theUniversityofStrathclyde,NapierUniversityandGlasgowSchoolofArt)willinvestlessintheirestatesthantherecommendedlevelsuntil2008/09,afterwhichincreasedlevelsofinvestmentareplanned.However,achievingthelevelsofinvestmentforecastdependsonSFCcontributionsoverandabovecurrentknownallocationsofSRIFandformulaLTIF.Assuch,alternativesourcesoffundingwillneedtobeusedifplansaretoberealised.21EdinburghCollegeofArtmayalsoneedtousefundingfromsourcesotherthantheSFCifitistoinvestintheestateatthelevelsuggestedandtoallowittoaddressitsmaintenancebackloganddeveloptheestate.

TheUniversityofAbertaydidnotprovidesufficientinformationaboutfutureinvestmentplanstoallowustocommentonhowitsestateandbacklogmightdevelop.

43.Usingthistypeofanalysiscanhelpinstitutionsidentifyiftheirfinancialstrategieswillallowthemtomaintainanddeveloptheir

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Exhibit 6Change in percentage of estate classed as sound by institution, 2001/02 to 2005/06Estateconditionhasimprovedatsomeinstitutionsbut,atothers,lessoftheestateisnowclassedasneworsound.

Notes: Figures are ‘absolute’ change in percentage of GIA classed as sound between 2001/02 and 2005/06. Institutions starting with a high proportion of their estate in sound condition will be limited in the amount of improvement they can make. The change measured for Queen Margaret and St Andrews Univeristies is from 2001/02 to 2003/04 as recent data are not available.

Source: EMS data; excludes data for Abertay as 2001/02 data are not available

Cha

nge

in %

of e

stat

e cl

asse

d as

new

or

soun

d

40

30

20

10

0

-10

-20

Institution

Str

athc

lyde

Edin

burg

h

Gla

sgow

Cal

edon

ian

Rob

ert G

ordo

n

Abe

rdee

n

Dun

dee

Gla

sgow

Sch

ool o

f Art

St A

ndre

ws

Pais

ley

Her

iot-

Wat

t

Bel

l Col

lege

Stir

ling

Que

en M

arga

ret

Nap

ier

Edin

burg

h C

olle

ge o

f Art

Gla

sgow

RS

AM

D

29%

22%

7% 7% 5% 5% 4% 3% 2% 2%

0% 0% 0%

-2% -6%

-8% -10%

Exhibit 7Investment in the estate, 2002/03 to 2005/06

Current suggested annual level of investment

4.5%

Levelofinvestmentasa%ofIRVforScottishHEinstitutions

2001/022002/032003/042004/052005/06

4.1%3.2%4.2%5.4%4.3%

Note: A number of institutions did not provide complete data for each year. They have been excluded from the figures for that year.

Source: Audit Scotland from EMS data

21 GlasgowSchoolofArtiseligibletoapplyforselectiveLTIFassistancewhichmayprovidesomeofthefundingneeded–seeparagraph87.


Exhibit 8Maintenance backlog compared to average annual investment for 2004/05 and 2005/06

Category Institution Maintenance backlog

(£m)

Average annual investment in estate 2004/05

to 2005/06(£m)

Insurance replacement value (IRV)

(£m)

Average annual

investment as % of IRV

Annual ‘required’ investment

for sustainable purposes

(£m)

Actualexpenditureexceeds‘requiredinvestment’

QueenMargaret £8.9 £10.5 £57.3 18.2% £2.6

Aberdeen £44.7 £25.0 £278.3 9.0% £12.5

GlasgowCaledonian

£1.2 £11.5 £160.0 7.2% £7.2

Glasgow £97.0 £46.2 £725.7 6.4% £32.7

Dundee2 £60.0 £22.8 £371.3 6.1% £16.7

RobertGordon £0.0 £10.7 £175.5 6.1% £7.9

Actualexpenditureinlinewith‘requiredinvestment’

Paisley3 £29.0 £3.8 £81.0 4.6% £3.6

Edinburgh £102.3 £54.8 £1,253.2 4.4% £56.4

Actualexpenditurelessthan‘requiredinvestment’

StAndrews £40.0 £10.1 £239.6 4.2% £10.8

Stirling £17.5 £5.5 £139.0 4.0% £6.3

Napier £8.5 £5.7 £144.3 3.9% £6.5

Heriot-Watt £96.5 £5.7 £163.4 3.5% £7.4

Strathclyde £110.8 £14.5 £713.6 2.0% £32.1

BellCollege £19.2 £0.9 £45.7 1.9% £2.1

EdinburghCollegeofArt

£6.8 £0.6 £66.2 0.9% £3.0

GlasgowSchoolofArt

£20.9 £0.6 £86.3 0.7% £3.9

Abertay £26.2 £0.5 £84.5 0.6% £3.8

RSAMD £0.4 £0.3 £66.2 0.4% £3.0

Total £690.1 £229.4 £4,851 £218.3

Average 4.7%

Notes: 1 Data are unavailable for SAC. 2 The value of the backlog at the University of Dundee is a provisional figure based on a building condition survey completed in early 2007.3 The backlog figure quoted for the University of Paisley excludes £45 million replacement cost for one of its campuses deemed ‘beyond recovery’.

Source: EMS data 2004/05 and 2005/06

14

majorworkneededsoon)andthelowerpercentagethatisincategoryB(sound)(Exhibit9).

47.ThesituationinScotlandisduetoacombinationoffactors:

Theestateisolder,with29percentofinternalareabuiltpre-1940comparedto25percentfortheUKasawhole.

Ahigherproportionofbuildingsarelisted,accountingforaquarterofinternalareacomparedwith15percentfortheUK.Listedbuildingsareoftenlessflexible,costlytomaintainanddifficulttorenovate.

Scottishinstitutionsoffermorespaceperstudent(anaverageof16.0m2perstudentcomparedwith12.3m2fortheUK).Thisreflectsarangeoffactors,includingthemixofactivitiescarriedout.Forexample,Scottishinstitutionsconductmoreresearchandthisrequiresmorespaceperstudent.However,itmeansthatthefundsavailableforcapitalinvestmentarespreadmorethinly.

Lessincomeisgeneratedpersquaremetre(£781perm2comparedwiththeUKaverageof£949perm2).ThisdisparitymayincreasewiththeintroductionoftuitionfeesinEngland,WalesandNorthernIreland.

Lessmoneyisbeinginvestedintheestate.AverageyearlyinvestmentintheScottishHEestatewasequivalentto3.7percentoftheestate’sIRVbetween2001/02and2005/06comparedtoanaverageof4.5percentfortheUK.22

Thereislesspublicsectorcapitalfunding.SFCfunding

•

•

•

•

•

•

commitmentsfortheperiod2004/05to2007/08areequivalentto7.5percentofIRV,comparedwithanaverageof9.7percentforallUKfundingcouncils.

48.Arecentreport,commissionedbytheSFC,suggeststwootherpotentialfactors:23

Thelargenumberofpost-1992institutionsinScotlandwhichhaveinheritedpoorestates(someofwhichhasnotbeendesignedforHE).

ThetendencyinScotlandforearliercapitalgrants(suchasJointResearchEquipmentInitiative,JointInfrastructureFundandearlySRIF)tobespentonnewbuildingsratherthanexistinginfrastructure,whichislesslikelytoreducethemaintenancebacklog.

A wide range of other measures can be used to benchmark estate management

49.Itisimportantthatarangeofindicatorsareusedtoassessestateperformancefullyandallowcomparisonandtheidentificationofgoodpractice.Part4ofthisreportdetailstheextenttowhichinstitutionscurrentlymakeuseofperformanceinformationandAppendix2showshowinstitutionsareperformingonsomemeasures.

50.ThefiveauditbodiesintheUKhavedevelopedarangeofvalueformoneyindicatorsforusebypublicsectorbodiestohelpassessperformanceincorebusinessfunctions,includingestates.24Theintentionwastodevelopalistofcommonindicatorsthatwillallowinstitutionstobenchmarkthemselvesagainstothersectors.Inrelationtoestates,fiveprimaryindicatorsareidentifiedforusebyseniormanagementand11secondary

•

•

estatesand,overaperiodofyears,canidentifyinstitutionswheretheconditionoftheestateisindangerofdeteriorating.Someinstitutionswillneedtoformulaterealisticfinancialstrategiestoaddressthesituationandallowthemtoreshapeanddeveloptheirestates.44.ThedatapresentedinExhibit8representasnapshotofthesituationfortwoyearsonly.Theremaybevalidreasonssuchasthephasingoffundsandworkprogrammesthatcauseinstitutionstounderinvestforashortperiodoftime.The‘annualrequiredinvestment’figurerepresentstheaveragetobeachievedoveranumberofyearsifinstitutionsaretobesustainable.

It is too early to establish the impact of investment in the estate. With the additional investment planned, the effect should be evident in the next few years

45.TogethertheSFCandinstitutionsexpecttoinvest£589millionontheestateoverthetwo-yearperiodendingMarch2008,ofwhich£223millionisfromtheSFC.Giventhelong-termnatureofcapitalinvestmentprogrammes,theimpactofthisfundingisnotyetfullyreflectedintheperformancedata.However,withtheadditionalinvestmentplanned,weexpecttoseefurtherprogressbeingmadeonthequalityoftheestateinthenextfewyears.

Due to a combination of factors, the condition of the Scottish estate compares unfavourably with the UK estate

46.Justunderhalf(45percent)oftheScottishestateiscategorisedaspoororinoperablecomparedwith36percentintheUK.ThesituationinScotlandarisesfromthehigherpercentageofestatethatisclassedasconditionC(operational,with

22 Earlierworkin2001byJMConsultantscalculatedthe‘requiredinvestment’levelforthehighereducationestatetobe5.5percentatthattime.23 Future needs for capital funding in higher education,JMConsulting,September2006.24 Value for money in public sector corporate services;AjointprojectbytheUKpublicsectorauditagencies,May2007,

http://www.public-audit-forum.gov.uk/performanceindictors.pdf

54.FurtherindicatorscurrentlybeingconsideredbytheSFCincludethe‘CE/CPratio’(costofequitytothecostofproduction)(seebelow).ThiscomparestheIRVoftheestate(costofequity)withthelevelofincome(costofproduction).

55.Theresultingfiguregivesanindicationofhowefficientlytheestateisused,althoughotherfactorsmustalsobeconsidered.Forexample,IRVwillbeaffectedbythepresenceoflistedbuildings,bypropertypricesandbythemethodusedtodetermineIRV.

56.AhighCE/CPratiocouldindicatethataninstitutionmightnothavesufficientcapacitytomaintainitsinfrastructureasthevalueoftheestateishighrelativetoincome.Ingeneral,alowCE/CPratiowillindicatemoreefficientuseofassets,althoughinstitutionswithlowCE/CPratiosmayneedtoconsiderwhethertheyareinvestingenoughintheirestates.Individualcircumstancesmustbetakenintoaccount.

