Flexible working in Scottish local authority property: developing a combined resource management strategy/Lankstus darbas Skotijos vietos valdzios poziuriu: kuriame kombinuota istekliv vadybos strategija.

ABSTRACT. As indicated in Government reports and previous research, the traditional office environment of both central and local governments has been occupied with high occupancy cost. Flexible working supported by information and communication technology, human resource, and workspace management has emerged as a modern concept for managing office resources. Workspace management models covering both activity-based working area and portfolio flexibility are developed to assist an organisation to allocate staff and working area more flexibly and efficiently. However, public organisations like Scottish Local Authorities (SLAB) are unlikely to fully adopt commercial workspace management models. Therefore, the concept of a combined resource management strategy has been introduced to assist the Authorities in considering adoption in financial/economic terms before taking-up of flexible working in practice.

KEYWORDS: Flexible working; Combined resource management strategy; Scottish local authority

SANTRAUKA

Kaip rodo Vyriausybes ataskaitos it ankstesnis tyrimas, it centrines, it vietos valdzios tradiciniuose biuruose daug demesio skirta didelems turto valdymo sonaudoms. Lankstus grafikas, pagrjstas informaciniq it komunikaciniq technologijq, zmogis kWq is tekliq it darbo vietos vadyba, atsirado kaip modernus biuro is tekliq valdymo budas. Jau yra darbo vietos valdymo modeliq, kurie apima it su veikla susijusiot darbo vieta, it portfelio lankstump, leidzia organizacijai lankstauu it efektyviau paskirstyti darbuotojus bei biurq ploto.. Taciau mazai tiketina, kad valstybines organizacijos, pavyzdziui, Skotijos vietos valdzia, perims nepakeistus komercinius darbo vietos valdymo modelius. Todel pristatyta kombinuotos is tekliq vadybos strategijos ideja, kuri padetq valdziai apsvarstyti modeliq taikymot finansine it ekonomine prasme pries realiai imantis lankstaus darbo.

1. INTRODUCTION

Property management principles in the public sector have been continuously developed by researchers and practitioners over the last two decades. The need for more effective, efficient, and economic use of property has been recommended by UK Government reports such as Audit Commission (2000) Hot Property Report, Gershon (2004)-Public Sector Efficiency Review, and Lyons' Reviews (2004a,b). The reports address the term 'Flexible Working' (FW) as a modern concept that should be applied to public organisations. The emergence of the flexibility principle is likely to influence property management practice, in terms of operational flexibility and efficiency. This paper aims to describe an application of flexible working, especially Workspace Management (WSM) in public organisation offices. Moreover, the implications from the survey of flexible working in Scottish Local Authority (SLA) property are described to assist public offices, like SLA, to successfully take-up flexible working in this context.

2. LITERATURE REVIEW

2.1. Needs for flexible working

Efficiency, Effectiveness and Economics (3Es) in property management have been recommended by both researchers and, particularly, Government auditors. Audit Commission (AC) (1988a, 1988b) recommends property management of Local Authorities (LAs) to prepare strategic operational cost information and adequate property review. The main reason given is that strategic property management information, such as income, expenses and occupancy costs per area, can enable senior management to achieve better efficiency, effectiveness and economy of property management (Gibson and Hedley, 1999). Moreover, Audit Commission (2000) indicates key actions for property review of LAs, including regular reviews of utilisation of property holdings and sharing of back offices, where 3Es can be gained. Consequently, office management and Human Resource (HR) concepts, such as open-plan, hotdesking, electronic communication and flexible working hours, have been introduced to LAs as modern property management tools (ibid). Lyons (2004a) stated that because Information and Communication Technology (ICT) has been significantly developed, the office environment can be changed from a static to a flexible working environment. He suggests that the three key areas which should be considered are property efficiency, productivity and service effectiveness, and regional economic growth and devolution. In his opinion, when these three areas are improved, the office estate can be managed more strategically.

