Why PFI Handback Planning Failures Explode Into Costly Disputes | The Surveying Shift Ep. 8

PFI handback planning is where estates managers and public sector clients most often get burned.

The failure is a familiar one: organisations plan forwards from today rather than backwards from the handback date, leaving a dangerous backlog of lifecycle works that explodes into dispute territory just as resource and institutional knowledge are at their thinnest. Mark Whittaker, General Manager at Thomson FM and founder of APSAS, the first competency framework for asset surveying, brings hard-won lessons from the UK's most complex PFI environments to show why accurate asset data, dedicated planning resource and a single agreed survey methodology are the only things standing between a clean handback and an expensive conflict.

Mark draws on Thomson FM's 23 years working PFI contracts from bid phase through to contracts now approaching expiry to identify the warning signs of a disputed handback. Only 15% of FM organisations are confident their asset registers are accurate, down from 23% the prior year per SFG20's latest report. FM contractor changes mid-contract, including collapses like Carillion, compound knowledge loss. APSAS, the competency framework Mark founded and launched 12 months ago, responds by establishing Level 1 and Level 2 assessed training pathways for asset surveyors, giving client organisations a standard to stipulate when procuring condition survey services.

Listeners leave with a clear action sequence. Audit asset data, maintenance records and O&M documentation now. Commission condition surveys under a brief agreed tripartitely by the authority, SPV and FM contractor using one methodology. Two conflicting datasets from two separate surveys become the dispute. Build dedicated handback resource outside the day-to-day FM role. Engage surveyors early enough to link condition findings to lifecycle responsibilities. Complete remedial works before contractual handback criteria fall due. Plan backwards from the handback date, not forwards from today.

Connect with Mark:
LinkedIn (Thomson FM Company Page)
LinkedIn (APSAS Company Page)
Thomson FM
APSAS

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Transcript

Coming up...

Mark Whittaker 0:00

Only 15% of respondents were confident that their asset information is accurate. Now, from a surveying perspective, one of the frustrations has to be that FM co's or client-side organizations sometimes as well. Investing in good asset data is so fundamental, but it's something that is so overlooked because there isn't an obvious return on that investment because they think maybe we can get away with not having done it for a period of time.

Louis Blaxill 0:25

As Mark Whitaker, general manager at Thomson FM, an independent facilities management and lifecycle cost consultancy that provides specialist advice to organizations across a multitude of sectors. He believes only approximately 15% of FM organizations trust their asset data. And that gap causes all manner of issues for public sector clients at handback.

Mark Whittaker 0:47

We don't necessarily work from today's date forwards, we kind of work from the handback date backwards in terms of understanding what is achievable, what needs to be done.

Louis Blaxill 0:54

In this episode, we discuss the importance of working backwards from the handback date, exactly what must be done, when, and why a single agreed survey methodology stops two conflicting data sets from triggering an expensive handback conflict. I'm Louie Blaxell, and this is The Surveying

Mark Whittaker on Thompson FM and 23 years in PFI

Louis Blaxill 1:12

Shift. Welcome to this episode of The Surveying Shift. And joining me today is Mark Whitaker, General Manager at Thompson FM, one of the UK's leading independent FM consultancies, and a really interesting guest that's uh slightly different to our usual uh surveying guests on this episode. Um, because we're talking about PFIs and we're talking about PFIs more holistically. We'll talk about where surveyors fit in with them, but we'll also provide an FM angle. And Mark is perfectly placed to talk about all of that because he has been working on some of the most complex PFI contracts in the country. Mark is a certified IWFM member, and until recently he served as chair. So alongside the day job of advising authorities, SPVs, um, FM contractors uh on PFI compliance and handbacks, he's one of the leading voices shaping the profession nationally. So, Mark, over to you to do a quick introduction to Thomson FM and your role in it more broadly.

Mark Whittaker 2:15

Thanks for the opportunity just to uh be on the podcast. Um Thomson FM is a business we've been operating for 23 years. Like you mentioned, we're an independent facilities management consultancy. We started off 23 years ago on some of the very early PFI schemes, and interestingly enough, on some of the ones we're working on now, we're getting towards the end of uh expiry on some of those schemes. Um, I suppose from a from a perspective of the of our business, um we work across a range of different sectors as well as PFI. We've got a team of 15 people um that work directly for us um with a whole range of of different skill sets, really. Um so yeah, that's that's our business in a nutshell. We we're kind of UK-based here in uh Lancashire, but we we've we've done global um projects

What a PFI contract actually involves from bid to expiry

Mark Whittaker 3:03

as well.