Someinstitutionsmayhavedifficultiesinfinancinginvestmentintheirestates53.Someofthefinancialindicatorsalreadyusedbyinstitutionsinclude(seeAppendix2forfulldetails):

propertycostspersquaremetre:thisrangesfrom£44perm2atEdinburghCollegeofArtto£123perm2attheUniversityofEdinburgh

propertycostsperstudent:thisrangesfrom£530perfull-timeequivalent(FTE)studentatGlasgowCaledonianUniversityto£3,129perFTEstudentattheUniversityofEdinburgh

capitalexpenditureasapercentageofincome:thisrangesfromunderonepercentatAbertayto42percentatQueenMargaretUniversity(QMU).IfQMUisexcluded,themaximumfigureis16percentattheUniversityofGlasgow.

•

•

•

indicatorsareidentifiedforusebyoperationalmanagers(Exhibit10,overleaf).

51.Theseindicatorsprovideacoresetofmeasuresthatcouldbeusedforbenchmarkingacrossthesector,althoughsomemayneedtobedevelopedtoreflectthespecificrequirementsoftheHEsector.TheEMSdatasethasover200performanceindicatorsandthiscouldprovidethebasisfordevelopingasmallercoresetofindicatorsfortheHEsectorwhichshouldcover:

financialindicators

space-useindicators

fit-for-purposeindicators

environmentalindicators.

52.Intheremainderofthissection,weconsidersomefurtherindicatorsthatmightmeritinclusioninthecoresetofindicators.

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•

Exhibit 9Comparison of estate condition across the UK, 2005/06

Note: 1 Based on Royal Institution of Chartered Surveyors ( RICS) classification.

Source: Data from EMS (weighted by Gross Internal Area (GIA)), based on all institutions replying in 2005/06

Insured replacement value of the estate

(IRV)

Level of incomeCE/CP ratio =


Condition of estate1 Scotland

%

England

%

Wales

%

N Ireland

%

UK average

%

inconditionA(asnew) 16 14 6 9 14

inconditionB(sound) 39 52 54 61 50

inconditionC(operationalbutmajorrepairneededsoon)

42 31 39 28 33

inconditionD(inoperableorseriousriskoffailure/breakdown)

3 3 1 2 3

Total A and B 55 66 60 70 64

Total C and D 45 34 40 30 36

16

Exhibit 10Suggested value for money indicators for the estates function

Primary indicators

1 Totalpropertycosts(occupancy,operationalandmanagement)persquaremetre.

2 Totalaccommodation(squaremetre)perstaff(FTE).

3 Totalpropertymaintenancebacklogasapercentageofaverageannualmaintenancespendforthelastthreeyears.

4 Commissionerandusersatisfactionindex–acompositeindicatorcompiledfromtheresponsestoasetofstatementsbycommissionersandusers.

Commissioner statements:The property management function supports the overall objectives of the organisation.

The property management function manages maintenance and capital programmes effectively (on time, budget and specification).

The property management function helps the organisation to make best use of its accommodation.

The property management function helps the organisation to reduce energy and water consumption.

The property management function provides value for money.

User statements:The buildings/offices are easily accessible for staff, service users and visitors.

The buildings/offices are appropriate for my needs.

The buildings/offices are appropriate for service users’/visitors’ needs.

The buildings/offices are appropriately secured to protect people and property.

There is a clear point of contact for any building or accommodation-related queries.

•

•

•

•

•

•

•

•

•

•

5 Managementpracticeindicator–thenumberofpracticesthathavebeenadoptedbytheorganisationoutofapossibletotaloften.

For the last financial year, planned property maintenance costs equate to 60 per cent or more of total property maintenance costs.

There is a formal environmental management system in place covering all significant administrative buildings.

The organisation has the ability to ‘zone’ buildings in terms of heating to reduce energy consumption.

A comprehensive professional development programme is in place for professionally qualified property management staff which ensures that they receive at least five days of continuing professional development (relevant accredited training) per annum.

The officer responsible for Property Services reports directly to a member of the Executive/Corporate Management Team and there is an identified individual at board/cabinet level with responsibility for the estate.

The organisation has clear and well-publicised arrangements for staff who have property-related queries, and all queries are logged and monitored.

Staff and user ‘built environment’ satisfaction surveys are undertaken at least annually and the results published and developed into an action plan which is monitored and regularly reviewed.

Surveys of the estate in relation to sufficiency, suitability, condition and costs have been carried out in the last five years and inform the capital strategy and plan, and these are updated according to risk.

The organisation does not allocate individual ‘owned’ desks to staff who work in the office less than 50 per cent of their time, and regularly monitors workstation utilisation.

The organisation has undertaken an assessment of property requirements across the organisation within the last three years and has identified property that is either currently surplus to requirements or will become surplus within the next three years, and has a plan agreed by the board/cabinet to address this surplus.

57.FortheScottishestateasawhole,theCE/CPratiois2.6,butthereisconsiderablevariationacrossthesector(Exhibit11,overleaf).ArecentreportsuggestedthataCE/CPratioof2.0to2.5isappropriate,withresearch-intensiveinstitutionsexpectedtobeatthehigherendofthisrange.2558.OuranalysisidentifiesfiveinstitutionswithCE/CPratioswellinexcessoftherecommendedrange,indicatingthattheymighthavedifficultiesinfinancinginvestmentintheirestates.AllthreeSSIsareincludedinthiscategory.Theytendtohavehigherratiosbecauseoftheirsmallsizeandthespecialistnatureoftheirpremises.FortheUniversityofEdinburghtheratioislikelytoreflect

Exhibit 10 continued

Secondary indicators

1 Costoftheorganisation’sestatemanagementfunctiona) per square metreb) as a percentage of organisational running costs.

2 Totalpropertyoccupancy/ownershipcosts(revenue)persquaremetre.

3 Totalbuildingoperation(revenue)costspersquaremetre.

4 Percentageofproperty-relatedcapitalprojectscompletedwithinthelastthreeyearsa) within the project budget b) within the timetablec) within project budget and timetable.

5 Spaceuseefficiency:a) workstations per full-time equivalent staff (FTE)b) area (square metres) per workstation.

6 Averageannualpropertycapitalexpenditureoverthelastfiveyearspersquaremetre(GIA).

7 Totalannualenergyconsumption(kw/h)persquaremetre.

8 Totalannualwaterconsumption(cubicmetre)persquaremetre.

9 Netinternalarea(squaremetre)ofaccommodationovergrossinternal(squaremetre).

10 Percentageofsolidwastethatisrecycled.

11 Thepercentageofbuildingswhichareusedbythepublicinwhichallpublicareasaresuitablefor,andaccessibleto,disabledpeople.

Source: Value for money in public sector corporate services; A joint project by the UK public sector audit agencies, May 2007


thehighvalueoftheirassetsresultingfromacombinationofhigh-qualityresearchfacilitiesandasignificantnumberoflistedbuildings.FortheUniversityofStrathclyde,theinsuredvalueoftheestateishighcomparedwithothercitycentreinstitutions,buttheuniversity’splanstoreshapeandrationalisetheestateshouldhelpaddressthis.

59.Attheotherendofthescale,institutionswithverylowCE/CPratiosmaynotbeinvestingenoughintheirestate.Intensiveuseofcapitalmayindicategoodestatemanagement,butcanalsobeanindicatorofapoor-qualityestate.

60.Poor-qualityestatesmayaffectstudentexperiencesandthequalityofteachingandresearch.However,

thereisalackofsubstantiveevidenceontheimpactthatestatequalityhasonstudentandstaffexperiencesandthequalityoflearninginScotland.TheSFChascommissionedsomeresearchonthis,forexampletheSpacesforLearningreport,andpost-projectevaluationsplannedbytheSFCwillprovidefurtherinsight,butthisisanimportantareaforpotentialfutureresearch.

SpaceusevariessignificantlyacrossinstitutionsandtheScottishaverageof24percentisslightlylowerthantheUKaverageof26percent61.Overthepastfewyears,institutionshavefocusedonuseofspace(referredtoasspaceutilisationwithinthesector)asanimportantefficiencyindicator,withsupportfromvariousinitiativesundertakenthrough

25 Future needs for capital funding in higher education,JMConsulting,September2006.

18

Exhibit 11CE/CP ratios for institutions, 2005/06

Institution CE/CP ratio (non-residential estate)

RoyalScottishAcademyofMusic&Drama 6.6

GlasgowSchoolofArt 5.6

EdinburghCollegeofArt 4.6

UniversityofStrathclyde 3.9

UniversityofEdinburgh 3.1

UniversityofAbertay 2.7

UniversityofStAndrews 2.5

RobertGordonUniversity 2.4

UniversityofGlasgow 2.4

BellCollegeofHigherEducation 2.4

UniversityofDundee 2.3

QueenMargaretUniversityCollege 2.3

NapierUniversity 1.9

UniversityofAberdeen 1.9

UniversityofStirling 1.9

Heriot-WattUniversity 1.8

GlasgowCaledonianUniversity 1.7

UniversityofPaisley 1.4

Scottish Average 2.6

UK Average 2.2

Note: Scotland figure excludes Glasgow Caledonian University for which data are unavailable.

Source: Audit Scotland, based on EMS data

26 TheSpaceManagementGroupoffersarangeofsupporttoestatedirectorstomanagetheirspaceefficientlyandsustainably.TheSFCisinvolvedinandpartfundsthisgroup.

27 IPDdatafromEMS.ThisisanaverageforcoreteachingspaceonlyusingweighteddataforNIA,basedon16institutionsinScotlandand122UKinstitutions(excludesAbertayandHeriot-WattinScotland).

theSpaceManagementGroup.26The2006EMSreportstatesthat:‘The most effective way of reducing environmental impact per student is through improved space efficiency, space being probably the biggest environmental driver of all’.

62.Goodestatemanagementhelpsimprovespaceusebycreatingmoreflexibleteachingspacesandidentifyinginefficientlyusedspacefordisposalorrefurbishment.Spaceuseiscalculatedbytakingintoaccount

howfrequentlyateachingspaceisusedandtheoccupancylevelofthatspacewhenitisinuse.Forexample,ifaroomisusedforhalftheamountoftimethatitcouldbeuseditwillhaveafrequencyrateof50percent.Iftheroomisusedathalfitscapacityitwouldhaveanoccupancyrateof50percent.Togetherthisresultsinspaceuseof25percent.

63.Variousspaceusetargetshavebeensuggestedinthepastforinstitutions–typicallyintherangeof30percentormore.SpaceuseinScottishinstitutionshasincreasedfrom21percentin2001/02to24percentin2005/06butitisstillslightlylowerthantheUKaverageof26percent.27Spaceusevariesconsiderablybetweeninstitutions(Exhibit12).

64.TheSFCisencouraginginstitutionstoidentifyspaceefficiencytargetswithintheirestatestrategiesandexpectsbetteruseofspacetohelpdeliverthesavingsrequiredthroughtheEfficientGovernmentinitiative.

