Background/Current Position

SHEFFIELD CITY COUNCIL Cabinet Report 15

Report of: Executive Director for Resources – Laraine Manley

______Date: 24th August 2011

______Subject: Sheffield City Council’s Office Accommodation Strategy

______Author of Report: Director of Property & Facilities Management Services Nalin Seneviratne 0114 273 4120

______

Summary:

This paper sets out a plan with recommendations for dealing with the Council’s need for office space which aim to deliver a variety of benefits, in terms of reduced costs, reduced environmental impact and improvements in working arrangements. The constraints on budgets and the fact that a number of leases will be coming to an end over the next four years, mean that action needs to be taken to change current arrangements.

______Reasons for Recommendations:

The current office accommodation model is not sustainable in terms of cost, use of space and environmental grounds.

The use of Moorfoot leaves future options for the site open along with the use of an otherwise redundant building. It provides the greatest flexibility for the Council regarding its own requirements as it will not be tied to any lease or contractual commitment. The Council can therefore use the site or vacate it as needs require in the future.

Recommendations:

1 thereof to be in accordance with the profile set out in this report. As the project develops, any required variation to the final cost profile is to be approved through the budget monitoring process for capital and revenue as for any project. Over the lifetime of the project, cash flow requirements will change or need to be modified due to normal project issues or changes in market conditions particularly with reference to the delivery of capital receipts.

2. To provide the Director of Property & Facilities Management delegated authority to deliver this accommodation strategy in consultation with the Executive Director for Resources, the Cabinet Member for Finance and the Executive Management Team.

3. Project governance and monitoring to be established through the Modern and Efficient Council Board.

4. To approve the implementation of Workstyle, currently being implemented in Redvers House, as the standard across all Sheffield City Council office accommodation. The costs for which are included in the revenue cost profile indicated in table 2, section 13. Without adopting Workstyle, the required reductions cannot be delivered.

5. To provide the Director of Property & Facilities Management and the Director of Legal Services as appropriate to their respective areas delegated authority to deal with all estate management issues with regard to the existing leasehold office accommodation, including negotiating lease terminations and agreeing and approving expenditure with regard to, for example, dilapidation costs and completing any documentation required to formalise such matters.

6. To provide the Director of Property & Facilities Management delegated authority to work with the City Development Division and lead the work on seeking long term regeneration for Moorfoot with existing adjacent landowners or the wider development market.

7. To confirm the requirement to centralise all office accommodation costs under Property& Facilities Management.

______Background Papers: 1. Investment Property Databank – Benchmark Report

Category of Report: OPEN/CLOSED*

Statutory and Council Policy Checklist Financial Implications

YES/NO Cleared by: A Kidder Legal Implications

YES/NO Cleared by: G Duckworth Equality of Opportunity Implications

YES/NO Cleared by: J Toner Tackling Health Inequalities Implications

YES/NO Human rights Implications

YES/NO: Environmental and Sustainability implications

YES/NO Economic impact

YES/NO Community safety implications

YES/NO Human resources implications

YES/NO Property implications

YES/NO Area(s) affected

City Wide

Relevant Cabinet Portfolio Leader

Cllr B.Lodge Relevant Scrutiny Committee if decision called in

Scrutiny Management Committee Is the item a matter which is reserved for approval by the City Council?

YES/NO Press release

YES/NO

1. Summary

The Office Accommodation Strategy (Phase 1) Cabinet report of the 10th November 2010 set out the position regarding the Council’s core office portfolio. The report showed how the base case (i.e. do nothing) costs will rise with inflation over the next 10 years to almost £18 million per annum (excluding the costs for the acquisition of the Moorfoot building) increasingly outstripping available budget levels.

With leases coming to an end over the next 4 years, doing nothing is not an option. We are currently faced with taking action to manage our office accommodation.

The Investment Property Databank benchmarked our office space and found that our costs equated to £3068/annum/full time equivalent member of staff (FTE). This is some 18% lower than the private sector in the region and some 4% lower than other public sector partners. However, our utilisation of space is very poor, with further savings being achievable with the implementation of modern methods or working (Workstyle). This report advocates the full use of Moorfoot over at least a 10 year period to enable the following benefits:-

 Co-location of staff groups in a flexible working environment to assist service delivery.  Co-location opportunities for other partners, public, private or community.  Phased regeneration of the Moor through adding over 2000 people to the built environment, aiding footfall for the retail district.  Reduced carbon outputs by approximately 50%  Reduced floor space and buildings (26 to 5)  Common office standards  Reduced costs, on average from £3068/annum/FTE to at most £2450/annum/FTE.  To achieve an overall financial profile within limited resources.  To provide a flexible approach as an owner-occupier, providing the flexibility to exit Moorfoot as and when alternative regeneration proposals are available.

The current use of Moorfoot has made it possible to surrender the lease at Central Buildings and facilitates the lease ‘swap’ between Sovereign House & New Bank House.

The analysis in the report demonstrates that the option of retaining Moorfoot provides the lowest cost over the 10 year period examined. It seems appropriate therefore that this be progressed as the recommended option.

Work will continue to address the profile of short-term additional costs that arise in both the current year and 2012/13. Thereafter the strategy does generate savings against the approved funding level.

It needs to be emphasised that the “do nothing” option is not sustainable. Part of the costs of Moorfoot arose from acquiring the building for wider regeneration purposes. However we are now using the site for both this objective and our own occupation needs. Therefore we have incurred consequential costs such as the £1m rates liability. 4

This paper seeks approval for the implementation of Workstyle across the office accommodation, the full use of Moorfoot over at least a 10 year period, enabling a reduction in core office buildings from 26 to 5 and approval for the additional costs that will be incurred, particularly in 11/12 and 12/13.

2. What does this mean for Sheffield People?

Delivering this accommodation plan is an effective use of resources by the City Council. Optimising office use will assist with the provision of key services to Sheffield people without unnecessary expenditure on office space. It also means that through a reduced office requirement, our carbon footprint is reduced thereby adding to the improvement of our environment.

3. Outcome and Sustainability

The outcome will be to provide office space in an effective and efficient manner, allowing for flexibility with regard to future requirements. The reduction in energy consumption together with more people using the Moor improves the sustainability of our current position.

4. Current Position

The Council currently occupies a large amount of office accommodation, with a mix of tenures, types, quality and efficiency of use. Our office buildings are mainly leased with a number of leases coming to an end over the next 4 years. The current office estate is not meeting the needs of the organisation, is costly to run and maintain and due to the number of leases will inevitably increase significantly in cost over the coming years. The Council has undergone significant reductions in funding over the last months and is consequently in the process of service redesign.

The Council’s office accommodation therefore has to respond to the challenge of reduced budget, service redesign, energy efficiency, carbon reduction and pressures in terms of impending lease terminations.

Council funding constraints mean that the accommodation strategy pursued by the council must have cost as a key focus. Securing funding for investment in local government offices has always been a challenge which traditionally has been offset through rationalisation and disposal programmes. However the current position of spending cuts means that the options are increasingly limited even as pressure mounts to maintain a high level of service provision to the public with fewer people and or assets. With the challenge of a falling budget the Council needs to find a way to deliver improvement and efficiency.

There needs to be a drive for efficiency and effectiveness in the Council’s office accommodation through

 Exploring office space as a corporate asset  The need for a strategic business driven approach to property asset management linked to locally focussed initiatives

5  The need for a significant improvement in sustainable buildings and performance  The need to reduce the cost and footprint of office accommodation.  Finding and delivering efficiencies e.g. new ways of working and joined up working with public sector partners

At Sheffield City Council we have an annual electricity bill of circa £4,000,000 excluding street lighting. This accommodation strategy presents the Council with an opportunity to take a strategic approach through asset retention and disposal to reduce this cost. The Council's Energy Unit (based on current thinking across the UK) estimate that about 10 - 12% saving (over a three year period) could be made through “good housekeeping” measures to further drive down costs.

5. How is the Office Accommodation Performing?

Investment Property Databank (IPD) is a global information organisation specialising in the objective measurement of property performance. IPD have been appointed by the Office of Government Commerce (OGC) as a specialist supply partner to undertake detailed analysis, benchmarking and reporting of property data.

To understand how the Council’s offices are performing, IPD have undertaken an office benchmarking review. This compares results through comparison to bespoke private sector benchmarks, industry standards and other public sector authorities. This will enable the council to clearly understand the current position to identify and deliver future opportunities and targets.

The key results from this review indicate the following:

 Average cost of Council (SCC) office space per full time equivalent staff member (FTE) stands at £3068 (2009/2010). At £3068 the average office space cost/FTE is 18.4 % lower than the private sector benchmark of £3758/FTE.

 Average space use of 12.6 m2 per FTE, which trails the performance of other occupiers in comparison, and is 1.6 m2 above the private sector average of 11.1m2/FTE.

 73% of the benchmarked office space is currently occupied above 12 m2 / FTE

 10m2/FTE or less is deemed to be good practice. 22% of the SCC office space reviewed by IPD was at or below this figure.

6. How our office accommodation needs to change

The Council needs to operate efficiently and effectively within a target office accommodation cost per FTE via a move to best practice space use per person of 10m2 or less through the adoption of flexible working practices.

Office rationalisation holds the key to unlocking this potential and can be achieved by

- reducing the property portfolio - increasing space efficiently/utilisation

6 - reducing operating costs

7. Background

The Office Accommodation Strategy (Phase 1) Cabinet report of the 10th November 2010 set out the position regarding the Council’s core office portfolio.

The report confirmed that the Moorfoot building had been acquired for investment and regeneration purposes with the building and surrounding areas earmarked as a potential New Business District. However lack of a prospective scheme for the site and the current state of the property market gave an option to use the building as Council accommodation in the short or medium term.

The report set out a number of options for the future of the office accommodation portfolio and recommended that, given potential changes to the size and shape of the organisation and emerging government budgetary reductions, that short term use be made of the Moorfoot building within agreed financial parameters with ongoing review of other available options in light of budgetary constraints and private sector investment interest in a New Business District.