Louis Blaxill 3:03

For those who perhaps are uh earlier in their career or haven't had the chance to work on uh a PFI contract, if you could give a kind of broad overview, I appreciate it's a it's a multi-year uh engagement, but to try and piece it together so that everyone has a view of kind of what's involved at the start all the way through to the expiry, are you able to give a an overview of what a PFI contract looks like?

Mark Whittaker 3:27

Yeah, no, no, absolutely. And I suppose they were kind of um PFIs in themselves when they were were first kind of came to to fruition in the 90s. It was a it was a means of getting that private finance um and borrowing really that wasn't necessarily available to governments at that particular moment in time. So there was cheap an opportunity for cheaper borrowing and a commitment by the Labour government of Tony Blair at that time, really, to try and improve the infrastructure, which which had been underinvested for a long, long time. And it was seen as a mechanism really to improve the state of the health, healthcare and education sector in particular. Um, so from our perspective on some of those early PFI schemes, um, we were involved in the in the bid phase uh of that, and it was very much looking at the kind of the life cycle of those particular properties and what amounts of money were going to be required um to maintain those properties during that 25 years, 30 years, 35 year duration, with a view that eventually, at some point, at the end of that, that those properties then will be handed over to whether it be the local authority, whether it be the uh NHS Trust, whether it be the Academy Trust or whoever that owns that particular building at the end of that concession period. There was a number of great of FM companies that are involved at the very early stages of these PFIs, and during the course of the actual FM companies involved, sometimes have changed hands either through like Carillion um of going uh going under and other other other organizations um taking taking that on, or sometimes organizations wanting just to sell the stake in that PFI and that FM Co and it passing to somebody else. So um, so yeah, it's been seen as a mechanism really of improving the infrastructure. I suppose it goes without saying that there's mixed views on the success of it, that you have a look at the the the quality of the schools, hospitals, health centres and the like on on particularly the PFI schemes, and and it there has been some great buildings that have been built and there's lots of good stories on it. Um there's also a lot of bad press that sometimes comes with it as well, saying that lots of organizations have profited from um from it, and perhaps that the charges that have been levied over that period of time are are significantly above what what market should have expected to have to pay. So whether it be trusts, local authorities, some people, some commentators have argued that they've paid a lot more than they they should have needed to just because of the way that the original contract was uh was actually first kind

Are the industry and surveyors ready for PFI handbacks?

Mark Whittaker 6:04

of drawn up.

Louis Blaxill 6:04

Obviously, you mentioned you were there at the at the start, as it were, and you you helped shape some of those contracts. Now we're you know 25 to 30 years into those, and that is inevitably meaning sparos, meaning handbacks, and and people uh well certainly the surveying world is becoming more cognizant of PFIs and and the potential opportunities they they present from a commercial perspective. Um, how how big a thing, and how do you I mean more broadly than necessarily just the surveying world, but how well prepared do you think the industry is to deal with these handbags, particularly as you referenced, some have been really well maintained, some have been set up really well from the start, others perhaps less so. What do you think is coming for the industry in the in the next kind of 10 years?

Mark Whittaker 6:45

There's a lot of different variables and dimensions to how successful it's going to be. Um, I suppose that there's been a lot of assistance for local authorities, NHS trusts in particular, that have been given that was from previously from the the IPA um infrastructure uh project authority that that that gave kind of indications then of saying you need to start planning for your handback seven years in advance. And that there's been a lot of of good practice document documentation that's been given to the market to to to assist in that one. I think that a key element to it also, one of the variable factors that will will change from different PFI contracts to another is the fact of um it's it's very much depending on the relationship between the client, the SPV, and the FM co as well. And and that can vary quite considerably. And I suppose, and and I suppose the link with surveying as well um is the criticality of the whole area of asset data, the maintenance records in particular as well, but particularly for asset data, condition data. Um some of the early early PFIs that are now in the process of being handed back generally were less specific on the handback requirements than some of the ones that came on later. So I suppose the argument is that there is more um potential areas of of conflict or or uh debate between parties if the handback requirements aren't as clearly stated um as they could be. And um, so um so that's where where some of those um factors are. But there's certainly lots of guidance out there. I think it really depends on as well in organizations as to how much planning they've they have put into that whole handback process. Um, because as you can imagine, um a lot there's been a lot of personnel changes in that kind of 25, 30 years as well. And that's another that's a whole other issue in terms of the trail of of what's gone on over that period of time and how that then is kind of brought together in readiness for handback to understand exactly what's gone on and what is documented and what's been agreed during the course

The warning signs of a difficult handback

Mark Whittaker 8:50

of that time as well.

Louis Blaxill 8:50

I mean, sure, there are lots of telltale signs, but it'd be interesting to get them from you when you look at a PFI contract, whenever you get involved in it, if you were involved from the start or or actually you came in midway through, what are the telltale signs of something that you can assume is going to be relatively smooth, come handback, and um you know, every party is gonna walk away from it looking relatively good. Where where are the telltale signs of actually that might not be occurring?

