SPENDING WISELY Laurence Brett Partner Davis Langdon LLP

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SPENDING WISELYLaurence BrettPartnerDavis
Langdon LLP
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Introduction

• General Observations
• Back to Basics
• Current/Future Pressures
• Allocating Capital Spending
• Sustainability

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General Observations

• 130 HEIs
• 130 Estates teams
• Over 130 solutions/opinions of
• Procurement route
• Contract
• Attitude to risk
• Value
• Sustainability demands

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Back to Basics

• Estate Strategy
• The Brief
• The Team

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Back to Basics

• When is the biggest commitment made?
• When are the biggest mistakes made?
• Right at the outset

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Estates Strategy

• All Universities have a vision
• Does Estates Strategy align with University
  Vision?

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The Current Estate

• Do you know what you already have?
• Do you know how well it is being used?
• What is it really costing to run?

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Your Next Project

• Where is the demand for it coming from?
• How robust is that demand?
• Is there really no other way of providing the
  space?

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Setting the Brief

• Is it clear?
• Limits set?
• Area / Budget / Use?
• Does a feasibility study exist?

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Appointing the Team

• Clarity of roles
• Clarity of responsibilities
• Gaps in appointments cost money. So do overlaps

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Who is the Client?

• Estates Departments?
• Finance Committee?
• End Users?
• Maintenance Department?

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So What do the Best in Class Do?

• Have an audit process
• Have a space planning resource
• Have a time tabling resource
• Link them

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So What do the Best in Class Do?

• Have a briefing process that the users sign off
• Have clarity over their internal structure
• Have clarity over internal approvals process
• Have a common set of appointments
• Have clarity over roles and responsibilities

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Current/Future Pressures

• Capital availability
• Maintaining the current estate
• Sustainability
• Energy Prices
• Carbon Reduction commitment

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Capital Availability

• Accelerating Spade-Ready projects
• Capital Investment Framework changes
• Alternative methods of financing

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2011 - 2014

• The era of rationalisation
• Refurbishment True sustainability?
• Time for Innovation?
• Time for Iconic building?

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Allocating Capital Spending

• Lower Value
• Lecture Theatres
• Cellular Offices
• VAT

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Allocating Capital Spending

• Higher Value
• Atria/Informal Learning areas
• Scientific Research

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Sustainability Challenges

• Carbon Reduction
• BREEAM
• Student Survey
• Planning requirements for renewable energy
• Increased Building Regulations

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Cost trend to achieve BREEAM ratings
Traditional add-on approach
Capital Cost Increase
14 12 10 8
Holistic sustainable design construction
approach
6 4 2 0
BREEAM Rating
Very Good
Pass
Good
Excellent
Outstanding
Davis Langdon 2008
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Sample scenarios for reducing energy consumption
Energy Reduction Technologies Implemented Capex Increase CO2 Reduction
25 Intermediate energy efficiency Ground source heat pump Roof-top wind turbines Solar thermal hot water PV array 2.2 15
25 Intermediate energy efficiency Solar thermal hot water 2.4 20
37 Advanced energy efficiency Solar thermal hot water 3.3 28
37 Advanced energy efficiency PV arrays 3.8 31
50 Advanced energy efficiency Ground source heat pump Solar thermal hot water PV array 5.9 42
Energy efficiency measures include higher
levels of insulation, efficient ME plant and
lighting coupled with lighting controls.
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How effective are low carbon technologies?

• What levels of reduction in CO2 emissions?
• What level of improvement in energy consumption?
• What capital costs?
• What savings in utility costs?
• What lifecycle costs?
• What pay-back periods?
• What impacts on how we build?
• What impacts on land use site densities?

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Key findings from studies

1. There are several ways of achieving CO2 and
   energy improvements in excess of 50 in all
   building types without introducing fundamental
   changes to how they are built.
2. There is a law of diminishing returns with
   thermal insulation upgrades. Use of low carbon
   technologies can often achieve the same impact
   for lower capital cost.
3. Different building types have very different
   energy use profiles and require different
   solutions.
4. There is not always a direct correlation between
   reductions in CO2 emissions and reductions in
   energy consumption.
5. For new buildings, the payback periods for
   micro-renewables are typically in excess of 20
   years. For existing buildings, payback periods
   of 5-10 years are more common.
6. The analysis is highly sensitive to future energy
   price inflation Payback periods can be quite
   long, but high levels of energy price inflation
   strengthen the economic argument.

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Conflicting Agendas
Effectiveness Kg Carbon saved /
PR Value Visibility of Technology
Building form, massing and orientation Passive
ventilation strategy Daylight strategy Exposed
mass
Lighting Controls Shading Reduced Air
Leakage Glazing Specification Insulation
Biomass Boilers Solar Hot Water Generators Ground
Source Heat Pump CHP Wind Turbines Small Scale
Hydro Photo Voltaic Fuel Cells
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Time to name and shame

• Who does it well?
• Who doesnt