This recommendation was accepted by Cabinet and in order to facilitate the disposal of leases and/or achieve accommodation efficiencies, a number of services have been or are in process of being re-located to Moorfoot. These are:

Children, Young People & Families (CYPF) – from Derwent House Finance – from Central Buildings Property &FM (P&FM) – from Town Hall, Redvers House, Derwent House & Yorkshire House SCM (Strategic Contract Management) – from Town Hall & Central Buildings Legal – from Town Hall & Sovereign House Performance& Communications – from Town Hall and other locations Insurance – from Sovereign House

The above activity has made it possible to surrender the lease at Central Buildings and facilitates the lease ‘swap’ between Sovereign House & New Bank House.

8. Other Office Accommodation Activity

Creation of the Customer First Contact Centre at Howden House

Refurbishment of floor 2 at Howden House (phase 1 of the contact centre) commenced at the beginning of April 2011, In order to vacate the floor for refurbishment a number of moves within the building and to Derwent House have been carried out.

Redvers Workstyle

The Redvers House Workstyle project has commenced with a series of internal moves to free up a floor for Workstyle implementation. A phased development of all floors will follow together with staff moves within and from other buildings to achieve 7 service synergies and allow disposal of leases such as Barkers Pool House and Palatine Chambers. Notice has been given that the Council will surrender these leases from 30th June 2011.

The implementation of Workstyle at Redvers House will allow the potential for up to 750 staff to be based from the building – a significant improvement in costs and efficiencies from the circa 500 originally based there.

Moving forward the Council needs to advocate as far as practical, given the constraints of retained buildings, the workstyling of its office accommodation. This provides the opportunity for the Council to reduce its property portfolio, reduce costs and increase space efficiency. This is supported by

- IPD benchmarking figures of a current area of 12.7m2 /FTE against a best practice workplace standard of 10m2 /FTE

- Redvers Workstyling pilot based on a 7:10 ratio(desks to staff) will result in a 34 % reduction in cost per FTE at Redvers

Workstyling of the office accommodation provides a collaborative setting to develop, the removal of silos and allowing for the adoption of flexible working practices. The provision of a nurturing and efficient workplace reflecting changing work styles, new technologies and an evolving workplace culture is now as important in the public sector as in the commercial world and the link between improved working environments and increased productivity and efficiency can be observed in both.

9. Accommodation Constraints

The Council will need to retain the Town Hall, Howden House and will also need to retain Crystal Peaks and perhaps create accommodation in the localities (Service Districts ) to assist service provision and play a part in the life of district and local centres.

These buildings are constants irrespective of the final accommodation solution and present a challenge to achieving space efficiency. For example the Town Hall provides accommodation for meetings, democratic and 3rd Party use; designed in the 19th Century it is a cellular building with poor space efficiency (IPD Benchmarking identifies 18.8 m2 /FTE in 09/10)

Howden House is under a Private Finance Initiative (PFI) contract which expires in 2031.The IPD analysis indicates that Howden is the highest cost per FTE at £6016 in 09/10 with average space per person of 12.8m2 (slightly above the average of overall current office accommodation.)

Whilst Howden House can be workstyled, the maximum number is limited by fire strategy numbers and any change to the building and services will be expensive and take a significant time to deliver under the PFI contract.

Crystal Peaks provides office accommodation and local library provision, with the IPD study confirming Crystal Peaks at 21.5 m2/FTE in 09/10.

8 Crystal Peaks and the Service Districts accommodation present an opportunity to contribute to the Councils strategic objectives for Thriving District and Local Centres.

10. Council Space Requirements and Target Cost

The current population of the Council’s core office accommodation has been established as 4605. With service redesign, the number of core office users has been estimated to be 3914 people.

Redvers workstyling will, when complete, provide accommodation at a cost close to £2000/FTE. This is however in a building which facilitates efficient use of space and it is not possible to achieve this figure over all the retained buildings due to space constraints and accommodation mix.

It is suggested therefore that a reasonable target cost per FTE for office accommodation should be £2450/FTE.

Using the IPD data this figure can be validated by reducing pro rata the current costs per FTE of £3068 at 12.6 m2 to the best practice average of 10m2 giving a figure of £2435/FTE

Based on the target cost per FTE the total target annual running cost for office accommodation based on current day figures should be £9,589,300

Key Performance Indicators for future assessment will therefore be based on the following:-

 Target running costs of £2450/FTE/annum  Space of 10m2/FTE  Carbon Reduction based on a reduction of 49% of CO2 compared to the current position  The flexibility of future office space requirements – this is to be related to our ability to vacate to alternative premises from Moorfoot as and when alternative regeneration proposals become viable (metrics to be defined but based on ability to relocate within a 24 month period).

11. Options

Given the portfolio, constraints and targets, a number of options as set out below have been considered for the longer term strategy for the office accommodation portfolio, the cost of each option has been considered against the target operational cost per FTE, the budget per FTE, current do nothing cost and IPD benchmark review of the office accommodation.

Operational cost has been taken as the cost of running the buildings only i.e. excluding the cost of financing for any refurbishment and for implementing Workstyle, excluding any capital receipts from any property disposal and excluding any potential income from Meeting Rooms or the letting to third parties of any potential surplus space within Moorfoot and excludes any internal fees.

9 The operational costs per FTE in the options are based on a net present value (NPV) over a ten year period 2011-2020 and are for comparison purposes only at this stage.

The following buildings are constants in all options and where possible will be workstyled on a 7:10 basis (7 staff to 10 desks on average), the impact of this in terms of m2 per FTE will differ due to the constraints previously mentioned, the different shapes and sizes of the buildings and differing mix of Workstyle profiles.

Town Hall 250 Howden* 752 Localities (Service District and Crystal Peaks) 290 Total staff numbers 1292

*Actual achievability of this staff number based at Howden will depend on agreement with the PFI provider and final confirmation of the staff that will be located within the Customer First Contact Centre on the First and Second Floor at Howden House. This figure allows for a 7:10 workstyling provision on floors 3 – 5 via space efficiency and worker profiling but with no physical changes to the building, and 212 staff from the office accommodation portfolio located within the Customer First Areas on the First and Second Floors.(Numbers for Customer First are to be confirmed and this is a working assumption)

A total of 1292 staff can be located within the Town Hall, Howden and Localities, the following options set out therefore potential solutions to provide accommodation for the balance of 2622 staff.

The options consider minimising the office portfolio and the buildings within the current accommodation office portfolio which are most suitable for workstyling and will provide operational benefits in terms of business synergy.

The balance of 2622 staff could be accommodated through the options 2-4 detailed below, which would be workstyled on a 7:10 basis .It must be recognised however that the mix of different types and shapes of buildings in the options have consequent variations in efficiency potential for Workstyle which gives rise to differing total floor areas required under the different options.

Option 1 November 2010 Cabinet Report Exit Strategy

The option involved the use of Moorfoot for circa 4 - 5 years whilst Council restructuring took place and leases were terminated. Selected buildings from the existing portfolio - Carbrook, Redvers House and Howden House were to be Workstyled and surplus assets disposed of.

This option would not adequately support City-wide service delivery, co-location benefits and regeneration aspirations and was only suitable as a short term measure.

A decision was taken after this report to accommodate the Customer First function over 2 floors at Howden House; this effectively displaces a large number (circa 316) of staff from these floors which were to be Workstyled.

10 The Cabinet report exit Strategy is therefore not deliverable in the manner as previously described and has been superseded by the options below.

Option 2 Retain Moorfoot

The Council would retain the Town Hall, Howden, Crystal Peaks and a variety of office space in Service Districts along with Moorfoot which would be retained for a period of circa 10 years during or after which there would be a review of the options moving forward.

The remainder of the office accommodation is disposed of and all other leases terminated.

This option would involve the refurbishment and workstyling of the remaining office space within Moorfoot and adapting for Workstyling the space which has already been refurbished for temporary occupation. Upgrading of certain infrastructure items and key maintenance works identified in the condition survey report commissioned for the buildings purchase, would also be undertaken.

Through the period of the Moorfoot refurbishment there would be phased moves into the building which would support the rationalisation of existing office buildings through termination of all leases including Redvers and the sale of freehold buildings. Occupation would therefore be phased over the next 4 years subject to any other viable demand for the site.

Approximately 2600 staff would be located in Moorfoot occupying circa 20,800 m2 of space, this would leave a balance of space which could be let to external public sector partners. This option would provide flexible accommodation, support co- location with other public sector partners, provide the potential for increased retail activity at the bottom of the Moor and support rationalisation of the existing office estate.

This option results in an outcome of 9.5m2/ per person compared to the 12.6 m2 in the IPD benchmark, and achieves £2377 per /FTE

This option could be procured via

 Self delivery

 Lease arrangements (including a sale or lease of the building to the private sector and a lease back of the space for a rental payment)

The retention of the building could be considered to compromise the proposed New Business District vision of a totally cleared site and entirely new development but in current economic conditions that option will not be deliverable for several years without substantial pre-lets.

Retaining the building will not necessarily prevent the remainder of the proposed vision being brought forward. The street layout and potential plot sizes can support a phased approach whether by a single party or potentially 2 or 3 developers within a jointly agreed master plan. This may be more deliverable than a ‘big-bang’ approach and would still be sufficiently flexible and large enough to support major relocations. 11

If the building is to be retained for the medium term then it is vital that the public realm around the building is revitalised, costs for which would have to be provided. It will also be highly desirable to increase activity at the ground floor and ideally create publicly accessible routes through the building during the daytime in order to provide attractive links from The Moor to London Road. The cost of such access work is currently outside the scope of the budget for the accommodation strategy, however we will investigate cost effective options for re-opening the access to London Road. We will therefore work with City Development Division and private sector partners to develop the master plan for the wider regeneration of the southern end of The Moor.