Mark Whittaker 9:15

I think from our perspective, because we very much, when we're involved, we come at it very much from a kind of a technical um element to it. Um telltale signs for us, really, I suppose, is looking at the fundamentally at the asset, the the asset data, um, and also um aligned to that is the condition data and then also the maintenance records. Now, if if it's quite clear that that asset information hasn't been updated or or um is accurate, that's going to lead to a lot of issues because then it's kind of how do you prove that you've been maintaining an asset when you haven't got proper records of of it over a period of time and how and tracking of the condition of it um and has it been properly maintained, therefore over that period of time. So a telltale sign for us really, I suppose, um, when you're looking at some of these handbags, is is having a look at the quality of the asset data, the quality of the maintenance records, the quality of the OM manuals, and the room data sheets and has built drawings as well. So there's all this kind of data that that should be there. And if it's not readily available and hasn't been updated, or is sitting in a plant room photocopied fourth generation there or it's uh in somebody's office, but that's when kind of alarm bells will be thinking this is an area of potential conflict um at handback if sorry at the latter stages that they're trying to catch up on some of this

Why the survey brief can make or break the process

Mark Whittaker 10:38

information.

Louis Blaxill 10:38

And you mentioned uh you know the asset data and and that probably being, or rather the condition data being most prevalent in the um mind of surveyors. Where where is it important that the FM consultancy or the FM provider um or contractor rather interfaces and gels really well with a surveyor? I mean, it'd be interesting to get your take on being on the other side of the fence, as it were, to many of our um listeners, where it's really important they work collaboratively and and things run really smoothly.

Mark Whittaker 11:09

Yeah, and I suppose uh as with a lot of um the asset asset surveying projects, it's really, really important right from the outset to get the brief right as to what is expected to be collected and the criteria that's being used in the format of that data is going to be presented. I think the key element really is understanding when, particularly with the lifecycle um planning, is the fact that the guidance has been very much is to get your your your um handback surveys, condition surveys done in in plenty of time in advance of handback. So that if if they are flagging certain things that need to be done because you may have certain assets that are C or D, for example, rated, um, and that there's a lifecycle responsibility for it to be replaced, then that's got to be agreed with the with the authority and with the SPV potentially, um, between them, and and then those lifecycle works kind of implemented as well in sufficient time before um before the handback is is ready. Because one of the worst scenarios would be is to have this whole um kind of I don't say backlog, but a huge amount of work that needs to be done in terms of life cycle replacement works prior to it being handed back to meet the contractual obligations of handback. And that's why I think really the the guidance um from the IPA that's been replaced by NIST and now uh is very much kind of pushing people to to saying get your planning done early, work with your surveying companies to get the the data the way you need it to be and understanding what the condition of these assets are, and then really start agreeing as to what lifecycle replacement works need to be done to meet the criteria at handback for that for the condition of those assets.

Where PFI condition surveys differ from standard surveys

Louis Blaxill 12:49

And you you talked about the the gathering of those conditions, and obviously the majority of our listeners will be well experienced in condition surveys more broadly. How does the condition survey vary and what are the really important nuances to understand? And have you seen people fall into the pitfalls of approaching this in a in a more traditional kind of condition survey uh approach?

Mark Whittaker 13:11

From our perspective, in terms of look uh from our experience and and generally understanding what the market is there, um, it's really important in terms of the condition reporting that they've access to all of the information in advance of understanding where they're going to be surveying. So there aren't any areas that aren't that are missed. So it the brief as to what assets and responsibilities are is quite needs to be really, really clearly stated in the surveyors brief. But also just though that pre-planning stage is really, really important because you know if if that isn't done, then a surveying company may well go and and do what their standard output will be or their standard approach to this will be. Um, and then that's reported back. And and that may not necessarily sound really simplistic, but may not meet the client criteria, and then saying, well, actually, no, that wasn't what we're looking for. This has been um, you know, the the approach taken or the areas that have been looked at, or the the the way that um approach the kind of condition reporting isn't what it what it needs to be. And I think that's where it can fall down. Surveying companies have got the competence and ability and expertise and experience of being able to do it, but sometimes it's also a matter of educating the clients in terms of agreeing this is what the format's going to be, this is how we're going to approach it. Can we have all this information in advance so we can understand exactly where we're going to need to be surveying and where your areas of responsibility are and what falls within the PFI contract and what is not, because as I mentioned to me before, that sometimes there can be variances along the way of these PFI contracts and understanding that what falls into this surveying scope as well.

