Performance management for better service delivery in local
Better-Measurement-Better-Management
1. Better measurement
– better management
Procurement | Estates | Sustainability
The Property Benchmarking Service
www.ogc.gov.uk
2. Better measurement – better management
The Property Benchmarking Service2
Managing an estate, whatever the economic climate, requires vigilant attention
to detail to ensure that costs are understood and that resources and space are
not wasted. To maintain this on a consistent basis over the long term, occupiers
and their estates managers need a robust process which allows for continuous
measurement of all estate management variables.
That process is benchmarking. For occupiers,
benchmarking enables comparisons of cost, space,
resources and environmental performance over
time. It can also be used to establish peer and wider
industry comparisons. The variables which affect
estate management need to be counted, measured
and compared on a like-for-like basis to understand
where opportunities may exist for efficiency gains
and improvements in effectiveness.
The term ‘benchmark’ comes from surveying where
a notch or mark was made to represent a given
altitude against which other heights could be
calibrated or ‘benchmarked’. It has since come to
mean any standard against which something is
compared. Benchmarking, as referred to in this
document, involves learning, sharing information
and adopting best practice to bring about a step
change in performance.
Better Measurement, Better Management: How do
you measure up? sets out the benefits of property
benchmarking; how it works in practice for the
public sector; and whether benchmarking is right
for your organisation.
Contents
Why benchmark?
Delivering benefits in the Public Sector
The Property Benchmarking Service
Performance framework
Reporting
Are you ready to meet the
performance challenge?
Beyond offices
Extending the benefits: the Property
Benchmarking Framework
Further information
Efficient management is dependent on
the availability of good information and
the ability to interpret it meaningfully and
use it effectively. In the case of property
management, good data would inform
senior management, and help ensure
that property is given due consideration
at a strategic level
Lord Carter of Coles
Operational Efficiency Programme, 2009
3. Better measurement – better management
3
Why benchmark?
For the public sector it is essential that all resources
are managed as efficiently as possible to minimise
any adverse impact on frontline services. Indeed,
in any organisation, monitoring and measuring
performance is fundamental to improving the
management of important resources. Property is one
such key resource; a hugely valuable asset of which
all organisations must make the best use. Buildings
must support core business operations, so occupiers
must ensure they are at their most efficient, effective
and environmentally sustainable. Collecting relevant
data is one thing but transforming it into meaningful
metrics suitable for comparing performance with
others, is another. Getting that right provides the
basis for effective and informed decisions that should
deliver solid business benefit, realise efficiency savings
and improve and communicate property performance.
Benchmarking involves looking outside the
organisation to examine how others achieve their
performance levels and therefore helps explain the
processes behind excellent performance.
When the lessons learnt from benchmarking are
applied appropriately, they can facilitate improved
performance in critical functions within a building or
inform the development of a strategy across an estate.
Benchmarks seldom remain static, and benchmarking
should not be seen as a one-off exercise. To be
effective, it must become an ongoing, integral part
of a continuous improvement process with the goal
of keeping abreast of ever-improving best practice.
Benchmarking of a building or property portfolio
brings a number of benefits. It:
n enables the like-for-like comparison of
buildings and estates
n facilitates a better understanding of how
an estate is performing
n identifies where the greatest savings can
be made
n enables an organisation to set and monitor
realistic targets
n assists legislative and regulatory compliance
n allows an organisation to assess its impact on
the environment of an individual building and
across an estate.
Know
Reliable data is critical to delivering
meaningful analysis
Compare
Performance and quality can be
compared, exposing strengths and
weaknesses relative to others
Understand
Breaks down costs for the building to
understand how they are structured
and identify inefficiencies
Decide
With understanding comes evidence-
based decisions for cost reduction
and improvement
Improve
Decisive, targeted improvement action
can be taken on cost and performance
The Property Benchmarking Service
Understand
Know
Compare
Decide
Improve
Source: HouseMark
The benchmarking process
4. Better measurement – better management
The Property Benchmarking Service4
Delivering benefits in the Public Sector
A key element of the Government’s programme to
transform asset management in central Government
through the High Performing Property (HPP)
programme, is the need for departments to have
information that is accurate, complete and readily
accessible to decision makers across the business.
OGC has put in place the methodology for
benchmarking the performance of administrative
offices across the central Government estate – the
Property Benchmarking Service. This is structured
around a set of related key performance indicators
(KPIs) which allow for the measurement of efficiency,
effectiveness and the environmental sustainability
performance of individual buildings, and for
comparison against private sector benchmarks.