65.Institutionscanusespacechargingschemestoencouragedepartmentstoconsidertheirspaceneeds.SevenScottishinstitutionsuseaspacechargingschemeatpresenttotryandencouragebetterspaceuse.Detailsfortwooftheseschemesareprovidedinthegoodpracticeboxonpage19.Seventy-threepercentoftheScottishestateisratedasbeingsuitableforitscurrentpurpose66.Fit-for-purposeindicatorsareusefulinassessingtheeffectivenessofexistingassets.Abuildingmayhavenomaintenancebacklogbutstillbeunsuitableforitscurrentuse.Again,thisreinforcestheneedtoconsiderarangeofindicatorswhenassessingestateperformance.

Exhibit 12Space use across institutions, 2005/06

Source: EMS data on core teaching space for 2005/06. Comparable data unavailable for Abertay and Heriot-Watt, but partial audits at Heriot-Watt suggest utilisation rates of 22-26 per cent.

Perc

enta

ge o

f spa

ce u

sed

80

60

40

20

0

Institution

Str

athc

lyde

Edin

burg

h

Gla

sgow

Abe

rdee

n

Dun

dee

Gla

sgow

Sch

ool o

f Art

St A

ndre

ws

Pais

ley

Rob

ert G

ordo

n

Bel

l Col

lege

Stir

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Que

en M

arga

ret

Nap

ier

Edin

burg

h C

olle

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f Art

Gla

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Cal

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ian

RS

AM

D

Scottish Average 24%

University of Edinburgh

Aspacetradingschemehasbeeninplacesince2002.

Theschemeisbasedonanannualspaceaudit.Departmentsreceivepaymentiftheygiveupspaceandarechargedforhavingextraspace.Reportsaresenttoschoolsontheirspaceusetoreinforcetheimportanceoftheissue.Bookingsforcentrallybookablespacearemonitoredand,(althoughthissanctionisnotcurrentlyused),schoolscanbefinedforbookingspacethatisnotused.

From2001/02to2005/06,spaceuseincreasedfrom17percentto22percent.

Glasgow Caledonian University

Theschemehasbeeninplacesince1998.Theuniversitycalculatestheamountofspaceownedbyeachdepartmentusingaroommanagementsystemandthisisthenusedtoidentifytheproportionoftheaccommodationoverheadthatischargedtodepartments.Theoverheadincludesutilitycosts,cleaningandmaintenancecosts.Sharedteachingfacilitiesarealsochargedfor,withtheamountchargedbasedonmeasureduse.

Spaceuseovertheperiod2001/02to2005/06iswellabovetheaverageforthesector–averaging35percentforGlasgowCaledonian.

Good practice examples of space-charging schemes


67.TheEMSdatasetcontainsameasureoffitforpurposereferredtoas‘functionalsuitability’,whichisdefinedusinga1-4gradingscale,with1beingexcellentand4beingpoor.28Thisisbasedonself-assessmentsoisarathersubjectivemeasure.TheamountofspaceratedasexcellentorgoodacrosstheScottishestatewas73percentin2005/06comparedto70percentin2001/02.29ThereisconsiderablevariationamongScottishinstitutionsalthough,overall,theScottishsectorperformssimilarlytotheUKsector,with74percentratedasexcellentorgoodfortheUKasawhole.

68.FivepercentoftheScottishestateisclassedaspoor,meaningitisunsuitableforitscurrentfunction(Exhibit13,overleaf).30However,thisaveragefigureisaffectedbytheveryhighlevelofpoorspaceidentifiedatGlasgowSchoolofArt(34percent).Excludingthisinstitutionreducestheoverallfiguretofourpercent,butthereisscopetoimproveperformanceonthismeasure,especiallyinsomeSSIswhere18percentoftheestateoverallisclassedaspoor.

Progresstowardsenvironmentalsustainabilityismixed69.Environmentalsustainabilityisanincreasinglyimportantaspectinassessingestateperformance.TheScottishExecutiveannouncedinFebruary2007thatitwasextendingitsCentralEnergyEfficiencyFundtocoverhigherandfurthereducation,making£4millionavailabletosupportthesectorinimprovingenergyefficiency.ArangeofmeasuresforenvironmentalmonitoringwasrecentlyintroducedintotheEMSdatasetcoveringwaterandenergyconsumption,energyemissionsandrecycling.

28 1=excellent.Thespacefullysupportsitscurrentfunction.2=good.Thespaceprovidesagoodenvironmentforcurrentfunctioninallormostrespects.3=fair.Thespaceprovidesareasonableenvironmentforcurrentfunctionsinmanyrespects,buthasanumberofshortfalls.4=poor.Thespacefailstosupportcurrentfunctionsand/orisunsuitableforcurrentuse.

29 DataforQMUandBellCollegearenotavailable.30 WeighteddatatotakeaccountofGIA.

Exhibit 13Functional suitability across institutions, 2005/06

Source: EMS data 2005/06. QMU and Bell College are excluded from the total and pre-1992 groups

Perc

enta

ge o

f GIA

100

80

60

40

20

0

90

70

50

30

10

Ancients Post-1992 Pre-1992 SSls Total

HEI category

Excellent

Good

Poor

Fair

31 BREEAM;BuildingResearchEstablishment’sEvaluationAssessmentMethod.

70.Thedatashowconsiderablevariationinperformanceacrossinstitutions.Someofthevariationisexplainedbythedifferenttypesofcoursesoffered,withsciencecoursesrequiringmuchhigherenergyuse.Thedataalsocurrentlyincludetheresidentialestateonsomemeasures,whichcomplicatescomparisonsamonginstitutions.

71.Theevidencecollectedduringoursurveyofinstitutionssuggeststhatprogresstowardsenvironmentalsustainabilityismixedacrossinstitutions.Someinstitutionsareclearlyintheveryearlystagesofdevelopingapproachestoimproveenvironmentalsustainability;oneinstitutionstated“our environmental sustainability programme is limited to general energy management and waste paper recycling at each campus”whileanotherstated“we have not yet done anything that I would consider to be leading edge.”Othershaveidentifiedprojectstoimproveenvironmentalsustainability.Greentransportpoliciesarecommon,buttherearefewermentionsacrossthesectorofbuildingdesignsthatincludefeaturessuchasrainwaterreclamation,maintenance-freeandrecyclablebuildingmaterialsorenergy-efficientheatingsystems.However,thenewcampusforQMUatMusselburghwillbeoneofthemostenvironmentally-sustainabledevelopmentsofitskindaswellasprovidingqualityfacilitiesforteaching,learningandresearch.IthasreceivedaBREEAMexcellentrating(Exhibit16,page25).31

72.Atthisstageitistooearlytocommentonperformanceofenvironmentalsustainabilitybut,giventheimportanceoftheissue,measuresforenvironmentalsustainabilityshouldbedevelopedfurtherandusedtobenchmarkperformanceacrossthesector.

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Recommendations

73.TheSFCshouldundertakefurtherresearchtobetterunderstandtheroleoftheestateininfluencingoutcomessuchasstudentexperienceortheattractionofinternationalstudentsandresearchfunding.

74.TheSFCandinstitutionsshouldworktogetherto:

makegreateruseofEMSandotherdatatomeasuretheimpactofpublicsectorcapitalfundingontheHEestateandtofocusattentiononareasforimprovement

agreeasmallcoresetofindicatorsthatwillbereviewedregularlyataninstitutionalandsectorlevel.

75.Institutionsshoulddeveloprealisticfinancialplanstosupporttheirestatestrategies.

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Part 3. The role of the Scottish Funding Council

TheSFChasanimportantroletoplayinensuringthatpublicfundsareusedtomeetkeynationalpriorities.

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22

Key messages

TheSFChasanimportantroletoplayinensuringthatpublicfundsareusedtomeetkeynationalpriorities.

Themajorityoffundingforcapitalexpenditureisdistributedusingaformula.CombinedwiththeuseofbroadassessmentcriteriaforSRIFandLTIF,thismeansthatitisdifficulttoassesswhetherkeynationalprioritiesarebeingmet.

TheSFCshouldcarryoutacomprehensiveevaluationofestatemanagementperformanceacrossthesectorandreportthispublicly.

RecentSFCinitiativeswilladdtothestrategicsupportitprovidesforestatemanagement.

The SFC sets the overall strategy for the HE sector

76.TheScottishExecutivesetstheoverallpolicydirectionfortheHEsectorandprovidesfundingtosupportitspriorities.TheSFCdistributespublicsectorfundstoinstitutionsandsetsoutthestrategytoimplementthispolicyinitscorporateplan(Exhibit14).32Institutionscombinepublicsectorfundingandfundsfromothersourcestodeliverhighereducation.

77.IndividualinstitutionsareresponsibleforthedeliveryofthestrategyasdetailedintheFinancialMemorandumbetweentheSFCandeachinstitution.ThisFinancialMemorandumalsorequiresthegoverningbodiesofinstitutionstoensurethatfundingisusedforitsintendedpurpose.Failuretocomplywiththesetermscan,inprinciple,leadtofundingbeingwithheld.

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78.Althoughinstitutionsareautonomousbodies,theSFCisaccountableforthepublicfundingthatitdistributesandhasadutytoensurethatthisfundingsupportsScottishExecutiveandSFCpriorities.

79.Initscorporateplanfor2006-2009,theSFCoutlinesitsaimsandobjectivesforthehighereducationsector(Exhibit15,overleaf).

80.ObjectivesrelatingtotheHEestatearecoveredbytheseventhaim.Fiveobjectivessupportthisaim,twoofwhichrelatespecificallytothehigherandfurthereducationestate.TheobjectivesfortheHEestateidentifytheneedfor:

high-qualitybuildings,facilitiesandequipment

sustainableinvestmentanddevelopment.

81.Insupportofitsestatedevelopmentobjectives,theSFC:

offersfundingthroughSRIFandLTIF.ConditionsareattachedtothefundingandtheSFCcanreclaimfundingifinstitutionsdonotcomplywiththeconditionsset

providesguidancetosupportestatemanagement.

Most of the funds available for developing estates are allocated on the basis of a formula

82.SRIFfundingisallocatedtoinstitutionsusingaformulawhichtakesaccountoftheexternalresearchincomeoftheinstitutionanditsresearchgrantfromtheSFC.MostLTIFfunding(withexceptionofselectiveLTIF-seeparagraph87)isalsoallocatedusingaformula,basedonthemainteachinggrantreceivedbyinstitutions.InstitutionsprovidedetailstotheSFCofhowtheyintendtousetheirfundingallocationsandtheSFCassessestheseproposalsagainstsetcriteria.