Louis Blaxill 14:42

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Why reporting format and client expectations must align

Louis Blaxill 15:14

It's an interesting one in terms of the responsibilities of Savaria in that in that pre-planning phase, because obviously really clearly outlining the scope is absolutely critical, as you've kind of outlined there. But if they're getting a sense that I suppose that they can only be as um educated or or or as um structured as the the customer is to a degree, in the sense that if they're not providing them with the right information, then that can I imagine cause challenges as well if they haven't got a firm grasp on on exactly what needs to be done, as you said, till the the data comes in, then they go, hang on, actually, I need it a bit more.

Mark Whittaker 15:47

Yeah, and and I and I suppose this particularly when we're kind of reporting on assets that may be in condition C or D, you know, particularly where, you know, what what format of reporting on the condition do you want that to take as well? Um so that it doesn't require, you know, toing and froing and lots of queries, but also potentially needing a revisit to clarify any certain items. So yeah, it's it's the format of the reporting is particularly important, obviously. It it sounds really, really simplistic in that it should run smoothly, but you do see instances where it doesn't, and and there can be that gap in terms of that ex client expectation and what the what the surveying company or the surveyors think the client's gonna um gonna be require as part of the the survey outputs, and there sometimes you know can be that difference that needs to be kind of resolved and and and involves and sometimes in a bit of a to kind of a toing and froing uh situation really to get to where they need to be in terms of the the data that they get in return.

Louis Blaxill 16:45

And are surveyors and or um the clients ever given the opportunity to draw in expertise like like yours if they feel like there is a gap, is do you feel like there's a do you think that's done enough in terms of, you know, actually we need someone with a slightly firmer grasp on exactly what needs to be captured here?

Mark Whittaker 17:35

Oh probably uh now and again we we we kind of we do we do get involved, but I think in the vast majority of the cases, with all uh to to be fair to to you know the the the surveying companies out there, they've they've they understand exactly what the requirements are uh and and what needs to be recorded. I think sometimes, as I say, from a from a client side perspective, sometimes it's just the education part of what what what needs what the approach is going to be. Um so yeah, I I invariably I I think it you know that particularly as as more and more of these PFIs are uh are being handed back, the the kind of level of understanding and expertise in terms of what needs to be recorded and and the format of of how it's how it's been presented back um will be will get more and more um commonplace. Um but yeah, I think I think the surveying companies themselves have got that expertise of understanding clearly what what it is they they should be looking at. Because also during the course of the PFIs, anyway, you know, there's going to be some periodic requirements anyway to be doing condition um surveys anyway. We we do we do that on on some, particularly within the um within the prison environments that where we've we've been to some some of the properties where every periodically every two years we're there to to update that information. And and I suppose the benefit of that is the fact of that level of continuity that we've we you know we understand what what assets are there, um, can look at previous records of of what's been recorded and then can update the condition reporting of uh of those assets.

Louis Blaxill 19:04

You would expect a surveying firm to come in kind of five to seven years before having done, I mean, maybe they would have even run PBMs before that, but certainly

When should surveyors be brought into the handback process?

Louis Blaxill 19:11

would have been brought in five to seven years before the obviously the expiry to allow, as you said, for that for that time and hopefully involved before. I mean, how how frequently do you see that continuity?

Mark Whittaker 19:21

I don't know whether that's a luxury that's relatively rarely afforded or or Yeah, I'm not too sure really, because I don't I I think there's there's a lot of companies that are that are doing um the some of the some of the big surveying companies out there are obviously doing a lot of work on the on the um on the expiry surveys um who may not necessarily have been involved previously, but the the authority, the the the trust may have kind of um kind of gone to an approved list as such, maybe and gone with certain one of the particularly one of the one of the bigger um surveying companies to be able to do that. And they may not have had an involvement before. And to be fair, sometimes it there's also a benefit in that because they take a fresh viewpoint to it, an independent, fresh viewpoint of going in there and looking at things slightly differently as well. So I suppose there are benefits. But I think the big thing is making sure that there is sufficient time in terms of doing those surveys, analysing the results, linking it to the lifecycle responsibilities, and then understanding what needs to be done in advance of the handback. That's utterly crucial. Um, and not leaving it too late and thinking, and I suppose that and I suppose one of the biggest challenges out there that we're seeing as well is the organizations actually putting the resource aside to do the the handback planning as well, and it's not just an addition to the to the J job. As you can imagine, the J job takes over, and then suddenly kind of all the the the handback planning isn't really as as um uh as detailed as it needs to be, and then it's only towards the latter stages that suddenly lots of resources being put in there because it's the it's looming frighteningly on the horizon. Yeah. Um it's it needs it needs dedicated resource well in advance to start planning that really and to getting everything everything together.

