Over the last 5 years the higher education sector has been subject to many, unprecedented, external factors, from Brexit, to COVID-19 and now to a looming financial crisis that threatens their long-term sustainability. Many institutions will be starting (and many already have started) to evaluate their current strategic direction in readiness for the future.  This future direction will differ for each institution, and there is no one size that fits all.

Typically, in the current economic environment, universities can do one of three things:

- Grow – through building and acquisition
- Maintain – through repurposing and redevelopment
- Shrink – through consolidation and selling

Each strategy will present different obstacles and challenges, but the challenge they will all encounter is Condition and Compliance. Understanding the condition of your existing assets is vital, regardless of growth, consolidation or rationalising. For any of these strategies to be successful the current status of the estate’s condition and compliance must be known to determine what future steps are required.

A well-run estates team will ensure that data for condition and compliance is captured and stored, typically within a CAFM system. The data is then used to inform any rectification and maintenance strategies to ensure the estate remains compliant and to the minimum allowable standard. Smaller estates may not have a CAFM system, but they typically have the information captured on spreadsheets or the finance system. This is all useful and usable data. It should be noted that a reliable spreadsheet that captures the status is of more use than a CAFM system that has been neglected. 

With the changes that estates are facing, poor data will create delays and uncertainty. The kind of strategic options that are being considered such as mergers, acquisitions and rationalisation will be more successful if they can rely on the input information. The senior management team need to have confidence that the estates team have completed the necessary tasks to ensure there is data that is fit for purpose and accurate. These estates can expect internal and external parties to:

- Audit the systems and data 
- Analyse the information that supports property valuations and forecast future costs
- Critically challenge the working assumptions and models

Failing to have clear condition and compliance status can be costly and delay any proposed strategies and transactions. It is therefore important to get your estate into a clear position on condition and compliance quickly and cost effectively. This can be achieved through many ways, and during a recent appointment we supported a client with understanding the compliance position of a new estate they were merging with.

Case Study

There was a clear need from the client to understand the inherited risk and condition of the new estate that they would acquire during the merger to determine their risk exposure as a result of non-compliant systems and assets contained within the estate.

Upon reviewing the existing data, it was apparent that the current risk and condition assumptions were based on incomplete data. Therefore, an audit and survey of the asset was required to determine the current status. However, whilst our client’s key priority was to understand the compliance of the asset, they also understood that analysing the data would enable them to unlock potential value and better forecast their future spend and programme. We therefore provided them with a data-driven approach to compliance capture and analysis which comprised of:

- Establishing a RAG rating and risk categorisation system to understand types and priority. This supported the creation of future works packages and programme priorities
- Inputting the rectification and whole life cycle costings to influence future forecasting and budgeting
- Creating a programme for preventative maintenance and upgrades to avoid non-compliant status
- Identifying high risk areas to clearly understand risk and compliance position

This enabled our client to critically challenge, determine and understand the condition and compliance of the new estate. The additional value this approach generated meant they:

- Removed the uncertainty over condition and compliance risk
- Can make justified and fact-based decisions regarding the future of the estate
- Identified cost savings through the creation of condition and compliance-based work packages
- Understood the priorities, timelines and programme for rectification
- Created a roadmap for a compliant estate at the acceptable level of condition

The review of the current data combined with the additional, new non-intrusive survey data enabled the modelling of outcomes and the start of high-level option appraisals and scenario planning for the estate. The risks that were identified enabled meaningful discussions with regards to the future estate’s strategy and plausible, realistic outcomes that can be executed in the medium term to significantly reduce compliance risk.

This exercise has enabled the production of an Intervention Plan to mitigate the current short-term risks to the newly merged estate and the planning and creation of the Estates Compliance Improvement Programme (ECIP) which will bring the estate up to an acceptable compliance level within 18-24 months.