Raising Interest Rates Put Pressure on FMs

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13 July 2023

The team behind the SBFM maintenance standard predicts that rising interest rates will pile pressure onto building owners and managers to get their operating costs under control.

The company’s research found that driving down the costs associated with operating and refurbishing buildings is a top priority for facilities managers and is putting maintenance budgets under increasing strain. 

The Bank of England has raised interest rates to 5 per cent, the highest level since 2008, in a bid to tackle soaring inflation.

Many FMs report that this pressure is tempting some owners to take a chance with their maintenance programmes and reduce the frequency of key tasks, increasing their chances of falling foul of safety legislation. 

“Ironically, the problem is exacerbated by the fact that many organisations work on a 100 per cent maintenance approach when budgeting i.e., they calculate their costs based on maintaining all of their assets” said SFG20 Product Director Paul Bullard.  

“Avoiding over or under-maintaining systems is the key to getting best value for money from a building maintenance programme while remain legally compliant. It is equally important to avoid the temptation to only do the bare minimum to save costs as this can lead to operationally critical assets being undermaintained. That increases the risk of failure, drives up energy costs and reduces their remaining useful life – it’s a vicious cycle.” 

“Avoiding over or under-maintaining systems is the key to getting best value for money from a building maintenance programme while remain legally compliant. It is equally important to avoid the temptation to only do the bare minimum to save costs as this can lead to operationally critical assets being undermaintained. That increases the risk of failure, drives up energy costs and reduces their remaining useful life – it’s a vicious cycle.” 

–Paul Bullard

Product Director, SFG20

Targeted Maintenance

SFG20 says that many of its users find adopting this kind of “risk-based approach” to maintenance supported by accurate, up-to-date digital asset registers can cut their overall costs by as much as 20 per cent without compromising legal compliance or operating efficiency. 

“The complexity of estimating maintenance, particularly in large commercial new builds or refurb projects, has defeated many project teams” continued Paul. “However, the financial and environmental impact can be colossal particularly as around 80 per cent of the total cost of a building is accounted for during its operational life.” 

He said that key factors to consider include the quality of the building design, its location, the materials used, services installed, and size. However, in many cases the specific characteristics of the building are ignored, and the maintenance strategy is simply based on the total floor area. 

“Targeted maintenance already had a clear financial payback by keeping systems operating at peak efficiency and reducing expensive breakdowns. With costs rising all around us, that approach can now deliver even better value for money as it keeps FMs on top of areas of real financial concern, like energy consumption and equipment downtime, and prevents teams from carrying out unnecessary work.” 

Picture: a photograph of Paul Bullard. Image Credit: SFG20

Article written by Ella Tansley | Published 13 July 2023

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