Louis Blaxill 21:04

You you mentioned throwing resource at it uh when things become more acute. Is there because I'm sure you will

Planning backwards when time is already running out

Louis Blaxill 21:11

have been in situations where the reality is you've just been brought in perhaps to rectify a situation where they've left it too late and and you know at that point they really do need some expertise, and someone who's done it before can't afford to make any missteps, as it were. Is is there any advice you'd give at that point in terms of prioritization, in terms of executing these things quickly and or effectively? Or is it just a case of you know, do what you can in the time uh uh uh is allowed?

Mark Whittaker 21:38

From from our perspective, um, you know, from the from some of the expires more recently we've been involved in in assisting with with the planning on um, we don't necessarily work from today's date forwards, we kind of uh work from the handback date backwards, if you know what I mean, in terms of understanding, okay, what is achievable, what what what needs to be done. Let's be realistic, yeah. Yeah, and and what the what where the where are the key again it sounds sounds obvious, but what where are the key risks, what are the key the priority tasks that can be can be done in in that in that period of time. And I think as well, when you're looking at the resourcing side of things, another key element to it as well, which we can't kind of lose sight of is um the kind of the level of resourcing out there that could potentially support it isn't necessarily prevalent. Um, you know, you only need to kind of look in terms of some of the regular adverts you may see on LinkedIn for recruitment by recruitment companies that are. Trying to kind of recruit kind of PFI managers or PFI handback managers and the like. There aren't a lot of people out there that are available to do that. And I think, you know, that's where we've we've been asked to come in sometimes, where where clients are actually struggling to get the the resource in to be able to do it, or they just need, as is like I mentioned before, a dedicated resource that can just purely concentrate on that. And you know, whether it be on a particular project that maybe three or four members of our team may be actually kind of working on that particular handback project like we've we've got one at the moment, or um, you know, with different areas of responsibility in terms of that, sometimes it it can be kind of needing to get that resource really concentrated on there from a consultancy spec perspective, because it's difficult to recruit sometimes for the for those roles.

Louis Blaxill 23:26

You can only see that skill set growing, I suppose, over the next few years, but if there is a a shortage at this point in time and that those skills are high.

Mark Whittaker 23:35

And there's a lot of with there's a lot of people that have that have been involved in in PFIs that have during the during the course of their the contract that now kind of no longer around because they've retired. And and we don't it with it because you know we don't um we've not had new PFI schemes um in the in the recent past. Um you've got people that have joined existing ones, but they're they're obviously they're gonna be expiring. But you've also got people, as I say, that's that's left the workforce. And generally within the FM profession, there is a skill shortage, and you don't there is a lack of technical skills because those people have that have left the workforce have not necessarily been replaced by people um because there aren't the numbers and the numbers coming through to do that. So it's um it's a tough one out there, really.

Louis Blaxill 24:23

Yeah, worth mentioning mentioning APSAS uh at this point because you are clearly trying to do something about that and and support the industry and

How APSAS is raising competency standards in asset surveying

Louis Blaxill 24:30

grow and and shine a light on the importance of of really technically capable people. So uh I mean it's certainly worth you just just mentioning the good work you're doing on that front.

Mark Whittaker 24:40

Yeah, well I suppose what we what we wanted to do, and this is uh a group really of of people that within the industry, um what we decided to do is to say, listen, everybody talks about kind of differing levels of skills within the asset surveying um uh marketplace, particularly on for mechanical electrical surveying. Um, and there isn't any kind of level of competence that's that measures uh um how how competent people are to be actually doing the surveying work, but also in the same token as well, there's a there's an education piece for for clients to understand what level of expertise you should expect from a surveyor that's going out there as well. So, what we decided to do is we set up the Association of Professional Standards for Asset Surveying APS. Um we launched that 12 months ago, and the the the main objectives of really doing it uh was first of all involving the wider industry, which is what we what we did um to shape how that should look. But the the core objectives really is to improve the competency levels within the profession by training and and competency assessment, but also fundamentally to offer career pathways for people so that they could um, you know, anybody that's interested in joining the profession could see actually this is you know, there's always there's a clear route, a clear, clear means to to um um to to to progress, but also um to be able to get an ability to help them along that pathway, really. So um that's why we set the the association up. That's why kind of only only recently now we've we've we've launched our level one and level two training courses so that they could they've got an online course and then that results in um them to take an exam and then to pass that either level one or level two competence, with the hope that then that's then as a as an industry kind of say kite mark, but understanding that that's the level of competence that somebody's kind of at that level. So if they are procuring surveying services, um they you know a client-side organization can can stipulate that they want the surveyors to be at at level two and level. Yeah, yeah.

