Estate strategies hit the big time

Two years ago, the funding councils told all higher education institutions to prepare estate strategies. The reason was to improve the management of property resources and to satisfy the councils that funding was being directed towards projects offering the best value for money.

Deadlines for submissions have passed, and all estate strategies should be safely with the councils. But how have institutions gone about the exercise?

There have been marked differences in approach. Some have dealt with the requirement grudgingly as a hurdle to be jumped for the funding council. It is to be got out of the way with the minimum effort before getting back to what really matters.

Others have found the process interesting and useful. It has been the first time that they have really sat down and focused on their estate needs on a comprehensive basis. This can be a sobering experience given the costs and level of disruption involved in providing an estate of the desired size and quality, particularly if institutions have major projects under way and have to test how they will fit into their long-term estate needs.

Other institutions have been through similar exercises before and find it a fairly straightforward matter of basically confirming and updating their strategies.

Whatever the method of preparation, there should now be a strategy sitting on the shelf. But what is going to happen to it? Will it be used as part of the overall strategic planning process, or will it gather dust and eventually head for the bin? The answer depends on whether institutions really view the estate as a critical resource. If it is to be part of the overall planning process, then an estate strategy document sets a direction rather than a blueprint for action. That direction has to be consistent with the strategic plan, and as the strategic plan changes, so must the estate strategy.

It also has to be a framework for making decisions on individual projects. That means monitoring and evaluating the success of projects as they are implemented. Time and resources are needed to do this - is it worth it?

Some argue that there is not much point in having an estate strategy in a climate of uncertainty and restrictions on capital funding; others say that an effective strategy comes into its own precisely when resources are scarce and when the capital and recurrent costs associated with property are so great. In the public sector the second viewpoint is winning the day.

But does the private sector, in the absence of a specific requirement to produce an estate strategy, take a strategic approach to property needs? Small companies maybe not, but large corporations are increasingly taking an overview. For many, property costs are the second biggest expenditure after salaries, and they want to get the best balance between keeping costs down and creating a good working environment that supports the business.

Big corporations are tackling the issue primarily by focusing on how to use space efficiently and how to make sure that it is as flexible as possible, so that it does not just meet the needs of today but can be adapted to satisfy changing requirements in the future.

Despite the big difference in the way the private sector and higher education institutions use property, they have similar objectives. To achieve these, buildings have to perform both effectively and efficiently.

Many are simply not in a fit state to do this. Not only are there problems of repair backlogs and health and safety legislation but their layout is unsuited to patterns of teaching and research. To overcome such problems, the estate strategy will have to guide the introduction of space-management methods designed to use space more efficiently and intensively. It will also give a framework for programmes to remodel and upgrade space, and with which to justify greater finance from both the funding councils and external sources.

It looks as though estate strategies are here to stay. Having produced them, the main challenge now will be how to put them into place successfully, how to use them to best effect and how to make sure that they continue to be relevant and up-to-date with overall strategic planning.

Sian Kilner

Partner in Grimley International Property Advisers.