Start planning for the Whole of Government Asset and Facilities Management policies

NSW Government Asset Management and Facilities Management

The NSW Government released a new asset management policy in October 2020 with full compliance required, at the latest, by June 2024. In our experience, it would be fair to say that most facility/property and asset managers are yet to work out how this translates to the better management of government owned facilities and property assets on the ground.

We recently became aware that the NSW Government is developing a new strategy for facilities management (FM) and there are clear overlaps with their thinking and the asset management policy.

Given Grosvenor’s experience working with NSW Government and Victorian agencies (and other jurisdictions for that matter), there is:

considerable opportunity to improve asset management of state-owned property assets.
a lot of work to be done to meet the intent of the new policies and comply with the mandated requirements.

Asset Management

The NSW asset management (AM) policy seeks to improve overall asset management of across the sector by mandating:

A set of principles that departments and agencies must use to align their AM practices
Development of an Asset Management Framework (AMF) that includes a Strategic Asset Management Plan (SAMP) and Asset Management Plan(s) (AMP)
The completion of perioding self-assessments as to the maturity of AM capability
Annual attestation to compliance with the AM policy including regular submission of SAMP and AMPs.

Asset and facilities managers in Victoria have a similar policy which is called the Asset Management Accountability Framework (AMAF). The AMAF was first released in 2016 so is arguably further embedded into asset management practices across the state.

For property and facilities managers, the NSW policy has significant implications not the least of which is the requirement to evidence how asset management provides value by supporting government objectives (Principle #1). This means starting with the services that facilities support and developing facilities management strategies that align and support those services.

While asset and facilities managers aren’t required to undertake a detailed assessment of their compliance against the AM policy (as detailed as for example their Victorian counterparts), we anticipate that there will be increased scrutiny on how assets are enabling service delivery outcomes and associated governance, processes, systems and service delivery models in place to support effective and efficient asset maintenance.

Facilities Management

We have been made aware that the NSW government is also looking at facilities management across the sector as it seeks to improve overall performance and leverage total government spend. To date the history of whole of government facilities management contracts is poor. While standardising services and leveraging total spend sounds like a good idea the reality is very different for several key reasons including:

You can’t standardise the requirement – the scope, service standards and performance requirements of facilities related services needs to be customised to support the type of facility, its location, age, and use(s). Most importantly, standardised contracts do not enable managers to provide value by aligning the service to support the government use of that particular facility (Principle #2 of the AM policy).
The facilities service can’t be integrated into other functions – whole of government contracts don’t enable managers to integrate the service into asset management requirements let alone the data management risk and other activities that operate in a facility (Principle #4 of the AM Policy).
Aggregation does not always deliver a better price – many facilities services are costed based on the labour required. Aggregating them under a single contract does not change the cost of labour or the number of hours required to complete a service like cleaning. Aggregation can actually lead to a decline in value for a service as the economies of scale are lost in the diseconomies of complexity created by having to modify ‘standardised’ arrangement.

Our understanding is that the NSW government is looking at how facilities and asset management can be better aligned and particularly what capabilities are required to deliver the value required.

Better Practice

For those with a background in facilities or asset management, these policies are a government version of ISO55000 and align closely with international best practice. From our work with government and non-government organisations we would summarise better practice as including:

a clear service delivery model including consideration of what is outsourced and allocation of responsibilities
systems necessary for collection and management of asset data and registers
lifecycle planning and forecasting (e.g. 10 year)
regular program of inspections and updating of asset data updates
engagement with business managers to assesses the alignment of FM to business goals and objectives
property portfolio strategy and strategic asset management planning that aligns assets to the services they support
compliance management through preventative and scheduled maintenance programs
capital expenditure planning (e.g. 3 year) and programming (1 year including projects, budgets, timing, delivery models)

For a more detailed view check out our Function Assessment Framework for property, facilities and asset management functions.
For some agencies and departments, compliance with the policy will require significant change in systems, process and an improvement in internal capabilities. There are, however, ways to make significant improvements without major investment. One of those ways is outsourcing where service providers can deploy their data management systems to radically improve the quality, reliability and completeness of asset data required to comply with the policy.

However, compliance should not be the goal as significant benefits will accrue to those who use compliance as a tool for improving asset and facilities management outcomes. While the benefits should be mapped to improving government services and outcomes they will include:

greater visibly of the total cost of asset ownership and through this, better utilisation and lower overall costs
better alignment between asset decisions and government programs leading to service improvements and lower overall lifecycle costs
asset rationalisation through closer links between long term government plans and asset ownership decisions.

Overall, a better use of government resources will result from those willing embrace the change. Asset, property and facilities managers had better start planning now to be best placed to not only implement better practice asset management facilities practices, but to comply with the new policies. Remember, there are long lead times to implement these approaches, models, systems and practices.

Need help to become compliant? Contact property experts hello@grosvenor.com.au