Louis Blaxill 26:46

It's a great initiative and uh and and giving pretty much supporters of it. And actually it'd be interesting to do another podcast on on you know the thinking behind that and and the the shine a bit of a light on it because it is it's a great movement. Um kind of I suppose bringing bringing you back to the the PFI side of things, it was quite interesting. You mentioned that the kind of continuity and the um

Building Safety Act, golden thread and the asset data problem

Louis Blaxill 27:08

I suppose the the the shared or or carried forward understanding of an asset or or or what's gone on before. An interesting, another interesting thing of contracts of this length is the changing landscape of kind of building regulations. So you've got the Building Safety Act, the Golden Thread Motion coming through. I'm always interested in understanding how that's impacted, you know, what was it, what can't have been baked in at the start and and what the expectations are associated with that, and whether there are any contravening assets that you go actually, whose responsibility and how do we make sure that when we do hand it over, it is fully compliant. How how has that impacted conversations and how should surveyors think about that side of things?

Mark Whittaker 27:48

There's a few elements too, I suppose, really. When you're looking at the kind of the requirements and uh I think just going to a point I alluded to before, really, is the fact that during the course of that PFI contract, there may have been some variations that have been agreed, and and we've you know it's almost sometimes been kind of like a telephone conversation or something or uh you know or an email exchange where it hasn't been properly documented. Um, but everybody assumes that that was the that was the case. And when you're coming back to the Hamback requirements and what's agreed and what the responsibilities are for the FM Co. or for the for the trust and stuff uh for a building and and for somebody to say, well, that that was agreed you know 10 years ago that we are we're not responsible for that. The difficulty sometimes is is because, like I mentioned before, the people have changed, that can be a that can be a difficulty in terms of understanding what is in scope and what's out of scope. I think the interesting thing as well from the Building Safety Act kind of aspect of it is the fact that it's it's reiterating good practice, it should have been there in the first place anyway. So accurate asset records and adequate then PPM regime and compliance records should be a given. But for those of us in the industry for a number of years know that it isn't a given. Um and even, you know, even last last this last month, um, SFG20 have published a report on the state of the industry, uh, the state of the FM industry and and um did the usual data in terms of asking respondents as to how accurate how confident are they in the accuracy of their asset registers. Um and even from last year's report, it's gone down, I think, from something like 23% to 15% or something, something along those lines. That only 15% of respondents were were were um uh were confident that their asset information is is accurate. Now, from a surveying perspective, one of the frustrations has to be that FMcos or client-side organizations sometimes as well, investing in good asset data is is so fundamental, but is something that is so overlooked because there isn't an obvious return on that investment.

Louis Blaxill 29:57

It's the first thing to go, right? It's the where can we cut, where can we uh you know get away with it for another year type type.

Mark Whittaker 30:04

It is, and we work, you know, it in we work for organizations, uh particularly local authority, um uh non-PFI areas as well, is the fact that they're wanting to move to a different operating model, and whether that be, for example, a corporate landlord model or something similar to that, everything that they want to do within within within that, and and certainly in terms of their asset management planning, which is really prevalent. We're doing a lot of work on that at the moment, for example, is all underpinned by good asset data, good systems and processes. Again, it sounds really, really obvious. And for years and years and years, the industry hasn't been where it's needed to be, despite lots of us saying, you know, why are we not, why, why are we not being able to. Yeah, absolutely. Why are we not in a position where we can we can evidence compliance? So why is it the fact that we will spend all that money on getting surveying companies to go out there five years ago and then not thinking actually we need some protocols in place for updating that asset information during the course of after that after that, so we can make sure that that return on the investment is there so that we've got up-to-date records. Again, it it it sounds really, really simplistic, but as an industry, sometimes uh the uh um the FN industry industry, particularly in terms of asset data and the quality of that, just let itself down and has done for a number of years.

Louis Blaxill 31:23

I'd be keen to uh again, from a surveyor's perspective, talk about the criticality of the surveyors' survey and the and the

Why collaboration can prevent two conflicting datasets

Louis Blaxill 31:30

condition uh survey that they're doing um as part of this. And you know, I can't remember it was I read um, I think it was something like a third of uh um third of handbacks are expected to be disputed by authorities. Um and I don't know whether that that's reflected in your experience of it, but it'd be interesting to maybe take a spectrum, obviously an anonymised example, but of where you know the evidence has been from a condition survey has been scrutinised uh under a microscope in one of those disputes and it's held up really well, and the surveyor's done a fantastic job, and and perhaps uh an alternative one where it has been challenged and it hasn't necessarily stood up scrutiny and the the things that were done really really well and the things that perhaps could have been done done better. I don't know whether you have that spectrum.