Option 3 Lease Balance (Keep some existing core buildings and lease the balance of space required)

This option retains the Town Hall, Howden, Crystal Peaks and Services Districts along with Redvers, Carbrook (which would be workstyled) and a balance of space within leased office space. This balance of space would also accommodate staff on a workstyled basis

This balance of leased space could be considered in number of ways, it could be space which is already leased by the council, or alternative leased space or a new building as a bespoke development for the council.

The remainder of the office accommodation is disposed and all other leases terminated.

This option offers both a short term solution for the Council’s accommodation needs at Moorfoot and a long term opportunity for co-location and provision of shared services. The accommodation will support modern ways of working and a high quality environment for both staff and customers. It will be likely that this option will require the Council to commit to a long term lease. This option is not as flexible as the Retain Moorfoot option to respond to any future changes to staff requirements or numbers.

This option results in an outcome of 8.9 m2/ per person compared to the 12.6 m2 in the IPD benchmark, and achieves £2481 per /FTE.

Option 4 New Build Freehold Balance

This Option involves the temporary use of Moorfoot as the Exit Strategy option and a new build of total gross internal area (GIA) of 13,900 sq metres (net internal area – NIA of 12,100) of freehold office space to accommodate circa 1700 staff. This balance of space would accommodate staff on a work styled basis. This option retains the Town Hall, Service Districts, Crystal Peaks, Howden House and Carbrook (which would be workstyled) the rest of the office accommodation is disposed and all current leases terminated.

This Option offers both a short term solution for the Council’s accommodation needs at Moorfoot and a long term opportunity for co-location and provision of shared services. The accommodation will support modern ways of working and a high quality environment for both staff and customers. It will require the Council to commit

12 to a long term capital investment which will not as flexible as the All Moorfoot option to respond to future requirements.

This option results in an outcome of 9m2/ per person compared to the current IPD benchmark of 12.6m2 per person and achieves £2493 per FTE.

13 Summary of options

The table below summaries the buildings in each option Current Retain Lease Balance New Building Address Tenure Position Moorfoot Balance Build Freehold Town Hall (Part) Pinstone Street S1 2HH Freehold 33 Love Street S3 8NW Freehold Moorfoot S1 4PL Freehold 1Crystal Peaks 1-3 Peaks Mount Freehold Markets Exchange St S2 5TR Freehold Carbrook Office Park 2-10 Carbrook Hall Rd S9 2DB Freehold Meersbrook Offices Brook Road S8 9FH Freehold Station Road, Darnall Station Road S9 4JU Freehold Middlewood Road S6 4HA Freehold Addy Street S6 3FT Freehold 55 Jaunty Lane S12 3DZ Freehold (allowance for options in district centres, Freehold Service Districts including potential for Sorby House) Watermeade Barrie Crescent S5 8RJ Freehold Bannerdale 125 Carterknowle Road S7 2EX Freehold Derwent House 150 Arundel Gate S1 2JY Leasehold Redvers House Union Street S1 2JP Leasehold New Bank House 100 Queen Street S1 2DL Leasehold Sovereign House 110/111 Queen Street S1 2ES Leasehold Barkers Pool Burgess Street S1 2HF Leasehold Palatine Chambers 18-22 Pinstone St S1 2HN Leasehold Yorkshire House Leopold Street S1 1RQ Leasehold Queens Road Queens Road Leasehold The Parade Unit 1 The Parade Hillsborough Barracks, P Leasehold Stadia Business Park 60 Shirland Lane, Attercliffe, Sheffield Freehold Sheldon Road S7 Leasehold Howden House 1 Union Street S1 2LR PFI Lease Balance Leasehold Balance New Build Freehold Total (core sites) 26 5 7 6

Town Hall Vision

As part of the office accommodation strategy we have sought to improve the use of the Town Hall. The options for the Town Hall are being developed and a business case is being prepared for proposed adaptation and changes that seek to improve use of the building. Actual costs will be dependent on approval of the business case and works required.

A separate paper will be presented to Cabinet for consideration in the future as part of the accommodation project.

12. Comparison of Options

Carbon Footprint

Each option provides for a significant improvement in carbon reductions. The table below sets out the highlights and Appendix C provides further detail.

Option CO2 tonnes % reduction in Kg of CO2 per Carbon 2 per year – all CO2 from m of floor space Reduction fuels current position Commitment cost per year at a starting price of £12/tonne

Current Position 6571 0 87 £72K Retain Moorfoot 3362 -49% 90 £35K Lease Balance 3021 -54% 87 £33K New Build Balance 2554 -61% 73 £28K

Full details, assumptions and caveats are provided in the appendix.

The UK Government and City Council’s demanding targets and expectations around environmental performance particularly carbon reduction and climate change adaptation will only increase.

Oil prices continue to rise as demand outstrips supply and the global reserves have reached their peak. As a result we will have to reduce our consumption because prices will be prohibitive. We rely primarily on fossil fuels for transportation, heating, lighting and food production. With oil depletion, energy prices will rise as supply fails to keep up with the increasing demand. Energy efficiency is fundamental to cost reduction.

In March 2011 The Chancellor of the Exchequer, George Osborne, announced that Britain's floor price for a tonne of emitted carbon ( the carbon price) will start at £16 in 2013, rising to £30 a tonne by 2020. That could increase energy prices by up to 16 per cent by 2020 if the utility companies pass the costs directly on to the consumer.

The City Council also needs to conform to the Carbon Reduction Commitment Energy Efficiency Scheme (CRC) which requires it to pay £12 per tonne of carbon. The Local Authority’s annual electricity bill of £4,000,000 for 43,010,700 kWh

15 equates to approximately 23,270 tonnes of CO2, excluding street lighting. At £12 per tonne of CO2 this would be an additional cost of around £279,226 .This annual cost is also forecast to rise over coming years. A fully effective Environmental Management System would help support the City Council in making the further savings necessary to minimise the annual potential cost of the CRC so that it is not simply “lost” to the Treasury as a carbon tax. Our overall emissions including other fuels as well as electricity for the CRC reporting year 2010/11 were approximately 62,000 tonnes of CO2.

The refit of Moorfoot could include the generation of renewable and low carbon energy. A partnership with an energy company could assist in the overall predicted energy use and carbon output with respect to the re-fit programme required.

IPD benchmarking

The following table summarises the performance of the options compared to IPD benchmarking data and suggested target figure for £ cost / FTE and m2 /FTE for office accommodation. The second table compares options over 10 years.

Target Comparison

£/FTE % variance from m2 per FTE % variance from target target IPD £3068 12.6 Benchmarking Target £2450 10.0 Retain Moorfoot £2377 -3.0% 9.5 -5.0% Lease Balance £2481 +1.3% 8.9 -11.0% Freehold New £2493 +1.8% 9.0 -10.0% Build

Target m2 per FTE is based on best practice FT E figures are based on an operational Cost 2011-2020 Net Present Value (excluding finance cost for capital)

£/FTE Comparison

Retain Moorfoot Lease Balance Freehold New Build Balance 10 year total 2011-2020 £124,474,399 £132,116,645 £147,026,283 10 year total operational cost (NPV £93,065,184 £97,107,003 ££97,596,616 excluding capital financing costs) Annual operational costs (NPV) £9,306,518 £9,710,700 £9,759,662 £/FTE Operational cost NPV (excluding £2,377 £2,481 £2,493 finance 10 year total operational and finance £97,310,004 £102,716,148 £113,767,270 NPV £/FTE operational and finance NPV £2,486 £2,624 £2,907

Net Present Value figures are based on 2011-2020 figure discounted by 5% Staff numbers are based on 3914 FTE

16 13. Financial

Overview

The analysis below demonstrates that the option of retaining Moorfoot provides the lowest cost over the 10 year period examined. It seems appropriate therefore that this be progressed as the recommended option.

Work will continue to address the profile of short-term additional costs that arise in both the current year and 2012/13 (the £690,000 and £230,000 provided through Invest to Save). Thereafter the strategy does generate savings against the approved funding level.

This paper seeks approval for the use of Invest to Save funding to cover the additional costs currently shown in 11/12 and 12/13.

Projected costs (until 2020/21) for the options considered including comparison with the existing approval are shown in both the Table and graph below (in £m). This also demonstrates the projected costs of the original “do nothing” scenario from the 10th November 2010 Cabinet report.

Note that the approved case assumed an available budget of £13.13m which was overstated by the annual Moorfoot running costs of £880,000, the real figure being £12.25m (this is shown as the “corrected case for payback” in the Table and graph below).

The Table below compares the relative costs of the identified Strategy Options (deemed the most operationally and financially advantageous) over the 10 year period to 2020/21. It can be seen from this analysis that the Retain Moorfoot (Option 2) is the most financially favourable at a cost of £124m over the 10 year period to 2020/21, (£97m if we apply discounted cash flow) and an average per annum NPV of £9.73m. If Option 2 were to be adopted it would result in an increase in the funding requirement of £1.6m by 2020/21, when compared to the originally reported Moorfoot Exit Strategy (Option 1). This allows for the retrospective adjustment for the over-stated base position referred to above. The Chart below illustrates this graphically but focuses on the most financially advantageous options (2 and 3) with the original “do nothing” position and the approved (corrected) base provision to demonstrate the cost differential.

Principal reasons for the difference in cost of the retained Moorfoot option compared to the original exit strategy described in November 2010 are;

 Option 2 now has costs for Redvers Workstyle and Howden CFP based on Invest to Save and Customer First Project funding respectively rather than the assumption of financing costs spread over a longer period in the base case. So there is a higher up-front financing cost impact in both 11/12 and 12/13 17

 the removal of external room hire income (Town Hall) from the revised exit strategy (£725k 2015 onwards) and this is now showing as a funding contribution outside of the model’s costing.

 all capital spend being converted to prudential borrowing and financed over a 5, 10 or 25 years repayment term except where specific revenue or programme funding applies i.e. Moorfoot fit-out, Howden House, Redvers.