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Gershon (2004) and Lyons (2004b) identify the broad objectives of public sector efficiency. These are: 1) reduce resource costs, not public services; 2) enhance quality and quantity of production; and 3) improve ratio of output per unit cost of input. To achieve these objectives, LAs should:

--Increase the level of investment in ICT in both central and local government,

--Develop a HR joined-up approach facilitating back office functions, and

--Share back offices both within and between LAs.

To indicate the importance of operational efficiency, the Office of Government Commerce (OGC) and Investment Property Databank (IPD) (2005a,b) undertook a property occupational-performance survey across the UK. A quadrant analysis of the survey (Figure 1) clearly shows that only nine per cent of pilot-survey offices can be counted as efficient occupation. Fifty-two per cent (i.e. 15 + 37%) need to improve the efficiency of property occupation, either the working area density or occupancy cost. Interestingly, thirty-nine per cent of the pilot samples cannot be identified as efficient occupational property (OGC and IPD, 2005a,b).

Efficient performance recommendations, established as the survey outcome, for property occupation are (OGC and IPD, 2005a,b):

1. Maximum density of office space should not be exceeded at 15 sq. m. per Full-Time Equivalent (FTE).

2. Ratio of staff per workstation should not exceed 1:1.

3. Occupancy cost per area should not exceed 400 [pounds sterling] per sq. m.

If these targets can be achieved, theoretically, the potential saving of around 25 per cent of current annual occupancy cost will be achieved (OGC, 2006).

The issues addressed above show that senior management should consider employing the modern concept of office management, especially flexible working, as a tool for achieving better 3Es of property management (Gibson and Luck, 2004). To understand the relationship between flexible working and property management, flexibility principle and workspace management concepts are described as fundamental principles for managing office area more effectively.

2.2. Flexibility principle

The principle of flexibility has been addressed by Gibson (2003) as a key concept for flexible working. There are two perspectives on flexibility, which relate to the organisation and property.

2.2.1. Flexibility from an organisation perspective

Organisations always expect to increase their resources performance, while workers expect more suitable working condition (ibid). There are three important types of organisation flexibility which are:

Contractual Flexibility

Full-time and non full-time (e.g. part-time or short-term) staff can be employed on a portfolio flexibility basis (Gibson and Lizieri, 1999). Full-time staff will work in core office areas, whereas the peripheral staff are employed depending on organisational needs to fulfil organisation business (Gibson, 2003).

Time Flexibility

Work-Life Balance is a main principle of time flexibility. Organisations may provide ranges of working-time flexibility patterns to their employees in terms of. alternative working time, alternative working place, and additional benefits (Gibson, 2003; DfEE, 2000).

Locational Flexibility

In a modern office, employees should be able to choose their workplaces based on working activities. For example, if a worker needs to do a concentrated task, he/she should be provided a personal office for the period of the task (Laing et al., 1998; Ward and Holtham, 2000).

2.2.2. Flexibility from a property perspective

According to organisational business pressure, awareness of liability associated with property, frequent relocation of staff, productivity improvement, and total occupancy cost are counted as important factors leading an organisation to adapt the flexibility concept (Gibson, 2003; NAO, 2006a). Three main types of property flexibility are:

Contractual (Financial) Flexibility

According to the property portfolio model, organisations should monitor and manage their property assets both freehold and leasehold based on the business utilisation purpose (Gibson and Lizieri, 1999). For example, short-term property may be arranged in order to facilitate a quick disposal.

Physical Flexibility

Working space in the office should be easily adapted when business activity changes. The office should provide flexibility to change its layout, for example, from cellular office to open plan office (Laing et al., 1998; Gibson, 2003)

Functional Flexibility

Organisations should provide flexibility for changing business functions. This relates to the office location, and legal and planning obligations (Gibson, 2003).

Flexible working requires flexibility from the organisation and property perspectives supporting its adoption in practice. Moreover, senior management have an important role in promoting flexible working in their business. Therefore, the opportunities for improving performance and reducing occupancy cost may be considerably increased (Simms and Rogers, 2006).

2.3. Workspace management