Mark Whittaker 32:16

We haven't as yet from our own consultancy background, and I I think um I think from generally in the uh in the industry at the moment, it's it's it's difficult because nobody wants to necessarily um shout too much about when things aren't going particularly well, really. So trying to find out what's you may get some good stories of things that that that have got you know initially have are done really well, but then you've you've got you've got when things aren't going well, they won't necessarily hear about it unless um, like with the example of Stokes Schools, the BBC get hold of it. And then, you know, you know, I remember a few few months ago that you know, listening to to the BBC News and uh at breakfast time, and it was it was the first story on the rate on the on the news, um at the eight o'clock news about it. So I think from from things have have kind of gone well. I think sometimes I think organizations that may kind of whether the trust SPD and FM Co come to a kind of um tripartite agreement to say we're going to instruct this company to do the asset surveys because we trust them and we'll we'll work we'll work together in terms of developing the the the survey brief so that there isn't a level of duplication of you know FM Co getting their own asset survey asset condition surveying done and the trust or the education authority um authority getting getting theirs done. So that level of collaboration at that particular point, I think really, really important. And that's where it's gonna work well. It's not gonna work well if you've got two sets of data from different two different surveying companies that are wildly different, and that's when I think it's gonna be kind of really get start getting complex and and um there'll be a lot of toing and froing because there may be some discrepancies in terms of how asset condition has been classified, because there's there's those discrepancies as well, really. So um I think that that's the the level of collaboration um is really really key. But I suppose that goes back to the point that I made right at the start in terms of some of the successes are down to relationships. And it seems as though from what I've heard so far of the ones that I've heard have gone successfully, it's been on the basis of a really good relationship um between FM Co, SPV, and the authority um um for example.

Louis Blaxill 34:28

So it's less adversarial. It's yeah.

Mark Whittaker 34:30

Yeah, and it's kind of been doing that in partnership. And to be honest with you, sometimes as well, what the what's happened is the fact that that FM Co has then continued with the contract post-expiry, obviously on a different kind of commercial um sounding because they won't necessarily be responsible for life cycle anymore, but but they're getting a good service and they do they don't necessarily want to change that. Um but I think where the relationship is not working well and where there isn't a level of collaboration and where there's a level of distrust and suspicion that maybe the FMCO will try and get away with um not doing what they should have been doing and try and disguise that fact and that level of distrust, that's when it will get will get, I think, areas of conflict and distrust and a lot of kind of discussions potentially involving uh solicitors involved in that, really, to try and reach a resolution that might be protracted over a period of time because that level of trust isn't there.

Louis Blaxill 35:27

Yeah. It's an interesting one. I was thinking throughout throughout all of this, inevitably

How surveying firms can enter the PFI handback space well

Louis Blaxill 35:33

I've been thinking, okay, what what what does a surveying firm who knows there is an opportunity? I mean, inevitably there is a commercial opportunity there for surveying firms, and there will be for the next 10, 10 to 15 years as these come to expiry. What what what do you think is really critical that a surveying firm does? You know, some will be already on that journey, and as you said, there's some really good surveying firms who are already doing that out there who are actually working working with us in a number of occasions uh in a number of instances. But if you're thinking about dipping your toe, or you think you've you've got the the requisite skill set to do that, what what are the steps you would suggest taking? Where would you look? How would you upskill your team to to make sure you can deliver PFI surveys well and or you know get into that space slightly more?

Mark Whittaker 36:16

Yeah, well I suppose I suppose there's there's plenty of guidance out there, as I say, from what was IPA NISTA as well, in terms of what requirements are and what the reporting is going to be and what they need what needs to be done in terms of the the handback surveys as well. It's really important, obviously, to develop relationships with particularly with the end user clients sometimes as well, that are going to be requiring the surveys to be done. I think it's important, um useful as well, given given that there is publicly available information on what what expires are going to be coming up and when, um that can then start planning in terms of what which ones may be in particular geographical areas you may be particularly strong, but also just getting getting the good news stories out there where things are going really really well, and you've got a client that's prepared to uh to put put it in writing, just how how good the service has been been received so that that can be transferable, so that you've got that independent um referenceability really from another client to say they're really, really good. Um and I think, yeah, I think the relationship side of things is really, really key because you can understand, given the amounts of money that's involved in the handback, that the clients are going to want them some um some reassurance really in spending this money on the survey that they're gonna get the required outputs, because if they're not, it really, really compromises the success of the handback and all other areas of of that activity that follows on from the uh condition surveys and and uh looking at the lifecycle planning um and what needs to be done in advance of the handback.

Louis Blaxill 37:46

Most surveyors listening will have come across PFI buildings uh and perhaps been involved in in some of the contractual kind of machinery

Understanding the authority, SPV, FM contractor and payment mechanism

Louis Blaxill 37:53

uh behind them, but you know, some won't have a really good understanding of the different players involved in it. So you've got your uh your SPV, your FM contractor, your authority, uh, and the payment mechanism that that sits behind it. You know, quite often surveyors are at an arm's length because they are focused on the on the condition survey, just at a high level, because I think it's important if you're entering into these, you have an appreciation for everyone who's involved. Could you walk us through how that structure kind of shapes what happens on on the ground?