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83.Theformulafundingapproachhasanumberofbenefits.Theallocationprocessiseasilyunderstoodandencouragesindividualinstitutionstotakeresponsibilityformanagingtheirestateseffectively.Italsoensuresthatallinstitutionswillreceivesomecapitalfundingandallowsinstitutionstopredictwithsomecertaintytheamountthattheywillreceive.ThishelpswithforwardplanningovertheExecutive’sthree-yearspendingreviewcycleandallowsinstitutionstoplanmorestrategicallyratherthanonaproject-by-projectbasis.Itcanalsoimprovevalueformoneybyallowinginstitutionstotakeforwardrelatedprojectsatthesametime.

The formula approach, combined with broad criteria for SRIF and LTIF funding, makes it difficult to assess whether key national priorities are being met

84.InstitutionsmustspendtheirSRIFallocationsinaccordancewithcriteriasetbytheOSI.LTIFcriteriaaredevelopedbytheSFC.ThecriteriaattachedtobothSRIFandLTIFfundingbytheSFCandOSIallowawiderangeofuses(Appendix5).

85.ThecriteriaforSRIFandLTIFfundingreflectOSIandScottishExecutiveprioritiesandthefundingcanbeusedforawiderangeofpurposes.However,theformulaapproach,combinedwithbroadcriteriaforSRIFandLTIFfunding,meansitisdifficulttoassesswhethernationalprioritiesarebeingmet.Forexample:

CollaboratingtojointlydevelopfacilitiesisonewaybywhichthesectorcouldsupportthedeliveryoftheEfficientGovernmentinitiative.33Promotingcollaborativepartnershipsbetweeninstitutionsleadingtoshareduseofbuildings,facilitiesormajoritemsofcapitalequipmentisanaimofSRIFfunding,withincentivesofferedintheformofreducedinstitutionalcontributions.In

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32 http://www.sfc.ac.uk/publications/SFC_Corporate_Plan_2006-09.pdf33 By2007-08,annualsavingsof£10millionareplannedthroughbetteruseoftheFEandHEestates.

Exhibit 14Accountability in higher education, 2005/06

Scottish Parliament

The Scottish ministers

Role: To set high-level policy and provide support for the provision of fundable further and higher education.

Scottish Executive Enterprise, Transport and Lifelong Learning Department (now Scottish Executive

Lifelong Learning Directorate)

Role: To ensure that the council’s strategic aims and objectives support the Scottish ministers’ wider strategic aims and to

monitor the performance of the Funding Council.

Scottish Funding Council

Role: To secure the coherent provision by the fundable bodies of high-quality fundable further and higher education.

Accountable Officer

HE Institutions

Role: To deliver higher education and undertake research in support of the strategy set out by the SFC.

HE institutions are fully autonomous.

The governing body (sometimes referred to as the university court or council) has the overall responsibility for governance of the institution.

The principal is the designated officer of the institution and must satisfy the SFC and the governing body that the terms and conditions

of the Financial Memorandum are being adhered to.

Financial Memorandum Policy Guidance

Financial Memorandum Code of Audit Practice

Condition of Grant

External auditorsHE institutions

appoint their own independent external

auditors

Flow of funds

Acc

ount

abili

ty

Part3.TheroleoftheScottishFundingCouncil23


24

asampleofover100projectsreceivingSRIFfundingsince2002,lessthantwopercentinvolvecollaborationwithapartnerindevelopingjointfacilities.However,oncecompleted,manyofthefacilitiesmaybeusedcollaboratively.Anevaluationof15ScottishprojectsinreceiptofSRIFfundingbetween2002and2004suggeststhattheSRIFfundingpromotedsubsequentcollaborationorstrengthenedexistingcollaborationsbutthereislittleevidencethatthefundingwasawardedtoprojectswhereotherorganisationswereinvolvedintheprojectduringdevelopment.34Developmentisalmostalwaysledbyasingleinstitution.Jointprocurementofequipmentismorecommon.BasedoninformationprovidedbyHEFCE,itisestimatedthataround£10millionoftheSRIFmoneycomingtoScotlandeachyearisusedforequipmentwhichisprocuredonacollaborativebasis.

Capitalfundingforhighereducationalsocontributestothedeliveryofanumberofothercross-cuttingExecutiveprioritiessuchascommunityuseandaccess.AllowingthecommunityaccesstoHEfacilitiesensuresbetteruseofthesefacilitiesandcontributestothedevelopmentofcommunities,citiesandregions–oneofthecross-cuttingthemesidentifiedintheSFC’scorporateplan.Whereinstitutionsreportsomecommunityuseoftheirfacilities,thisisoftenintermsofgeneralpublicaccessforsocial,sportorotherrecreationaluse.Therearefewerinstancesofshareduseofotherfacilitiesbythelocalcommunityandstudentsandstaff(seegoodpracticeexample,left).

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1 Scotland’scollegesanduniversitiestooffer–withinthetotalvolumeoflearningsetbyScottishministers–fairaccesstoadiverserangeoflearningprogrammessuitedtoindividuallearners’circumstances.

2 LearningprovisionandprogrammesofferedbyScotland’scollegesanduniversitiestoberelevanttostudents’livesandcareers,societyandtheeconomy.

3 Alllearningprovisionandprogrammesofferedbycollegesanduniversitiestobeofahigh-quality.

4 Scotland’suniversitiestoprovideahigh-qualityandinternationallycompetitiveresearchbase.

5 Scotland’scollegesanduniversitiestogenerateeffectiveknowledgeexchangethatstimulatesinnovationanddevelopmentinpublicandprivatesectororganisationsandenterprises.

6 CollegesanduniversitiestosupportScotland’sinternationalambitions.

7 Scotland’scolleges,universitiesandFundingCounciltobehighlyeffective,world-classorganisations.

Robert Gordon University

TheGarthdeecampuscontainsahealthcentreandnurserybothofwhichallowcommunityanduniversityuse.ThehealthcentreisleasedbytheuniversitytoNHSGrampianandthenurseryisleasedtoacommercialprovider.

University of Strathclyde

TheCentreforLifelongLearningisavailabletothecommunityatweekendsandintheevening,providingarangeoflearningopportunities.

University of Aberdeen

TheuniversityisjointlydevelopingaregionalsportscentrewithsportscotlandandAberdeenCityCounciltoprovidefacilitiesforthenorthofScotland.Fundingisbeingprovidedbyallthreepartnersandthecouncilhasprovidedthelandforthedevelopment.

Good practice: Community use and access

34 A database of university infrastructure improvements resulting from SRIF 1 funding (case studies),DTI/OST,April2005.

Corporate plan cross-cutting themes

Developingtheeconomy.

Contributingtothedevelopmentofcommunities,citiesandregions.

Promotingexcellenceandinternationalcompetitiveness.

Promotinggreatercoherence.

Listeningtotheviewsoflearners.

Promotingequalityofopportunity.

Encouragingsustainabilityandsustainabledevelopment.

Exhibit 15SFC corporate plan aims:

Source: SFC corporate plan 2006-09

86.AmorerigorousassessmentprocesswithtightercriteriawouldallowtheSFCtoensureitsfundingmeetskeynationalprioritiesandthatbenefitsfromtheinvestmentaremaximised.

Selective LTIF funding more clearly demonstrates collaboration, sustainability and improved capital efficiency

87.AfterconsultationwiththeHEsector,theSFCdecidedtoretainasmallproportionofitsLTIFallocation(£20millionfortheperiod2006/07to2007/08)forselectiveallocationtoinstitutionstosupportstrategicallyimportantprojects.Seveninstitutionsareeligibletoapplyforthisselectiveassistance.35Toaccessthefunding,institutionsmustsubmitadetailedbusinesscaseforscrutinybytheSFC’sCapitalInvestmentCommittee.Theprojectssupportedbyselective(non-formula)LTIFshowaclearerlinktoSFCprioritiesandthisfundinghasbeenusedtofacilitatecollaborationbetweenthehigherandfurthereducationsectors.

88.UptoMarch2007,threeprojectswereallocatedfundingof£18.7millionfromthetotalallocationof£20million.TheseprojectswilldeliverkeybenefitsforthesectorinlinewiththeSFC’sprioritiestoimprovecapitalefficiencyandsustainabilityorpromotecollaborativeinvestment.Exhibit16givesdetailsabouttwooftheprojects,oneofwhichdemonstratescollaborationbetweenthehigherandfurthereducationsectors.

There is no publicly reported comprehensive evaluation of the impact of capital funding on the HE estate

89.TheSFCcollectsinformationthatcouldbeusedtoassessexpenditurebyinstitutionsacrosskeypriorities

andcross-cuttingthemes.TheSFCcollatesandanalysesthisinformationforinternalpurposes,butthereisnopublicreportingofcapitalinvestmentactivityacrossthesectororitsimpact.Thismakesitdifficulttoassesstheextenttowhichpublicsectorfundsaresupportingkeynationalprioritiesorachievingtheoutcomesintended.

90.InpartthisisduetotherelativelyrecentintroductionofSRIFandLTIFfunding.AreviewofSRIFfundingfrom2004/05to2005/06willbepublishedlaterin2007andevaluationsofselectiveLTIFprojectswillalsobeproducedaftertheir

completion.MorefrequentpublicreportingofprogressisneededsothattheSFCcandemonstratetheimpactofitsinvestmentonthequalityoftheestate.Thisinformationcouldalsohelpinformthefuturedeliveryofcapitalfundingbyallowingthefundingtobechannelledtowhereithasmostpotentialimpact.

35 TherearesevenprojectseligibleforselectiveLTIF;thetwoidentifiedatExhibit16andprojectsattheGlasgowSchoolofArt,PaisleyUniversityAyrcampus,BellCollegeHamiltoncampus,CrichtonCampusinDumfriesandtheUniversityofAbertay.CriteriaweresetoutinAnnexAofaletteroriginatingfromtheSFCdated12July2006.

Exhibit 16Expected benefits arising from two projects approved for selective LTIF funding

Projects Benefits expected:

DevelopmentofanewcampusforQueenMargaretUniversity.

Cost=£75million

ContributionfromselectiveLTIF=£7.5million

Campussizewillreducefromthecurrent33,000squaremetresto23,700squaremetres–asavingof28percent.

Spaceuseisexpectedtoincreasefromthecurrent18percentto40-50percentforgeneralteachingspaceandaround35percentforspecialistspacessuchaslaboratories.

Maintenancecostsareexpectedtoreduceby£230,000peryear(16percent).

Utilitycostsareexpectedtoreduceby£240,000peryear(44percent).

Overallannualsavingsofjustunder£500,000areanticipated.

DevelopmentofajointcampusintheBordersbetweenHeriot-WattUniversityandBordersCollege.

Cost=£31million

ContributionfromselectiveLTIF=£5.2million

OtherSFCcontributions=£16.2million

Thedevelopmentwillallowcost-effectivedeliveryoftertiaryeducationinarurallocation.Operatingcostsareexpectedtoreduceandspaceusetoincrease.Afeasibilitystudyisbeingcarriedouttoidentifythelikelyimpactoncostsandspaceuse.