Implemented as a pathfinder programme in 2005,
property benchmarking has become pivotal in
supporting Government departments in delivering
best value from the civil estate. It has informed the
establishment of standards for workspace efficiency
that challenge organisations to be more imaginative
about the way they use space. Through benchmarking,
it becomes obvious where workspace falls short of
these standards, and increasingly decision makers
are taking notice – realising a progressive reduction
from over 17m2
/FTE (full time equivalent) in 2006,
to where central Government and the private sector
now meet at around 13m²/FTE. Such substantial
progress in delivering efficient, effective and
sustainable property solutions is built on high-quality
information about performance and on consistent
and meaningful interpretation.
High Performing Property
The HPP initiative is a major change programme
that challenges Government to bring about a
significantly smaller, more sustainable and agile
central civil estate which delivers value for the
citizen. Under HPP, Government accommodation
will be acquired on the basis of whole-life value
to meet the well-defined business needs.
The HPP programme sets out the framework
and direction for improving strategic Property
Asset Management (PAM) in central Government
through to 2013 with key actions, milestones and
objectives. Outcomes and benefits include:
n a rationalised ‘fit-for-purpose’ estate
n PAM positioned as a strategic arm of
business delivery
n hard-edged performance data driving
continuous improvement
n improved stewardship and accountability
n 20% annual efficiency savings.
Driving workspace efficiency improvement
18
16
14
12
10
8
Key
2006 2007/08 2008/09
Space per FTE (m2
)
With year on year improvement, benchmarking
is contributing to delivering strong property asset
management on the Civil Estate.
5. Better measurement – better management
The Property Benchmarking Service 5
The Operational Efficiency Programme
The 2009 Operational Efficiency Programme (OEP)
recommended the collection of benchmarking data
as the key to making the transformational change
required to deliver savings. This provides the
opportunity to gather detailed cost information on
all back-office activity including property. Data will
be gathered and published annually, increasing the
transparency and accountability of public bodies.
This programme is the first step towards capturing
the cost and performance information that will
help identify savings and improve performance
across the whole public sector. Successive
benchmarking exercises will improve the quality of
available information and therefore will contribute
to better management of operational activities.
The Property Benchmarking Service is an integral
part of the OEP benchmarking programme and
provides a route to gauging progress, understanding
performance, and improving the management
information available for decision-making.
The results of the first annual benchmarking exercise across
central government; the largest exercise of its kind in central
government and a recommendation of the Operational
Efficiency Programme review.
6. Better measurement – better management
The Property Benchmarking Service6
The Property Benchmarking Service
The Property Benchmarking Service was developed
to establish the performance of central Government
office buildings measured against independent and
validated private sector benchmarks; and against
Government targets and standards, where these
have been set.
Each year, departments, and their arms’ length bodies,
are required to measure the efficiency, effectiveness
and environmental sustainability of their administrative
office occupations over 500m2
. The performance of
each building is reported through consistent and
independently validated metrics against benchmarks
derived from comparable buildings in the private
sector and industry best practice. Increasingly,
information from this process is being used across
Government to inform strategic decisions about
buildings and their impact on service delivery.
The Property Benchmarking Service is managed by
OGC. IPD Occupiers are OGC’s specialist supply
partner, providing the detailed analysis of the
data supplied by participating organisations.
The practical stages cover start-point data, including
surveys of building managers and occupants, through
to high-end, reliable benchmark analysis, which is
used to drive through cost, space and environmental
efficiencies as well as building effectiveness. There
are four main steps:
n the collection of defined data to create KPIs
n independent validation and checking of data
to ensure reliability of the KPI outputs
n the development of independent, robust
industry-standard benchmarks
n the assessment of individual building performance
which leads to decisions which will underpin the
development of PAM planning.
KPIs
The Property Benchmarking Service has adopted a
framework for property cost categorisation, with robust
definitions for each data element, derived from the IPD
Cost Code. This provides the consistency essential to
effective internal and external benchmarking, enabling
reliable and like-for-like comparison between and
across buildings and organisational property portfolios.
Property performance is established through a set
of KPIs supported by a mandatory dataset. These
are grouped into three areas of analysis:
Key findings are presented in The State of the Estate,
an annual report to Parliament.
