Property & Development Magazine September 2014

FRAUD IN CONSTRUCTION George McKillop, M.D. of Haymarket Risk Management Ltd explains why we can’t rely on audit to detect fraud

Also inside...

MAR SERVICES P22

HOUSING SOLUTIONS P32

HOLLAND AND BARRETT P48

ISSUE 409

PROPERTYAND DEVELOPMENT THE MAGAZINE FOR THE PROPERTY INDUSTRY

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editors page_feature 2 29/07/2014 16:49 Page 1

01 PROPERTY AND DEVELOPMENT

MAKE RENTING ATTRACTIVE

❱

We are a nation hotwired to buy our own property. A mortgage isn’t a burden but an opportunity. It is something to aspire to, not turn your back on. That’s why it is

becoming harder for those stuck in the renting sector to see 40% of their earnings on average taken by rent compared to 20% on average for those with mortgages. Ultimately, the most damning charge against renting is that you end up with nothing at the end of it.

But renting shouldn’t be shunned and can be viewed as a positive, especially for those who want to keep their options open.

There are problems in the market that need to be addressed, not least the fact that a quarter of those in the private rented sector are subsidised by housing benefit putting further strain on the welfare bill. There is also a call to better regulate the sector in order for it to deliver improved living conditions. A recent government survey found that a third of privately rented homes were in poor condition.

But renting shouldn’t be seen as a bad option. It offers flexibility which is especially useful to the renting market’s chief demographic - 25 to 35 year olds. Where jobs aren’t as secure as they used to be, moving home is likely to be more frequent and therefore renting gives people the opportunity to do just that.

What’s important is helping “generation rent”. We must ensure that the sector is properly regulated and we must provide availability and affordability to renters. Matt Hutchinson, Director of UK flat and house share website SpareRoom.co.uk says, “There's plenty of scope for debate on how we tackle the housing crisis in the private rented sector: build more, cap rents, enforce a landlord register, make better use of the estimated 15m empty bedrooms in England alone. But tackle it we must. It's time to turn the property ladder on its side and provide affordable options for everyone.”

DANIEL STEPHENS GROUP EDITOR

PAD Ltd Property and Development Magazine is published by PAD LTD. Company registered in England & Wales. All material is the copyright of PAD LTD. All rights reserved. Property and Development Magazine is the property of PAD LTD. This publication may not be reproduced or transmitted in any form whole or part without the written permission of a director of PAD LTD. Liability: while every care is taken in the preparation of this magazine, the publishers cannot be held responsible for the accuracy of information herein, or any consequence arising from it. In the case of company or product reviews or comments, these have been based upon the true and honest opinion of the Editor at the time of going to press.

MAGAZINE MANAGER: KEN BOOTH

CONTRIBUTORS: JEFF SENIOR

FEATURE MANAGERS: VAUGHAN WILKS OSCAR WILDE MARK BRITTEN

PRODUCTION: VICKI LINDSAY LISA POLLINGER

GROUP EDITOR: DANIEL STEPHENS EDITOR: CIARAN JAROSZ ART EDITOR: STEVE WILLIAMS DESIGNER: STACEY BREWER

ACCOUNTS: NICK CHARALAMBOUS ADMINISTRATION: LISA BARRANS PROPERTY AND DEVELOPMENT IS PUBLISHED BY: PAD LTD, 6TH FLOOR, CROWN HOUSE, SOUTHGATE, HUDDERSFIELD, HD1 1QX TEL: 01484 437300

contents_feature 2 30/07/2014 11:04 Page 2

2

CONTENTS COVER STORY FRAUD IN CONSTRUCTION

George McKillop, M.D. of Haymarket Risk Management Limited explains why we can’t rely on audit to detect fraud

26

32

HOUSING SOLUTIONS

A clear solution 14

FACILITIES SHOW

Follow us on

_PADMagazine www.padmagazine.co.uk

20

AMALGAMATED LIFTS

contents_feature 2 30/07/2014 11:04 Page 3

3

SECTIONS

BALI FACILITIES MANAGEMENT FEATURES

10 14 26

HOUSING

30

RETAIL

42

NEWS

4

This month’s top stories

LANDSCAPE DESIGN BALI

10

BALI success

THE GARDEN BUILDERS

12

Award winners

FACILITIES MANAGEMENT FACILITIES SHOW 2014

14

A resounding success

INTERSERVE

16

The changing shape of FM

AMALGAMATED LIFTS

20

Improving efficiency

MAR SERVICES

22

A refreshing approach to cleaning

FEATURES FRAUD IN CONSTRUCTION

26

A new approach to fraud detection

HOUSING CHARTERED INSTITUTE OF HOUSING

30

New President takes office

HOUSING SOLUTIONS

32

A clear solution

RETAIL

42

PUNCH TAVERNS

PUNCH TAVERNS

42

Investing in partnership

HOLLAND & BARRETT The good life

48

PAD News9_feature 2 16/07/2014 13:23 Page 4

4 PROPERTY AND DEVELOPMENT News

MITIE AWARDED UK COMMERCIAL £33M CONTRACT PROPERTY VALUES RISE AT FASTEST RATE OF YEAR

❱

Commercial property values in the UK rose by 1.6% in June, up sharply

from a 1.1% rise in May. This is the highest monthly increase of 2014 and also the highest since the recovery in

BRISTOL-BASED outsourcing

services and porter duties

company Mitie has been

at Epsom Hospital.

valuations began in May 2013.

IPD UK Monthly Property

It will also supply patient

Index data show values have risen

management contract with a

catering, retail catering and

by 10.1% over the past 14 months

hospital trust in Surrey.

ward hostess services at both

of growth, but remain well below

Epsom Hospital and St Helier

the peaks of 2007.

awarded a £33m facilities

The business reported that the Epsom and St Helier University Hospitals NHS Trust

Hospital.

Rob Cattell, managing

agreement would run for an initial

director of Mitie's

five years, valued at £33m, with

Environmental + business,

the possibility that it could be

said: “This is a fantastic

extended by up to two more years.

development for our business,

Under the terms of the agree-

and further expands our

ment, Mitie will provide a range

capability to deliver a full range

of services to the trust including

of hospital services to a major

domestic cleaning, helpdesk

acute trust.”

The asset class is outperforming the core classes

ing 2.5% in June, followed as has

of equities and bonds. UK

been consistently the case by

commercial property returned

retail, which returned 1.6% overall

2.1% for the month with income

for the month.

return at 0.5%, versus bonds

assets have been in outer London

equities at -1.3%.

offices and industrials in the outer

Offices and industrials were at the forefront of this both return-

DODDLE LAUNCHES NEW SERVICE TO HELP FREE UP MAILROOMS DODDLE, the UK’s first fully

Doddle will offer Corporate

key business districts and the

dedicated, staffed, online shopping

Deals to businesses on both a

quality of these dedicated outlets

collection and returns service

national and local basis to cover

will mean that organisations can

located in Network Rail train

providing a collection point for all

be proud of where they send their

stations and major hubs, has

personal employee parcel deliveries.

employees. Other benefits include

launched a unique solution

This is a truly viable alternative as

longer opening hours designed to

designed to help organisations,

Doddle can be used to collect

facilitate the extended working day.

property and facilities

items from any retailer, unlike all

management companies to free up

the other solutions in the market-

also be used to send parcels using

their mailrooms. The new service

place that are tied to specific ones,

a range of different carriers,

is designed to address the

providing the only service that

enabling companies to benefit

challenges faced by companies

enables customers to combine

from a consolidated B2B rate for

who allow employees to have

multiple collections and returns at

all their business tenants located

their online shopping purchases

a time that suits them or coincides

in a single building. National

delivered to work, and are now

with an already planned journey.

corporate deals will also be

struggling to cope with the volumes involved.

The Doddle Shops will also be conveniently located in and around

The best performing specific

which returned -0.7% and

In addition, Doddle shops can

available for this and inter company deliveries.

South-East, both returning 3.2% in June. Retail outside of the

PAD News9_feature 2 16/07/2014 13:23 Page 5

5 PROPERTY AND DEVELOPMENT News

TELEREAL TRILLIUM AWARD £300 MILLION CONTRACT TO COFELY

❱

Telereal Trillium has appointed Cofely to deliver a range of hard and soft facilities management (FM) and project services under a new integrated facilities management

(IFM) agreement.

The new agreement, which is worth up to £300 million over the life of the contract, will see Cofely become a key partner to Telereal Trillium. Cofely will be responsible for delivering a range of FM and project services across Telereal Trillium’s Department for Work and Pensions portfolio, and project services across the Driver and Vehicle Licensing Agency and Aviva portfolios.

Commenting on the new agreement, Adam Dakin, joint managing director at Telereal Trillium, said: “We are delighted to add Cofely’s skills and expertise to our service delivery capability.

Over the last two decades, Telereal Trillium has built a strong track record of managing and optimising complex estates and FM

outside the South-East was the

being bolstered by strengthening

supply chains. Appointing Cofely in this key, frontline role

weakest, returning just 1.0%.

occupier markets, while yields

represents the further evolution of Telereal Trillium’s service

“June 2014 was very good

remain competitive with other

delivery model to ensure we continue to deliver an effective and

asset classes,” he added.

efficient service to our customers.”

month for investors in UK commercial real estate, with returns

The IPD UK Monthly Property

Wilfrid Petrie, chief executive officer of Cofely, added: “This latest award clearly illustrates the strength and breadth

matching their highest levels of

Index tracks performance of

the current recovery,” Phil Tily,

3412 property investments with

of Cofely’s capabilities, in terms of both range of services and

IPD’s head of UK and Ireland said.

a total value of £38.2 billion as

geographical coverage. It demonstrates how we can integrate FM,

“Encouragingly, performance is

of June.

energy and project services to create value for our customers. We are looking forward to working in partnership with Telereal Trillium and building on our existing relationship with Department for Work

SHORTAGE OF QUANTITY SURVEYORS AT CRISIS LEVEL SKILLS shortages have hit their

shortages of bricklayers and

highest level since 2008 with

51% reported a shortage of

54% of firms reporting

managerial workers.

insufficient numbers of quantity

Alan Muse, RICS Director of

surveyors available to meet

Built Environment, said: “The UK

current workloads.

construction market is mirroring

Figures in the latest RICS UK

the natural consequence of a rise

Construction Market Survey Q2

in demand after five subdued years.