Source: The SFC and institutions


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The SFC has committed to assessing the impact of capital investment in its corporate plan, but more can be done to assess estate management performance

91.Initscorporateplan,theSFCidentifiestwohigh-levelmeasuresitwillusetoassesstheimpactofcapitalinvestmentontheHEestate:

The overall condition of the estateinScotland’sinstitutionsshowingthepercentageofgrossinternalareawhichfallsundertheheadingsof‘asnew’(RICSconditionA)and‘sound’(RICSconditionB).

The total value of the backlog in estates maintenanceacrossallinstitutionscomparedtothevalueofannualinvestmentandthelevelofinvestmentrequiredforsustainablepurposes.

92.Anevaluationofprogresswillbepublishedannuallyfrom2007onwardsbytheSFCfortheseandothermeasuresinitsperformancemanagementframework.

93.ThecommitmentsgiveninthecorporateplanareausefulstartingpointformonitoringthesustainabilityofScotland’sHEestate.However,theSFChasyettodecidehowitwillevaluateperformanceonthetotalvalueofthebacklogmaintenanceandthisissubjecttofurtherdiscussion.

94.Othermeasuresarealsousedorplanned.TheSFCalreadyreportsprogressonthefinancialsustainabilityoftheestatetotheFundersForumandtoinstitutionsandmakescertaininformationavailableonitswebsite.36

However,thisanalysiscommentsonthesustainabilityofthewholeestate,andsowillneedtobefurtherdevelopedifitistoshowtheimpactofpublicfundingwhichistargetedsolelyatthenon-residentialestate.TheSFCperiodically

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reviewstheconditionoftheestatewhenpreparingSpendingReviewsubmissionsandusedthisapproach,forexample,whendevelopingthecaseforselectiveLTIFfunding.TheJMConsultingreportreferredtoearlierwascommissionedaspartofthisprocessandoffersaninsightintotheconditionoftheScottishestate.However,furtherreportingofproject-baseddataandEMSdatashouldbeundertakentooutlineprogressforthesectorasawholetoawideraudiencethantheSFCitself.

95.TheSFCcoulddevelopasmallcoresetofindicatorsfromEMSthatincludes:

financialindicatorstodemonstratetheefficientuseofassets

space-useindicatorstoidentifyhowefficientlyspaceisused

fit-for-purposeindicatorstodemonstratetheeffectivenessofassets

environmentalindicators,suchaswaterandenergyuse,toreflectgreenissues.

96.TheindicatorsincludedinPart2coveralloftheseareasandwouldprovideausefulstartingpointforregularandcomprehensivereportingofperformanceacrossthesector.AstheanalysiswillrelyheavilyonEMSdata,itisvitalthattheEMSdatasetiscomplete,accurateandtimely.

The SFC is providing more strategic support

TheSFChasrecentlyissuedrevisedguidanceonestatestrategies97.Whendedicatedcapitalfundingwasintroducedin2001/02,theSFCaskedinstitutionstosubmitapplicationsforfundinginlinewiththeirestatestrategies.WhereestatestrategiesareavailabletotheSFC,theyarenowreviewedtoensurethat

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thefundingprovidedwillbeusedtomeettheinstitutionskeyobjectives.However,notallinstitutionshavekepttheirestatestrategiesuptodate.Initsnewlyrevisedguidanceondevelopingestatestrategiesforthefurtherandhighereducationsectors,theSFCstatesthatitwilladoptamorerigorousapproachtoreviewingestatestrategies.37Forexample:

allinstitutionsareaskedtoupdatetheirestatestrategiesbytheendof2007,unlesstheyhavesubmittedanupdatedstrategyinthelasttwoyears

institutionsaretosubmitabriefsummaryupdatetotheSFCbyNovembereachyearandtorefreshtheirstrategyeveryfiveyears

thenewguidanceincludesanestatestrategyevaluationsummarywhichtheSFCwillusetoreviewupdatedestatestrategies.

98.Byadoptingamorerigorousapproachtoreviewingestatemanagementstrategies,theSFCwillbeinabetterpositiontomonitorprogressandidentifyopportunitiesforcollaborationandsharingbetweeninstitutionsandotherpartners.

99.ItisimportantwhenevaluatingestatestrategiesthattheSFCidentifiesareasforimprovementinestatemanagementatindividualinstitutions.Forexample,theSFCiskeentoencourageinstitutionstoimprovetheirscrutinyofestatemanagementthroughtheuseofperformanceinformationandtherevisedestatestrategyguidancerecommendstheinclusionofarangeofkeyperformanceindicatorsininstitutions’estatestrategies.

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36 TheFundersForumincludesrepresentativesfromtheHEsector,governmentdepartments,fundingcouncils,charities,industry,ResearchCouncilsandRegionalDevelopmentAgencies.

37 Atwww.sfc.ac.uk/information/infofunding.htm.TheSFCplanstorunworkshopsessionsin2007tosupportthenewguidelines.

TheSFCsupportsgoodpractice100.TheSFCsupplementstheworkundertakenbyorganisationssuchastheScottishAssociationofUniversityDirectorsofEstates(SAUDE)toensurethatinnovativeandgoodpracticeispublicisedandimplementedacrossthesectorasquicklyaspossible.Approachesusedincludetheannualspringconferenceforthefurtherandhighereducationsector;involvementingroupssuchastheSpaceManagementGroup;andfundingtheEMSdataset.Lookingtothefuture,theSFCintendstoconductaprojectevaluationoftheBordersjointcampusco-locationproject(Exhibit16,page25).TheseallrepresentusefulinitiativestoallowtheSFCtoevaluatetheoutcomesofitsactivitiesandsharethemwiththesector.

101.TheSFCcanalsoplayanimportantrolebysupportingtheHEsectortodealwithemergingissues.CompliancewithlegislationisonerecentissuewheretheSFChassoughttohelpinstitutionsunderstandtheirresponsibilities.

Recommendations

102.TheSFCshould:

reportpubliclyoncapitalfundingforthehighereducationestate,demonstratingthelinkbetweenfundingandnationalpriorities

continuetoensurethatSRIFandLTIFprogrammesworktogethertomaximisetheimpactofthefundingontheestate

continuetopromotegoodpracticeandprovideguidanceandensurethatthisisfollowed

encourageinstitutionstoimprovetheirscrutinyandreportingofestate-relatedperformance.

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Part 4. Estate management in higher education institutions

Someinstitutionshavesystemsinplacetosupporteffectiveestatemanagement,butgoodpracticeneedstobeadoptedacrossthesectorasawhole.

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Key messages

MostinstitutionsarecurrentlyreviewingtheirestatestrategiestosubmitrevisedstrategiestotheSFCbytheendof2007.However,capitaldevelopmentplanningismadedifficultbyuncertaintyoverlong-termpublicfunding.

AlthoughextensiveinformationontheHEestateisavailable,itisnotusedeffectivelyinmanagementreporting.

Someinstitutionshavesystemsinplacetosupporteffectiveestatemanagement,butgoodpracticeneedstobeadoptedacrossthesectorasawhole.

103.Thispartofthereportreviewsestatemanagementininstitutions.Itexaminesthe:

useofestatestrategiesandcapitaldevelopmentplans

useofinformationontheestate

systemsinplacetodeliverestatemanagementininstitutions.

104.Institutionsarefullyautonomous,answerabletotheirgoverningbodyforalldecisionsaffectingtheinstitution.DecisionsonestatemanagementaresubjecttoapprovalbythegoverningbodyandSeniorManagementTeam(SMT).TheprincipalandothermembersoftheSMTareoftenrepresentedonthegoverningbody.

Most institutions are in the process of revising their estate strategies

105.ThreeinstitutionshavealreadysubmittedestatestrategiestotheSFCinlinewiththelatestguidance.Another14intendtorevisetheirstrategiesandsubmitthemtotheSFCduring2007,buttwoinstitutionshaveindicatedthattheirrevisedstrategywillnotbecompletebefore2008(Exhibit17).

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106.Estatestrategiesaredesignedtobeflexibletoallowinstitutionstoadapttheirplansinlinewithchangingconditionsandopportunities.Theyaresupportedbycapitaldevelopmentplanswhichshowhowbuildingandmaintenanceprojectswillbetakenforwardandfinanced.Capital

developmentplansarecomplexdocuments.Forexample,thecapitaldevelopmentprogrammesat:

theUniversityofStirlingidentifies54projectscurrentlyunderwayorplanned,withbudgetfigurestotalling£74.5millionupto2013

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Exhibit 17Institutions’ estate strategiesTwoinstitutionswillnotsubmitarevisedestatestrategybefore2008

Institution Current estate strategy ends in…

New estate strategy will be available in…

Heriot-Watt University Not provided 2008

UniversityofStirling 2005 2007

EdinburghCollegeofArt 2006 2007

UniversityofAberdeen 2007 2007

BellCollege 2007 2007

UniversityofGlasgow 2007 Masterplansubmittedandevaluatedin2007

RSAMD 2007 2007

GlasgowSchoolofArt 2009 Underdevelopment

UniversityofDundee 2009 2007

UniversityofAbertay 2010 2007

University of Paisley 2014 2008

RobertGordonUniversity

2014 Masterplansubmittedandevaluatedin2006

UniversityofStrathclyde 2014 Annualupdates

UniversityofEdinburgh 2015 Strategysubmittedandevaluatedin2006

GlasgowCaledonianUniversity

2015 2007

NapierUniversity 2016 2007

QueenMargaretUniversity

2007 2007

UniversityofStAndrews 2027 Annualupdateswithfullreviewasneeded

Note: The Relocate project was the working estate strategy for QMU. SAC is not included as it is not SFC-funded.


Part4.Estatemanagementinhighereducation29

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theUniversityofEdinburghcontainsdetailsofinvestmentstoatotalvalueof£326million,covering79currentandfutureprojectsfortheperiod2004/05to2008/09

theUniversityofDundeehasavalueof£242millioncovering85projectsforcompletionby2013,withafurther37awaitingapproval.

Capital development planning is made difficult by uncertainty over long-term public funding

107.Theprovisionoffundsspecificallyforcapitalinvestmentallowsinstitutionstofocusontheirinfrastructurerequirements.However,long-termfinancialplanningismadedifficultbythree-yearpublicspendingcommitmentsascapitalprojectsoftenhavesignificantlylongerleadtimes(seecasestudybelowfortheJordanhillcampus).

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108.Institutionsdealwiththeuncertaintycreatedbythethree-yearspendingcycleindifferentways.Somehaveassumedthatfundingwillbeavailablefromthepublicsectorbeyond2008,whenthecurrentprogrammeends;othersassumenofuturepublicsectorfunding.Therearerisksinbothapproaches:

Whenfundingisassumedtocontinue,projectsmaybedevelopedthroughthedesignandapprovalstage.Thisinitialexpendituremaybewastedifthefundingdoesnotmaterialise.

Whenfundingisassumedtocease,preparatoryworkonnewprojectsisnotundertaken.Thisdelaysprogressifthefundingthenbecomesavailable.

