5.1. Standard of service

Figure 13: Standard of service

Almost all authorities were happy with the availability of the asset. In most PPP contracts, availability is by far the most significant factor used in calculating the public sector's payment to the contractor, and this financial incentive appears to be working effectively to encourage good performance in relation to availability. Authorities were less happy with soft facilities management (FM) service standards (cleaning, laundry, catering etc.) and even less happy with hard facilities management service standards (building repairs etc.). In general, interviewees noted that performance was best in those areas where the financial penalties could be made to bite.

Respondents noted that the quality of soft FM service is dictated by the terms of the contract and is not inherently better or worse because the operator is providing it under a PPP contract - although in some cases it is better because the impact of PPP has been to increase the budget. One interviewee pointed out that authorities may be very happy with the standard of service because their main point of comparison is the service at older, non-PPP facilities. It is extremely difficult for authorities to judge whether the service at PPP facilities is as good as it could be given the new assets and the service levels set out in the contract.

Unhappiness with soft FM provision generally related to lack of flexibility (see section 5.5 below). The other source of unhappiness, raised in several interviews, was the quality of cleaning, and many authorities cited cleaning reports as the most important performance indicator. There were particular issues with cleaning in some parts of Scotland where contractors had under-estimated the buoyancy of the local employment market and had struggled to maintain staff. In some cases authorities had exercised their right to step in and carry out one-off cleaning services themselves, passing the costs on to the contractor. This is a good example of the contractual remedies working effectively to ensure the required service to the end users, but is frustrating for authorities. In some contracts there is the opportunity to bring cleaning in-house as part of a benchmarking exercise, but this leads to issues over the interface between hard FM and soft FM (for example, using appropriate cleaning products on the floor so that it sees out its expected life).

Issues around heating and cooling were also raised by a number of interviewees. Although contracts include requirements about allowable temperature ranges, it is difficult and time consuming for authorities to build up evidence of a breach. The temperature can differ within one availability area, and can change rapidly over time - in most cases the contractor has a period of several hours to remedy any service failure and so repeated monitoring is needed to demonstrate that the temperature has not been corrected.

Unhappiness with hard FM provision typically related to the fact that repairs often required input from the SPV's off-site staff and therefore took longer. In interviews several authorities commented on the fact that the SPV structure caused frustrations when the on-site FM contractor needed to refer issues back to the SPV for decision or for action by another consortium member. Repairs which the authority considered to be minor (and therefore expected to be resolved by the on-site soft FM team) were sometimes bundled together and classed as a major repair, taking longer to be carried out.

At this relatively early stage in projects' operational phases, most of the issues about repairs raised in interviews related to snagging issues left over from the construction phase rather than to life-cycle maintenance. (Project managers in the water sector seemed happier with the transfer of the interface from construction to operations.) Interviewees noted that it was too early in the operational period to form judgements on whether life cycle maintenance was being carried out effectively.

Recommendation: The Scottish Executive could consider carrying out further research in the area of hard FM provision, with the aim of producing best practice guidelines for authorities and contractors and informing the terms of future contracts.

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15 Only 2 respondents considered that the service exceeded expectations.