Efficiency
n Cost per person n Space per workstation
n Cost per square metre
(rent, rates, other costs)
n Workstations
per person
n Space per person
Environmental sustainability
n CO2
per person/per
square metre
n Non-recycled waste
per person
n Water consumption
per person
n Management
practice score
Effectiveness
n Facilities score n Compliance and
flexibility score
n Workplace
environment score
n Health and Safety
score
n Functional
suitability score
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The Property Benchmarking Service 7
The IPD Cost Code provides the framework for the
collection, measurement and analysis of property cost
information. A copy of the Cost Code can be downloaded
at www.ipdoccupiers.com/costcode
Data requirements and assembling data
Collecting accurate, consistently defined and verifiable
data is at the heart of any robust benchmarking
process. However, data in isolation can be of limited
value and without meaning. Meaning is given
by transforming it into information by creating a
relationship between the various elements. This
combining of data into KPIs such as £/FTE or CO2
/
m2
adds considerable value to the data, but it will
still only become truly significant to the business if it
is supported by knowledge of relative performance:
“Is this good or bad?” “How do we compare to
others?” Effective benchmarking will provide this
understanding by identifying opportunities and
areas for action.
Benchmarking can often be a difficult and resource-
intensive exercise requiring time and commitment. The
Property Benchmarking Service has started by adopting
a simple, graduated approach but with the ambition to
build up complexity as the appetite for understanding
of buildings and property portfolios grows.
Data collection is facilitated by ePIMS. The system
currently has the capacity to collect and record
significantly more data than is currently benchmarked
and this provides the flexibility for the inclusion
of additional metrics in future. To provide a level
playing field for comparison, the core data set used
for the Property Benchmarking Service is focused on
a basket of data elements; all of which should be
readily available for all buildings. This provides a good
balance between improving performance and seeking
increasingly sophisticated ways of measuring it.
The IPD Cost Code
To support the central role which information plays in
understanding and shaping the future Government
estate, common standards and definitions are
essential. The IPD Cost Code has been adopted and
implemented as the basis for OGC cost categorisation
and provides a robust foundation for defining data
elements on the Government’s electronic Property
Information Mapping Service (ePIMS).
The IPD Cost Code is an internationally acknowledged
framework for property cost categorisation with clear
definitions to provide the consistency essential to
effective internal and external benchmarking. This
consistency, coupled with an emphasis on the value
of data in effective management, has enabled reliable
and like-for-like comparison between and across
buildings and estates on the civil estate. Gathering
and structuring clearly defined cost data has:
n promoted and facilitated knowledge exchange
between departments and their arms’ length bodies
n supported the communication of cost data and
informationthroughcredibleandtrustedreporting
n increased the value and potential of data through
its effective use in property benchmarking.
8. Better measurement – better management
The Property Benchmarking Service8
Building name Rental equivalent (freehold only)
Town Unitary charges (£) (PFI only)
Postcode Service charge (£)
Business location Internal repair maintenance cost (£)
GO region Security cost (£)
Tenure type Cleaning costs (£)
Property use Water and sewerage costs (£)
Air conditioned Total energy costs (£)
Vacant Net Internal Area (m2
) Total water consumption (m³)
Building occupied Net Internal Area(m2
) Total segregated recycled waste (tonne)
Total office-based staff contractors (FTE) Total waste (tonne)
Number of workstations Natural gas (Kilowatt hours)
Rent (£) (leasehold only) Total electricity consumption (Kilowatt hours)
Rates (£)
From data to wisdom
Spreadsheets
databases
Mandatory data items
Data
Information
Knowledge
Wisdom
Performance
indicators
Benchmarking
Low value High value
Source: R L Ackoff 1989
Understanding
Connectedness
Understanding relations,
patterns and comparing
with others helps move from
data to information, from
information to knowledge,
and finally from knowledge
to wisdom.
9. How is performance assessed?
A balanced view of relative building performance is
illustrated through the presentation of a standardised
performance model. The model captures various
levels of KPIs to provide an independent, fact-
based and comparative assessment of building
efficiency, environmental sustainability and building
effectiveness. To provide critical context, all KPI
results are clearly set alongside average private sector
benchmark performances, appropriate target levels
and Government standards.
The model presents performance for each KPI
scored relative to a benchmark index score of 100.
The underlying benchmark is derived from data held
on equivalent private sector buildings in the dataset
used by the Property Benchmarking Service and/or
good practice or industry standards.
The performance framework model alerts the user to
differences in results for buildings, groups of buildings
or an entire estate and their appropriate benchmarks.
It also shows how the relationship between cost and
space influences overall efficiency.
Better measurement – better management
The Property Benchmarking Service 9
ePIMS
OGC has developed ePIMS as the Government’s
central property information database. Since 2005,
its use has been mandatory for all departments
and their arms’ length bodies. The system has
been progressively developed so that today, ePIMS
supports and provides a centralised reporting
database with a comprehensive dataset covering
all central Government property holdings.