2014 show private housing,

“The upsurge in housing

commercial and industrial

demand is creating pressure

sectors driving strong growth

across an industry which failed

across the whole of the UK.

to invest in attracting new talent

But a shortage of white and

or in the training of existing

blue collar workers is a real

employees at the height of the

threat to recovery.

economic downturn and this in

The survey showed that 59% of respondents reported

turn is creating similar effects among material supply.”

and Pensions.”

As part of the new agreement, which runs until March 2018, around 275 Telereal Trillium service delivery staff will transfer to Cofely in July 2014.

Cofely will be responsible for providing services at over 900 locations across the UK.

PAD News9_feature 2 16/07/2014 13:23 Page 6

6 PROPERTY AND DEVELOPMENT News

SCULPTURE PARK WINS MUSEUM OF THE YEAR AWARD Yorkshire Sculpture Park wins art fund prize for museum of the year 2014

❱

Yorkshire Sculpture Park (YSP) has won the Art Fund Prize for Museum of

the Year 2014. The great and good of the museum and art world gathered at the National Gallery on 9 July 2014 to find out who would win the prestigious prize, which was presented by the Oscar-winning film and theatre director, Sam Mendes.

The judges chose YSP out of six remarkable finalists; the other museums were Ditchling Museum of Art + Craft in East Sussex, Hayward Gallery in London, Mary Rose Museum in Portsmouth, Art Fund Prize for Museum of the Year awards dinner. Courtesy the Art Fund.

(L-R) Sam Mendes, Clare Lilley, Peter Murray, Greville Worthington

Sainsbury Centre for Visual Arts in Norwich and Tate Britain in London.

The judges were incredibly impressed by YSP during their visit, and found it to be a truly

Stephen Deuchar, Chair of the

outstanding museum with a bold

Judges, said: “A perfect fusion of

artistic vision, consistently

art and landscape, Yorkshire

delivered at the highest level. They

Sculpture Park has gone from

remarked upon the mix of sensory

modest beginnings to one of the

experiences, created by the

finest outdoor museums one might

“A PERFECT FUSION OF ART AND LANDSCAPE, YORKSHIRE SCULPTURE PARK HAS GONE FROM MODEST BEGINNINGS TO ONE OF THE FINEST OUTDOOR MUSEUMS ONE MIGHT EVER IMAGINE.”

harmonious integration of

ever imagine. In 2013 it really

learning, landscape and sculpture,

came of age with art projects

and brought to life with works by

such as Yinka Shonibare’s

incredible staff, the artists with

health is a different matter,

artists including Julian Opie,

extraordinary exhibition; the

whom we’re privileged to work so

however – and in that respect

Henry Moore and James Turrell.

fruits of the expansion and

closely, and our truly wonderful

this award is a crucially

consolidation of the landscape on

visiting public.”

important boost to one deserving

The exhibition by Yinka Shonibare MBE, the sensitive

both sides of the lake; and with the

Announcing the winner, Sam

restoration of the beautiful

conversion of the chapel to house

Mendes said: “I’m genuinely

organisation.”

18th century chapel, and the

(as its inaugural exhibition) a

honoured to have been asked to

Art Fund director, Stephen

installation of Roger Hiorns’

major new work by Ai Weiwei.”

be a part of announcing this

Deuchar – were Sally Bacon,

Seizure 2008/2013 were the

Peter Murray CBE, YSP’s

award. The dedication, love and

director of the Clore Duffield

This year’s judges – chaired by

crowning highlights of 2013 – the

Founding and Executive Director,

unbelievable creativity of the six

Foundation; Michael Craig-Martin

culmination of a 40-year journey

said: “We are so surprised and

candidates for the Art Fund

RA, artist; Wim Pijbes, director of

led by Founder and Executive

honoured to win this major award.

Prize for Museum of the Year

the Rijksmuseum, Amsterdam;

Director Peter Murray.

It’s extremely important to have

are clear for all to see, as is the

and Anna Somers Cocks,

the validation of our peers. This

creative health of the UK Museum

chief executive of The Art

award is dedicated to our

community as a whole. Financial

Newspaper.

Barbara Hepworth, The Family of Man, 1970.

PAD News9_feature 2 16/07/2014 13:23 Page 7

7 PROPERTY AND DEVELOPMENT News

KIER GROUP LAUNCHES NEW HOUSING DIVISION

KIER GROUP, the leading

explains: “The model of balancing

construction, services and

activity across the public and

property group, which employs

private housing markets will

over 16,000 staff worldwide, has

protect the business against

confirmed its launch of a new

market fluctuation and enables

unified housing division to

Kier Living to really leverage the

respond to the significant market

potential of its mixed tenure

opportunities created by a nation-

model. The cross subsidy effect

wide shortage of housing stock.

of this model enables our local authority and housing association

The new division, which will be branded as Kier Living, brings

clients to generate the necessary

together three existing Kier

funding to deliver a wide range of

housing businesses that have each

housing solutions limiting the

been incubated over the last few

impact on the public purse.

“We believe this is the ideal

years to provide the Group with specialist housing skills, from

intends to triple its output,

respond to the volume of public

time to focus our house building

contracting, to affordable housing

increasing house building from

land emerging through the HCA

offering in this way and to grow

partnerships to private market

1,500 units currently, to circa

Developer Partner Panel

our presence across our core

housing. This blend of skills

4,000 units over the next five

Framework and the HCA

markets and regions. Housing

enables Kier Living to offer both

years. The Kier strategic model

Affordable Homes Programme.

associations and local authority

the public and private sector a

will also see the division splitting

The division will target growth in

clients along with other public

comprehensive end to end

its focus, with 25% of that activity

the north and the south-east,

and private bodies are increasingly

housing solution, which is rare if

on its own land and 75% on client

supplementing its other existing

asking Kier to help them deliver

not unique on this scale.

held land.

regional strongholds and

new housing stock for the first

Kier Living will expand its

providing a true nationwide

time in many years so it’s vital that

very well placed to respond to

geographical footprint to meet

footprint for the first time.

we expand our housing delivery

market demand to increase

nationwide demand for new

housing delivery. Kier Living

homes, to be better able to

The new division is therefore

John Anderson, Kier Living executive managing director,

solution to respond to this growing demand.”

BIFM ‘FACILITIES MANAGER OF THE YEAR’ AWARDED PLATINUM AWARD OF EXCELLENCE IN FM THE BRITISH Institute of

said: “This is probably the greatest

Facilities Management’s’ (BIFM)

accolade I can receive from my

reigning ‘Facilities Manager of the

peers and industry bodies. I am

Year’, Deborah Rowland, has

extremely proud to have won this

officially been presented with her

on behalf of all UK Facilities

‘Platinum Award of Excellence in

Managers particularly those

FM’ after her success in the 2014

serving the public sector.”

Global FM Awards. The annual

Key to her win was the

Awards from Global FM recognise

creation of a central FM strategy

and reflect the ‘best-of-the-best’

which is assisting government in

in facilities management (FM)

reducing the budget deficit by

from across the globe, as entrants

proving that FM is the enabler to

only consist of award finalists

achieving significant running cost

from Global FM members.

efficiencies across the public

Speaking on her win, Deborah

sector estate.

PAD News9_feature 2 16/07/2014 13:23 Page 8

8 PROPERTY AND DEVELOPMENT News

FROM MAIL BAGS TO SHOPPING BAGS

SAGER GROUP has completed a

Sager will develop the site

deal with Royal Mail to relocate

simultaneously to Royal Mail’s

the Islington delivery office to

building and moving to their new

Eagle Wharf Road and absorb the

and modern facility which will be

remaining buildings of the former

operational by summer 2015. Sager

North London Sorting Centre into

has owned the majority of the site

Sager’s £370m Islington Square

for a number of years while it

retail and leisure development.

obtained detailed planning consents.

The acquisition is part of

The new scheme will be

Sager’s planned regeneration and

launched as Islington Square and

development of the Former North

will have pedestrian entrance

London Mail Centre, Islington N1

from Upper Street, Almeida Street

which has been operated by Royal

and Studd Street. Islington Square

Mail since 1904. The 500,000 sq ft

will revitalise the heritage of the site

mixed use Islington Square devel-

whilst creating a new residential

opment will incorporate 170,000

and retail hub with a selection of

sq ft of retail and leisure space

shops, cafes, restaurants, offices,

along with 356 residential units

health club and bespoke cinema.

NEWS IN BRIEF ❱❱The north west office of BAM

already delivers repairs and

spending power. Cowgill

Assessment Centre, who

Construction, based in Salford, has

maintenance services to 42,000

Holloway Property and

describes Paul as, “Someone

been selected as the preferred

council houses, maintain homes to

Construction team worked with

who always presents a ‘can do’

contractor for the £10m design

a high standard, as well as ensuring

Landmark to secure the new

attitude and has the ability and

and build contract for the

adaptations are carried out for

funding from RBS.

professionalism to deal with all

Ambulance and Fire Services

those who need it most.

types of security issues, making

❱❱ Paul Hodgson, Security

him a credit to both his profession

❱❱ Bolton-based Landmark

Supervisor at Equinox Security, a

and his company”.

❱❱ Kier Services has been awarded

Investments Group says it has

TC facilities management company,

more than £13m in new contracts

£10m available for acquisitions of

has been recognised at the ACS

❱❱ The leading UK-based

to provide new heating systems

residential and commercial

Pacesetters’ inaugural awards

facilities management company

and carry out adaptation works to

ground rents.

lunch, as an “Officer of

Incentive FM has made a key change

Distinction” for his ‘can do’

within its team. Simon Morrison

Resource Centre in Wrexham.

homes across Sheffield.

The contracts, awarded by

Landmark recently sold part of its portfolio for £6m at a 3% yield.

approach at the Cambridge

will be promoted into an exciting

Sheffield City Council, will

The proceeds have been put

Assessment Centre.

and highly responsible new facilities

see Kier Services’ housing

towards new bank facilities which

maintenance business, which

now gives the Group £10m of

Paul was nominated for the

management role, in order to help

award by Mark Hayward from the

bolster the company’s growth in 2014.

PAD News9_feature 2 16/07/2014 13:23 Page 9

9 PROPERTY AND DEVELOPMENT News

BUDGETS CONTINUE TO RESTRICT FMS ❱ Forty per cent of FMs

of which relate directly to

believe that budget is the

administration.

main challenge facing

“Once upon a time, we would

Ricky Nelson, senior facilities

manager at Jones Lang LaSalle, added: “The role of the FM has

them, according to a survey

have had answers along the

changed significantly over the

conducted by Propertyserve UK,

lines of: 'troublesome tenants’,

past 10 years. The administrative

which provides fully-managed

‘over- demanding clients’ or ‘time

responsibilities have grown due to

helpdesk and procurement

spent on the road' as some of the

the drive from managing agents to

solutions exclusively to the

typical responses.

provide their clients with real

property and asset management sector.