18 Table One: Analysis of Strategy Options

10 NPV Average Year NPV p.a Cost Model 2011/12 2012/13 2013/14 2014/15 2015/16 2016/17 2017/18 2018/19 2019/20 2020/21 Cost 120.94 12 Original “do nothing” 13.97 13.56 14.62 15.51 15.76 16.26 16.60 17.00 17.50 17.72 158.50 12120.94120 12.09 Approved Base for Payback 13.13 13.13 13.13 13.13 13.13 13.13 13.13 13.13 13.13 13.13 131.30 101.41 10.14 Corrected Base for Payback 12.25 12.25 12.25 12.25 12.25 12.25 12.25 12.25 12.25 12.25 122.54 94.62 9.46

Original Exit Strategy 14.22 14.00 11.82 10.05 9.54 10.19 10.44 10.70 11.09 11.21 113.27 88.50 8.85

Retain Moorfoot 13.94 14.48 14.03 14.16 11.40 10.65 10.96 11.28 11.62 11.96 124.47 97.31 9.73

Lease Balance 13.81 14.23 14.08 15.29 12.78 11.73 12.05 12.38 12.72 13.07 132.12 102.72 10.27 New Build Freehold Balance 13.73 14.16 14.24 18.44 15.95 15.27 13.32 13.64 13.97 14.31 147.03 113.77 11.38

19 Office Strategy Option Analysis - June 2011 20000000

17721504 18000000 17498000 16997969 16603304 16258507 16000000 15290502 15764567 15506988 14227661 14622736 13940856 14475769 13967271 14026211 14158788 14000000 13066609 13561768 14076477 13805533 12716868 12780393 12254101 12377209 12254101 12254101 12254101 12254101 12000000 12254101 12254101 12254101 12254101 12254101 12047596 11727797 11957700 11616900 11284726 11399683 10962969 10000000 10650797

8000000

6000000 Original "do nothing" option

Corrected Approved Base 4000000 Retained Moorfoot - Option 2

Lease Balance - Option 3 2000000

0 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

20 Funding Implications

Table Two below sets out the funding implications of the Retained Moorfoot Option (the most favourable financially).

It should be noted from this analysis that the need for incremental funding has been recognised and additional amounts provided corporately via MTFS and Invest to Save in 2011/12 and 2012/13.

21 Table 2

Funding Implications of Retain Moorfoot Option

Table 1: (all figures in £ millions) 2010/11 2011/12 2012/13 2013/14 2014/15 2015/16 2016/17 2017/18 2018/19 2019/20 2020/21 Identified Costs of Office Accommodation Strategy Actual Planned Retained Moorfoot Strategy Option Costs

1 Gross Strategy Option cost £14.83 £13.94 £14.48 £14.03 £14.16 £11.40 £10.65 £10.96 £11.28 £11.62 £11.96

2 Base Funding available £12.25 £12.25 £12.25 £12.25 £12.25 £12.25 £12.25 £12.25 £12.25 £12.25 £12.25

3 Revised Strategy Funding requirement -£2.58 -£1.69 -£2.23 -£1.78 -£1.91 £0.85 £1.60 £1.29 £0.97 £0.63 £0.29

Specific Approved Funding - Customer First Programme £0.08 £0.12 £0.12 £0.12 £0.12 £0.12 £0.12 £0.12 £0.12 4 - Redvers Workstyle £0.41 £0.41 £0.41 Revised Funding Shortfall (+ excess/- shortfall) -£2.58 -£1.69 -£1.74 -£1.25 -£1.38 £0.97 £1.72 £1.41 £1.09 £0.75 £0.41

Additional Funding Requirement -£2.58 -£1.69 -£1.74 -£1.25 -£1.38 £0.97 £1.72 £1.41 £1.09 £0.75 £0.41

Contribution from Resources budget outturn (to cover MF fit- 5 out) £1.65 Covered in other out-turn position 2010/11 £0.93 6 Unapproved accelerated additional refurbishment phases -0.5 0.01 0.04 0.06 0.06 0.06 0.06 0.06 0.07 0.08 7 Council's MTFS £1.50 £1.50 £1.50 £1.50 £1.50 £1.50 £1.50 £1.50 £1.50 £1.50 8 Invest to Save Funding (+) and Payback (-) £0.69 £0.23 -£0.92 Revised Council Funding Shortfall (+ excess/- shortfall) £0.00 £0.00 £0.29 £0.18 £1.61 £3.28 £2.97 £2.65 £2.32 £1.99

Memorandum Items 9 Savings from Corporate Room Bookings Policy £1.00 £1.03 £1.06 £1.09 £1.12 £1.15 £1.18 £1.21 £1.24 £1.27 10 Inco me from Town Hall refurbishment £0.10 £0.10 £0.10 £0.10 £0.10 £0.10 £0.10 £0.10 £0.10 £0.10

Notes: 1Based on actual costs of strategy for 2010/11 and Retained Moorfoot option (least cost option in report to MEC Board 27/5) from 11/12 onwards. Contains cost of Moorfoot fit-out at £1.6M in 10/11 and "paying-back" of I2S for Redvers from 11/12 until 14/15 at £200k per annum. 2Based on originally Cabinet approved base strategy cost adjusted for Moorfoot running costs (£878k) incorrectly assumed to be in existing base provision. 3£2.58m in 10/11 comprises principally the £2.63m in Moorfoot entirely unbudgeted offset by other smaller variances. 4Redvers cost line adjusted to reflect finance cost recovery over 3 yrs rather than original 10, as building vacated 2015. 5"One-off" contribution from Council revenue balances to fund £1.65M of Moorfoot fit-out costs in 10/11. All financing costs of fit-out now removed from strategy from 11/12 to 15/16 6Based on estimated impact of unapproved up-front additional capital spend in 11/12 with gradual off-set against original planned refurbishment programme. 7Assumes funding set aside in 11/12 Medium Term Financial Strategy is recurrent for 10 yrs of strategy as shown above. 8Invest to Save funding to cover shortfall initial shortfall in strategy in 11/12 and 12/13 with full payback in 15/16 9Potential savings from introduction of new Corporate Room Bookings system from evidence of 11/12 operation to date. Budgets need to be captured to make saving cashable. 10Potential income from increased Town hall room usage arising from refurbishment works that are costed in full in model.

23 14. Advantages / Disadvantages Analysis

The table below summarises the advantages /disadvantages of the Retain Moorfoot and Lease Balance options. Given the high comparative cost of the Freehold New Build Balance option it has been discounted as a practical option and excluded from this analysis and recommendation

Retain Moorfoot (self fund refurbishment)

Advantages Disadvantages

(1) Supports rationalisation of the estate (1) Postponement of potential major by enabling lease divestment. regeneration scheme in medium term ( remodelling or redevelopment of building)

(2) Low risk –can be delivered to flexible (2) Impact on available funding given SCC driven timescale in line with lease current budgetary constraints divestment profile and service imperatives

(3) Delivers a flexible accommodation solution that could be held or exited as required given changing circumstance and regeneration need.

(4) Allows creation of Workstyled and efficient space

(5) Feed back from staff re-located to the building so far is extremely positive.

(6) Space would be available for co- location/ shared service development with public sector partners

(7) Phased regeneration effect to the bottom of the Moor and new Market due to movement there of circa 2600 staff

(8) Much reduced number of sites with movement to freehold tenure will make the application of consistent and effective Health and Safety standards and policies easier to achieve with consequent reduction in risk exposure.

24 Retain Moorfoot (External Provider - Lease and Lease Back)

Advantages Disadvantages

(1) Supports rationalisation of the estate (1) Postponement of potential major by enabling lease divestment. regeneration scheme in medium term ( remodelling or redevelopment of building)

(2) External Finance therefore no impact (2) Structure of the required agreement on currently constrained SCC funding would mean that SCC would be required to commit to the building for a significant number of years ( circa 12 to 25 years) with consequent reduction in flexibility / agility of the organisation and ongoing budgetary implications.

(3) Allows creation of Workstyled and efficient space

(4) Feed back from staff re-located to the building so far is extremely positive.

(5) Space would be available for co- location/ shared service development with public sector partners

(6) Phased regeneration effect to the bottom of the Moor and new Market due to movement there of circa 2600 staff

(7) Much reduced number of sites with movement to freehold tenure will make the application of consistent and effective Health and Safety standards and policies easier to achieve with consequent reduction in risk exposure.

Lease Balance (Keep some existing core buildings and lease the balance of space required)

Advantages Disadvantages

(1) Supports rationalisation of the estate (1) Loss of organisational flexibility and by enabling lease divestment agility.

(2) Could take advantage of current (2) Would require SCC to commit to long competitive market and availability of term lease to achieve most leased office accommodation advantageous lease costs with ongoing

25 budgetary implications

(3) Accommodation acquired could (3) Would require SCC to take additional support modern ways of working such as space to facilitate co-location/shared Workstyle service working with public sector partners.

(4) Supports the short term exit strategy (4) Loss of phased regeneration effect to of Moorfoot the bottom of the Moor and new Market

(5 )Frees up Moorfoot as a major regeneration site

15. Recommendations

1. Cabinet is recommended to approve this strategy (Retain Moorfoot) including approval of its financing as set out in section 13 including utilisation of the Invest to Save Reserve. Any Capital funding approvals to be dealt with through the Capital Approval process with borrowing and revenue support thereof to be in accordance with the profile set out in this report. As the project develops, any required variation to the final cost profile is to be approved through the budget monitoring process for capital and revenue as for any project. Over the lifetime of the project, cash flow requirements will change or need to be modified due to normal project issues or changes in market conditions particularly with reference to the delivery of capital receipts.