Mark Whittaker 38:23

It can be quite complex, actually, to be honest with you. A point in time, whether that be 25 years, 30 years, that the property, the buildings are going to be handed back. You've got the SPV there that's that's managing that interactions between the trust authority and and um um also the the management of the uh the FM company to make sure that they are delivering on the contractual obligations. And from a from an FM code perspective, then clearly their responsibility, sometimes they will have life cycle responsibility, sometimes they won't. But they would have they would have bid those that particular contract on the basis of maintaining the assets within a particular building for a uh for the contract duration, but also during the course of that particular PFI scheme, whether it be as I say 25 or 30 years, a requirement to replace those assets that that would have expired their natural life cycle expectancy. Um so that by the time that it's handed back, for example, um they need to make sure that it's been properly maintained and in a condition of, say, for example, in in um usual one of the condition B, but is of a certain age as well. So um it's all about kind of the the managing of um performance um of the data. Um there's been a lot of key role of SPVs as well, is kind of looking at the kind of the payment payment mechanism, the penalty side of things as well, which is a particularly prevalent, where the FMCO may not necessarily be performing the way that they need to have been performing, and there may be unavailability or other issues that um that meant that um it's subject to penalties as well. So it's it can be very complex, um, different type of arrangements. I think fundamentally, though, I think it's a good point that you make in terms of the surveying side of things, is that it's really important for a surveying company to understand exactly where they fit in with all of this as well. Um what what how is their output going to be used? What you know seems again, probably sounds obvious, but I think it's it's it's really important to understand exactly where their role is within all of this, and particularly within within handback, the criticality of what they're doing really and the the accuracy of their information, because fundamentally that's going to underpin a lot of the the handback kind of uh negotiations and and agreements um based on what assets are in there and and what conditions um it's been reported as.

Louis Blaxill 41:06

Yeah, and I I think you know uh recognising that that it does underpin a lot of the conversations that then come after and the ramifications of of the condition survey is it's really critical to to being part of that. And you know, we'll talk about as you did, relationships and and and various other things, the impacts of that output can have on those and and and communicating that in the right way and and not just handing over a survey and uh washing hands of it, it's it's absolutely yeah, absolutely. Thank you very much for joining, Mark. Uh really appreciate it. It was a very, very interesting conversation. I think the big takeaway from my side, and I I'll give you the opportunity to to kind of give a key takeaway as well, but you know, you talked about time, you talked about relationships, you talked about um making sure that the the process or the steps in the process are followed. And it sounds like most people get themselves in into trouble when they try and cut corners, or they haven't been doing the right steps throughout the the PFI um contract. So you know spotting those signs as early as possible and then um yeah, joining uh joining the process at the right time and leaving enough time at the end of the contract is is going to be absolutely critical for all of these PFI contracts coming to expiry over the next few years. But yeah, sorry, over over to you for no no.

Mark Whittaker 42:22

No, you're absolutely right. I suppose the key takeaway from my perspective really is is from a I think from a surveying perspective, understanding the key role that that surveying and the data that that comes from that surveying um plays within the within the handback. Um and I suppose the key element for to it that that's been a mantra for all the handbacks uh has been to start planning that early and putting enough sufficient time and resource into the handback process. And I suppose the final takeaway really is the fact that, you know, to a point that I made earlier on, really, is the fact that although there is a lot of bad publicity about PFIs, uh there is a need not to generalize that all of them are awful and and um that organizations are paying over the odds and some some companies have made an absolute kidding out of them. Um yes, that has happened, but also there's been a lot where where that isn't necessarily the case. And we've we're now, you know, anybody that um you know has has children, for example, will understand just how the um good some of the buildings um the schools are now, but also those of us that you know who visiting hospitals and health centres as well. Just the infrastructure has so has greatly improved in the last 30 years. So um who knows what what what comes next in terms of what the next stage of a of a of a PI PFI arrangement um that the government decides to potentially take take us on. But um, but I think it's it's delivered a lot of benefits. So I wouldn't necessarily have a um a general view of of negativity on the there's some really good stuff that's that's that's happened as a result of PFIs.

Louis Blaxill 43:55

No, I I think that's a very fair and uplifting point to end on. So thank you very much, Mark. I appreciate it. My pleasure. If you enjoyed today's episode and/or it gave you some food for thoughts, be sure to follow our show on your preferred podcast platform. To learn more about what we do at GoReports, visit goreport.com. The links are also in the bio. Until next time.