“Today, the FM's role has

time budget reporting as well as

been extended so that the

providing audit trails for each

control measures and level of

FM process facilitating a

challenges, more than one third

administration involved carry

transparent service.

(35%) stated procurement, and

equal, if not more, weight than

26% advised that it was time.

the traditional and practical role

a heightened appreciation for

of a facilities manager.

the importance of health and

In terms of the other

Commenting on the findings, Chris MacDonald, Managing

“Procurement is an area of

“This has been coupled with

safety and the need to

Director at Propertyserve, said:

property management which

thoroughly vet and validate

“The fact that the three leading

has come under the spotlight in

risk assessments and method

concerns stated by FMs make

recent years. More than ever, it

statements, whilst ensuring

no reference to property owners

has become important for

contractors have the necessary

or tenants is a real sign of the

organisations to achieve savings

qualifications, certifications

times. Procurement, time and

through economies of scale,

and insurances in place to

budgets are mainly internal

and improved control over their

work safely on the managed

procedures and activities – two

contractor base.”

portfolio.”

POUNDLAND FOUNDER ENTERS THE PROPERTY MARKET

management company Jones

THE ENTREPRENEUR who

sell or let any property online for a

role as General Manager for

Lang Lasalle, after having been

founded Poundland with a

one-off fixed fee.

Capco’s Covent Garden London

awarded a million pound

£50,000 loan before selling it 12

Portfolio and will become

contract for Middleton Grange

years later for £50m has talked

EstatesDirect.com the UK's

responsible for several key facili-

Shopping Centre in Hartlepool.

about the potential for his new

largest personal estate agency

fixed-fee estate agency business to

network within the next few

revolutionise the property market.

years," Smith said.

Simon will be moving from his

ties management contracts

Middleton Grange Shopping

"We want to make

including Somerset House in

Centre covers an area of over

London, St Anne’s Shopping

550,000 square feet and contains

EstatesDirect.com, which

Centre in Harrow, Ilford

140 stores, including some of the

smashed its crowdfunding target

to operate via a network of

Exchange Shopping Centre and

leading names on the UK high

in April (2014) securing almost

franchises and licensees around

The Marlowes Shopping Centre

street, as well as an indoor market.

double its £250,000 target, is in

the country, will use the

in Hemel Hempstead.

It has a car park with 1,200

the process of scaling up with

crowdfunding cash to fund its

spaces. The centre prides itself in

almost 130 people willing to

expansion plans.

❱❱ Incentive FM, the leading

delivering ‘a good day out’ and

take on the franchise across the

independent facilities management

Mark Rycraft was recently

country, Steve Smith said.

company, has further extended

awarded “Centre Manager of the

its relationship with property

Year’ at the SCEPTRE awards.

Launched in 2012 to break in

The company, which plans

The idea for EstatesDirect came to Smith when some potential tenants came to look at

to a UK market valued at more

renting some properties he had

than £6bn, it allows customers to

developed in Liverpool.

BALI_feature 2 28/07/2014 15:48 Page 10

10 PROPERTY AND DEVELOPMENT Landscape Design: BALI

❱

BALI members at the 2014 RHS Chelsea Flower Show have been rewarded with a haul of five Gold, seven Silver-Gilt and seven Silver medals, and one Silver Flora medal. With the usual focus on the show’s winning designers, BALI are proud and delighted to celebrate the achievements of the BALI contractors and supplier members who transform the complex designs into gardens that inspire and stay in the memory long after the show has finished.

The Outdoor Room achieved two Golds – for the Homebase Garden ‘Time to Reflect’, in association with Alzheimer’s Society, and for London Square in the Fresh gardens. They also walked away with a Silver-Gilt for the Cloudy Bay Sensory Garden, completing a magnificent achievement by David Dodd and his team. BALI Registered Designer Gavin McWilliam and Andrew Wilson of Wilson McWilliam Studio designed the Cloudy Bay garden.

Outdoor Options received a worthy Gold for the beautiful No Man’s Land garden for ABF The Soldiers’ Charity and picked up a Silver-Gilt with Living Landscapes for the WellChild Garden. MD Brian Herbert said he was privileged to work on these two emotive gardens and is delighted the designers and his team have raised the profile of both charities as a result of the gardens’ success.

Landscape Associates, with Himalayan Landscaping, helped young designer Hugo Bugg to a magnificent Gold for the RBC Waterscape Garden for the Royal Bank of Canada. Hugo is Chelsea’s youngest Gold Medal winner and Landscape Associates will be justly proud of their contribution to his success.

BALI SUCCESS BALI members at the 2014 RHS Chelsea Flower Show have been rewarded with a haul of five Gold, seven Silver-Gilt and seven Silver medals, and one Silver Flora medal

BALI_feature 2 28/07/2014 15:49 Page 11

11 PROPERTY AND DEVELOPMENT Landscape Design: BALI

Bartholomew Landscaping, Bowles & Wyer and PC Landscapes each received Silver-Gilt for their Show Gardens – Positively Stoke-on-Trent, The Brewin Dolphin Garden, and The Extending Space gardens respectively.

Success in the Fresh gardens category came to both BALI Registered Designers and Contractors. Silver medals were awarded to designers Chris Deakin and Jason Lock and contractor Landform Consultants for the House of Fraser garden, Fabric, to Indoor Garden Design for The World Vision Garden, to designer Helen Elks-Smith and contractor Wycliffe Landscapes for the innovative and thought-provoking City of London Corporation Oak Processionary Moth Garden, and to Mark Wallinger for the Cave Pavilion in support of the Garden Museum.

BALI Affiliate (supplier) members’ products were out in force on virtually every garden at the show and also graced the BALI information stand on Eastern Avenue with composite wood decking from Silvadec, stunning planters from IOTA and contemporary plants from Robin Tacchi Plants. BALI Affiliate members Harrod Horticultural

“Once again our members have demonstrated, across the board, their professionalism and exquisite attention to detail. Our contractors are trusted with the designs of some of the best designers in the world and never fail to deliver. With our trade presence at this year’s event we are reinforcing the message that the expertise and skill of BALI Designers and Contractors, and the products of BALI Affiliate members, are all that is needed to deliver an award winning garden. On behalf of the wider membership I congratulate each and every one of our medal winners on their magnificent achievements.”

WAYNE GRILLS BALI’s Chief Operations Officer

were joint winners of the Product of the Year Award 2014, which they received for their Slot & Lock Storm Proof Vegetable Cases.

And finally, in the Great Pavilion, The Perennial Garden won a Silver-Gilt for BALI contractor Streetscape, and BALI Training Provider Sparsholt College Winchester is to be congratulated on achieving Gold and Best Discovery Exhibit for The Paper Chase, which looked at the plants linked to paper and the cycle of use and re-use.

Capel Manor College was also rewarded for its exhibit, Small is Plentiful – the story of community food production across London – with a Silver Flora.

BALI Landscape House Stoneleigh Park, Warwickshire CV8 2LG www.bali.org.uk

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12 PROPERTY AND DEVELOPMENT Landscape Design: The Garden Builders

The Garden Builders has gained a solid reputation within the industry for producing well constructed gardens with a keen eye on detail and for running well managed schemes that are completed within budget and on time

AWARD WINNERS

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The Garden Builders was formed in 1998 and is based in Fulham, south-west London.

The office is set within an attractive showroom/gallery, which showcases the best in exterior garden lighting, contemporary garden furniture, bespoke water features and desirable exterior sculptures. The business to date has specialised in the design and construction of mainly private, domestic gardens both in the UK and overseas. It also works for a variety of established and younger, up-and-coming landscape architects and garden designers, interpreting their designs and creating beautiful gardens for clients.

The Garden Builders has gained a solid reputation within the industry for producing well constructed gardens with a keen eye on detail and for running well managed schemes that are completed within budget and on time. More recently the company has won several APL and BALI awards and has constructed Gold and Silver Gilt medal winning show gardens at the prestigious RHS Chelsea Flower Show.

The Garden Builders management team has a combined experience of some 55 years plus in all aspects of building, design and horticulture – the skills required to create truly inspired gardens.

The management team is led by Paul Alder. Paul has over 25 years experience in the horticultural and landscaping industries. Starting his career in the Royal Parks, working at both Kensington Gardens and at the Queen Mary's Rose Garden in Regent's Park, he was promoted to the position of Charge Hand at the age of 24, with a responsibility for over 40 staff. Paul continued to study horticulture on a full time basis at Oaklands Horticultural College. Paul started his own

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13 PROPERTY AND DEVELOPMENT Landscape Design: The Garden Builders business, in conjunction with the Princes' Trust and went on to win a regional award. In 1993 Paul was granted a franchise by Great Gardens of England in order to run his business from Syon Park, the Duke of Northumberland's London estate. Paul's company also re-built the main courtyard garden at the house. During this time Paul also won the BALI (British Association of Landscape Industries) Award 1997.

He has built show gardens at Decorex International and a water garden at the RHS Chelsea Flower Show – in conjunction with the Princes' Trust and with the help of Anthony Archer Willis – noted water garden designer.

Paul is ably supported by Ricky Goodwin. Having begun working in the industry at age 18 restoring local authority woodlands to their former glory, Ricky was inspired to look into garden construction within the private sector. This led him into working for several suburban landscape contractors.

Here Ricky began to understand his craft and this in turn led him into undertaking and successfully completing a HND in Horticulture, finishing in 1996. This qualification combined with his previous 'on the tools' experience enabled him to set up his own domestic landscape contracting company.

Schemes undertaken ranged in size from £500 to £50,000.

These contracts were tendered for, designed and built by himself and a small number of staff. It was these years of successfully running his own small business that allowed Ricky the opportunity to become an integral part of a larger business, successfully managing varied, innovative, high quality projects that the Garden Builders strive to undertake.

Adding to the team are the skills of Neil Dunster. Neil has worked in the garden landscaping industry for 12 years.

Whilst studying for a degree in Landscape & Garden Design he worked for a successful London based landscaping com-

The Garden Builders management team has a combined experience of some 55 years plus in all aspects of building, design and horticulture pany completing various prestigious landscaping schemes.