3. Project governance and monitoring to be established through the Modern and Efficient Council Board.

5. To provide the Director of Property & Facilities Management and the Director of Legal Services as appropriate to their respective areas

7. To confirm the requirement to centralise all office accommodation costs under Property& Facilities Management.

APPENDIX

A - Carbon Footprint (see below)

B – Investment Property Databank’s benchmark report (accompanying document)

28 APPENDIX A CARBON FOOTPRINT

29 On the pulse of Office benchmarking review the property world

Sheffield City Council 2009-2010 04 March 2011 Summary report On the pulse of the property Sheffield City Council 2009-2010 world 04 March 2011

This report presents the performance results for the benchmarked offices of Sheffield City Council 2009-2010. Key results are presented for building efficiency KPIs and results are set in context through comparison to bespoke private sector benchmarks, industry standards and other public sector authorities. Efficiency

► Cost / FTE stands at £3068. This is 18.4% lower than the private sector benchmark average cost/FTE.

► Cost / FTE has increased by 17.4% since the previous year (see Note 1).

► 60% of the analysed office space has a cost / FTE which is lower than the private sector average.

► Current space per FTE stands at 12.7m². This represents a reduction of 0.2m² / FTE since the previous year (see Note 2).

► At £3065, the reported cost per FTE of Sheffield City cost/FTE in Sheffield Council's office accommodation falls below the average cost £3,758 reported by Central Civil Estate office occupiers in Sheffield. £3,204 The lower cost per FTE is the result of a lower reported cost £3,068 per m² while at 12.7m²/FTE, space efficiency trails the performance of other occupiers.

The chart (right) illustrates how the efficiency of SCC office space compares to the private and Central Civil estate (Public Sector) office estates in Sheffield. Sheffield CC Private Sector Public Sector

% of buildings achieving various space standards

22% 5% 73%

< 10m² / FTE 10 - 12m² / FTE > 12m² / FTE

► 73% of the benchmarked office space is currently occupied above 12m²/FTE. 22% of the space under review reports current space efficiency below 10m²/FTE representing good practice.

Strengths cost / FTE space / FTE

% of space out performing private sector benchmark 79% 25% % of buildings reporting improvement or no change 44% 87%

Opportunities

% of space performing below private sector benchmark 21% 75% % of buildings increasing by up to 10% 4% 4% % of buildings increasing by more 10% 52% 9%

Theoretical saving opportunity £3,729,613 ► The theoretical saving opportunity across benchmarked space stands at £3729613. The saving expresses, in £s, the gap between current year cost efficiency and private sector benchmark averages while also moving to a 10m²/FTE workspace standard.

Note 1. Kier Group have provided historic data to enable performance to be tracked up to 2010. The access to and the quality of the historic data provided expose data management challenges which need to be met moving forward. All changes in annual performance should be viewed with caution and minful of data accuracy issues. 2. Headcount data has been used to approximate to FTE data and a 1:1 desking ration has been assumed to reflect missing workstation data.

The benchmark review helps provide information to both report performance objectively and to help expose opportunities. The performance scores and key performance indicators (KPIs) presented in the review are based on data provided by your organisation to reflect as realistically as possible the actual occupational and cost profiles for the past year. Considerations

Data quailty and coverage Data for three consecutive years was provided for the benchmarked offices in Sheffield. This approach was prmoted to enable performance to be tracked over time. While the accuracy and integrity of the 2009/10 year data has been checked and validated, IPD would recommend that previous years data and results are viewed with caution.

Some operating costs for previous years are simply either not accessible or are patchy. Efforts should be focussed as part of a data development plan to ensure fuller transparency in operating costs going forward.

All rental and rates data for 2009/10 has been approved. Several very low rental costs reported reflect the quality, condition and location of respective space. This low cost does help to keep the overall cost efficiency of the estate below benchmark.

FTE staff data was provided on the basis of headcount only and a 1:1 desking ratio has been assumed.

This model presents the aggregated performance results for those office buildings nominated for inclusion in this performance review by Sheffield City Council 2009-2010.

Number of benchmarked offices 23 Total occupied net internal area 54,654 m² Total office based FTE staff 4,305 Total annual property cost £13,205,592 Occupied office space under review reports a cost per person which is lower than the private sector benchmark average and environmental sustainability which is better than benchmark performance.ahead of benchmark.

Level A Level B Level C KPI Score1

Cost per m2 Rent / m² £154 96 Cost per FTE £242 Rates / m² £31 143

128 Other costs / m² £57 158

£3,068 118 m2 / FTE 12.7 m² m² / workstation 12.7 m² 57

86 Workstations / FTE 1.0 119

r CO2 / FTE 0.65 t 172 Environmental sustainability r m³ water / FTE 76.8 m³ 0

91 r Non recycled waste / FTE

1 The scoring system (each KPI is assigned a score value between 0 and 200) provides an "at a glance" view of how each KPI sits in the context of private sector benchmark data and agreed standards for performance. Simply, the higher the score is above 100 the better the respective KPI is in the context of private sector average performances. Conversely, a lower score (below 100) indicates performance which is below average. A warning symbol (r) is used to highlight any results which are based on a building level data availability of lower than 75%. Results highlighted using the symbol (r) should be viewed with caution and may not be wholly representative.

Sheffield City Council 2009-2010 04 March 2011 Contents On the pulse of the property Sheffield City Council 2009-2010 world 04 March 2011

The report provides an overview of the performance of those buildings within the Sheffield City Council 2009-2010 estate. Data has been provided, validated and approved for use and the results presented represent a consolidated and consistent view of office performances.

1. Summary report

2. Analysis report Introduction 1 Key data 2 Identifying opportunity 1 3 Efficiency profile 4 Office performance: Sheffield 5 Cost efficiency 6 m² / FTE 7 Space utilisation standards 8

3. Further information and building details

Annex 1: Building KPIs - efficiency 10 Annex 2: Building KPIs - efficiency 2 11 Annex 3: Building KPIs - environment 12

Disclaimer IPD has no liability for any losses, damages, costs or expenses suffered by any person as a result of any use of or reliance on the information contained in this report. © Investment Property Databank Limited 2010. All rights reserved.

Property benchmarking Property benchmarking can be used by the organisation to augment the reporting of property issues both within the organisation and to other stakeholders. We expect that the Benchmark Review will help expose opportunity for change, provide objective and contextualised evidence of progress and good performances, provide data to support and inform key decisions and help raise the profile and performances of property within organisations. Assessing performance

Property performance is about understanding and reporting context and change. Throughout the report attention is focussed on the relative performance of measures compared to a private sector benchmark average; these comparisons, made at building level, help users to understand their results is context. Also, throughout the report attention is focussed on the annual change in performance - change represents a valuable aspect of performance assessment. Performance scores. Scores are generated for all measures at a building level and subsequently aggregated to present overall performance. The aggregated measures/scores are weighted by occupied area and thus a large office will have a more significant impact on performance than a small office.

The scoring system is set so that the expected results for an average building produce a score of 100, based on comparison with the IPD Dataset and good practice or industry standards. A score of 100 is equivalent to benchmark and differences from 100 are indicative of percentage differences both above and below benchmark. The more positive the relative performance of your office, the higher the associated performance score. Broadly, performance scores of below 90 are reflect performances below the benchmark average and those above 110 are contributing performances which exceed benchmark. The scoring approach allows users to review performances for all metrics on a consistent basis and means all performances can be coded to help identify varying performances. A red/amber/green colour code is used to help identify low, average and high performing buildings and estates.

Interpreting the report

To help identify performances above and below benchmark (or target levels), a colour coded system applies to the performances scores. The following key helps to identify the performance contributions made by each office across all the key performance indicators reviewed in the Property Benchmarking model.

l Green. "Good performers" and positive performance results which bear a "score" value of > 110. Buildings illustrated in this band are exceeding benchmark performance by at least 10% and delivering a positive contribution (eg cost / FTE is at least 10% lower than benchmark cost / FTE). ▴ Amber. Performance results which show a "benchmark" level of performance. Performance scores between 90 and 110 (+/- 10% of benchmark performance). ■ Red. "Buildings for review". Performance results which bear a "score" of < 90. Buildings illustrated in this band are falling at least 10% below benchmark performance and thereby delivering a negative contribution (eg cost / FTE is at least 10% above the benchmark cost / FTE). i Used to indicate a reduction in the key performance indicator value since previous year. For most KPIs a downward movement represents improvement. g A horizontal arrow indicates no change since previous year. h Used to indicate an increase in the key performance indicator value since previous year. For most KPIs, an upward movement represents worsening performance.

Benchmarked offices This report is based on property benchmarking data for those offices in the Sheffield City Council 2009-2010 estate. Performances for up to the largest 20 buildings (arranged in descending order of occupied space) included in this review are shown below. For this first review, data has been provided for three years but data quality for years before 2009/10 should be viewed with caution.

Offices Occupied NIA Total Cost Efficiency Environment Howden House, Sheffield 9,341 m² £4,381,905 ■ ● Town Hall, Sheffield 8,471 m² £1,676,758 ▴ ■ Carbrook Office Park, Sheffield 6,772 m² £1,206,447 ● ▴ Bannerdale, Sheffield 5,002 m² £776,730 ● ▴ Redvers House Fl1 -11, Sheffield 4,845 m² £1,234,007 ● ● New Bank House , Sheffield 2,869 m² £692,309 ● ● Markets, Sheffield 2,593 m² £185,279 ● ▴ Derwent House, Sheffield 2,341 m² £731,148 ● ● Crystal Peaks , Sheffield 1,915 m² £372,899 ■ ▴ Sovereign House, Sheffield 1,891 m² £455,966 ● ● Central Buildings, Sheffield 1,497 m² £295,627 ● ● The Parade Hillsborough, Sheffield 1,368 m² £282,526 ● ● Fl1 Barkers Pool, Sheffield 1,144 m² £197,391 ● ● Meersbrook Offices, Sheffield 1,085 m² £129,773 ● ▴ Palatine Chambers, Sheffield 703 m² £101,502 ● ● 18-22 Union St, Sheffield 562 m² £144,461 ● ▴ Station Rd Darnall, Sheffield 476 m² £56,832 ● ▴ 96-100 Middlewood Rd, Sheffield 466 m² £59,326 ● ▴ Yorkshire House, Sheffield 325 m² £64,612 ● ▴ Addy St, Sheffield 305 m² £34,929 ● ▴ all benchmarked offices 54,654 m² £13,205,592 ● ▴

Cost profile 07/08 08/09 09/10 Total property cost £10,830,161 £11,299,140 £13,205,592 Rent 1 £6,003,137 £6,394,039 £8,391,549 Unitary charge Rates £2,004,356 £1,549,846 £1,685,450 Other costs £2,822,668 £3,355,255 £3,128,593

- Service charge £675,531 £628,478 £513,286 - Cleaning £562,657 £700,362 £736,931 - Repair & Maintenance £598,365 £710,852 £885,658 - Utilities £561,500 £800,677 £765,347 - Security £424,615 £514,886 £227,371

Environment 07/08 08/09 09/10

CO2 (tonnes) 1,872 t Water consumed (m³) 5 m³ 151,330 m³ Total waste (tonnes) Management practice score

Benchmarked properties 25 25 23

1 A rental value has been used to assess the equivalent annual rental cost of freehold accomodation

Cost Exposing strength & opportunity is a key application for Benchmarking. The outputs below expose opportunity by highlighting buildings which have either reported deteoriation in performance since the previous year or report low scores across several areas of performance. In some instances, of course, no immediate actions will be justifiable (e.g due to specifics of business requirement or lease terms etc). Up to 5 occupations in each category for action are presented below.

