30 January 2014
In his previous article, Rob Cunliffe explained the various funding streams available to local authorities. Here he looks at how they manage their budgets.
FM funding at schools and housing maintenance is ring-fenced and they are individually in control of those budgets.
Because of this, schools can make their own decisions on how to buy FM services, although the LA will offer FM services to schools - either in-house or through outsourced contracts. The housing maintenance is usually delivered through an outsourced partner dedicated to social housing maintenance.
For the LAs operational property they will pull together all the funding streams into a capital and revenue budget, which is split between departments. Typically, these are adult social care, children's, leisure, transport, parks, waste and corporate services. Different budget treatments and the political policy will dictate the approach to FM.
Budgets for FM can be allocated and managed centrally, recharged to departments or managed by individual departments. However, these arrangements are only an accounting treatment. There is a lot of flexibility in how LAs can manage their funding to support different delivery models and innovate to meet the challenge of reducing budgets and an increasing need for services.
Developing the FM policy
Traditionally, FM services were part of the LA's Direct Labour Organisation (DLO). These have been steadily externalised since the 1980s. There are different degrees of externalisation in LAs and a number of factors including political bias and organisation themes/strategy affect the historical and future direction.
LAs have differing political attitudes towards outsourcing that can drive the FM agenda in a particular direction. This can range from externalising the whole property and FM department to retaining all services in-house. Most LAs nowadays have a blend of in-house service provision and outsourcing, but there is not a predominant theme.
Tough financial challenges are driving LAs to innovate in how they provide services; this affects FM as the services are delivered to property. Themes include:
- Co-operatives and mutuals - whereby the third sector or community groups manage and provide public services;
- Commissioning - where the LA commissions whole services either in-house or outsourced; or
- Arm's length or shared services - where public services are jointly provided.
These themes can have a direct and indirect impact on how LAs provide FM services to the departments. Therefore, FM policy is not always set directly by the officer responsible; it can be set indirectly by the choices the LA makes about how to provide public services.
Making decisions about FM
Decision-making in LAs has to be transparent and well documented. LAs make decisions at cabinet meetings where elected councillors debate and vote in a similar way to how Parliament agrees on bills. It is the duty of the officers - paid council staff - to undertake the work of the council, develop and implement the proposals that meet the needs of the public and the budget available.
The procurement team will have a role if outsourcing/contracting is part of the way LAs deliver FM services. Most FM contracts will follow the OJEU tender process and have to be transparent and decisions evidence-based and well documented.
What is FM in LAs?
Facilities management in LAs is varied but not dissimilar to the industry norms that we understand FM to be. There are property services or estates departments that will manage the building maintenance or 'Hard FM' functions and there is a facilities department that will provide the 'soft FM' and support services.
In some cases for outsourced services like vending, the procurement department, and not a FM, will manage the service. There could also be other support services attached to either department including water features, paddling pools, grounds or parks maintenance, porters and drivers. Catering for schools is generally a separate contract or down to each school to provide. Reprographics would be the responsibility of the IT department.
Next issue: The different FM delivery models used by local authorities
Rob Cunliffe is senior business development manager, Local Government