He has been involved in building numerous exciting projects, including a BALI National Award winning garden and also building an acclaimed award winning show garden at the RHS Chelsea Flower Show.

Neil is a Landscape Manager at Garden Builders, a company he helped to form in 1998. Neil's speciality is his working knowledge of modern design concepts and the exciting use of up to date 'cutting edge' materials. He can advise garden designers on the more technical aspects of building a scheme whether modern or traditional in design.

Complementing the group is Jack Wac. Jack graduated from the University of Warsaw in 2003 with an MA in Landscape Architecture. Jack decided to come to the UK – the home of horticulture and garden design – to pursue his love for garden design, garden construction and plants! Jack teamed up with The Garden Builders to bring his comprehensive skills in both free hand drawing and Computer Aided Design software to the business. Jack is also a successful landscape and horticulture photographer and has been working on a ‘planting data base' to support his garden and landscape design interests.

Garden Builders 259 Munster Road London SW6 6BW www.gardenbuilders.co.uk Tel: 020 7381 8002

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14 PROPERTY AND DEVELOPMENT Facilities Management: Facilities Show

A RESOUNDING SUCCESS❱

The Facilities Show organisers announce 10,000 visitors and a 7% increase in seniority of attendees at this year’s exhibition.

Facilities Show has celebrated its 15th year in style, with a 16% increase in stand space and over 10,000 visitors. The move from the NEC Birmingham to London ExCeL was long in the planning and keenly anticipated, with over 100 brand new exhibitors attracted to the event. Show organisers have declared the event a resounding success as 10,000 Facilities Show visitors registered for the show and crossing over from the co-located events.

In total, the Protection and Management Series welcomed 40,000 visitors to the ExCeL over the three days.

Fergus Bird, Group Event Manager, UBM Live, said: “We are really pleased with the overall event this year. We saw an increase in visitors, seniority, international attendees and a large crossover from the other co-located show. These are highly encouraging signs for the future of Facilities Show as we aim to grow in all these areas over the coming years.”

The show, held June 17-19, is run in association with the British Institute of Facilities Management (BIFM). The event is the world’s largest dedicated exhibition to the facilities management industry and plans to further internationalise the event have now been cemented by its new residence in London.

There is no other comparable exhibition dedicated to uniting FM professionals from all sectors and geographies with suppliers, advisers and specialists offering the very latest in innovation and education.

A perk of the being situated in London was the highly exclusive site tour at Queen Elizabeth Olympic Park during the show, organised in association with BIFM London Region. Attendees were given a “behind the scenes” look at many of the facilities including the Aquatics Centre by the

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15 PROPERTY AND DEVELOPMENT Facilities Management: Facilities Show

Head of Facilities and Estates, Stephen Gill. Both Tom Daley and Rebecca Adlington were using the competitor pool at the beginning of the site tour, creating much excitement for the attendees.

Another benefit of the new venue was the co-location of the show with other events within the Protection & Management series covering security, fire, safety & health, energy & environment and service management. Facilities managers attending heralded this one-stop shop for all their needs, a true rarity for the diverse needs of the FM. One of the major characteristics of this year’s event was the prevalence of technology being used throughout the event. The education sessions were a proverbial melting point of devices with headphones being used for silent technology, wireless smart screens being used for the presentations and visitors diligently taking notes on lightweight laptops & iPads and planning their next move using the show app on their smart phones. Visitors buying needs were being connected to exhibiting suppliers via twitter using the buying request service.

Our stand was well attended and we received lots of positive feedback from visitors and other exhibitors about our ‘PR & social media clinic’ theme. I spoke in the keynote theatre and BIFM Networking Hub to an audience keen to

“The move to London was a major undertaking for all parties and we are thrilled to have moved safely to the docklands world-class convention centre, London ExCeL. It is vital for our profession that we have an annual meeting point for the exchange of ideas and the latest innovations. We believe that the UK is the global leader in facilities management and Facilities Show is an important event for the industry.”

Gareth Tancred, Chief Executive BIFM learn and discuss utilising social media in their businesses.

The silent seminars were a great idea, given the large number of visitors and noise levels. I would highly recommend exhibiting at the Facilities Show at ExCel London and Zoodikers are very much looking forward to being part of the 2015 event.”

One of the most eye-catching exhibitors was Innovise Software with a Wild West themed presence at the show. They were running the cowboys out of FM and judging by all the happy faces at this year’s event, they may well have done this.

Facilities Show 2015 will take place Jun 16-18 at London ExCeL. For more information, visit: www.facilitiesshow.com

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16 PROPERTY AND DEVELOPMENT Facilities Management: Interserve

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With its roots dating back to 1884, Interserve is one of the most prominent and successful organisations operating within the UK construction industry, reporting revenues of over £3bn and staff levels of over 75,000 across the world. A core of Interserve’s operations revolves around its facilities management services, of which Interserve has been providing now for over 20 years and has established itself as one of the market leading facilities management services throughout the UK. Understanding that every organisation needs a reliable and experienced partner to enhance its performance as a business through effective facilities management, Interserve Facilities Management aims to innovate and redefine what facilities management solutions can do for clients and how this can enable organisations to focus solely on service, cost and overall business efficiency.

Interserve is able to offer such a reputable and altogether convenient method of supporting business’s operations by covering a wide variety of areas such as: cleaning, catering, security, maintenance, industrial cleaning, mechanical and electrical services and project services as part of complete, integrated service packages. Though effective management and a wealth of experience in the sector for each and every aspect involved in its services, Interserve is able to focus on legislation and compliance for its services.

Providing facilities management services for an assortment of organisations, including schools, banks, shopping centres, industrial parks and a whole plethora of other market sectors, Interserve is truly able to claim the experience and capability of meeting whatever the requirement for whatever the client. Interserve’s services are reputably reliant, resilient and compliant which has enabled a multitude of organisations to rely on such facilities management services and the ample benefits that they provide.

THE CHANGING SHAPE OF FM

ROLE MODEL Having won the 2013 Premises and Facilities Management (PFM) Partners in FM Secure Facilities award for work with the Defence Infrastructure Organisation (DIO) and its PFI team, Interserve has become something of a role model for facilities management throughout the sector. The PFM Awards are widely acknowledged as the premier accolade for quality, best practice and in partnerships to deliver facilities management and support services in both the public and private sectors. Interserve’s success at these awards is great testament to the service that it has provided to the DIO and its overall service quality for all of its clients.

Interserve has been working with DIO for approximately 25 years to provide a service delivery solution for modern communication amongst the Armed Forces.

Providing building and grounds maintenance, medical and dental support, leisure and hospitality services, environmental and conservation services, logistics, tailoring, administration, reprographics and motor transport services in addition to managing the underground military town

Every organisation needs a facilities management partner that has the expertise to enhance their business performance and their brand – a partner that can focus relentlessly on service, cost and efficiency.

Interserve provide services to a diverse range of estates and environments, from schools, banks and shopping centres through to industrial parks.

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17 PROPERTY AND DEVELOPMENT Facilities Management: Interserve

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18 PROPERTY AND DEVELOPMENT Facilities Management: Interserve

Interserve Plc, Interserve House, Ruscombe Park Twyford, Reading Berkshire RG10 9JU www.interserve.com Tel: 01785 255146

at Corsham, Interserve has been both privileged, and able to support our ever-important Armed Forces and our heritage, such as links to our Cold War history at Corsham.

Judges from the awards commented: "Both Interserve and the team at MoD Corsham are working closely together for the greater good and to constantly innovate and improve. There was a passion for this partnership that is a recipe for continued success into the future. The complexities of this relationship needed to be seen and understood to appreciate its scope and significance to the MoD. Meeting many of the Interserve and MoD personnel firsthand demonstrated how the partnership is so strongly knitted together."

In addition to success with the DIO, Interserve was awarded an impressive contract with the Foreign and Commonwealth Office (FCO) this year. The three year contract, which could extend by a further three years depending on success will see Interserve delivering a wide range of services to British diplomats in France, such as: cleaning, waste management, planned and reactive building maintenance, pest control, asset management and support for events. The contract itself comes as a nice addition to Interserve’s already existing and widely acclaimed seven-year facilities management contract for FCO’s UK estates, with a further 14 diplomatic missions around Europe and further cleaning services in Spain.

Managing Director – Defence for Interserve, Nick Goodridge commented on the acquisition of this impressive new contract, saying: “We continue to successfully develop our service, performance and relationship with the Foreign and Commonwealth Office. This is testament to the hard work of the Interserve FCO team during 2013 and will contribute towards the further expansion of our service delivery across Europe.”

With a vision to redefine the future for people and places, Interserve has managed to firmly place itself at the core of facilities management and support services throughout the UK, with an ever-growing network of key organisations being added to its client portfolio. It could be said that the portfolio speaks for itself and with such acclaim for work with the DIO and FCO being added to this; Interserve is likely to take an ever-more prominent position in the industry with years to come.

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19 PROPERTY AND DEVELOPMENT Facilities Management: Interserve

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20 PROPERTY AND DEVELOPMENT Facilities Management: Amalgamated Lifts

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29 Rowan Road, Denvilles, Havant, Hampshire PO9 2UX www.ffmservices.com

Amalgamated Lifts founded in 1988, have been providing Lift Maintenance, Repairs, Modernisation and Installation services throughout London and the Southeast for the past 25 years. Independently owned they have established long lasting relationships with a number of clients within the Private, Commercial, Public, Housing and Facility Management Sectors.

Their strongly skilled workforce of which 40% have been with the company for more than 10 years are dedicated to customer satisfaction; providing full, open and honest communication, solutions and quick, real time report information. The company had been using a somewhat dated vehicle telematics system. This system required the installation of expensive hardware and did not have the ability to monitor engineers once out of their vehicles.

So Amalgamated Lifts recently evaluated their telematic systems and upgraded to Romex’s Mobile Employee Management solution.

John Brand, Finance Director for Amalgamated Lifts said: “We have to have a monitoring system in place as it is imperative that we know where all our engineers are at all times. Given the nature of our industry it is vital to monitor staff for Health and Safety compliance. It’s a dangerous pro-

fession working in lift shafts and we need to know if, for example, a person hasn’t moved location for an hour. With our previous system whilst we knew they were on site, once they left their vehicle they were not traceable. My initial concerns were that I would lose some of the information that I was receiving from my old system, for example, driver behaviour. In fact, I now have all this and more and the transition was really smooth.”

