Prevention is better than cure

  • 9th July 2024


Simon Johns, a partner at property firm Gerald Eve, says buildings maintenance is undervalued by schools


With more than 17 years’ experience in undertaking building surveys, I thought I’d seen it all in terms of the condition of a building, the various stages of disrepair or commonplace defects. I continue to be surprised at how wrong that assumption is.

“Every building is different” was a sales pitch I was given when researching my options about what a career in surveying would look like. This quote has never lost its impact since I first heard it.

I’ve been fortunate enough to undertake a large number of building surveys within the education sector across the country, spanning from Plymouth to Peterborough, and Stockport to Southampton.

Mainly schools (both charity-owned and for-profit schools groups) have been very attentive as to general day-to-day property maintenance, regular upkeep and improvements, while other schools perhaps not so much.

Getting the priorities right

The key focus of all schools is education, this is the core of the business or its charitable objects. In various priorities thereafter are staff, recruitment, finances, outdoor and indoor facilities, food safety, insurance, hygiene, training and so on. Among all of this is your property and its regular maintenance and improvements.

The trend I have witnessed is generally how low down the priority list upkeep and maintenance of a school and its property estate has become. Whether schools are consolidating their existing sites, expanding or merging, maintaining property has never been more important.

With the looming threat of VAT on school fees and the potential impact on pupil enrolment, the scrutiny of your property’s maintenance and how well it presents to parents and pupils is even more pertinent.

In-house property due diligence in terms of reviewing your property is essential to ensure it remains fit for purpose, provides a safe learning and nurturing environment, and promotes an edge over any local rival schools. I have frequently inspected sites where a school hasn’t seen a paintbrush for more than 20 years, or where floor coverings are beyond their life expiry, the electrical installation dates back to the 1970s, or where ad-hoc ‘bodge’ jobs have compromised health and safety. I’ve seen leaks in a classroom and the facilities team confused as to why they continue. A cursory look on the roof usually identifies the root cause, whether it be leaking or blocked gutters, vandalism or removal of lead flashings, or through merely the effluxion of time, the waterproof roof covering now being at (or even beyond) its expected useable life. The vast majority of the defects and items of disrepair encountered are seen as preventable through proactive property maintenance.

Nipping it in the bud

Capturing and undertaking preventative work (rather than reactive) is usually a far less costly exercise than permitting issues to exacerbate and snowball into something far larger. As an example, last year I witnessed a severely leaning chimney stack on a converted Victorian school building. The prognosis was sulphate attack owing to long-standing wetting and drying over a long period of time. The school was unaware. The impact, should the chimney stack have toppled into the playground, was unimaginable and at worst, could have resulted in a tragedy. The reactive remediation I recommended was a full reconstruction of the chimney stack. This may appear quite an excessive repair, however the reactive measure was the only viable option given the pronounced lean of the chimney.

The preventative alternative, upon witnessing failure of the brickwork and mortar pointing at the start of its initial deterioration, would have simply been localised brickwork repairs and repointing. This would have given stability to the chimney and been far cheaper. This is just one example where a preventative measure hands down trumps a reactive repair. Contemplating the ‘what ifs’ had the chimney actually collapsed into the playground is difficult. Not just the cost to rebuild the chimney, but also the potentially grave health and safety impact and reputational damage to the school.

Unfortunately, many schools are currently too financially constrained to keep a property in a suitably maintained condition or commensurate with the requirements of any lease obligations.

Take control

A planned preventative maintenance (PPM) plan is a useful tool to provide foresight as to future remedial and maintenance works, alongside providing a budgetary estimate which can be incorporated into forecast cash flows. This is something your operations or facilities team, or a building surveyor can assist you to prepare. A PPM will clearly illustrate and forecast what building, mechanical, electrical and public health services, statutory compliance, and health and safety aspects need attention, based on a priority basis considering their existing condition.

Impact on transactions

If you are contemplating a transaction, ‘getting your house in order’ will assist a transaction process, making it more straightforward and less combative if preventative measures are taken now.

We, along with many others, anticipate greater numbers of school mergers and acquisitions over the next few years. Buyers of schools almost always commission a building survey as part of their due diligence (along with a valuation, legal, property, commercial and financial due diligence).

Once a building survey is instructed, an experienced surveyor will root out property defects. A report will follow, which will highlight the property’s poor condition, lack of maintenance and investment, together with the remedial costs to bring it back into the expected condition. The effect of this will be to:

  1. a) give a buyer ammunition to renegotiate and reduce the agreed price, and
  2. b) substantially delay the acquisition process.

Worst case, we have seen poor condition and lack of investment in school property resulting in transactions failing.

Buyers are currently more cautious with acquisitions. If a school is making a loss/deficit, prices paid are generally equating to vacant possession value, less a discount for costs to bring a property into repair (catch-up capex). We have been involved with several transactions where buyers have successfully negotiated millions of pounds off the agreed price to reflect substantial costs for repairs. One school we advised had a repairing liability of more than £1 million for the windows alone. In a further example, another for-profit schools buyer negotiated a financial commitment for the vendor (a charity) to pay for the school’s capex of up to £2.5 million post-completion.

Your school property is a valuable, essential piece in the jigsaw of its ongoing operations. The significance of it and its ongoing maintenance must not be ignored. Whether or not you are considering a sale/merger in the near future, do give your own property its necessary due diligence in advance.

Simon Johns

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