109.Aclearerindicationoffuturepublicfundingforcapitalprogrammesforalongerperiodwouldreducetherisksandtheinefficiencies

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thatresultandhelpinstitutionswiththeirstrategicplanning.Forexample,throughtheStrategicWasteFund,indicativefundinghasbeenallocatedfordistributiontoScottishlocalauthoritiesupto2020forinfrastructureinvestments,providingassuranceaboutthefutureavailabilityoffundstosupportplannedwastemanagementprojectsinanareawherelong-termstrategicplanningiscritical.38

Good estate management requires detailed information about the estate

110.Mostestatesdepartmentsuseperformanceinformationtomonitorthequalityoftheestate.TheEMSdatasetisoneofthekeysourcesused.In2005/06itcovered18Scottishinstitutions(SACisexcluded).However,coveragewaslesscomprehensiveforearlieryears,makingitdifficulttomonitorpatternsovertime.Also,althoughallSFC-fundedinstitutionssubmitteddatain2005/06,therearesomeimportantgapsincoverageforcertainindicatorsandsomedifferencesinthewaysthatinstitutionsdefineandmeasurecertaindata.Itisimportantthatthisdatasetiswellmaintainedandaccuratetoensurethatitcanbeusedeffectivelyinthefuture.

111.BuildingconditionsurveysareanotherimportantsourceofinformationonthequalityoftheestateandhelpensurethatdatasubmittedtoEMSareaccurate.BothBellCollegeandtheUniversityofStirlingconductedsurveysin2006,updatingtheirassessmentoftheirmaintenancebacklogsandhighlightingthevalueofsuchinformationinprovidinganaccurateassessmentofestatecondition.GuidancefromtheSFCsuggeststhatbuildingconditionsurveysarekeptuptodate.39Mostinstitutions(11)completedabuildingconditionsurveyonatleastpartoftheirestateinthelastfiveyears,andsixothers

Case study – development of the Jordanhill campus by the University of Strathclyde

TheUniversityofStrathclydeacquiredtheJordanhillCollegeofEducationin1993,whichthenbecametheFacultyofEducation.Itwasdecidedtomovetoasinglecampusin2004.Theprocesswillbecompletedin2010whentheFacultyrelocatestoanewbuildingontheJohnAndersoncampus.

Date Event

2004 Decisionmadetoconsidermovetoasinglecampus.

2005 OptionsconsideredbyUniversitySteeringGroup.

2006 CourtagreesinprincipletorelocatetoasinglecampusandtodisposeofJordanhillcampus.

2007 GlasgowCityCouncilapprovedplansforJordanhillcampus.Buildingsizeanddetailedspecificationagreedfornewsite.

2008 SaleanddevelopmentofJordanhillcampus.Planningconstructionprocurementfornewsite.

2009 Constructionandfitoutofnewbuilding.

2010 VacationofJordanhillcampusandoccupationofnewbuilding.

38 Building a Better Scotland – Infrastructure Investment Plan: Investing in the Future of Scotland, ScottishExecutive,2005.39 www.sfc.ac.uk/information/info_funding.htm

40 UniversitiesofAbertay,DundeeandPaisley,BellCollege,EdinburghCollegeofArtandSAC.

arecurrentlycarryingoneoutorplantodosoin2008(Appendix2).QMUislikelytoformaliseplansforsurveyworkafteritsmovetothenewcampusin2007andRGUwillundertakearollingprogrammeofupdatedbuildingconditionsurveysaspartofitsMasterplanprogramme.

112.Ingeneral,institutionswithplanstorepeatbuildingconditionsurveysstatetheywillrepeatthemeveryseventoeightyears.

Institutions could make better use of information about the condition of the estate

113.Afewinstitutionsarealreadymakinguseofperformanceindicatorstomonitortheperformanceoftheirestates.TheUniversityofEdinburghhasasectiononperformanceassessmentinitscurrentestatestrategyandafewotherspublishinformationabouttheirestateontheirwebsites(Exhibit18).

114.Mostestatesdepartments(18)alreadymakesomeuseofarangeofindicatorsaboutthequalityoftheestate.ThiscouldformabasisforbetterperformancereportingtotheirSMTandgoverningbodies.Appendix6identifiesthenumberofinstitutionscurrentlyusingeachofthecoreindicatorsidentifiedintheEMSdataset.Exhibit19,overleaf,showsthefiveindicatorsusedmostcommonlybyestatesdepartmentsandreportedatleastoccasionallytothegoverningbody.Inmostcases,itisnotclearwhycertainmeasuresareusedbyestatesdepartmentsandhowrelevanttheyaretotheoverallaimsoftheinstitution.

115.Managementscrutinyoftheperformanceoftheestatecouldbebetter.Attwoinstitutions(NapierUniversityandRSAMD)theestatesdepartmentsdonotprovideregularperformancereportstothefullSMTorgoverningbody.Insixothers,regularreportsareprovidedbuttheydonotcontainquantitativedataonthe

overallperformanceoftheestate(forexample,ontheoverallconditionorsuitabilityofthebuildings,operatingcostsorspaceuse).40

116.Bycontrast,progressonindividualprojectsismorefrequentlyreportedtomanagement,particularlywhenmajornewbuildorrefurbishmentprojectsareunderway.Thissuggestsafocusondetailedprojectmanagement,ratherthanastrategicapproachtoestatemanagement.

Good practice is evident in a number of the systems and procedures used to deliver estate management

117.Thestructuresusedtodeliverestatemanagementvaryamonginstitutionsreflectingthecomplexityoftheestateandtheresourcesavailable.Appendix2includesdetailontheinternalstructuresandresourcesinplacetodeliverestatemanagementactivity.

118.Ourstudyidentifiedanumberofimportantstrengthsinthesystemsandproceduresinplacefordeliveringestatemanagement:

Exhibit 18Examples of performance measures used at the Universities of Edinburgh and Stirling

The University of EdinburghidentifiedtargetstosupportthegoalsandprioritiesofitsStrategicPlanandwillmeasureprogressontheseonanannualbasis.Sixestateindicatorsareincludedonitsbalancedscorecard:

1. Totalincomepersquaremetreofgrossinternalarea.2. Capitalexpenditureandplannedmaintenanceasapercentageof

estatevalue.3. Totalpropertycostasapercentageofuniversitytotalincome.4. BacklogmaintenancespendrequiredtomeetDisabilityDiscrimination

Actrequirements.5. Roomutilisation.6. Utilities,servicingandmaintenancecostspersquaremetreofgross

internalarea.

Inadditiontheuniversityuses:abuildingperformanceassessmenttolookattheperformanceofeachindividualbuildingsustainabilityandenvironmentalimpactmeasuresforthecampus.

Theuniversityiscurrentlyworkingtowardssettargetsforspaceperformanceandbusinessmeasures.

•

•

The University of Stirlingreportsdetailsonperformanceforthreenon-residentialmeasuresinitsmanagementhandbook,showingprogresssince2000/01:

1. Estatescosts:maintenancecostpersquaremetreofgrossinternalareaenergycostspersquaremetreofgrossinternalarea.

2. Totalnon-residentialnetinternalareaperstudentFTE.3. Useofteachingrooms(percentage)

••

Source: www.planning.ed.ac.uk/bsc.htm and University of Stirling Management Information Handbook, March 2006


32

Linesofaccountabilityareclear.Directorsofestates(ortheirequivalent)reportdirectlytoamemberoftheSMT–usuallytheuniversitysecretaryalthough,insixinstitutions,theyreporttotheprincipal,viceprincipalordirectorofanotherdepartment.

Therearegoodstrategicandoperationallinksbetweentheestateandfinancedepartments.In16institutionsthedirectoroffinanceanddirectorofestates(orequivalent)meetatPolicyandResources;Estates;orFinancialPlanningCommittees.Anumberofinstitutionsalsohavemembersofthefinancedepartmentwithintheestatesdepartment(forexampleattheUniversitiesofGlasgow,EdinburghandHeriot-Watt)oraspecificpointofcontactforestatesbusinesswithinthefinancedepartment(asattheUniversitiesofDundeeandPaisley).Theproceduresfollowedfortenderingandprocurementsuggestthereisregularcontactbetweentheestatesfunctionsandfinanceandclosemonitoringofexpenditure.

Mostinstitutionsconsultwithstaffandstudentswhenplanningtheestate.Formalinvolvement,throughmembershipofthegoverningbodyandestatescommittee(oritsequivalent)occursinmostinstitutionsforbothstaffandstudents.Inaddition,studentviewsaresoughtfromrepresentativesofthestudentassociationinthemajorityofinstitutions(Exhibit20).Someinstitutions,suchastheUniversityofStirlingandRGUoperategroupscombiningstaffandstudentstohelpwithestatesissues.InallinstitutionsexcepttheUniversityofAbertay,whereothermeansareused,staffviewsarecapturedduringtheannualconsultationwhichtakesplacetoestablishprioritiesforthecapitaldevelopmentplan(seegoodpracticeexamplesopposite).

•

•

•

Exhibit 19Key indicators used by institutions

Performance indicators Number of estates

departments using indicator

Number of estates

departments reporting

indicator to governing body

PercentageofGIAinRICSconditionAandBFor the non-residential estate

14 10

Spaceuse–teachingspace 14 10

CosttoupgradeestateinRICSconditionCandDtoRICSconditionBasapercentageofIRVFor the non-residential estate

12 8

Totalpropertycostspersquaremetreofnetinternalarea(NIA)For the whole estate

13 7

IRVpersquaremetreofGIAFor the non-residential estate

11 6


Exhibit 20Methods used to collect views on the estate


Number of HEIs

0 2 4 6 8 10 12 14 16 18 20

Contact with thestudent association

Consultation ondeveloping the capital plan

Representativeon a governing body

Representativeon estates committee

Representativeon other formal group

General invitations toprovide views

Surveys

Focus groups

Staff

Students

Thereareclearlinksbetweentheestatestrategyandthecorporateaimsandobjectivesoftheinstitutionreflectingthehighlevelofmanagementinvolvementinthedevelopmentoftheestatestrategy.ThesearesubjecttofinalapprovalbythegoverningbodyorboardinallScottishinstitutions.InpracticetheSMTisalsoheavilyinvolvedindevelopingtheestatestrategythroughitsdraftstages.

Althoughinstitutionsareautonomousbodiescompetingtoattractstudentsandinvestment,thereisacultureofsharingwithintheScottishsector.Forexample,thejointventurebetweentheUniversitiesofStAndrewsandEdinburghtocreateachemistryresearchschool(knownasEaStCHEM)andthroughthejointprocurementapproachesforequipmentdescribedearlier.Inthecontextofestatesactivity,thereisevidenceofwidespreadinformationsharing.ExamplesincludetheuseofcomparativedataforpeergroupsfromtheEMSdataset;fact-findingvisitstoexplorebetterwaysofdeliveringservices;andmembershipofspecialistgroupssuchastheSpaceManagementGroup,theAssociationofUniversityDirectorsofEstates(AUDE)anditsScottisharm(SAUDE).