Romex’s Mobile Employee Management solution is web based software app run via a smart phone that monitors an employee’s movements. Given that their mobile phone will always be on a person, it can record where that member of staff is at any given time. The software is able to locate the best placed person for a job whether they are in vehicle, on foot or using public transport, giving management total visibility.

John continued: “It gives our customers a peace of mind to know where a member of our staff is at all times with the ability to identify who they are, monitor their location and how long the job takes. The ability to validate the time spent on site by our engineers is a great benefit to our customers, we weren’t able to do this with our previous system.”

Amalgamated Lifts routinely upgrade 50 lifts, maintain approx. 2000 lifts and complete a number of major modernisation projects each year. They work with all types of lift

IMPROVING EFFICIENCY

Tel: 0800 5423461

Discussion with John Brand, Finance Director for Amalgamated Lifts about the new mobile employee management solution he has implemented and its benefits.

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21 PROPERTY AND DEVELOPMENT Facilities Management: Amalgamated Lifts

equipment and technology within a variety of builds. Since using the Romex solution, Amalgamated Lifts have begun to appreciate the benefits. John said: “We receive emergency call outs, when people are trapped insides lifts, sometimes in a panic. We need to be able to get the nearest engineer to that site in the shortest time possible. With this system we know exactly where our engineers are specifically located and this in turn helps reduce our reaction times during emergencies.”

As Finance Director for the company, John is interested in bottom line savings: “We are monitoring the system, and are confident we will see savings due to time efficiencies afforded by these solutions. Our engineers are guided to take the most efficient routes, saving both fuel and time. By allocating the nearest engineer to a job, we are able to increase productivity. The reporting system is already saving us time, with Romex emailing us the information, our admin staff are finding the detail is easily analysed.”

Amalgamated Lifts operate a green policy, using hybrid vehicles and working to reduce their carbon footprint, so by reducing travelling times this adheres to their policy. Run on a Smart phone, the Romex Mobile Employee Management solution means that there isn’t any hardware to install, so no additional cost with new vehicles or employees.

“This system has enabled our company to give our clients the best service, comply with all our Health & Safety regula-

“It is a competitive marketplace and we want to make sure that we are at the top of our game, it is important to keep up to date with technology and use the most innovative systems available.” tions and ensure that our staff are doing their jobs to the best of their abilities. Due to the nature of our industry we are very conscious of Health & Safety and the fact that we have lone workers in unusual situations. This system alerts us when an engineer has been untraceable for a certain amount of time and is able to pin point their last position, which has never been available to us previously.”

The Romex’s Mobile Employee Management solution has a number of other features including driver distraction prevention (DDP) module that Amalgamated Lifts may be introducing shortly. The DDP application is able to cut-off and blocks all voice calls and locks the keypad to prevent any texting (or emailing) after the start of a business journey.

There is also a job scheduling module they are interested in working with.

In conclusion, John says: “It is a competitive marketplace and we want to make sure that we are at the top of our game, it is important to keep up to date with technology and use the most innovative systems available. This way we are confident we will continue to offer the best service for the next 25 years and beyond.”

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23 PROPERTY AND DEVELOPMENT Facilities Management: MAR Services

A REFRESHING APPROACH TO CLEANING Established in 1985, MAR provide hassle-free, superior, high value cleaning services to the corporate, educational, leisure and manufacturing sectors. They know the business of cleaning inside out and they know how to organise and manage cleaning services to give you exactly what you require.

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For a company that will be celebrating its thirtieth birthday next year, MAR Services is far from the turmoil of middle age. “We are at a very exciting point in the life of our company,” states General Manager Christa Brazier. “MAR Services is launching a new website and marketing overhaul to publicise the company’s expansion into a new range of services.”

Having started from humble beginnings in 1985 as a small cleaning business, the company’s organic growth has proved fruitful. Today, MAR offers full facilities support services, delivering security, waste management as well as building and grounds maintenance services. Christa emphasises the importance of flexibility: “We are specialists in each service but also offer a total FM approach if that’s what clients’ want.

“WE DON’T LIKE TO BE NOTICED…” “The biggest reward is when a client says they enjoy a clean, safe, well maintained building without even noticing the service is taking place. This means they are able to focus on their business rather than their facilities. If we achieve that, we’ve achieved our goal.”

The business is based on transparency and a strong company culture that will help the company achieve its aims of expanding and diversifying. Christa says: “We have rigorous procedures and we provide a comprehensive quality man-

agement system. In accordance with our ISO 9001 accreditation, these systems are consistently reviewed and improved upon.

“We really live it right through the organisation and have a passion and belief in what we deliver. The culture of this organisation and the attitude to service delivery are second to none.”

LOYAL CLIENTS Clients are mainly from the leisure, education and corporate sectors and, as Christa states, have exhibited tremendous loyalty through the recession: “We have excellent retention rates; our longest running contract is sixteen years and counting, which demonstrates the strength of our working relationship. Within the industry, there is a lot of churn but we get a high number of clients returning because they had a much better service with us, which is a real testament to our company.”

MAR Services 29 years’ experience benefits greatly when mobilising new contracts yet it maintains the fluidity needed to overcome unprecedented situations. Recently taking on a client that had been badly let down by a previous contractor, and with only a week’s notice; MAR pulled in the necessary resources to mobilise the contract and also managed to make vast improvements in terms of standards and

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24 PROPERTY AND DEVELOPMENT Facilities Management: MAR Services management. Christa describes how the whole team work side by side in these situations to achieve results: “Every member of the team will put in a special effort and we all feel immensely satisfied when the client is happy.”

All services, with the exception of using a waste carrier, are self-delivered and that’s important to a company that takes pride in achieving high quality standards. MAR Services is in the top 5% of the Security Industry Authorities Approved Contractor Scheme. “Having the expertise in-house allows us to control what we need to drive standards right across the organisation,” remarks Christa. “We work in sectors such as schools that require high levels of security and also areas that require high levels of cleanliness, like laboratories. We pride ourselves on making sure all staff reach and exceed clients’ standards in whatever function they perform.”

2 Pear Place, Waterloo London SE1 8SA www.marservices.co.uk Tel: 0800 975 7217

TEAMWORK Christa explains that: “Staff recruitment and training are always a challenge but we place great emphasis on the right calibre of staff and training for each job. MAR

Services considers its staff to have great importance and commits to train, nurture and develop them, ensuring they know they are valued members of our company.”

The training, which is of The British Institute of Cleaning Science’s (BICSc) standards, provides operatives with a qualification in cleaning, enabling job progression. Staff are also offered the chance to take part in the Skills Partnership Training Programme, which gives eligible employees the chance to enhance their current skill set, culminating in NVQ and Diploma Certification. “We believe in encouraging and empowering our staff to be the best they can be,” claims Christa.

Successful infusion of the company’s priorities is evident through recent research suggesting 97% of staff strongly agree that client needs come first.

THE FUTURE IS BRIGHT Christa states: “Our website re-launch is taking us into a new era of MAR Services. We are utilising new technology and media to enhance the way we do business and we are very excited about what the future has to hold.”

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25 PROPERTY AND DEVELOPMENT Facilities Management: MAR Services

“We believe in encouraging and empowering our staff to be the best they can be”

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26 PROPERTY AND DEVELOPMENT Feature: Fraud in Construction

FRAUD IN CONSTRUCTION George McKillop, M.D. of Haymarket Risk Management Limited, argues that shocking revelations into the diversity of construction related fraud and the economic kickbacks suggest the need for a new approach into fraud detection

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“Fraud in Construction” are words that we hear all the time, whether it be the OFT investigating fraudulent cartels, black holes in construction company accounts, senior managers being suspended whilst a probe takes place. My favourite though, when major public construction contracts become massively overspent and a Peer of the Realm is appointed to investigate. His report will inevitably include words such as “mistakes were made”, “no-one was really to blame”, “new controls have been put in place” and “it won’t happen again” – until it does.

I wonder, however, how many people fully understand the true diversity of fraud in construction, not only how endemic it is, but how it affects just about any business, including major public works, perpetrated by people at all levels in all sorts of organizations and in a wide variety of ways.

The one common element in all construction fraud is that the main victim is usually the principal or, in public works contracts, the taxpayer. The only way that this blight on the industry can be minimised is by understanding fraud – how they are perpetrated, and how they can be prevented.

Many mistakenly believe that internal and/or external audit will detect fraud. However, as they invariably only check what is on record, and most construction-related fraud is either disguised or off record, it is almost impossible for routine audit to detect fraud.

I am presenting a series of scenarios demonstrating the diversity of construction fraud, illustrate why routine audit fails to detect it and highlight the fact that the forensic Quantity Surveyor has a major part to play in its prevention and detection. I hope you will be able to note the key preventative measures.

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27 PROPERTY AND DEVELOPMENT Feature: Fraud in Construction

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28 PROPERTY AND DEVELOPMENT

CASE STUDY 1

A LARGE health club chain invited three construction companies to bid for a contract for a new gym.

The three companies formed a cartel which preagreed that company B would submit the lowest, albeit inflated, bid. The health market chain vetted the bids but did not have them properly costquantified and consequently the contract was awarded to company B. Companies A and C later invoiced company B for non-existent consultancy services. The invoices were duly paid – a classic case of a kickback paid against invoice.

After the gym was built, the client’s internal audit department performed a review of major contracts, including the one in question. It found nothing untoward, which was unsurprising as there was nothing in the health club chain’s

records to indicate what had happened.

The fraud only came to light when a senior manager of company B was dismissed (for unconnected reasons) and subsequently wrote to the CEO of the health club chain, attaching copies of the “kickback” invoices.

Following a covert investigation, all of the parties to the fraud were confronted with evidence in simultaneous, unannounced interviews. Having initially denied any business relationships, each was confronted with the copy ‘kickback’ invoices and full admissions were made.

CASE STUDY 2

THE CONTRACTS Manager of the client company was befriended by a director of a construction company. The relationship culminated in the two agreeing that the Contracts Manager would share confidential information to help his ‘friend’ in a contract bid, in return for a kickback if the construction company won the contract... which it did.

The kickback was the building of an extension to the Contracts Manager’s house. To distance themselves from any suspicion and frustrate any audit review, the main contractor instructed a subcontractor to supply the materials and perform the work. He invoiced the cost to the main contractor, which subsequently passed the cost on to the client. The Contracts Manager simply signed off the payment for the cost of the work done, which had been, by then, disguised within a series of stage payments.

