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Public sector asset management gains attention

Monday, April 4, 2016

A new $50-million fund to help Canadian municipalities implement asset management programs is in sync with broader efforts to adopt standards, make better use of data analytics and eliminate the silo mentality in managing government-owned and occupied assets. The Canadian government’s funding pledge in the recently unveiled 2016 federal budget came just before last week’s release of a global report on public sector asset management, drawn from consultation with senior and mid-level managers in eight countries.

“This research is the first of its kind on a global scale, and it is important to see that issues in public asset management are not local, but global,” says Kristin Bammel, project manager for the report, which was sponsored by the Royal Institution of Chartered Surveyors (RICS).

Participants in a series of roundtable discussions — in Canada, the United States, Mexico, Australia/New Zealand, Japan, the Middle East, the United Kingdom and the Netherlands — oversee assets collectively worth more than $1 trillion. Despite the geographic distance between these venues, similar experiences and concerns were voiced at each session.

Public sector portfolios face common cost pressures as governments move to reduce leased space and make maximum use of owned holdings, while often simultaneously cutting operations and maintenance budgets. Meanwhile, there are new requirements to meet sustainability targets and effectively implement smart technologies. The need for training, improved IT proficiency, and strategic asset management plans anchored with accurate life-cycle costing capability were identified as priorities.

The report summarizes asset managers’ insight on governance, standards, business practices and systems, examines decision-making processes and the rise of performance metrics, and makes recommendations for the future. It stresses that coordination within government operations and a shared asset management system among all departments and agencies are critical to transparent and comparable data that can be used for modelling and predictive analysis.

Canada and the United States are remarked upon for international cooperation worthy of emulation. “The United States and Canada are collaborating on sustainability. Agencies across these governments have established regular meetings to share information on strategies, policy formation and best practices. These types of activities are encouraging, and demonstrate the visibility that asset management is beginning to receive at the executive level,” the report states.

For Canada’s local governments, the Federation of Canadian Municipalities (FCM) has been designated to administer the new $50-million fund to support strategic asset management planning. “Smaller communities, in particular, have indicated that they lack corporate capacity to undertake these important planning activities,” the 2016 budget document states.

The budget also confirms that Statistics Canada will place new focus on collecting “information on the state and performance of core public infrastructure assets for all levels of government” — a commitment FCM commends.

“With municipalities responsible for 60 per cent of Canada’s infrastructure, the time has come to collect comprehensive data on the condition of infrastructure to inform decision making in the future,” the organization states in its response to the 2016 budget. “FCM will work with key stakeholders to set up an infrastructure data and asset management capacity building program.”

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