D. Toma
David Toma

As we all know, buildings are expensive to construct and maintain, but they are critical for the delivery of public services. If entities do not maintain their buildings well:

  • they may fail or not satisfy the public’s expectations for service delivery 
  • the cost of owning these assets over their whole-of-life will increase
  • entities will have poor building asset information which is important for planning for asset renewals. 

Public sector boards, executive management, and audit committees need to provide oversight over their entities’ asset maintenance program. This requires management to report to those charged with governance on how well the entity is maintaining public assets against its plans. This can be challenging when entities’ have limited funding, and the cost of labour and supplies for maintenance works is increasing due to the effects of inflation and supply chain limitations.  

In our Health 2023 report (Report 6: 2023–24), we stated that ‘Hospital and Health Services continue to face significant challenges in funding the anticipated maintenance of their assets.’ The cost of anticipated maintenance across HHSs as of 30 June 2023 was $1.4 billion. This was a 32 per cent increase from 2022. 

The Queensland Government Building Policy—Growth and Renewal states that entities should ‘plan for minimum maintenance funding of 1 per cent of the replacement cost of the agency’s existing building portfolio. Higher amounts, for example, 3 per cent to 5 per cent, should be planned for heritage buildings and specialised assets on a case-by-case basis. An example of a specialised asset is a cyclone shelter.’

Health and Education entities of course build and maintain hospitals and schools. In our sector-based reports each year, we report how much they spend to maintain these assets. We have found that even when these entities spend the one per cent expected on maintenance, they may not complete all the maintenance work required due to the rising costs of labour and supply. 

So, what can entities do to maintain their buildings when they have limited funding and labour supply? 

Prioritise assets based on impact of service delivery and risk of failure

By focusing on the assets that are essential to service delivery and are at risk of failure, entities can allocate their limited resources to where they matter most. Knowing the condition of their assets, and the risk of failure and consequences of failure, will help entities prioritise assets for maintenance.

In addition, when prioritising maintenance works, entities also need to consider:

  • any statutory obligations relating to maintaining specific assets for safety reasons (for example, fire safety systems, elevators and air conditioners)
  • preventative maintenance. These are maintenance works that are routine, scheduled and recurring to prevent breakdowns and mitigate deterioration. These works should be prioritised because they extend the life of assets and help prevent costly repairs. 

While it’s important to prioritise assets for maintenance, entities still need to properly calculate their total maintenance needs. The Queensland Government Building Policy Guideline states: 
‘calculating funding requirements should be governed by the total maintenance needs of an agency’s portfolio (for example, maintenance demand), and not based on perceived limitations related to availability of funds. The required level of funding to address identified maintenance needs should be sought. This may involve seeking additional funding through the government’s annual appropriation funding process, or reallocating funds from internal funding sources.’

The Queensland Government Building Policy—Growth and Renewal requires entities to develop a Strategic Maintenance Plan (SMP). A SMP should establish an order of priority for maintenance activities and nominate how the entity will fund maintenance works. Entities should prioritise their assets using their entity’s risk management framework. 

Ensure asset management systems integrate data that will help inform decision-making

To accurately prioritise maintenance tasks, entities need an asset management system that will help inform their decision-making. Our last blog in this series, Eight steps to consider for a systems approach to asset management covers this in more detail. This system should enable them to track asset performance, maintenance history, and costs. The system must be able to effectively support the analysis required, relevant to the size and complexity of the assets and organisational needs.

Entities can use asset data in these systems to inform key aspects of managing assets such as life cycle costing, maintenance, and renewal programs. When systems are well integrated (as opposed to asset data being in disparate systems), data can help inform decision-making. 

A mature system will provide organisation-wide asset performance information to staff on service performance, asset reliability, availability, maintainability, risks, and costs. The system can generate maintenance and renewal programs, work orders, and identify criticality of assets based on predicted and input asset condition. 

Condition assessments provide the source data for asset management systems. For buildings, Queensland Government entities need to conduct condition assessments at least every 3 years. These assessments identify the schedule of maintenance works required to bring each building up to the desired specific condition standard. This information can assist with planning and prioritising maintenance works. As these condition assessments are generally performed every 3 years, entities can supplement the data with other sources such as forecasting, field service reports, valuations, and maintenance targets. 

Coordinate and plan work with other public sector entities in a single geographical location

Multiple government sectors service a single geographical location – such as schools, hospitals, roads, and local councils. If each of these sectors independently source labour supply for maintenance works, it can lead to inefficiency. 

By coordinating maintenance works, entities can access labour supply for common maintenance tasks. In the current environment of limited labour supply, it is important public sector entities work together to use their combined buying power to access labour supply to conduct maintenance works. This is particularly important in regional and remote locations where access to labour and materials supply is more challenging. 

QAO’s asset management maturity model – coming soon!

We are continuing to focus on supporting our clients to effectively manage their assets. Self-assessing the maturity of an organisation’s approaches to asset management can provide a useful baseline to inform future planning. It can also help with internal conversations across the business to create a shared understanding of the value of asset management as a whole. 

As we reported in Health 2023, entities need to plan for future requirements, manage existing assets, and invest in new assets. To achieve the best outcomes, they also need to ensure there is a close relationship between how they manage and maintain existing assets and build new ones.

We’ve developed an asset management maturity model from a self-assessment questionnaire we issued to local governments in 2023 as part of our Improving asset management in local government (Report 2: 2023–24) report. This asset management maturity model is based on the framework the Asset Institute developed from the better practices identified in the International Standard ISO 55000. 

We are currently piloting this model with the Department of Health and the 16 Hospital and Health Services. Following this pilot and our consideration of any feedback, we will publish this model on our website for wider use. 


Queensland Government policy:

Reports to parliament:

Blog posts:

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