From an audit viewpoint, the client’s records contained nothing untoward and again, the fraud only came to light during an investigative review of past contracts. The lack of a Quantity Surveyor and the unhelpful attitude of the Contracts Manager, fuelled suspicions and a covert investigation was initiated. A visit to the local Planning Department revealed the application for the extension and a stroll past the Contracts Manager’s house confirmed the recent work.

In response to a casual remark about the excellent extension, and a question as to whether she could recommend who did it, the Contracts Manager’s wife unwittingly provided the name of the subcontractor which had carried out the work.

THE MANAGING Director of a large construction engineering group subsidiary agreed a £25m fixed price to undertake a major and complex construction contract. Questions from colleagues about the wisdom of this decision were met with a mixture of indignation and bullying by the subsidiary Managing Director. But while his colleagues were sceptical, they lacked the technical knowledge to challenge his decision.

The contract went ahead but the subsidiary had to be bailed out by the Group when costs significantly escalated, causing the failure of the subsidiary and the near collapse of the group.

Investigations revealed that the soon-toretire subsidiary Managing Director was paid a substantial kickback to agree the £25m price,

which he knew was unachievable (all the more so because he used a favoured subcontractor to provide labour at inflated costs and excess vehicles and plant).

A recovery was made from the supplier of labour and materials but this was too little and too late to save the subsidiary.

CASE STUDY 3

Feature: Fraud in Construction

WHAT CHANGED? The health club chain changed its pre-vendor vetting procedures and, crucially, ensured major construction contract bids were cost-analysed by an independent forensic Quantity Surveyor to identify intended overcharging before the award of contract.

WHAT CHANGED? The client introduced a policy whereby all contracts above £500,000 be reviewed by an independent Quantity Surveyor before contract award and as a part of the contract management.

WHAT CHANGED? The Group introduced new procedures whereby contracts above a certain monetary level had to be agreed at Group rather than subsidiary level. They also introduced stringent pre-vendor vetting procedures whereby no new supplier could be introduced without first being vetted to ensure they were independent from anyone in the Group and had a track record in the area for which they were bidding.

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29 PROPERTY AND DEVELOPMENT Feature: Fraud in Construction

LESSONS LEARNED Case studies 1 and 2 highlight the risks of relying upon normal audit functions to identify construction fraud.

Audit has to go beyond its normal procedures and become more proactive in searching for clues to fraudulent activity. Further, detection tests should form part of the procurement process, i.e. before contract award and before fraud has had a chance to occur.

In case study 1, an independent Quantity Surveyor cost analysing the projected work in advance of contract award would have identified the inflated bids.

Case study 2 highlights the fact that the principal should demand to know the identity of the intended subcontractors from the outset, and audit should become more proactive in applying off-record tests as a matter of course.

In case study 3, the lesson is that if you have doubts, do not be fobbed off. Press for detailed answers until you are satisfied and, if needed, employ someone technically qualified to help.

ABOUT GEORGE MCKILLOP Following thirteen years in the HM Customs & Excise Investigation Division, George McKillop left to pursue a career as a corporate fraud investigator in the private sector. He is Managing Director of Haymarket Risk Management Limited, a consultancy which he founded in the 1990’s to provide a top-level service in corporate intelligence and investigation to multi-national clients.George McKillop is Managing Director of Haymarket Risk Management Ltd. Web: www.haymarketrisk.com Email: gwn@haymarketrisk.com

PART 2, in next month’s issue, looks at construction fraud trends and how these can be combated

MAINTENANCE CONTRACTS Contractors often maintain buildings they have constructed. In cases where controls are lax, e.g. no segregation of duties and no independent needs assessment, this can introduce risk particularly where a close relationship has developed between the contractor and the principal’s Contracts Manager, who can invent maintenance work in return for a share of the spoils.

The first step in detecting fraud in maintenance contracts is prevention, which should begin when contractors are invited to bid for a maintenance contract, and should continue through the bidding and contract award process and for as long as the contract exists, specifically: 1. pre-vendor vetting of potential contractors (before being invited to bid) 2. an independent Quantity Surveyor to analyse bids to identify value for money/quality issues 3. segregation of duties to ensure no one person has control of a transaction 4. maintenance and repair work (above a pre-determined value) not to be ordered by the Contract Manager without prior independent assessment 5. Quantity Surveyor checks on the value of works above a certain value 6. quality checks to be performed through random tests 7. all staff/suppliers to be informed that it is policy for these tests to be made.

In conclusion, good preventive controls are vital to reduce risk and it is always better to prevent a fraud than to have to recover from it. However, successful detection is a key part of prevention and it therefore falls to audit to review their processes, look beyond what is on record and to apply innovative detection tests rather than simply engage in a futile audit of what is on record.

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30 PROPERTY AND DEVELOPMENT Housing: Chartered Institute of Housing

“

MY PASSION FOR HOUSING AND THE WORK WE ALL DO IS AS GREAT TODAY AS WHEN I FIRST STARTED OUT 36 YEARS AGO New President takes office at the Chartered Institute of Housing

❱

”

Steve Stride has today been appointed

our members and the importance of standards, ethics and

President of the Chartered Institute of Housing

professionalism in housing.”

(CIH) following the organisation’s Annual

Steve has chosen the Trussell Trust as his presidential

General Meeting (AGM). Steve, who is chief executive

charity of the year, which runs food banks across the UK

of housing association Poplar HARCA and has been

and works to combat poverty and exclusion. He is kicking

CIH Vice President for the past 12 months, takes over

off his fund-raising activities on 28 June by leading a

the role from Paul Tennant.

group of Poplar HARCA staff on the Grand Union

Geraldine Howley, chief executive of housing group

Challenge – a 24-hour, 65-mile walk along the Grand

Incommunities, was elected as new Vice President by CIH

Union Canal from Paddington in London to the Chilterns.

members last month (April) and her appointment was also confirmed at the AGM.

He said: “My passion for housing and the work we all do is as great today as when I first started out as a

CIH chief executive Grainia Long said: “Steve will have

housing trainee for Southwark Council 36 years ago. I feel

a hugely important role to play championing the interests

immensely privileged to be representing my housing

of CIH members and housing professionals. And as the

peers and CIH as your President and am really looking for-

general election approaches in 2015, we’ll be working

ward to my year ahead and all we will achieve together.

together to make sure the voice of housing is effectively

Those of you who know me, will know how confident I will

represented in the political debate. Steve has done a great

be in promoting our offer to government, business and the

job as Vice President so I know he can do the same as

wider public.”

President.”

She added: “I’d like to thank outgoing president Paul Tennant who has been a fantastic ambassador for CIH,

Tel: 024 7685 1700 www.cih.org

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31 PROPERTY AND DEVELOPMENT Housing: Chartered Institute of Housing

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32 PROPERTY AND DEVELOPMENT Housing: Housing Solutions

A CLEAR SOLUTION

Established in 1995, Housing Solutions is a leading provider of affordable homes, managing and maintaining more than 8,000 properties

❱

Housing Solutions has a track record as an award winning housing association, which goes the extra mile to help build sustainable communities for its customers. It works closely with local communities, provides job opportunities for young people through tis apprentice programme and offers a training programme to residents to help them start their own business. This work is just one strand of its overall strategy which is designed to deliver excellent service and ensure that its customers are happy.

Housing Solutions owns, manages and maintains 8000 properties. It has its own in-house team of professional trades staff who provide a comprehensive repair and maintenance service. This includes a responsive repair service, 24 hour emergency call-out service, planned and cyclical maintenance, grounds maintenance, caretaking and management of void properties.

Approximately 5,000 of these properties are Housing Solutions’ stock, with the additional 3000 being managed and maintained on behalf of other housing associations, such as the One Housing Group. Housing Solutions has worked for One House for around 10 years and has a great working relationship with them.

INVESTMENT PLAN In 2005, Housing Solutions began an intensive investment plan to move its systems onto an electronic, digitalised basis including PDAs, dynamic scheduling and a new job costing system to refine the overall business processes. Peter Hatch, Director of Customer Services said: “That delivered a real efficiency savings immediately and an immediate improvement in customer service.

“Since then we’ve invested a further £2.5m to improve customer service with the introduction of IPads for our frontline staff, upgraded PDAs for the trades

team and an on-line repairs reporting system, which customers can use to book repair appointments 24/7.

“Our latest investment is the purchase of Keystone Asset Management system, The introduction of this will be a key focus for us during the coming year,” said Peter.

KEYSTONE MANAGEMENT SYSTEM The Keystone management system is an intricate piece of software which will allow Housing Solutions to better manage its properties, support the long-term programme for maintenance improvements and provide an overarching improvement on stock management for the organisation. Peter further explains the benefits that the system will offer them in supporting future planning and development, saying: “We can model all of our works and expenditure going forward far better than with the software that we had before. The new system will allow us to forecast a five year home improvement plan and target improvements that will improve the energy efficiency of our stock.”

“There will be a website version of the new planned maintenance programme which our Tenancy and Neighbourhood Officers will be able to share with residents during tenancy audits.”

It is expected that this system will provide a database which will effectively support efficiencies and cost effectiveness across all of the stock owned by Housing Solutions, While all key members of staff will be able to monitor, understand and use the information presented in the database, it is also of note that customers will also benefit greatly from this new system by being able to directly request information on scheduled maintenance and developments at their property and receive the information instantaneously. This approach will improve the overall communication and engagement that Housing Solutions has with its customers, hopefully supporting the service provided to them in the long-run.

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34 PROPERTY AND DEVELOPMENT Housing: Housing Solutions

Speaking about current plans for investment in renewable technologies and sustainability for its stock, Peter says: “We have invested in PV panels and external wall insulation. We are currently running a pilot using hydrogen fuel cells to generate electricity for communal areas in five of our sheltered housing schemes. We are cutting energy costs for residents living in our largest off grid neighbourhood. Through the Renewable Heat incentive (RHI) we have been able to provide 10 flats with more efficient, intelligent storage heaters and 25 houses with renewable air source heating systems. The £235k investment will help cut energy bills for our customers and we will get a return of approximately 30% of our original investment over a period of seven years through RHI. INVESTED “We invested quite a lot of money in photovoltaics a couple of years ago. In terms of our technologies, we’ve got some great recording and monitoring equipment in every property which streams back into our office and shows how the panels are performing, their productivity in terms of electricity generation and also the maintenance of those PV cells etc… so that’s a really good bit of kit we put in, in the last two years.”

