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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
KeymessagesPage 3
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
RecommendationsPage 20
Part 3. The role of the Scottish Funding Council Page 21
Keymessages
TheSFCsetstheoverallstrategyfortheHEsector
Mostofthefundsavailablefordevelopingestatesareallocatedonthebasisofaformula
Theformulaapproach,combinedwithbroadcriteriamakesitdifficulttoassesswhetherkeynationalprioritiesarebeingmetPage 22
SelectiveLTIFfundingmoreclearlydemonstratescollaboration,sustainabilityandimprovedcapitalefficiency
ThereisnopubliclyreportedcomprehensiveevaluationoftheimpactofcapitalfundingontheHEestatePage 25
TheSFChascommittedtoassessingtheimpactofcapitalinvestmentinitscorporateplan
TheSFCisprovidingmorestrategicsupportPage 26
RecommendationsPage 27
Part 4. Estate management in higher education institutions Page 28
Keymessages
MostinstitutionsareintheprocessofrevisingtheirestatestrategiesPage 29
Capitaldevelopmentplanningismadedifficultbyuncertaintyoverlong-termpublicfunding
GoodestatemanagementrequiresdetailedinformationabouttheestatePage 30
Institutionscouldmakebetteruseofinformationabouttheconditionoftheestate
GoodpracticeisevidentinanumberofthesystemsandproceduresusedtodeliverestatemanagementPage 31
RecommendationsPage 33
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.
5
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
Perc
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f exp
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d fu
ndin
g
100
80
60
40
20
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90
70
50
30
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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
Expe
nditu
re (£
mill
ion) 200
100
0
250
150
50
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
sgow
Cal
edon
ian
RS
AM
D
20 Future needs for capital funding in higher education,JMConsultingReport,September2006.TheIRVisthecurrentcostofrebuildingtheestatetoasimilarstandard.
Part2.Theimpactofcapitalfundingonthehighereducationestate11
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.
Part2.Theimpactofcapitalfundingonthehighereducationestate13
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
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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.
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•
•
indicatorsareidentifiedforusebyoperationalmanagers(Exhibit10,overleaf).
51.Theseindicatorsprovideacoresetofmeasuresthatcouldbeusedforbenchmarkingacrossthesector,althoughsomemayneedtobedevelopedtoreflectthespecificrequirementsoftheHEsector.TheEMSdatasethasover200performanceindicatorsandthiscouldprovidethebasisfordevelopingasmallercoresetofindicatorsfortheHEsectorwhichshouldcover:
financialindicators
space-useindicators
fit-for-purposeindicators
environmentalindicators.
52.Intheremainderofthissection,weconsidersomefurtherindicatorsthatmightmeritinclusioninthecoresetofindicators.
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•
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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 =
Part2.Theimpactofcapitalfundingonthehighereducationestate15
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
Part2.Theimpactofcapitalfundingonthehighereducationestate17
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
ling
Que
en M
arga
ret
Nap
ier
Edin
burg
h C
olle
ge o
f Art
Gla
sgow
Cal
edon
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
Part2.Theimpactofcapitalfundingonthehighereducationestate19
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.
20
Recommendations
73.TheSFCshouldundertakefurtherresearchtobetterunderstandtheroleoftheestateininfluencingoutcomessuchasstudentexperienceortheattractionofinternationalstudentsandresearchfunding.
74.TheSFCandinstitutionsshouldworktogetherto:
makegreateruseofEMSandotherdatatomeasuretheimpactofpublicsectorcapitalfundingontheHEestateandtofocusattentiononareasforimprovement
agreeasmallcoresetofindicatorsthatwillbereviewedregularlyataninstitutionalandsectorlevel.
75.Institutionsshoulddeveloprealisticfinancialplanstosupporttheirestatestrategies.
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Part 3. The role of the Scottish Funding Council
TheSFChasanimportantroletoplayinensuringthatpublicfundsareusedtomeetkeynationalpriorities.
21
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
Source: Audit Scotland
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
Part3.TheroleoftheScottishFundingCouncil25
26
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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Part3.TheroleoftheScottishFundingCouncil27
Part 4. Estate management in higher education institutions
Someinstitutionshavesystemsinplacetosupporteffectiveestatemanagement,butgoodpracticeneedstobeadoptedacrossthesectorasawhole.
28
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.
Source: Audit Scotland
Part4.Estatemanagementinhighereducation29
30
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
Part4.Estatemanagementinhighereducation31
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).
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•
•
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
Source: Audit Scotland
Exhibit 20Methods used to collect views on the estate
Source: Audit Scotland
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
Source: Audit Scotland
Part4.Estatemanagementinhighereducation33
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
Estate dimensions and trends
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
2005/06 211,100 127,500 87,400 293,800SpaceperstudentFTE(m2)-non-residentialGIA
18.48 19.67 12.28 20.19
Ageofestate(percentageofGIA)
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
Propertymanagementstaff(AsapercentageofFTEstaff(non-residential))
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
Source: EMS data and Audit Scotland survey
Post-1992 Institutions
University of Abertay
Bell College of Higher Education
Glasgow Caledonian University
Napier University
Estate dimensions and trends
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
2005/06 39,500 29,100 99,850 82,200SpaceperstudentFTE(m2)-non-residentialGIA
10.60 9.41 7.08 8.77
Ageofestate(percentageofGIA)
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
Propertymanagementstaff(AsapercentageofFTEstaff(non-residential))
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
Source: EMS data and Audit Scotland survey
Appendix2.ProfileoftheScottishhighereducationsectoronkeydimensions37
38
Post-1992 Institutions (continued)
University of Paisley Queen Margaret University
Robert Gordon University
Estate dimensions and trends
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
Ageofestate(percentageofGIA)
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
Propertymanagementstaff(AsapercentageofFTEstaff(non-residential))
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
Source: EMS data and Audit Scotland survey
Small Specialist Institutions (SSIs)
Edinburgh College of Art
Glasgow School of Art Royal Scottish Academy of Music
and Drama
Estate dimensions and trends
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
Ageofestate(percentageofGIA)
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
Propertymanagementstaff(AsapercentageofFTEstaff(non-residential))
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
Source: EMS data and Audit Scotland survey
Appendix2.ProfileoftheScottishhighereducationsectoronkeydimensions39
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.
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•
•
•
•
•
•
•
•
•
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.
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•
•
•
•
•
•
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
Source: Audit Scotland
Appendix6.Useofperformanceinformation43
Estate management in higher education
Audit Scotland, 110 George Street, Edinburgh EH2 4LHT: 0845 146 1010 F: 0845 146 1009www.audit-scotland.gov.uk
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