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Neville Small: "Maintenance costings should take into account both predictive and reactive work, as well as disposal costs and any downtime"

Taking the long term view

Investing in quality equipment improves a building's total lifetime cost, says Neville Small

Posted by Stephanie Broad | November 02, 2015 | People, policy, politics, money

Schools, colleges and universities alike are, by their very nature, designed and built to last. With high demands placed upon them in terms of how and when they are used, both the fabric of the building and the important systems within it – such as heating and hot water – must perform reliably and efficiently in order to fulfil their raison d’être. 

The ‘10-80-10’ rule is a well-known mantra in the building services sector. It states that 10% of the total lifetime cost of a building is invested at the construction stage; 80% is spent on operating the building; and the remaining 10% is accounted for in dismantling and demolition. 

However, the way buildings in the education sector are often procured, designed and delivered by local authorities, means that intense focus is put on the short-term, while the long-term aspects are neglected. With schools often coming under pressure to drive down the upfront capital costs of a project during the tender process, the focus tends to shift onto the immediate build, rather than the long-term running costs. 

The lifetime costing approach has gained increased traction in recent years, in part as a result of the Government’s carbon emission targets. Where it has become relatively common practice for commercial buildings overall, the priority now is for local authorities to give energy issues priority at a strategic level – so looking at cost from both a whole building and component level. 

Financial factors do of course remain a significant driving force for schools to find ways to release funds from building running costs that can be transferred to curricular resources. But there are also a multitude of environmental advantages to installing sustainable solutions, such as reducing energy consumption, which is becoming increasingly important to the reputation of schools as awareness around climate change heightens. 

In fact, the latest statistics show UK schools could reduce energy costs by around £44 million per annum, and reduce the amount of CO2 emitted into the atmosphere by 625,000 tonnes each year by installing energy-efficient systems, according to the Carbon Trust

Ultimately, the solution for both new build projects and refurbishments is to look at the long-term operational cost of each individual asset within the build, rather than the initial purchasing and installation cost. Often components which are cheaper at the initial stages end up costing more in the long run, whether as a result of operational costs or because they need repairing or replacing more quickly. Careful selection of high quality, long-lasting, and efficient heating equipment will help bring these costs down. 

The school, college or university must work closely with the specifier or selected contractor to ensure they are clear on the what, when and how. What work will need doing to that particular component throughout its life? When throughout its lifetime should the work be done? Finally how much it will cost to do the work, taking into account concerns around system access and downtime during term-time?

Straightforward payback calculations are useful to demonstrate the benefits of investing in higher quality products from the beginning to reduce energy consumption in the long run. Maintenance costings should take into account both predictive and reactive work, as well as disposal costs and any downtime.

These calculations alone will give a good indication of how a component will perform, and an idea of the expense it will incur to the customer as a result. For a more accurate forecast, other factors such as depreciation, assumptions on energy costs and even inflation can be included, depending on the application and level of detail required.

A school plant room with boiler cascade

The proof and value of making whole life calculations is in the building’s operational costs. An appliance made of lasting, quality components and materials which may cost more to purchase initially, may cost much less to run throughout its lifecycle, with a shorter payback period, resulting in better savings. In this way, the end-user can be sure that the school will be left with the best system to suit their functional and financial requirements. And with increasingly demanding public sector budgets, it’s clear to see why this approach should be so attractive. 

Lifecycle costing doesn’t just provide system and performance benefits for a school buildings; it can actually provide valuable cash flow forecast insight for facilities managers and head teachers too. 

The advent of the Energy-related Products Directive (ErP), which came into force this September, imposes tougher performance rules on complete building services systems, with an emphasis on how they perform over time, putting efficiency under the spotlight. And though this will help, contractors, specifiers and school decision makers alike must remain proactive in their choices and make them for the long, rather than short term. 

Neville Small is sales director at Potterton Commercial 

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