Though initially Housing Solutions attempted to follow the Green Deal grants for sustainability and renewable technology improvements on its stock, recent times have seen a massive change of focus for the organisation in which maintenance and developments are now seen as part of a “whole-house” to target needs as a priority. Through this strategy they look at how each property performs, the various ways in which efficiency, sustainability and performance can be improved and then finally looking at which grants may or not be available for those initiatives. This new approach will assist Housing Solutions in running what could be some of the best, most advanced and efficient stock in the sector, taking leaps ahead of its competition in terms of overall improvements and development strategies.

BIOMASS Of the measures that Housing Solutions is looking at for future investment and integration into its stock, Peter talks of the most prominent: “We’re looking at biomass and communal heating systems potentially in sheltered housing.

Ground source heat pumps we haven’t touched yet, so that’s certainly on the list, but an expensive and probably limited capability installation in our stock. One thing we’re certainly keen to explore further is PV that provides free communal electricity for lobby ways and communal lounges etc.,. so if we can reduce customer service charges through a communal installation of photovoltaic.

This comes as part of an ever-growing focus on community support and the development of communal assets for

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35 PROPERTY AND DEVELOPMENT Housing: Housing Solutions

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36 PROPERTY AND DEVELOPMENT Housing: Housing Solutions

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37 PROPERTY AND DEVELOPMENT Housing: Housing Solutions

Housing Solutions’ customers, including large-scale investments in courtyards, refurbishments, redevelopments and community-led groups for space usage opportunities.

The Decent Communals Programme, a initiative for the development of communal areas followed the completion of a Decent Homes Standard. This is designed to develop not only homes but also the supporting environment and amenities for these homes.

Peter explains the motivations, aspirations and progress made on this further: “Listening to customer feedback gathered by staff out on walkabouts and estate inspections it was clear that we’d spent a lot of money on the inside of properties but very little on the outside and actually the external environment was very important to our customers.

“We set up a six year programme to upgrade all of the communal areas for our stock that were built pre-1990, so old broken tarmac, concrete and derelict washing lines, horrible things like that are all being removed. We are consult with our customers about what they would like in their communal area and then we try and design and build that courtyard for them so that they can use that amenity and they might have a barbeque in it, seating or raised flowerbeds and whatever it is, they can take ownership of it and really take pride in it.”

Proposals for these refurbishments are announced to the customers along with invitations to pre-planning

“...we work with our customers on consultation about what they would like in their communal area and then we try and design and build that courtyard for them so that they can use that amenity...”

PETER HATCH, Director of Customer Services

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38 PROPERTY AND DEVELOPMENT Housing: Housing Solutions

meetings so that designs can be worked up by Housing Solutions and its customers together. These focus on meeting customer’s needs, wants and ideas wherever possible. Though Housing Solutions aspires to provide an environment which is truly perfect for all of its customers, it goes without saying that not all ideas can be implemented: “There have been a lot of ideas which is great. I think the challenge for us is doing something that meets most of their ideas, but also that we can manage and maintain in the long term as efficiently as possible.”

Peter, is incredibly proud of the project and how the residents have effectively taken to it: “We’ve had some great ownership of the communal areas. Customers have really looked after the areas. We also try to keep it going once we’ve left site to ensure that the courtyard stays really nice.”

In addition to consultation and communication with its residents, Housing Solutions has also contributed massively to the community through its innovative and ground-breaking “Business Start-up” scheme. Aiming to support local entrepreneurs, the scheme which has been running for three years across a number of local authorities looks to support such individuals with courses, training and potentially even contract opportunities for new start-up businesses rising up through the programme.

On the success of the project and its entrepreneurs, Peter comments: “We’ve seen some amazing community businesses set up. Probably the most relevant one for this would be a young resident who wanted to set-up his own grounds maintenance business and landscape gardening.

He went on the 12 week course that covers all aspects of starting your own business.. At the end of this programme the guy was so impressive that we awarded him a grounds

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40 PROPERTY AND DEVELOPMENT Housing: Housing Solutions

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41 PROPERTY AND DEVELOPMENT Housing: Housing Solutions

maintenance contract and he’s gone to run a successful business, has created jobs for others and has pushed up customer satisfaction on the work he does for us.”

“The businesses set-up range from professional photography through to dog grooming. They cover a whole spectrum of things and if we can help those businesses get off the ground then we will do.”

The scheme won the National Housing Federation’s “Community Impact Award for the South East for Building Futures in 2012. Housing Solutions are very proud of the award, which , came as a welcome addition to its growing portfolio of awards, including Most Innovative DLO in 2010, ROSPA Gold and Silver awards and an award for Organisation that was best at meeting resident’s needs in the provision of a maintenance service. These awards serve as testament to Housing Solutions’ dedication to innovation and in providing a customer-focused experience that both the market and its own customers are impressed by.

THIRD PARTY ORGANISATIONS Though Housing Solutions elects to handle much of the general maintenance, developments and its services internally, Peter explains that in keeping with efficiency goals and cost effectiveness it is often beneficial for them to use third party organisations in supporting the organisation: “At the moment, what we’re always conscious of is that we need some sort of subcontractor support so we aim to keep that at 10% of all of our services so that there is enough work to keep a contractor hungry, able and willing to work with us. Also we maximise the quality and cost benefits of having our own in-house team.”

Contractors are monitored very closely, both through very strict contractor criteria and in the constant review of their services both by Housing Solutions and through their Residents’ Scrutiny Panel, The Panel has the power to interview employees, investigate and assess the efficiency and service quality of contractors in comparison to the in-house team. Feedback from these reviews is passed straight up to the Board for action and to remedy any issues. “They carry a lot of weight and they’ve really taken to it,” adds Peter.

Housing Solutions remains proud of the quality of work that many of the long-standing contractors provide to the organisation and tries to maintain a balance between the in-house service and the services provided by its approved contractors.

Using the Keystone Asset Management System and associated initiatives, Peter hopes that Housing Solutions will continue improving its own business systems as the primary route for improving efficiency, planning and the service provided directly to the customers.

“Our business is about the long-term, we try to avoid short-termism whenever possible so it is about planning.”

This forward-thinking notion is expected to greatly benefit the organisation in the long-term and enable it to create long-lasting foundations for its future operations; Peter explains that crucial to this is: “Making sure our business is sustainable, maintaining and developing the inhouse labour force. We keep the apprenticeship programme going so that we can future-proof the services going forward. It is about having that stable platform.”

Housing Solutions Group, Crown House, Crown Square, Waldeck Road, Maidenhead, Berkshire SL6 8BY www.housingsolutions.co.uk Tel: 01628 543101

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42 PROPERTY AND DEVELOPMENT

INVESTING IN PARTNERSHIP

Retail: Punch Taverns

With a portfolio of around 4,300 pubs Punch Taverns is one of the UKs leading companies if anyone looking for pubs to lease

❱

Punch Taverns’ 250th pub refurbishment has proven the value of teamwork. The Jolly Drovers, near Consett in County Durham, reopened its doors in May, after a £450,000 refurbishment by the pub’s owners. Licensees Michelle and Brian Proud were delighted to play host to North West Durham’s MP Pat Glass, who enjoyed a grand tour and was invited to pull a pint to mark the occasion.

The project marks a milestone for Punch Taverns, as the company’s 250th completed pub upgrade since the start of its current financial year last September.

Punch Taverns will invest a total of £40m this year in upgrades to more than 400 pubs. Last year it completed 450 refurbishments at a cost of £45m. The programme has already successfully transformed pubs from Aberdeenshire to Cornwall and from Newport to Kent.

The company aims to give tired premises a makeover, but also equip each pub with the ideal facilities and licensees for the community it serves. Updated pubs can provide a wider

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43 PROPERTY AND DEVELOPMENT Retail: Punch Taverns

and better range of food, Sky Sports, better outdoor spaces and smoking areas. In addition, all Punch Taverns pubs now offer free WiFi. The Jolly Drovers had been closed for two years and has now been re-launched by experienced licensees. The newly updated premises provide a family-friendly space for local people, as well as being an ideal stop-off point for cyclists on the Coast to Coast bike route.

Licensee Michelle Proud said: “The investment has totally transformed the pub. The locals love the new décor and they say they’ve been desperate for a place like this on their doorstep. We’re also seeing a lot of new faces as customers come in from other villages – which is great!”

Punch Taverns takes on every investment project as a partnership, involving the licensee partners and calling on its own hugely experienced team of specialists to make sure every aspect of the upgrade goes well.

Operations Director Paul Pavli explains: “The success of the programme is down to a huge task force. As well as using good repairs and decorating contractors, every refurbishment calls on our in-house specialists in cellar management, catering, menu planning, accounts, business management, marketing, event management and stock control.

“To get this right, we set up a New Business Development Team to co-ordinate and oversee refurbishments. This team then stay and work closely with our partners for six months after the refurbishment, making sure that all aspects of the business are right for our partners and ourselves.

“Central to the long-term success of these pubs, we also focus on creating strong partnerships with our licensees, offering them unique levels of ongoing support through our awardwinning Punch Foundation Tenancy licence agreements.

“We see a strong future for our pubs, thanks to the right investment, the right planning and the right people. In particular, we’re always on the look-out for great new pub partners."

Punch Taverns is one of the UK’s leading companies for pub leasing. Founded in 1997, the company has grown its portfolio and now operates around 4,300 pubs nationwide.

The company was the first in the industry to introduce an accredited Code of Practice, which was endorsed by BIIBAS (British Institute of Inn keeping, Benchmarking and Accreditation Services). This code of practice ensures that its lease agreements and terms are clear, fair and transparent for its customers.

As a high quality organisation, Punch Taverns will provide licensees with the support and expert industry knowledge

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45 PROPERTY AND DEVELOPMENT Retail: Punch Taverns

needed in order to make a pub business successful. In addition, Punch Taverns provides a comprehensive range of business support covering everything from marketing to the legal and financial aspects.

It also invests heavily in its pubs for lease. Punch Taverns’ extensive industry knowledge and experience ensures that each of its pubs for lease has the right location, customers and environment. Punch Taverns groups pubs together depending on their strengths which makes it easier for prospective licensees to find the pub that’s right for them, to ensure their business is a success.

Indeed, Punch Taverns recently announced it had invested £2m into its pubs across Lancashire in the last six months.

As a result of the recent investments, this has led to over 50 new jobs created for people within the local area.