To support the central role which information
plays in understanding and shaping the future
Government estate, common standards and
definitions are essential. The IPD Cost Code has
been adopted and implemented as the basis for
OGC cost categorisation and provides a robust
foundation for defining data elements on ePIMS.
The Performance Framework Model
Efficiency
Effectiveness
Environmental
sustainability
Cost efficiency
Workplace
productivity
Environmental
impact
Rent, rates,
other costs
Facilities,
environment,
functional suitability
Energy, water,
waste
Space efficiency
Condition,
compliance,
flexibility
Management
practices
Workstation
density, capacity
utilisation
The 3 Es
The Property Benchmarking Service focuses on three
key components of assessing property performance:
efficiency, effectiveness and environmental sustainability.
Efficiency metrics are well established and understood
but, in parallel, performance-driven organisations
must also consider workplace effectiveness.
Workplace performance is assessed using:
n key measures of building effectiveness
n surveys of building occupants and building
managers
n quantitative and qualitative survey data on
workplace productivity, compliance and
management practice.
No assessment of building performance is complete
without metrics of environmental sustainability
performance. These provide a consistent and
essential assessment of the building’s overall
environmental impact.
The performance framework model alerts the user to
differences in results for buildings, groups of buildings
or an entire estate and their appropriate benchmarks.
10. Better measurement – better management
The Property Benchmarking Service10
Performance framework
Consistent KPIs and standardised reporting provide a
basis for clear, objective communication of property
performance issues.
The Property Benchmarking Service uses a hierarchy model to explain the
performance of a building or a portfolio of buildings against benchmarks in
a clear and systematic style. High-level results are shown at Level A; Levels B
and C show the components driving the Level A results.
Efficiency The relative efficiency of property should
prompt justification and challenge. A score of 98 tells
the user that the overall £/FTE of £7,006 is aligned to
private sector performance for equivalent buildings in
that location.
Action: Review contributions of each building, review
level B KPIs to understand if good performance in
one area masks poor performance in another; justify
and manage.
Effectiveness A score of 69 exposes a possible risk in
a building. Lower Level C scores for both workplace
environment and facilities may help focus future plans
for improvement.
Environmental sustainability The score value
of 58 exposes real issues with this building/estate.
All measures of environmental impact have relatively
low scores.
Action: Is environmental data robust? It needs
to be. Are there some real performance issues
highlighted here? Investigate and understand
what is driving performance.
£/m² The score value of 114 shows straight away
that £/m² (£435) is lower than the private sector
benchmark. This appears to reflect good value.
Action: Aim to strategically manage £/m² through
location, building selection and cost management,
report Level C KPIs to help uncover quick-win
opportunities – all with consideration to the
future business requirements.
11. Better measurement – better management
The Property Benchmarking Service 11
Efficiency
£/FTE
£7,006
98
Level A
£/m2
£435
114
m2
/FTE
16.1m2
81
Level B
124
75
102
£221
£100
£114
KPI Score
Effectiveness
69
Workplace
productivity
43
Condition, compliance,
flexibility
107
Environmental
sustainability
58
Environmental impact
42
Management practices
120
Rent/m2
Rates/m2
Other costs/m2
m2
/workstation
Workstations/FTE
Level C
Functional suitability
Workplace environment
Facilities
Condition flexibility
Compliance
Carbon/FTE
m3
water/FTE
Non-recycled waste/FTE
Management practices
12.9m2
1.3
50
3
18
30
5
4.06 tn
18.1m3
1.43 tn
12
85
90
90
8
31
119
90
45
80
0
120
Overall performance
Level A scores in the example below show that
£/ FTE is broadly aligned to the benchmark but
that effectiveness and environmental sustainability
are performing less well.
Performance drivers
Level B scores drive the performance reported at the
top level. This example shows that whilst £/ m² is
lower than the benchmark, m²/FTE (16.1m²) still
offers scope for significant improvement.
Uncovering performance
Level C Key Performance Indicators (KPIs) help users
understand the basis of performance reported at the
higher levels within the model.
Performance scores
For each metric, a score of between 0 (low) and
200 (high) is given to reflect how results compare
to a benchmark index score of 100. The underlying
benchmark is derived from data held on equivalent
private sector buildings and/or good practice or
industry standards.
12. Better measurement – better management
The Property Benchmarking Service12
Reporting
Reports present all key metrics at
varying levels, and as such highlight
performance, expose opportunity and
clearly summarise results. Reports are
produced as standardised, hard-copy
with graphics and tables. All results
at building level are also available as a
spreadsheet to allow active and flexible
use of the information.