% buildings reporting increasing cost / FTE

52% 4% 44%

% buildings where KPI has increased by >10% Increases up to 10% No change or reducti ons ePIMS ref Building Total Cost Cost / FTE % change in KPI 817223\1 Bannerdale, Sheffield £776,730 £1,872 138% 817217\1 Carbrook Office Park, Sheffield £1,206,447 £2,276 96% 817218\1 Meersbrook Offices, Sheffield £129,773 £1,426 83% 817219\1 Station Rd Darnall, Sheffield £56,832 £1,672 81% 817220\1 96-100 Middlewood Rd, Sheffield £59,326 £2,697 73%

Space

% buildings reporting increasing m² / FTE

9% 4% 87%

% buildings where KPI has increased by >10% Increases up to 10% No change or reductio ns ePIMS ref Building Occupied NIA m² / FTE % change in KPI 817241\1 The Parade Hillsborough, Sheffield 1,368 m² 12.3 m² 29% 817243\1 Sheldon Road, Sheffield 203 m² 10.1 m² 15% 817242\1 18-22 Union St, Sheffield 562 m² 12.8 m² 2% 817245\1 Howden House, Sheffield 9,341 m² 12.8 m² 0% 817212\1 Town Hall, Sheffield 8,471 m² 18.8 m² 0%

Cost per FTE ●

cost/FTE cost/FTE performance scores % space, £/FTE < benchmark £3,068 88% 87% 134 72% 109 118

£2,568 £2,614

%space

cost per FTE percostFTE (£) performancescore

07/08 08/09 09/10 07/08 08/09 09/10 07/08 08/09 09/10

Key points ► Cost / FTE across benchmarked offices stands at £3068 and has increased by 17.4% since last year. ► Current total cost / FTE is 18% below the private sector average cost/FTE. ► 79% of the benchmarked office space reports a current cost/FTE which is lower than benchmark.

Key building analysis Cost per FTE Annual change in KPI 07/08 08/09 09/10 07/08 08/09 09/10 performance

Howden House, Sheffield £5,674 £6,019 £6,019 h g ■ Town Hall, Sheffield £3,356 £2,974 £3,718 i h ▴ Carbrook Office Park, Sheffield £1,012 £1,164 £2,276 h h ● Bannerdale, Sheffield £813 £787 £1,872 i h ● Redvers House Fl1 -11, Sheffield £1,902 £2,510 £2,468 h i ● New Bank House , Sheffield £1,949 £1,984 £2,396 h h ● Markets, Sheffield £1,060 £1,765 £1,765 h g ● Derwent House, Sheffield £3,535 £2,752 £2,504 i i ● Crystal Peaks , Sheffield £3,018 £2,740 £4,190 i h ■ Sovereign House, Sheffield £3,353 £3,647 £2,923 h i ● Central Buildings, Sheffield £2,127 £1,658 £1,670 i h ● The Parade Hillsborough, Sheffield £1,955 £1,558 £2,545 i h ● Fl1 Barkers Pool, Sheffield £2,146 £1,969 £1,916 i i ● Meersbrook Offices, Sheffield £597 £778 £1,426 h h ● Palatine Chambers, Sheffield £2,757 £2,864 £2,538 h i ● 18-22 Union St, Sheffield £2,008 £3,934 £3,283 h i ● Station Rd Darnall, Sheffield £1,362 £922 £1,672 i h ● 96-100 Middlewood Rd, Sheffield £1,560 £1,560 £2,697 g h ● Yorkshire House, Sheffield £1,385 £2,582 £2,485 h i ● Addy St, Sheffield £617 £673 £944 h h ●

High scoring buildings1 (£ / FTE) 07/08 08/09 09/10 07/08 08/09 09/10 % change pa

Addy St, Sheffield £617 £673 £944 h h 40% Meersbrook Offices, Sheffield £597 £778 £1,426 - h h 83% Central Buildings, Sheffield £2,127 £1,658 £1,670 - i h 1%

Low scoring buildings2 (£ / FTE) 07/08 08/09 09/10 07/08 08/09 09/10 % change pa Howden House, Sheffield £5,674 £6,019 £6,019 h g 0% Crystal Peaks , Sheffield £3,018 £2,740 £4,190 i h 53% Town Hall, Sheffield £3,356 £2,974 £3,718 i h 25%

Efficiency Measures

cost/FTE cost/m² space/FTE 12.7 £3,758 £337 £3,068 £3,204 12.2 £242 £263 11.1

Sheffield CC Private Sector Public Sector Sheffield CC Private Sector Public Sector Sheffield CC Private Sector Public Sector

Key points

► Results are compared against public and private sector benchmarks constructed from evidence on office buildings in Sheffield only ► Cost / FTE across local public sector benchmarked offices stands at £3204

► Current total cost / FTE is 4% below the Sheffield public sector average cost/FTE.

► Current total cost / FTE is 18% below the Sheffield private sector average cost/FTE.

Total property cost comparisons

Public Sector £124 £52 £86

Private Sector £148 £54 £136

Sheffield CC £154 £31 £57

Rent per m² Rates per m² Other Costs per m²

► Rent/m² is 24% higher than the Sheffield public sector average rent/m². ► Rates/m² are 40% below the Sheffield public sector average cost/FTE. ► Other costs/m² are 34% below the Sheffield public sector average cost/FTE.

1 Sheffield public sector benchmark for total property cost does not include unitary charge.

Cost per m2 ●

cost/m² cost/m² performance scores % space, £/m² < benchmark 88% 87% 136 72% £242 119 128

£194 £203

% space%

cost per m²per(£) cost performance score performance

07/08 08/09 09/10 07/08 08/09 09/10 07/08 08/09 09/10

Key Points ► Cost / m² across benchmarked offices stands at £242 and has increased by 19.2% since last year. ► Current cost / m² is 32% below the private sector average cost / m². ► 83% of the benchmarked office space reports a current cost / m² which is lower than benchmark.

Key building analysis Cost per m2 Annual change in KPI 07/08 08/09 09/10 07/08 08/09 09/10 performance

Howden House, Sheffield £470 £469 £469 i g ■ Town Hall, Sheffield £143 £158 £198 h h ● Carbrook Office Park, Sheffield £79 £91 £178 h h ● Bannerdale, Sheffield £53 £65 £155 h h ● Redvers House Fl1 -11, Sheffield £194 £228 £255 h h ● New Bank House , Sheffield £202 £200 £241 i h ● Markets, Sheffield £72 £71 £71 i g ● Derwent House, Sheffield £294 £319 £312 h i ▴ Crystal Peaks , Sheffield £142 £127 £195 i h ● Sovereign House, Sheffield £324 £301 £241 i i ● Central Buildings, Sheffield £196 £196 £198 g h ● The Parade Hillsborough, Sheffield £176 £164 £207 i h ● Fl1 Barkers Pool, Sheffield £171 £177 £173 h i ● Meersbrook Offices, Sheffield £55 £65 £120 h h ● Palatine Chambers, Sheffield £137 £163 £144 h i ● 18-22 Union St, Sheffield £254 £315 £257 h i ● Station Rd Darnall, Sheffield £66 £66 £119 g h ● 96-100 Middlewood Rd, Sheffield £74 £74 £127 g h ● Yorkshire House, Sheffield £145 £207 £199 h i ● Addy St, Sheffield £49 £49 £114 g h ● High scoring buildings (£ / m²) 07/08 08/09 09/10 07/08 08/09 09/10 % change pa Markets, Sheffield £72 £71 £71 i g 0% Addy St, Sheffield £49 £49 £114 g h 133% Meersbrook Offices, Sheffield £55 £65 £120 h h 85% Low scoring buildings (£ / m²) 07/08 08/09 09/10 07/08 08/09 09/10 % change pa Central Buildings, Sheffield £470 £469 £469 i g 0% Yorkshire House, Sheffield £294 £319 £312 h i -2% Crystal Peaks , Sheffield £194 £228 £255 h h 12%

13.2 12.9 88 96 86 12.7 28%

% space % 20% 22%

m²/FTE performancescore

07/08 08/09 09/10 07/08 08/09 09/10 07/08 08/09 09/10

Key points ► m² / FTE across benchmarked offices stands at 12.7m² and has decreased by 0.2m² since last year. ► Current m² / FTE is 1.6m² above the private sector average m² / FTE. ► 36% of benchmarked office space reports a current m² / FTE which meets or exceeds a 12m² target.