Some of the pubs which have seen a cash injection include the Brook Tavern in Preston, Cardwell Arms in Adlington (Chorley), Bull & Dog in Burscough (Ormskirk) the Beaumont in Bolton and the Woodsman in Leyland.

One of the pubs to have seen a cash injection includes the Old Oak in Houghton, which had a £200,000 spend in March in partnership with AC investments, to completely transform the pub. Taking on 20 new staff from the local area and using locally-sourced produce, the Old Oak has become the hub of the community.

Punch Taverns groups pubs together depending on their strengths which makes it easier for prospective licensees to find the pub that’s right for them, to ensure their business is a success.

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46 PROPERTY AND DEVELOPMENT Retail: Punch Taverns

“We own a range of pubs, varying from community locals to destination food venues, and by investing in our pubs we can create the highest quality pub estate in the UK.”

Punch Taverns Jubilee House Second Avenue Burton upon Trent Staffordshire DE14 2WF www.punchtaverns.com Tel: 01283 501999

Owner Adam Chapman, said: “This is my fifth Punch pub and could always see the potential to create a family-friendly, home for home. We can now cater for a wider market, including families, as there is something for everyone.

“We have been well-received by the local community and feedback has been very positive. The bar is much more welcoming now , has a very homely feel and we are seeing lots of old and new faces coming into The Old Oak – which is great!”

“The investment has strengthened our food offer using fresh local produce with a twist on pub classics and allows customers to build their own burgers – which are proving really popular and our newly refurbished bar provides a varied event calendar with both live entertainment and live sports.

“Since the investment the pub has been doing great and meeting all our expectations. Business has increased and our customers like what we have done to the pub which has been to restore the interior to its former glory as one of Houghton’s iconic pubs.

“We have had great support from Punch Taverns in the refurbishment of the bar and I know Managing Director Aziz Berisha and the team are enjoying welcoming customers back.”

Punch has invested a massive £450,000 in The Study Room in Lancaster – a contemporary and stylish bar.

Mick Horan, who developed the Study Room brand, said that it was important that the location of its first venue could bring something new and exciting for our customers in Lancaster. “I believe we have created a great environment for all and that is really paying off with the comments we have received from our customers,” he said.

“The food has really taken off, with our burgers and cocktails proving really popular. I think customers like the fact that provenance of products is extremely important to us and can support local business by using local suppliers for our food and drink.”

Stephen Allen, Head of Investment at Punch, explained how this forms part of Punch’s overall business strategy: “We own a range of pubs, varying from community locals to destination food venues, and by investing in our pubs we can create the highest quality pub estate in the UK. “We believe that pubs are the hub of the community and by investing in our pubs it can create stronger business links with our Partners, like Adam and Mick, as well as the local community as pubs source staff and produce locally. From our investments alone, this has led to hundreds of new jobs created for people within the local areas.

“We are continuing to invest in our estate and are planning to spend approximately £40m over the next year nationwide, with a £200,000 refurbishment at the Green Man in Inglewhite which is due to reopen early June.

“Seeing the success of our pubs, with many nominated for national awards, we have every confidence that our operators can put these venues on the map as leading pubs in their areas and put the British pub back at the heart of the community.”

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48 PROPERTY AND DEVELOPMENT Retail: Holland & Barrett

THE

GOOD LIFE With 711 stores across the UK and Ireland Holland & Barrett is Europe’s leading retailer of vitamins, minerals and herbal supplements

❱

Successful retailing is generally dependent on listening to customers and acting on what they say. That, together with a change in the market, led to Holland & Barrett embarking on a store refit programme that started with one trial location and gathered pace due to positive feedback on customer experience.

The company is Europe’s leading retailer of vitamins, minerals and herbal supplements, with 711 stores across the UK and Ireland, international franchises in other countries and three other brands across Europe as part of the same group (trading as GNC, De Tuinen and Essenza). The size of the estate means a massive refit programme that, as Director of Property Gurdial Flora explains, is being undertaken through a phased approach: “It’s going to take a while to hit all the stores so we’re prioritising based on the time since the last refit, the store’s turnover and ranking. We’re also looking at when the current lease expires and whether we want to relocate or renew. It’s part of an overall strategy that covers asset management, refits, relocations, concepts, whether we want to downsize or upsize. Everything’s being looked at and we have a plan we’re managing.”

FRESH IMAGE The aim is to give all stores a fresh image although a standard template isn’t being rigorously applied to each one. The general approach has been to change from a light beech finish to a dark Cordoba Olive

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49 PROPERTY AND DEVELOPMENT Retail: Holland & Barrett

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50 PROPERTY AND DEVELOPMENT Retail: Holland & Barrett

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51 PROPERTY AND DEVELOPMENT Retail: Holland & Barrett

laminate for a modern feel. Within that are three basic styles, which have been refined since the project started — standard Cordoba finish, standard plus goal posts that have zoning for particular product categories and concept stores that apply to only the biggest sites and have exclusive product lines such as jelly bean units, beauty stands, cereal and oil dispensers, and pick and mix counters.

Although all stores potentially have variations, they are based on standard designs adjusted to individual sites.

“It’s based on the store size and the area’s demographics,” recounts Head of Facilities Management Alison McHugh.

“We’ll liaise with the retail, merchandising and trading teams to see if there are any special concepts they want in the store. We then use the in-house design team to design and deliver accordingly.”

Since our stores aren’t especially big when compared to other national retailers outlets, each refit doesn’t have to be individually tendered. Instead, as Alison points out, contractors deliver several stores a year on a turnkey basis: “The shop-fit contracts are tendered yearly to produce a list of four approved contractors to work on our stores. Because we have a fixed fit-out style and the concepts are fairly standard, it’s a process that happens once a year and approved contractors are allocated a certain number of stores.”

The same principle applies to the fitting out of new stores, with Holland & Barrett having an aggressive acquisition programme aiming to add some thirty stores a year, some being relocations, with a big focus on Greater London and large cities. The emphasis is on stores that can accommodate the concept format due to feedback showing these improve customer experience and increase sales.

Although there’s no preference between shopping centres and high streets, they have to be prime sites. “We’re very cautious about where we site new stores, especially with the potential demise of the high street,” remarks Gurdial.

“We’re being very particular and looking at demographics, with a requirements list that’s extensive and focused, going out to agents who introduce potential units. Our Acquisitions Manager reviews these and presents the ones that are of interest at the weekly property meeting

The shop-fit contracts are tendered yearly to produce a list of four approved contractors to work on our stores

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52 PROPERTY AND DEVELOPMENT Retail: Holland & Barrett

with the CEO. The opportunities that are of interest are then assessed by area sales managers and regional sales managers and then each goes through a viability assessment, based on our company acquisitions strategy, that includes return on investment calculations and the minimum contribution we require from the store. If it’s viable, a deal will be negotiated and we process it.”

SITE ASSESSMENT There’s a regular strategy review of potential sites because a particular area or location can alter and so the requirements list changes constantly. As Alison recounts, results from the new store programme and customer feedback surveys change the company’s perception of possible sites: “We’ve gained valuable information from certain new store openings about the store layouts, size of stores, local and catchment demographics.”

That’s part of the ongoing feedback that’s used to determine the retail estate strategy and is based on exit surveys and interviews, questionnaires, store performance statistics and the company’s Rewards for Life loyalty card. This provides a lot of customer insight in terms of who the customer is, what the average transaction value is and where customers are travelling from as well as a number of other things. That enables more mapping, analyses and understanding of the customer base.

There’s a bespoke property management system that holds all data relative to the property estate and provides vital information for the various functions within the Property Department. But, as Gurdial emphasises, the various sections don’t operate in isolation: “We’re a very tightly knit department where everybody links with everyone else. Our macro property strategy feeds into the various parts of the department at micro level where everybody is talking the same language with the aid of the bespoke central property system that links into the estates management, the maintenance helpdesk, the project managers and acquisitions as well as the legal team and regulatory services. It’s a central master tool that enhances communication, improves transparency, improves efficiency and overall ensures everybody is talking the same language and actioning towards the overall property strategy.”

The central property system also helps with the sourcing of contractors for reactive and preventive maintenance, with a preference for local suppliers where possible since this helps the local economy and is generally more cost-effective. However, specialist companies are

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55 PROPERTY AND DEVELOPMENT Retail: Holland & Barrett used for particular types of equipment and there’s a team of national builders and shop fitters that provide a benchmark against local firms.

All the work, as Gurdial recounts, is strictly controlled: “We have a programme each year that’s based on actual spend and a forecast of major expenditure based on the number of stores we want to open. The capital expenditure budget is based on that and maintenance is based on the amount being spent now plus a percentage for inflation.”

The budget includes environmental work, which covers a current trial of LED lights to assess the potential return on investment. That’s been complicated by a need for wall wash lighting that highlights the products but with no LED lighting equivalent available. A solution is being developed because the correct lighting is crucial to create the best shopping experience.

Another environmental development is smart metering, which has so far been installed in 470 stores and is intended to be rolled out further. That’s shown improvement in some stores but not in others where equipment is being left on when not needed and the aim is to change that behaviour. “We have our Plan It Green policy where the plan is to reduce consumption and make the business greener,” confirms Alison. “It makes people aware of energy consumption in stores. There are hints and tips such as switching off air conditioning, only boiling half kettles, making sure heaters and lights are switched off, that sort of thing. We’re also trialling PIR switches in the back of house areas to see the outcome.”

As part of the Plan It Green policy, the company is to adopt 100% sustainable power throughout its UK store

“We have our Plan It Green policy where the plan is to reduce consumption and make the business greener,”

estate. That’s being provided by Haven Power in the form of electricity generated from biomass, a form of stored solar energy from plant-based materials such as woodchip. That will significantly lower the company’s carbon footprint and continues its ethical approach that has included banning single use plastic bags and removing certain chemicals for toiletry products.

BRAND IDENTITY The main plan now is to complete the store refit programme and develop and implement more concept stores. Allied to the UK programme are the new store fit-outs and the need to maintain standards in the overseas franchised store.

Gurdial says: “We’re expanding globally and there’s going to be massive growth over the coming years. For the global franchising, whilst they have got their own business structure, any new shop designs have to be approved here in the UK to ensure consistency and the brand image is maintained. We take into account each country has a different style but we need to ensure that the rollout within those countries is consistent and the brand identity is maintained.”

Registered office: Samuel Ryder House Barling Way, Nuneaton, Warwickshire CV10 7RH www.hollandandbarrett.com Tel: 02476 215540

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