Report Features
Key performance
indicators set in
the context of the
private sector
Benchmarked results Trend analysis Ranked performances
Highlights change in year
on year performance
Exposes opportunity
and weakness at building
and portfolio levels
Explanation of
the metrics
Interpretive text Consistent scoring
Building level
performance
Easy to understand and
consistent approach
Performance model
presents clear report
for each building
13. Better measurement – better management
The Property Benchmarking Service 13
Are you ready to meet the performance challenge?
Standard outputs
Data validation report: This report targets data
improvement and, as such, draws attention to data
refinement and revision. Pointers and guidance help
expose errant and inconsistent data. The outputs
can be usefully used as a basis for a property data
improvement programme.
Performance report: This report consolidates
building-level data into a single summary of
portfolio performance. Reports can be aggregated
and presented at varying levels to meet the needs of
strategic property management and business-specific
reporting requirements of both large multi-building
operations and individual building occupiers.
Benchmarking will not be successful unless the
organisation is prepared to commit appropriate
resources to the initiative. It is therefore crucial to
have the buy-in of staff and those senior stakeholders
who will need to allocate resources from their teams
and potentially make changes to their mode of
operation over time. So the benefits and imperatives
must be clear, and the commitment of the senior
sponsor must be strong.
First and foremost, effective asset management and
the benchmarking of its performance depends on
data. However, this is of value only if it is current
and complete; poor-quality data can be misleading
and therefore is potentially worse than no data at all.
Given such a wide range and potentially large volume
of data, organisations need to have in place an
appropriate management structure to ensure that the
data is properly defined, managed and maintained.
Key questions include:
1. Do you have a central property/estates/facilities
team which handles all asset management and
property services?
2. Do you have an up-to-date asset register for
all buildings within the estate?
3. Do you have a central property database/system
which holds all key property information in
your estate?
4. Are you familiar with the different areas within
your organisation where all property data is held?
Transparency of results helps to expose opportunity,
challenge performance and so raise understanding.
14. Better measurement – better management
The Property Benchmarking Service14
Beyond offices
Performance assessment needs to be comprehensive.
Organisations should aim to capture data and report
metrics to reflect their entire portfolio. For many, this
presents a challenge as data is often hard to access
and metrics may not have been developed. The reality
is that many public sector estates comprise of a variety
of asset types.
Plans are advanced for analysis to extend beyond
back-office administrative buildings into more
operational and specialist property portfolios. In
taking this forward, it will be important to have
a good understanding of the purpose and use of
different property types. The absence of standard
taxonomy to classify different property types is a
barrier at present. OGC is therefore investigating
the establishment of a common system that would
be the first step towards meaningful analysis of the
relative cost and efficiency of different types of offices,
laboratories, public caller offices, courts and so on.
15. Better measurement – better management
The Property Benchmarking Service 15
Extending the benefits: the property
benchmarking framework
The Property Benchmarking Service is operated
under a four-year single-supplier framework with
OGC’s supply partner, IPD Occupiers. This was
established around provision of the ‘Core Service’ –
the requirement to deliver the annual analysis of
the performance of those buildings on the central
Government office estate over 500m2
. This is
centrally funded to facilitate property performance
measurement by departments and their arms’
length bodies.
The framework allows for organisations already
engaged in the Core Service to contract for
additional services as their appetite for performance
measurement expands. Importantly the systems and
processes developed to support the Core Service
are readily applicable across the public sector and
the framework has been constructed to provide
related services to other UK public sector contracting
authorities beyond central Government. This includes:
n additional or more detailed analysis of buildings
covered by the Core Service
n provision of the Core Service to organisations
which are not central Government departments
n provision of the Core Service for non-office
properties
n provision of the Core Service for office buildings
under 500m2
.
Please contact IPD Occupiers for further details and
to discuss your specific needs.
For more information please contact:
Richard Graham
Project Sponsor
Office of Government Commerce
T: +44 (0)20 7271 2713
E: richard.graham@ogc.gsi.gov.uk
David Pike
IPD Occupiers, Project Manager
T: +44 (0)20 7336 9654
E: david.pike@ipd.com
Elspeth Webster
IPD Occupiers, Government –
Senior Client Manager
T: +44 (0)20 7336 9200
E: elspeth.webster@ipd.com
Websites:
www.ogc.gov.uk/estates_property_benchmarking.asp
www.ipdoccupiers.com
Further information
Photo credit – P14 Richard Bryant/Arcaid.co.uk
