6.0 The potential for performance improvements
The performance analysis completed for this report indicates that there is good performance in many aspects of assets and facilities management in Boards. Not surprisingly given the size and complexity of these assets and services, the analysis also indicates significant variation in performance across both Boards and individual hospital sites. Boards need to thoroughly examine these variations in performance in order to better understand the causal effects for this variation and therefore, the potential for improvement in some areas. However, it needs to be recognised that potential efficiencies and savings relating to assets and facilities services may not always be achievable or desirable depending on the characteristics of the asset in question. Furthermore, potential savings should not drive the service function; the core function and quality of service provision of the service department must always be the first consideration. It also needs to be recognised that, in many cases capital and/or revenue investment will be needed to achieve these potential performance improvements and savings.
Notwithstanding the above, there is a need to examine the potential for performance improvement and this has been done by developing a number of scenarios where the impact of improvement in the Performance Framework KPIs (Nos 11 to 20) have been examined. The scenarios are based on the annual property assets and facilities services annual expenditure (£637 million) described earlier in this report. The scenarios examined were:
Scenario 1: Improve Estate Asset Utilisation (KPI No 11: Building Volume per Consumer Week): This scenario assumes that those Boards currently performing worse than the average for Scotland on this KPI can improve their performance to the NHSScotland average. Assuming that patient activity (consumer weeks) remains the same then this improvement would need to be achieved by reducing the size of the estate i.e. estate rationalisation, disposal of surplus property etc. This reduction in estate size will reduce costs that are primarily driven by estate size (cleaning, property maintenance, energy, PFI-FM and rent and rates). It should be recognised that the alternative way of improving performance on this KPI is to increase throughput (consumer weeks) which may provide opportunities for better utilisation of the best assets and enable rationalisation of the estate. In this scenario it is assumed that services will fully meet the NHSScotland National Cleaning Specification.
Scenario 2: Improve performance by reducing unit costs (£/sq.m) on cleaning, property maintenance, energy, PFI-FM and rent and rates. This scenario assumes that those Boards currently performing worse than the average for NHSScotland on the KPIs for each of these services improve their performance to the average. Example, the cost of cleaning per sq.m is reduced by investing in new floor cleaners that reduce cleaning times.
Scenario 3: Improve performance by reducing unit costs (£/consumer week) on catering, laundry and linen, waste and portering. This scenario assumes that those Boards currently performing worse than the average for NHSScotland on the KPIs for each of these services improve their performance to the average. Example, the cost of catering per consumer week is reduced by adopting a newly developed cooking appliance.
Scenario 4: Cumulative impact of Scenarios 1, 2 and 3. This scenario assumes that all three of the above scenarios are achieved. Since each scenario is independent there is no reason why they could not be achieved concurrently.
The results from modelling these scenarios are shown in the table below.
|Total Asset Ownership and Facilities Services Costs||Potential Efficiencies|
|Scenario No||Performance Scenario||Improved KPIs||Impact||£ per annum||£ per annum||% of current costs|
|1||Improve asset utilisation||Building Volume per Consumer Week||Lower total costs on those services driven primarily by estate size ie cleaning, property maintenance, energy , rent and rates||602,928,551||34,777,320||5%|
|2||Lower unit costs of cleaning, property maintenance, PFI FM, energy, rent and rates||Cost £ per 100 cu.m building||Lower total costs of cleaning, property maintenance, PFI FM, energy, rent and rates||583,214,282||54,491,589||9%|
|3||Lower unit costs of catering, laundry and linen, waste and portering||Cost £ per Consumer Week||Lower total costs of catering, laundry and line, waste and portering||632,948,631||4,757,239||1%|
|4||Scenarios 1, 2 and 3 concurrently||All above||All the above||544,645,623||93,060,248||15%|
The results from the modelling of these scenarios show that the impact of performance improvements in the Framework KPIs could be efficiencies of over £90 million per annum. Furthermore, these scenarios could be considered fairly conservative since they are based on Boards improving their performance on KPIs only to the NHSScotland average and no improvement on those KPIs where the average is already being achieved.
The ways in which Boards can work towards achieving these potential efficiencies will be different for each Board. In many cases, significant investment will be required to bring about change. For example, the four energy reduction projects described in Annex E have the potential to achieve savings of circa £32 million per annum but will require an initial investment of around £224 million. The annexes in relation to soft FM, fleet management, national procurement and shared services also provide possible options to achieving these efficiencies.
The information emerging from the benchmarking programmes should, over the next couple of years, enable Boards to focus on areas that can be developed into achievable programmes for performance improvement. In addition, the benchmarking information linked to the performance framework should provide a robust set of metrics for measuring the effectiveness and efficiency from proposal stage through to post project evaluation.
Email: James H White