•

•

Recommendations

119.TheSFCshouldconsiderwiththeScottishExecutivewhetheraclearerindicationofthefuturepublicfundingforcapitalprogrammescouldbeprovided,tohelpinstitutionsintheirstrategicplanning.

120.Institutionsshould:

complywithSFCguidanceandensurethisisreflectedinreviseddocumentsandapproaches

continuetoworktogethertoensurethatbenchmarkingdataarerelevant,consistent,comprehensiveandreliable

makeuseofperformanceinformationontheestateandensurethatitisreportedto,andscrutinisedby,management.

•

•

•

Robert Gordon University’sEstatesDepartmentmanagesanannualconsultationprocesswithkeystaffineachschooltogatherviewsontheirspecificestateneedsoverthenextfiveyears.TheseviewsarethenmergedwithprojectsidentifiedbytheEstatesDepartment.TheresultinglististhenprioritisedbytheExecutiveGroupwhosubmitthemtotheEstatesandBuildingsCommittee(forprogrammeapproval)andtheFinanceCommittee(forbudgetapproval).Theproposalscoverbothcapitalandlong-termmaintenanceworks.Theboardofgovernorshasthefinalrightofapproval.

AttheUniversity of Stirlinga‘learningspacesgroup’,comprisingstaffandstudents,meetseveryfewmonthstoconsiderchangestotheinsideoftheteachingareasandhelpsetprioritiesfortheuseofLTIFfunding.TheworkofthisgroupisusedtoprioritisecapitalexpenditureonteachingandlearningspacesandisreportedaspartofaregularreportontheCapitalDevelopmentPlanateachmeetingoftheFinanceandInfrastructureCommittee.

Good practice: Approaches used to gather views on estate needs



34

Category Name of Institution Institution type

Ancient

UniversityofAberdeen University

UniversityofEdinburgh University

UniversityofGlasgow University

UniversityofStAndrews University

Pre-1992

UniversityofDundee University

Heriot-WattUniversity University

UniversityofStirling University

UniversityofStrathclyde University

Post-1992

UniversityofAbertay University

GlasgowCaledonianUniversity University

NapierUniversity University

UniversityofPaisley University

QueenMargaretUniversity University

RobertGordonUniversity University

BellCollege CollegeofHigherEducation

SSIs

EdinburghCollegeofArt ArtSchool

GlasgowSchoolofArt ArtSchool

RoyalScottishAcademyofMusicandDrama

Conservatoire

UHIMillenniumInstitute CollegeofHigherEducation

TheOpenUniversityinScotland -

ScottishAgriculturalCollege -

Note: Bell College and the University of Paisley are merging and will become known as the University of the West of Scotland by the end of 2007.UHI Millennium Institute and The Open University in Scotland are not included in this study.

Categories:Ancient Institutions – The oldest institutions in Scotland. Governed by the Universities (Scotland) Acts 1858-1966.Pre-1992 Institutions – Established in the 1960s and earned their university status through Royal Charter.Post-1992 Institutions – Designated Higher Education (HE) status under the provisions of the Further and Higher Education (Scotland) Act 1992.Small Specialist Institutions (SSIs) – These institutions have their status awarded by the SFC. To achieve this status they must meet strict criteria set by the SFC.

The UHI Millennium Institute, The Open University in Scotland and the Scottish Agricultural College are not categorised.

Appendix 1. Categories of Scottish HE institutions

Appendix 2. Profile of the Scottish HE sector on key dimensions

Ancient Institutions

University of Aberdeen

University of Edinburgh

University of Glasgow

University of St Andrews

Estate dimensions and trends

Numberofbuildings2001/02 57 165 300 60

2005/06 61 237 262 72

Numberofsites

2001/02 3 5 16 32005/06 3 5 16 3

GIA(non-residential)(m2)2001/02 153,300 527,100 312,700 107,000

2005/06 164,500 513,400 356,700 119,300SpaceperstudentFTE(m2)-non-residentialGIA

15.41 25.50 19.19 16.81

Ageofestate(percentageofGIA)

Pre-1840 5% 19% 0% 18%

1840-1959 23% 22% 50% 34%

1960-1979 48% 51% 37% 37%Post-1980 24% 8% 13% 11%

Students and staffTotalstudents(FTE) 10,676 20,136 18,589 7,097

Totalstaff(FTE)(includesresidential) 3,086 6,494 4,749 1,700Mostseniormemberofstaffinestatesdepartment

Directorofestates

Directorofestatesandbuildings

Directorofestatesandbuildings

Actingdirectorofestates

Propertymanagementstaff(FTE) 22.17 72 52.7 18.5

Propertymanagementstaff(AsapercentageofFTEstaff(non-residential))

0.72% 1.18% 1.13% 1.13%

Financial dataInsurancereplacementvalue(£m) £278.3 £1,253.2 £725.7 £239.6Propertycostsperstudent £1,200 £3,129 £1,635 £1,178Propertycostsperm2 £78 £123 £85 £70

Capitalexpenditure(£m) £23.0 £18.1 £28.7 £8.1Maintenanceexpenditure(£m) £2.5 £31.7 £11.0 £1.4

Income(£m) £147.7 £409.1 £298.3 £94.5Capitalexpenditureasapercentageofincome(averageover2years)

17.4% 14.0% 16.0% 6.9%

Incomepersqm 897.81 796.87 836.41 791.55Condition/sustainability of the estate%ofGIAinRICSconditionA&B 68% 70% 43% datanot

available%ofGIAinRICSconditionC&D 32% 30% 57%ListedbuildingsasapercentageofGIA 15% 45% 42% 35%

Functionalsuitability(excellentorgood) 88% 83% 81% 95%

Buildingconditionsurveylastcompleted 2000 2002 2005 2006Nextbuildingconditionsurvey 2007 2010 noplans noplans

Source: EMS data and Audit Scotland survey

Appendix2.ProfileoftheScottishhighereducationsectoronkeydimensions35

36

Pre-1992 Institutions

University of Dundee

Heriot-Watt University

University of Stirling

University of Strathclyde


Numberofbuildings2001/02 55 72 14 46

2005/06 52 72 16 43

Numberofsites

2001/02 3 3 1 42005/06 3 3 1 4

GIA(non-residential)(m2)2001/02 187,200 122,600 85,300 294,600


18.48 19.67 12.28 20.19


Pre-1840 3% 1% 3% 1%

1840-1959 37% 3% 1% 30%

1960-1979 44% 46% 86% 50%Post-1980 16% 50% 10% 19%

Students and staffTotalstudents(FTE) 11,420 6,480 7,121 14,550

Totalstaff(FTE)(includesresidential) 2,892 1,510 1,587 2,926Mostseniormemberofstaffinestatesdepartment

Directorofcampusservices

Directorofestates Directorofestatesandcampus

services

Directorofestatesmanagement

Propertymanagementstaff(FTE) 29.75 7 23.8 41


Datanotavailable 0.48% 1.59% 1.41%

Financial dataInsurancereplacementvalue(£m) £371.3 £163.4 £139.0 £713.6Propertycostsperstudent £1,346 £1,526 £897 £1,415Propertycostsperm2 £73 £78 £73 £70

Capitalexpenditure(£m) £15.6 £3.8 £5.0 £13.4Maintenanceexpenditure(£m) £3.2 £2.0 £1.1 £4.8

Income(£m) £160.1 £88.7 £74.8 £182.8Capitalexpenditureasapercentageofincome(averageover2years)

14.6% 6.6% 4.2% 8.2%

Incomepersqm 758.33 695.88 855.93 622.25Condition/sustainability of the estate%ofGIAinRICSconditionA&B 34% 34% 70% 32%

%ofGIAinRICSconditionC&D 66% 66% 30% 68%ListedbuildingsasapercentageofGIA 14% 3% 3% 20%

Functionalsuitability(excellentorgood) 78% 56% 36% 55%

Buildingconditionsurveylastcompleted 1992 1998 2006 2004Nextbuildingconditionsurvey 2007 underway 2011 updatedregularly

internally


Post-1992 Institutions

University of Abertay

Bell College of Higher Education

Glasgow Caledonian University

Napier University


Numberofbuildings

2001/02 notavailable 4 13 21

2005/06 9 6 15 20

Numberofsites

2001/02 1 1 1 132005/06 1 2 1 10

GIA(non-residential)(m2)2001/02 notavailable 27,100 86,400 80,000


10.60 9.41 7.08 8.77


Pre-1840 0% 0% 0% 1%

1840-1959 36% 5% 0% 36%

1960-1979 48% 77% 43% 53%

Post-1980 16% 18% 57% 10%Students and staffTotalstudents(FTE) 3,731 3,091 14,097 9,369

Totalstaff(FTE)(includesresidential) 577 379 1,604 1,454Mostseniormemberofstaffinestatesdepartment

Headofestatesandcampus

services

Directorofestates Actingheadoffacilities

management

Directoroffacilitiesservices

Propertymanagementstaff(FTE) 14 4.25 27 7


2.47% 1.13% 1.71% 0.48%

Financial dataInsurancereplacementvalue(£m) £84.5 £45.7 £160.0 £144.3

Propertycostsperstudent £625 £538 £530 £704

Propertycostsperm2 £59 £57 £75 £80

Capitalexpenditure(£m) £0.1 £0.7 £3.1 datanotavailable

Maintenanceexpenditure(£m) £0.4 £0.2 £1.0 £2.0

Income(£m) £31.2 £19.2 £94.6 £76.5

Capitalexpenditureasapercentageofincome(averageover2years)

1.5% 4.7% 12.5% 5.7%

Incomepersqm 790.04 660.00 947.63 930.51

Condition/sustainability of the estate%ofGIAinRICSconditionA&B 46% 68% 93% 50%

%ofGIAinRICSconditionC&D 54% 32% 7% 50%ListedbuildingsasapercentageofGIA 22% 5% 0% 19%

Functionalsuitability(excellentorgood) 56% notavailable 97% 80%

Buildingconditionsurveylastcompleted 2006 2006 1993 2004

Nextbuildingconditionsurvey 2011 noplans 2007 2007



38

Post-1992 Institutions (continued)

University of Paisley Queen Margaret University

Robert Gordon University


Numberofbuildings

2001/02 51 29 32

2005/06 49 18 19

Numberofsites

2001/02 4 4 122005/06 4 3 6

GIA(non-residential)(m2)

2001/02 75,800 33,000 88,300

2005/06 75,450 33,000 80,100SpaceperstudentFTE(m2)-non-residentialGIA

9.91 8.97 9.92


Pre-1840 2% 0% 0%

1840-1959 10% 29% 31%

1960-1979 66% 68% 18%Post-1980 22% 3% 51%

Students and staffTotalstudents(FTE) 7,614 3,678 8,077

Totalstaff(FTE)(includesresidential) 1,159 504 1,306Mostseniormemberofstaffinestatesdepartment