Key building analysis m2 per FTE Annual change in KPI 07/08 08/09 09/10 07/08 08/09 09/10 performance

Howden House, Sheffield 12.1 m² 12.8 m² 12.8 m² h g ■ Town Hall, Sheffield 23.5 m² 18.8 m² 18.8 m² i g ■ Carbrook Office Park, Sheffield 12.8 m² 12.8 m² 12.8 m² g g ■ Bannerdale, Sheffield 15.2 m² 12.1 m² 12.1 m² i g ▴ Redvers House Fl1 -11, Sheffield 9.8 m² 11.0 m² 9.7 m² h i ● New Bank House , Sheffield 9.6 m² 9.9 m² 9.9 m² h g ● Markets, Sheffield 14.7 m² 24.7 m² 24.7 m² h g ■ Derwent House, Sheffield 12.0 m² 8.6 m² 8.0 m² i i ● Crystal Peaks , Sheffield 21.3 m² 21.5 m² 21.5 m² h g ■ Sovereign House, Sheffield 10.3 m² 12.1 m² 12.1 m² h g ▴ Central Buildings, Sheffield 10.8 m² 8.5 m² 8.5 m² i g ● The Parade Hillsborough, Sheffield 11.1 m² 9.5 m² 12.3 m² i h ■ Fl1 Barkers Pool, Sheffield 12.6 m² 11.1 m² 11.1 m² i g ▴ Meersbrook Offices, Sheffield 10.8 m² 11.9 m² 11.9 m² h g ▴ Palatine Chambers, Sheffield 20.1 m² 17.6 m² 17.6 m² i g ■ 18-22 Union St, Sheffield 7.9 m² 12.5 m² 12.8 m² h h ■ Station Rd Darnall, Sheffield 20.7 m² 14.0 m² 14.0 m² i g ■ 96-100 Middlewood Rd, Sheffield 21.2 m² 21.2 m² 21.2 m² g g ■ Yorkshire House, Sheffield 9.6 m² 12.5 m² 12.5 m² h g ■ Addy St, Sheffield 12.7 m² 13.9 m² 8.3 m² h i ● High scoring buildings (m²/FTE) 07/08 08/09 09/10 07/08 08/09 09/10 % change pa Derwent House, Sheffield 12.0 m² 8.6 m² 8.0 m² i i -7% Addy St, Sheffield 9.6 m² 13.9 m² 8.3 m² h i -40% Central Buildings, Sheffield 9.2 m² 8.5 m² 8.5 m² i g 0%

Low scoring buildings (m²/FTE) 07/08 08/09 09/10 07/08 08/09 09/10 % change pa Markets, Sheffield 14.7 m² 24.7 m² 24.7 m² h g 0% Crystal Peaks , Sheffield 21.3 m² 21.5 m² 25.1 m² h h 17% 96-100 Middlewood Rd, Sheffield 21.2 m² 21.2 m² 32.1 m² g h 51%

Profile of space utilisation

% of buildings achieving various m² / FTE targets

22% 5% 73%

< 10m² / FTE 10 - 12m² / FTE > 12m² / FTE

The chart above illustrates the proportions of space which currently report a m²/FTE ratio below 10m², between 10 and 12 and in excess of 12m²/FTE. Key points ► 73% of space retains a space/FTE above 12m². Buildings reporting >12m² are highlighted below. ► 9% of benchmarked offices have reported an increase in m²/FTE of more than 10% since last year. ► 87% of the offices reviewed have either remained the same or improved their m²/FTE balance.

Key building analysis 06/07 to 07/08 to 08/09 to <10m² 10-12m² >12m² 07/08 08/09 09/10 performance1 Howden House, Sheffield  h g ■ Town Hall, Sheffield  i g ■ Carbrook Office Park, Sheffield  g g ■ Bannerdale, Sheffield  i g ▴ Redvers House Fl1 -11, Sheffield  h i ● New Bank House , Sheffield  h g ● Markets, Sheffield  h g ■ Derwent House, Sheffield  i i ● Crystal Peaks , Sheffield  h g ■ Sovereign House, Sheffield  h g ▴ Central Buildings, Sheffield  i g ● The Parade Hillsborough, Sheffield  i h ■ Fl1 Barkers Pool, Sheffield  i g ▴ Meersbrook Offices, Sheffield  h g ▴ Palatine Chambers, Sheffield  i g ■ 18-22 Union St, Sheffield  h h ■ Station Rd Darnall, Sheffield  i g ■ 96-100 Middlewood Rd, Sheffield  g g ■ Yorkshire House, Sheffield  h g ■ Addy St, Sheffield  h i ●

1 current performance indicates how the current m²/FTE compares to private sector benchmark average.

Sheffield City Council 2009-2010 04 March 2011 Building KPIs: cost/FTE, m²/FTE On the pulse of the property Sheffield City Council 2009-2010 world 04 March 2011

Detailed below are the most significant office occupations in the estate. The list shows up to 45 offices and is arranged in descending order of occupied space. For each building, two key measures used to understand efficiency are presented. Particular attention should be drawn to both the relative performance in the context of benchmark (identified through score) and the change in KPI value since previous year (+/- %).

Occupied NIA cost / FTE m² / FTE

KPI score +/- % KPI score +/- %

Howden House, Sheffield 9,341 m² £6,019 40 0% 12.8 m² 85 0% Town Hall, Sheffield 8,471 m² £3,718 101 25% 18.8 m² 31 0% Carbrook Office Park, Sheffield 6,772 m² £2,276 139 96% 12.8 m² 85 0% Bannerdale, Sheffield 5,002 m² £1,872 150 138% 12.1 m² 92 0% Redvers House Fl1 -11, Sheffield 4,845 m² £2,468 134 -2% 9.7 m² 113 -12% New Bank House , Sheffield 2,869 m² £2,396 136 21% 9.9 m² 111 0% Markets, Sheffield 2,593 m² £1,765 153 0% 24.7 m² 0 0% Derwent House, Sheffield 2,341 m² £2,504 133 -9% 8.0 m² 128 -7% Crystal Peaks , Sheffield 1,915 m² £4,190 89 53% 21.5 m² 7 0% Sovereign House, Sheffield 1,891 m² £2,923 122 -20% 12.1 m² 91 0% Central Buildings, Sheffield 1,497 m² £1,670 156 1% 8.5 m² 124 0% The Parade Hillsborough, Sheffield 1,368 m² £2,545 132 63% 12.3 m² 89 29% Fl1 Barkers Pool, Sheffield 1,144 m² £1,916 149 -3% 11.1 m² 100 0% Meersbrook Offices, Sheffield 1,085 m² £1,426 162 83% 11.9 m² 93 0% Palatine Chambers, Sheffield 703 m² £2,538 132 -11% 17.6 m² 42 0% 18-22 Union St, Sheffield 562 m² £3,283 113 -17% 12.8 m² 85 2% Station Rd Darnall, Sheffield 476 m² £1,672 156 81% 14.0 m² 74 0% 96-100 Middlewood Rd, Sheffield 466 m² £2,697 128 73% 21.2 m² 10 0% Yorkshire House, Sheffield 325 m² £2,485 134 -4% 12.5 m² 88 0% Addy St, Sheffield 305 m² £944 175 40% 8.3 m² 126 -40% Queens Rd, Sheffield 288 m² £1,942 148 10.7 m² 104 -11% Sheldon Road, Sheffield 203 m² £2,139 143 37% 10.1 m² 109 15% 55 Jaunty Way, Sheffield 187 m² £1,665 156 71% 10.4 m² 107 0%

all benchmarked offices 54,654 m² £3,068 118 17% 12.7 m² 86 -2%

Detailed below are the most significant office occupations in the estate. The list shows up to 45 offices and is arranged in descending order of occupied space. For each building, two key measures used to understand efficiency are presented. Particular attention should be drawn to the relative performance in the context of benchmark, identified through score.

Rent/m² Rates/m² Other Costs/m²

Actual KPI Score Actual KPI Score Actual KPI Score

Howden House, Sheffield £4,135,041 £443 0 £246,864 £26 151 £0 £0 200 Town Hall, Sheffield £600,000 £71 152 £146,712 £17 168 £930,046 £110 119 Carbrook Office Park, Sheffield £600,000 £89 140 £349,393 £52 104 £257,054 £38 172 Bannerdale, Sheffield £450,000 £90 139 £63,756 £13 176 £262,974 £53 161 Redvers House Fl1 -11, Sheffield £625,300 £129 113 £170,963 £35 134 £437,744 £90 134 New Bank House , Sheffield £350,000 £122 117 £143,788 £50 107 £198,521 £69 149 Markets, Sheffield £154,030 £59 160 £1,368 £1 199 £29,881 £12 192 Derwent House, Sheffield £377,700 £161 91 £137,000 £59 91 £216,448 £92 132 Crystal Peaks , Sheffield £145,000 £76 149 £54,322 £28 147 £173,577 £91 133 Sovereign House, Sheffield £228,000 £121 118 £101,607 £54 100 £126,359 £67 151 Central Buildings, Sheffield £172,735 £115 122 £56,745 £38 129 £66,147 £44 168 The Parade Hillsborough, Sheffield £167,118 £122 117 £43,044 £31 141 £72,364 £53 161 Fl1 Barkers Pool, Sheffield £90,325 £79 147 £40,126 £35 135 £66,940 £59 157 Meersbrook Offices, Sheffield £55,000 £51 166 £20,490 £19 165 £54,283 £50 163 Palatine Chambers, Sheffield £43,200 £61 158 £20,952 £30 145 £37,350 £53 161 18-22 Union St, Sheffield £25,500 £54 164 £11,507 £24 155 £19,825 £42 169 Station Rd Darnall, Sheffield £25,000 £54 164 £8,436 £18 166 £25,890 £56 159 96-100 Middlewood Rd, Sheffield £20,000 £62 158 £9,463 £29 146 £35,149 £108 121 Yorkshire House, Sheffield £16,600 £54 163 £5,820 £19 164 £12,509 £41 170 Addy St, Sheffield £20,000 £69 153 £8,694 £30 144 £23,729 £82 140 Queens Rd, Sheffield £18,500 £91 138 £7,517 £37 131 £16,755 £83 139 Sheldon Road, Sheffield £12,500 £67 155 £7,298 £39 127 £10,172 £54 160 55 Jaunty Way, Sheffield

all benchmarked offices £8,391,549 £148 96 £1,685,450 £54 143 £3,128,593 £136 158

Detailed below are the most significant office occupations in the estate. The list shows up to 45 offices and is arranged in descending order of occupied space. For each building, key measures used to assess environmental impact are presented. Particular attention should be drawn to both the relative performance in the context of benchmark (identified through score) and the change in KPI value since previous year (+/- %).

