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Central Bedfordshire Council FM Service Management
1. Central Bedfordshire Council www.centralbedfordshire.gov.uk
Service Management in FM
Keith Fraser
Head of Facilities Management
2. Central Bedfordshire Council www.centralbedfordshire.gov.uk
Central Bedfordshire Council - Context
• Created in 2009 as a Unitary Authority following the
Government’s invitation to Local Governments to make
consensus-based proposals for re-structuring
• Formed from a merger of Bedfordshire County Council,
Mid Bedfordshire and South Bedfordshire District
Councils
• Bedford and Luton Borough Councils remained out of
scope of the new CBC and became Unitary Authorities in
their own rights;
3. Central Bedfordshire Council www.centralbedfordshire.gov.uk
Central Bedfordshire – Facts and
Figures
• Covers an area of 276 Sq Miles
• Population of 255,600
• Mostly small towns and villages with the exception of the
larger conurbations of Leighton Buzzard, Dunstable, and
Houghton Regis which make up over 50% of the
population of CBC
• Portfolio of 148 sites including 3 corporate offices, some
smaller mixed use offices, libraries, community centres,
care homes, schools and farms
4. Central Bedfordshire Council www.centralbedfordshire.gov.uk
Legacy Issues
• Contracts initially vired across from forming councils into
new Authority, not all of which geographically co-terminus
• No consistency of either T&C or specification therefore
quality and cost impossible to manage
• Piecemeal supply chain with management cost inefficiency
• Early attempts to enter shared service arrangements less
successful than predicted
• Budgets fit cost of vired contracts not necessarily cost of
service delivery
5. Central Bedfordshire Council www.centralbedfordshire.gov.uk
Commercial Delivery Strategy
• Consolidate supply chains into “CBC” contracts that reflect
the new Authority
• Reduce the number of contractors to 1 per service line
• Gain economies of scale & reduce management costs
• Drive uniformity of standards of service delivery
• Capture nature of estate flexibility
• Deliver a quality service throughout the estate
• Support the developing “Corporate Landlord” model
6. Central Bedfordshire Council www.centralbedfordshire.gov.uk
Challenges
• This will bring about a culture change as well as a process
change
• A change in Process = A change in Behaviour
• Mismatch in the perception of the appetite for Risk
• Fewer, bigger contracts introduces a risk of non-conformity
on a larger scale
Low Risk High Risk
Perceived Risk Actual Risk
7. Central Bedfordshire Council www.centralbedfordshire.gov.uk
Law of Conservation of Energy:
Energy cannot be created or destroyed, only transferred from
existing in one form to another
8. Central Bedfordshire Council www.centralbedfordshire.gov.uk
My First Law of Commercial Risk:
Risk cannot be created or destroyed, only transferred from
existing in one form to another
9. Central Bedfordshire Council www.centralbedfordshire.gov.uk
Managing the Commercial Risks
• Must have a mechanism to manage performance and
behaviour
• A link must exist between performance and profit
• Performance must be measured against 100% compliance
to the spec
• If the contractor is to take on the bulk of the risk there must
be levels of tolerance that reflect the real world
• Aim to drive contractor behaviour towards continuous
improvement
• Promote gain share and KPI deficit recovery through over-
achievement
10. Central Bedfordshire Council www.centralbedfordshire.gov.uk
Service Credit Scheme
• Based on dividing the declared monthly profit margin by a
set number of Credit points
• A KPI based on a part of the output specification has a
weighted Credit Score attached to it
• Failure to meet the KPI triggers the Credit Score which is
collated on a balanced scorecard
• Each month the Credit Score is applied to a repayment to
the client as a form of LAD for non-delivery
Performance
Measure
Penalty
Points
Frequency Comments
80% (4 of 5) of inspected
floor areas meet
specification per week.
15 Per
Instance
5 Floor areas to be inspected after
cleaning and before use per week.
11. Central Bedfordshire Council www.centralbedfordshire.gov.uk
Service Credit Scheme - Tolerances
• LAD Payments not triggered until a threshold is breached
• Individual KPIs have a degree of tolerance before Service
Credits are applied
• Over-achievement can allow contractors to recover lost
ground
• Scheme is flexible and can be tightened/loosened in
consultation with contractor
12. Central Bedfordshire Council www.centralbedfordshire.gov.uk
Conclusions
• Contracting out is a good way of reducing non-core costs,
but comes with risks
• Those risks are based in contractor behaviour and
alignment with your business needs
• The more risk you transfer the more cost you can incur
• Organisations carry more risks than they believe they
have an appetite for
• Therefore a shared risk management approach can work
• Risk share can be based on outputs and managed
through KPIs
• Contractors will buy in where they see a balance between
risk and reward