Directorofestates Directorofestatesandfacilities

Directorofestates

Propertymanagementstaff(FTE) 5.65 9 27.17


0.50% 1.82% 2.11%

Financial dataInsurancereplacementvalue(£m) £81.0 £57.3 £175.5

Propertycostsperstudent £743 £594 £835Propertycostsperm2 £75 £66 £84

Capitalexpenditure(£m) £0.7 £16.1 £5.8

Maintenanceexpenditure(£m) £1.1 £0.6 £1.8

Income(£m) £56.5 £25.2 £72.0Capitalexpenditureasapercentageofincome(averageover2years)

6.7% 42.0% 15.2%

Incomepersqm 748.37 764.95 898.17Condition/sustainability of the estate

%ofGIAinRICSconditionA&B 45% Datanotavailable

100%

%ofGIAinRICSconditionC&D 55% 0%

ListedbuildingsasapercentageofGIA 9% 22% 6%

Functionalsuitability(excellentorgood) 60% 0% 50%

Buildingconditionsurveylastcompleted 2001 2001 1995Nextbuildingconditionsurvey 2008 tobedecidedafter

relocationcompleterollingprogrammeunder

theirMasterplan


Small Specialist Institutions (SSIs)

Edinburgh College of Art

Glasgow School of Art Royal Scottish Academy of Music

and Drama


Numberofbuildings

2001/02 11 10 2

2005/06 10 10 2

Numberofsites

2001/02 5 2 12005/06 4 2 1

GIA(non-residential)(m2)2001/02 33,100 31,400 17,800

2005/06 32,450 31,950 17,750SpaceperstudentFTE(m2)-non-residentialGIA

20.02 21.55 30.62


Pre-1840 0% 0% 0%

1840-1959 60% 48% 0%

1960-1979 40% 46% 0%

Post-1980 0% 6% 100%Students and staff

Totalstudents(FTE) 1,620 1,482 580

Totalstaff(FTE)(includesresidential) 279 265 209Mostseniormemberofstaffinestatesdepartment

Buildingsofficer Directorofestatedevelopment

Directoroffinance

Propertymanagementstaff(FTE) 2 3 3.4


0.72% 1.14% 1.63%

Financial data

Insurancereplacementvalue(£m) £66.2 £86.3 £66.2

Propertycostsperstudent £888 £1,268 £2,435Propertycostsperm2 £44 £59 £80

Capitalexpenditure(£m) £0.3 £0.2 £0.0

Maintenanceexpenditure(£m) £0.2 £0.4 £0.4

Income(£m) £14.5 £15.3 £10.0Capitalexpenditureasapercentageofincome(averageover2years)

4.4% 3.8% 3.0%

Incomepersqm 447.12 478.62 563.59Condition/sustainability of the estate

%ofGIAinRICSconditionA&B 73% 27% 90%

%ofGIAinRICSconditionC&D 27% 73% 10%

ListedbuildingsasapercentageofGIA 34% 23% 0%

Functionalsuitability(excellentorgood) 29% 28% 100%

Buildingconditionsurveylastcompleted 2005 2003 1993Nextbuildingconditionsurvey 2012 noplans 2007



40

Member Organisation

Dr Peter West Secretary,UniversityofStrathclyde

Graham Roddick DirectorofEstates,UniversityofStrathclyde

Angus Currie DirectorofEstates,UniversityofEdinburgh

Angus Donaldson DirectorofEstates,UniversityofAberdeen

Liam McCabe DirectorofStrategicFinancialManagementandBusinessServices,QueenMargaretUniversity

Martin Kirkwood DeputyDirectorofProperty&CapitalFunding,ScottishFundingCouncil

Margaret MacLeod SeniorPolicyOfficer,UniversitiesScotland

Note: The Study Advisory Group was consulted by Audit Scotland several times throughout the project; when scoping the initial project and developing the project brief, after the pilot stage and when the key messages and report were at draft stages.

Members of the group sat in an advisory capacity only. The content and conclusions of this report are the sole responsibility of Audit Scotland.

Appendix 3. Members of the study advisory group

Appendix 4. Public sector capital funding streams

Science Research Investment Funding (SRIF)

Thisisthelargestofthefundingstreamsandaccountsforover60percentofthetotalcapitalfundingavailableupto2007/08.SRIFisaUK-widefundandwasintroducedin2002/03bytheOfficeofScienceandTechnology,nowknownastheOfficeofScienceandInnovation(OSI).TheSFCsupplementstheOSIfundingandmadetwoinitialpaymentsin2001/02inadvanceofSRIF.ThefundingisaimedspecificallyatrefurbishingtheUKhighereducationresearchestateinscience,engineeringandtechnology.

TheSFCdistributesthefundsonbehalfofOSIwhichsetsthecriteriaforthefunding.ThefundingisdistributedbyaformulawhichtakesaccountoftheexternalresearchincomeoftheinstitutionanditsresearchgrantfromtheSFC.InstitutionsreceiveaminimumSRIFallocationof£25,000.TherehavebeenthreeroundsofSRIFwiththelatestcoveringtheperiod2006/07to2007/08.

SRIFfundshavebeenusedprimarilyfornewbuildprojects(theseaccountfor48percentoffundingoverthethreeSRIFallocations).Majorrefurbishmentprojectsaccountforafurther22percentofSRIFfundingandequipmentpurchasesaccountforaroundsevenpercentofallSRIFspend.TherestisusedforprofessionalfeesandVATpayments.

Learning and Teaching Infrastructure Funding (LTIF)

Thiswasintroducedin2005/06bytheScottishExecutiveandisaimedatsupportingcapitalprojectsthatarenoteligibleforSRIFfunding,forexample,facilitiesthatareusedforteachingratherthanresearchpurposes.However,itcanbeusedalongsideSRIFformulti-purposeprojects.

TherearetwotypesofLTIF–formulaLTIFandselectiveLTIF.ThemajorityofthisfundingstreamisallocatedasformulaLTIFwithdistributionbasedonthemainteachinggrantreceivedbyinstitutions.Tohelpsupportcross-sectoralprojectsandotherprojectsofstrategicimportance,theSFChassetaside£20millionasselectiveLTIF.ThisisallocatedtoinstitutionssubmittingbidsthatobtainSFCapproval.41

41 DetailedinSFCcircularSFC/21/2006.

Appendix4.Publicsectorcapitalfundingstreams41

42

Appendix 5. Extract from circulars on SRIF 2006/07 and 2007/08 (3rd round) and LTIF showing how the funding can be used

SRIF third round

InstitutionsareencouragedtotakeaccountoftheEfficientGovernmentinitiative;toconsiderhowtheycansecurequantifiableefficienciesthroughcollaborationbetweeninstitutions,consideractivitiessuchassharedsupportservices,newapproachestoestatedevelopmentandmanagement,improvedprocurementandpoolingofresearchcapacity.

TheaimsofSRIF3areto:contributetothelong-termfinancialsustainabilityofinstitutions,researchactivitiesandthephysicalinfrastructurethatsupportsthem

addresspastunder-investmentinphysicalinfrastructureforresearch

promotecollaborativepartnershipsbetweeninstitutions,industry,charities,GovernmentandNHSTrusts(sic)

promotehigh-qualityresearchcapabilityinareasofstrategicnationalpriority.

Prioritiesfortheuseoffundsareto:maintaintheproductivecapacityoftheexistinginfrastructureinafitstate

investsothatexistingcapacityisusedmoreproductivelyorefficiently

enableinstitutionstodevelopproposalstoenhancethepublicandprivateuseofhighereducation’sresearchexpertiseandfacilities.

Fundscanbeusedfor:refurbishmentofpremisesforresearchorsupportinginfrastructure

replacement,renewalorupgradingofequipmentincludingITnetworks

replacementofpremisesorinfrastructurebynewbuildoracquisitionsbutonlywherethisisabettervaluesolutionthanrefurbishment.

Inaddition,institutionsarerequiredtodemonstrateintheirsubmissionsthatproposalsfitstrategicaimsandobjectivesandresearchandITstrategies;forexample,theyrepresentvalueformoney,theyareaffordableandtheydealwithissuesofenvironmentalsustainability.

•

•

•

•

•

•

•

•

•

•

LTIF 2006/07 and 2007/08 – for formula LTIF

Proposalsshouldfallintooneofthefollowingbroadpurposes:majorteachinginfrastructureprojects–strategicprojectstoaddressbacklogmaintenanceandobsolete/poor-qualityestate

teachingfacilitiesincludinglaboratoriesalignedwithparallelprojectsfundedthroughSRIF

majoritemsofcapitalequipment

studentsupportandlearningfacilities

projectsfore-learningandfacilitiesforstudentswithspecialneeds

studentlearningsupportservices

collaborativeprojectsinvolving,forexample,theshareduseofbuildings,facilitiesormajoritemsofcapitalequipment.

Institutionsarerequiredtodemonstratethattheirproposalsdemonstrateefficientoutcomes,strategicfitwithplansandestatestrategies,collaborativeandcross-sectorsolutionsandtheyimproveinclusivepracticebyensuringlegislativecompliance.

•

•

•

•

•

•

•

Source: SFC circulars HE/02/05 and SFC/21/2006

Appendix 6. Use of performance information by HE institutions

Performance indicators Used by the estates department

Reported to governing body

Financial indicators

Totalpropertycostspersquaremetreofnetinternalarea(NIA)For the whole estate

13 7

Totalpropertycostsperstudent(full-timeequivalent)For the whole estate

12 2

Non-residentialoperatingcostsperstudent(full-timeequivalent) 12 1

Insurancereplacementvalue(IRV)persquaremetreofgrossinternalarea(GIA)For the non-residential estate

11 6

Ratioofmaintenancecostsandcapitalexpendituretoinsurancereplacementvalue(IRV)For the non-residential estate

10 5

HEIincomepersquaremetreofnetinternalarea(NIA)For the whole estate

9 3

Estate dimensions and quality

Totalnetinternalareaperstudent(full-timeequivalent)For the non-residential estate

14 4

Percentageofgrossinternalarea(GIA)inRICSconditionAandBFor the non-residential estate

14 10

CosttoupgradeestateinRICSconditionCandDtoRICSconditionBasapercentageofinsurancereplacementvalue(IRV)For the non-residential estate

12 8

Non-residentialbacklogaffordabilityscore(Ratio of the cost to upgrade estate in RICs condition C and D to condition B to the non-residential income)

3 1

Coreteachingspacepertaughtstudent(full-timeequivalent) 11 3

Spaceuse–teachingspace 14 10

Environmental indicators

EnergyconsumptionkW/hperstudent(full-timeequivalent)For the non-residential estate

13 0

Waterconsumptionm³perstudent(full-timeequivalent)For the whole estate

12 1

Averageenergycostsper100kW/hconsumptionFor the non-residential estate

9 3

Recycledwasteproportion 7 2


Appendix6.Useofperformanceinformation43

Estate management in higher education

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