CO2/FTE Water/FTE Waste/FTE Enviromental sustainability KPI +/- % KPI +/- % KPI +/- % score

Howden House, Sheffield 0.11 t 2.8 m³ 145 Town Hall, Sheffield 1.55 t 321.5 m³ 82 Carbrook Office Park, Sheffield 100 Bannerdale, Sheffield 100 Redvers House Fl1 -11, Sheffield 0.79 t 4.4 m³ 134 New Bank House , Sheffield 1.15 t 114 Markets, Sheffield 100 Derwent House, Sheffield 0.27 t 7.1 m³ 133 Crystal Peaks , Sheffield 100 Sovereign House, Sheffield 0.36 t 122 Central Buildings, Sheffield 0.52 t 121 The Parade Hillsborough, Sheffield 0.08 t 126 Fl1 Barkers Pool, Sheffield 0.47 t 122 Meersbrook Offices, Sheffield 100 Palatine Chambers, Sheffield 0.50 t 121 18-22 Union St, Sheffield 1.54 t 109 Station Rd Darnall, Sheffield 100 96-100 Middlewood Rd, Sheffield 100 Yorkshire House, Sheffield 100 Addy St, Sheffield 100 Queens Rd, Sheffield 100 Sheldon Road, Sheffield 100 55 Jaunty Way, Sheffield 100

all benchmarked offices 0.65 t 76.8 m³ 76700% 93

1. The scoring system

Scores are generated for all measures at a building level and subsequently aggregated to present overall performance. The aggregated measures/scores are weighted by occupied area and thus a large office will have a more significant impact on performance than a small office.

"Good performers". Positive performance results which bear a "score" of > 110. Buildings illustrated in this band are exceeding ● benchmark performance by at least 10% and delivering a positive contribution.

Performance results which show a "benchmark" level of performance. Performance scores between 90 and 110 (+/- 10% of ▴ benchmark performance).

Buildings for review. Performance results which bear a "score" of < 90. Buildings illustrated in this band are falling at least 10% ■ below benchmark performance and thereby delivering a negative contribution.

2. Year on year change in performance

A critical aspect of measuring performance is not simply reviewing performance compared to external benchmark values but also to monitor changes in KPIs from one reporting period to the next. Improving. In this report, where performances have improved, the change is indicated by an downward arrow. So, for measures of i efficiency a downward arrow indicates a downward movement in the KPI (i.e a reduced cost/FTE, cost/m², space/FTE etc).

Slipping. In this report, where performances have slipped (i.e KPI values have increased), the change is indicated by a downward h arrow. So, for measures of efficiency an upward arrow indicates an increase in KPI value (i.e increases, or a slip in cost/FTE, cost/m², space/FTE etc).

In this report, where there has been no reported change in your KPI a horizontal indicator is presented. A horizontal indicator is also g shown in instances where data from a previous reporting year was not provided (a position of no change is assumed).

3. Efficiency measures A comprehensive and building level review of efficiency should help identify what drives the current efficiency of space. The measure of building efficiency selelcted - cost per FTE - is driven by performances in both cost and space efficiency. It is possible to make improvment to the overall efficiency through careful and appropriate management of either or both components.

4. Environmental sustainability

The assessment of environmental sustainability is split between measures of environmental impact and an assessment of environmental management practices. The metrics used to reflect the environmental impact of space are expressed in the context of office based FTE staff and present the impacts levied by carbon, water use and non-recycled waste (from buildings). The assessment of management practices aims to simply indicate the presence of processes in occupied space. 5. Effectiveness measures An assessment of building effectiveness relies critically on the perceptions of users. This data is derived through specific property related user and manager surveys. While much of this data is less quantitative and more subjective in content, it nonetheless provides useful strategic evidence and an important complement to measures of efficiency. It remains important that improvements in efficiency do not compromise the perceived effectiveness of workplaces.

Benchmark All performances are compared alongside the benchmark average for an equivalent private sector office building. Private sector data is held and recorded annually by IPD and represents the actual performances in offices of over 60 private sector organisations in the UK.

In all instances in this review, the benchmark simply represents a mean average performance. The average includes a range of performance outcomes and organisations may seek to compare their performance results to "best practice" performance to help expose further potential for improvement.

It is not possible to find a perfect comparison for each office building but every effort is made to ensure the best comparision available has been made. This is based around specific criteria. The IPD dataset is the most comprehensive and robust set of building performance data collected to consistent definitions and based on actual evidence in the UK. Every effort is made to compare building performance to private sector buildings of the same tenure, same broad specification and functional type and location. Postcodes are used to define location and, in London, a full postcode defines the parameters of the benchmark group. Outside of London, some comparisions may be more regional to ensure each benchmark grouping is based on an appropriate sample of buildings. Effectiveness Workplace effectiveness represents a measure to reflect the user perceptions of space provided and some basic inclusion of the condition and flexibility of space. The measure (score) value is based on the responses to both a user and a building manager survey. The effectiveness measure can help identify where any major workplace perception issues exist and help to ensure that user needs are balanced with efficiency demands. Efficiency Efficiency is defined in Property Benchmarking by a total property cost per full time equivalent measure.

Environmental The measure used to report and assess environmental sustainability within benchmarking relies on the sustainability access to core environmental data which supports core KPIs. The KPIs used to assess environmental sustainability include carbon dioxide per FTE, water consumed per FTE, non-recycled waste per FTE (measures of environmental impact which users should aim to minimise) and a management practice score which captures some basic understanding and assessment of the practices in place within buildings which contribute to more environmentally sustainable building management.

FTE staff The number of full time equivalent staff includes all full time and part time staff. In this review all references to "FTE" refer to office based FTE only and so do not include home workers. Part time and non-payroll staff, such as consultants, contractors, and other outsourced staff, should be converted to full- time equivalents. The following factors might be adopted as a guide for conversion to FTE:

• Personnel working on a regular basis >30 hours per week – 1.00 • Personnel working on a regular basis 20-30 hours per week – 0.75 • Personnel working on a regular basis 15-20 hours per week – 0.50 • Personnel working on a regular basis <15 hours per week – 0.25

To qualify as a member of staff working in the premises, staff must use the premises as their main base and also expect to work at the premises for at least some part of a typical working week. Full time home working staff are excluded.

Net internal area Net internal area used in this report reflects the net internal area physically occupied by the organisation within buildings. It specifically excludes any vacant or sublet space in buildings.

Other costs The annual costs of net service charges, repair & maintenance (includes internal, external and M & E repair costs), security, cleaning and utilities. All data fields are mandatory and a total figure is only calculated where all component costs have been provided. All component costs are defined in the IPD International Total Occupancy Cost Code.

Property cost Total Property Costs are defined in this review to specifcally include the annual rent, rates and "other" operating costs ("other costs" include net service charges payments, utility costs, cleaning, security and revenue maintenance costs). This total cost represents a sub-set of IPD Total Occupancy Costs (defined in the IPD International Total Occupancy Cost Code) which has been identified and reported by IPD as it represents the majority of total annual property expenditure where data is robust and is applicable for most property types. Reporting focuses on this as a key indicator of occupancy cost efficiency (ie. per m², FTE or workstation).

For freehold properties, annual rent is represented by a Treasury Capital Charge and for properties managed under PFI agreements the unitary charge payment is specifically incorporated and reported as part of the Total Property Cost. Rent The total outgoings (less income from external sub-tenants), defined in the IPD International Total Occupancy Cost Code, to include predominantly annual rent (either the actual rent paid for rack-rented leaseholds or rental value/Treasury Capital Charge for freeholds) and unitary charge payments (annual charge for a total real estate and facilities services package, such as in serviced offices or PFI managed properties).

Score Each key performance indicator (KPI) is allocated a performance score. The score simply sets the KPI in the context of the relevant IPD private sector benchmark average or industry standard average adopted for the model. The score system lies at the heart of the benchmarking process.

The scoring system is set so that performance which matches the benchmark average produces a score of 100. Scores in excess of 100 indicate performances which are above benchmark by a percentage equivalent to score (ie a score of 115 indicates performance which is 15% above benchmark). Scores which falls below 100 indicate performance below benchmark (ie a score of 80 represents a perforamnce which is 20% below benchmark).

Theoretical The concept of a theoretical saving simply aims to illustrate in monetary terms (£) the differences at saving building level between current cost and space per m² metrics and the private sector benchmark averages. The "saving" exposes the magnitude of value attached to driving improvements in cost and space efficiency rather than any actual wins. The estiamted value assumes first delivering savings in space requirement through adopting a 10m²/FTE standard and then moving towards a private sector cost/m² on the new space provided. It is termed "theoretical" since it does not take into consideration any specific building characteristics (ie listed or heritage buildings may be inhibited in their capacity to absorb better space/FTE ratios) or business requirements (ie need to locate in certain regions/centres). Workplace A score to assess the overall workplace environment which is derived from measures of functional productivity suitability, workplace environment, facilities and downtime. These measures are defined as follows, - Functional Suitability. A score derived from peoples’ satisfaction rating with the workplace for the performance of generic activity types. Examples of generic activity types are team working and ability to meet deadlines.

- Workplace Environment. A score derived from peoples’ satisfaction rating with the workplace’s physical environment. Examples of environmental aspects are ventilation and ambient room temperatures.

- Facilities. A score derived from peoples’ satisfaction rating with the facilities provided in their workplace. Examples of facility aspects are desk space and layout of the office.